June 2012 Foreclosure Sales in California were significantly down at 13.4 percent over last month, and down 48.8 percent vs. June 2011. Notice of Defaults were basically flat, being down 0.9 percent over last month.
We already have significantly low home sales in the market today, and with the declining level of Foreclosure Sales the inventory will continue to decrease. In California, banks take on average 272 days to resell properties they take back at auction, thus, Realtors, investors, and homebuyers should brace themselves for significantly less inventory in next years’ selling season.
“California Governor Jerry Brown signed into law the Homeowner Bill of Rights, an anti-foreclosure package which naively thinks that slowing foreclosures will benefit homeowners and the economy by leaving those owners stuck in their prison of debt,” stated Sean O’Toole, Founder & CEO of ForeclosureRadar. “We’ve long said negative equity, not foreclosures, are the problem, and this bill does nothing to truly help underwater borrowers. Fortunately this bill was watered down significantly from its original form, so we don’t expect it will have the same impact that we’ve seen from more aggressive legislation in Nevada. The most ironic part of this bills passage is that foreclosures have already plummeted, and that the real housing crisis in now a lack of homes available for sale. Next spring, we expect there will be half as many REO’s available for sale in California, significantly impacting overall home sales and hurting homebuyers, investors, real estate related services and the economy.”
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