Southern California Foreclosures

I took a little trip in Southern California to visit some friends and we talked about real estate which is a topic often discussed since the turning of the market.  First friend had three bank owned properties listed in their neighborhood with one more on the way.  That’s out of a total of three listed properties where we saw real estate signs out front.  Prices currently stand at about $600,000, they are located in the central part of Orange County.

Moving into south Orange County, we have some friends who purchased property a couple of years ago in the mid-800’s.  They’ve got a vacant, either REO or soon to be REO, a few houses up the street with the list price in the low 700’s.  It’s been there for a while with no takers, there were also more FSBO than I’d normally expect, but overall not that much property listed.

This type of property evaluation is totally unscientific, there’s a huge lack of information to be able to make informed decisions, yet it’s still interesting.  My take, totally unsupported, is that the lower priced areas were hit first with owners who did not have significant cash reserves or greater incomes.  The foreclosure process started sooner, and proceeded quicker.  The somewhat higher priced areas are probably holding a bit better with owners that have either the cash reserves or the income to be able to try to ride out the current market decline without getting into financial trouble.  As the market correction drags out, I’d expect to see more homes being foreclosed in the higher price ranges.

Just my thought from a couple of days in the area.

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