Foreclosures About 25% of Pasadena Home Sales

The number of foreclosure filings in the City of Pasadena has been increasing as it has just about everywhere. Having said that, it does not necessarily mean however that more people are losing their homes. I know that seems like a contradiction and almost sounds like political doublespeak. Let me see if I an explain this…

About 740 properties in Pasadena are in Foreclosure
About 740 properties in Pasadena are in Foreclosure

The Foreclosure Process

From the news reports you would think every home sold these days has been repossessed by the bank or is in some classification of being a “distressed property“. While that may closer to the truth in the Inland Empire it is not necessarily so in Pasadena. According to ForeclosureRadar, there are about 743 properties in Pasadena today in 1 of 3 stages of foreclosure. They can be in the very early stages of (1) preforeclosure meaning a “notice of default has been filed against the homeowner for not making their payments or they can actually have an (2) auction date scheduled. This is usually at the Pomona courthouse when the homeowner has failed to pay off the accrued mortgage balance including the late and legal fees. If nobody bids or does not bid high enough then the property will become (3) bank owned. Bank owned properties are usually listed with a real estate broker and are back on the market for sale in a short time.

By the Numbers

We have been very fortunate here in Pasadena that our real estate market began to bounce off of the bottom in January ’09 and has yet to look back. But what has been driving the increase? The monthly sales numbers are very healthy, but how much of it is due to distressed property sales which include short sales and bank owned homes?

Pasadena Home Sales in Foreclosure
Pasadena Home Sales in Foreclosure

Pasadena is on track to sell about 1250 housing units in 2009, up from about 1100 last year. With ForeclosureRadar reporting 740 units in foreclosure, you can quickly determine that is a large percentage of Pasadena’s housing inventory.

I did a short comparison and looked at the months of September and October when the number of home sales were 113 and 131 respectively. October home sales were very high on a historical perspective as the market typically descends from its summer highs. I was surprised to find out that of the 113 home sales in September only 25 (22%) of them could be attributed to either a short sale or a bank owned. For the month of October with 131 sold units, distressed sales jumped up to 38 properties, representing 27% of all the homes sold.

Facing foreclosure?
Facing foreclosure?

The graphs indicate that most of the distressed property sales are occurring in prices less than $500,000 but can also happen at any price point. Even in excess of $1,000,000. Lastly some advice for property owners who find themselves facing the prospects of foreclosure. Don’t ignore the correspondence from the bank, ignoring the problem will not make it go away. A short sale is by far a much more desirable outcome than a foreclosure. If you do not know where to turn or whom to call, contact me. I will be glad to help.

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