According to Irvine Based company Realtry Trac Inc. and an article today in Yahoo Finance http://biz.yahoo.com/ap/071011/foreclosure_rates.html the foreclosure rate dipped 8% this month throughout the nation.
Not a sign of a slowing foreclosure rate but “merely a blip” on the radar of what’s to come.
Matter of fact due to a recent article about mortgage rates and refincances most of the ARM’s that financiers fear will create the problem of impending foreclosures are not due to reset until this month October. Which means that the current foreclosure market (nearly double what it was this time last year) is simply the normal rate of foreclosure due to aggressive home pricing, a softening economy and unrealistic mortgage qualification practices.
You can today drive down any street and see countless for sale signs, boarded up or vacant homes, dry lawns and broken down cars. This for our local investors should seem reminiscent of the Base closures of the late 80’s early 90’s and the massacre of the Real Estate market in the Moreno Valley, Perris area of CA.
Today the effected will be the outer commuter areas that have blown up in recent years such as Victorville, Calimesa, and North of LA communities like Lancaster. These folks after loosing their homes will find plenty of affordable rentals nearer their work in the basin as investors become desperate to fulfill their vacancies and salvage their properties.
Meanwhile look for growth in Apartment home development as builders realize the potential for a growth in rents due to the inability for foreclosee’s to fund a purchase. They will be at the mercy of the employers and landlords for years to come.
How do we prepare for this upcoming invasion. Unemotionally. The decline in Real Estate values and the flood of foreclosures to come should not be seen as a short term sign to buy, don’t buy the falling sword. Unlike the stock market Real Estate provides long andsteady swings with a long flat bottom period before it’s next growth cycle. There is time, save your money, do what the rich do and invest it in Real Estate’s counter measure (stocks, bonds & mutual funds) and prepare to do whatever it takes to keep your primary residence through this cycle. The time is coming, a couple of years after the Real Estate does not blanket the front page of the news weekly or monthly. When Real Estate offices are converted back to corner markets and when all your friends whince in pain whenever you bring up investing in R/E.
There my friends, There ye shall find the time to invest, hopefully, better prepared than last time.
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Oh, I thought this blog was about dolphins… nevermind
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