HAS THE HOUSING MARKET BOTTOMED OUT?

According to MSN Money, the Foreclosure "crisis" is overblown
MSN Money states, "Although the national foreclosure rate rose 79 percent between December 2006 and December 2007, the rate was still only 1.033 percent of all homes. This is a regional problem, not reflective of the overall real estate market."

MAKING SENSE OF THE STORY FOR CONSUMERS
• Foreclosure statistics are rarely presented in context. Because about 30 percent of homes are owned free and clear, only seven-tenths of 1 percent of all homes were in foreclosure last year. • If you rank the top 100 foreclosure areas identified by RealtyTrac as reported by MSN Money, only 34 areas had foreclosure rates above the group average. • Fifty-one areas had foreclosure rates of 1 percent or less. • Foreclosure rates actually fell in 14 of the top 100 foreclosure areas.

The main source of foreclosure information comes for a company called RealtyTrac. But when RealtyTrac reports the latest information regarding defaults on loans, or foreclosures, it is not always a straightforward, easy to understand report. In fact, RealtyTrac reports defaults on loans, not on individual properties, so one household that defaults on a primary loan and an equity line will be counted as two defaults, driving up RealtyTrac’s foreclosure statistics. Because of this one home may be associated with a default notice, auction sale notice and bank repossession, each of which is counted as a foreclosure filing. This also skews RealtyTrac’s foreclosure statistics.

Now for good news! We are starting to see a rebound. In February, the hardest hit market in the Bay Area, my county, Solano, saw transactions under contract rise 63.5% over February 2007 (from 255 to 417). Over half the counties were on the plus side for transactions under contract. Joining Solano were Sonoma (+.52%), Napa (+29%) and Contra Costa (+12%). Yes, prices have been hit hard, but buyers are starting to show up and not just look, but make offers.

We see this in other ways, too. Our agents report that their Open House activity has really picked up. It’s not just a few buyers showing up, but in many cases dozens of prospects viewing a home held open. It is a buyer’s market and buyer’s are starting to take advantage of it.

The question then is - have we hit bottom? My guess is probably not, but we are getting close. The inventory of homes for sale in many areas is decreasing, even with the foreclosure problems many face. The bank owned properties are very attractive as they are really priced to sell. Let’s hope this keeps up. My prediction is that by Spring or early Summer we will have hit bottom and start actually see a stop in the price decline and a slight upswing in home values