BUBBLE TROUBLE: The latest foreclosure numbers out today for the third quarter show California the clear leader in foreclosure activity among the 50 states. Particurlarly noteworthy is an analyst's comment that buyers may nevertheless stay on the sidelines waiting for better deals, despite increasing foreclosure activity throughout 2008 as more adjustable rate subprime mortgages reset to higher payments.
Complete story in tomorrow's Business section on page B-2. Key excerpts from the Associated Press available now below:
LOS ANGELES — The number of U.S. homes in foreclosure more than doubled in the third quarter, a surge that analysts said will likely drive already weak prices even lower in the hardest-hit areas. While that amounts to good news for would-be buyers, it spells trouble for builders with projects languishing on the market and for other homeowners desperate to unload property to avoid foreclosure. . . .
“A wave of foreclosures is not going to be good for the broader market, and it will contribute to the weakness in pricing,” said Raphael Bostic, associate director of the Lusk Center for Real Estate at the University of Southern California. . . .
California led the nation in total foreclosure filings and reported one filing for every 88 households. The state had 148,147 filings on 94,772 properties, an increase in filings of 36 percent from the previous quarter and
nearly four times the year-ago period. . .
Even with foreclosure-driven price declines, many buyers are likely to hold out for even better deals.
“What is keeping people away is this uncertainty about whether or not prices will continue to fall,” said Sam Chandan, chief economist for Reis Inc., a New York-based real estate research firm.
Numbers source: Irvine-based RealtyTrac Inc.
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