Stockton Real Estate

The following is a summary of the Stockton real estate market in 2009:

• Lenders controlled 87% of the market over the past 12 months. According to Metrolist, of 6,164 units sold during the 12 month period ended December 31 units (87%) were related to Bank REOs and Short Sales.

• Relaxed lender Financial Reporting Standards (FASB and the SEC have now reset these standards) allowed banks to report "Record Earnings!" and not report obvious loan losses on assets. New, fictitious categories of assets were created to accommodate these lowered reporting standards like "Legacy Assets". These assets, pushed to off-balance sheet entities to avoid loss recognition, will come back and we anticipate:

  • Increased reporting of loan losses - whether or not these problem assets are foreclosed upon or sold.

  • Increased inventories from homes coming out of the shadows (Reduced shadow inventories. (Follow this link to our  October, 2009 Newsletter on this subject).

  • Additional losses on Alt-A and other loans resetting in 2010 and 2011 which foretell continued market problems unless lenders come up with other answers.

• In the last 5 months:

  • Inventories have decreased to 4 months' sales. If pending sales are excluded, inventories are at 2 months' sales:

  • Unit sales per month have decreased to lower levels than the comparable period last year.

• Recognition of loan losses and continued increases in mortgage delinquencies will require alternative solutions to the housing problem here in Stockton and nationally.

  • Short sales may be one alternative. I have more short sales and listings than any other agent in San Joaquin County, and would hope that this process will be streamlined. Although we have closed over 95% of our short sales listings, the process is now cumbersome and takes much too long. (Follow this link to our blog article on this subject).

  • Bulk sales may be another alternative. Sales on the courthouse steps have increased.

• The higher end has stalled. We will see more high end homes foreclosed upon and we have geared up to handle more short sales in this category.  According to Metrolist:

  • There were only 2 homes sold for 1 million dollars or more in 2009 - 1 in January & 1 in February.  

  • Last year there we 6 homes sold in this bracket.

  • There were 18 the year before.      

If you have to sell your home do it sooner rather than later. There will be increasingly challenging times:

• According to Real Capital Analytics, as of January 2010 there is more than $174 billion of U.S. real estate in distress.

• $136 billion (nearly 80%) of this number consists of "troubled assets" - where mortgages are delinquent or in default or liens have been filed or...

• Restructured and modified loans account for another $14 billion of distressed assets.

• Only $17 billion of distressed real estate has been resolved to date.

• There is approximately $1.5 trillion worth of commercial mortgages coming due before 2013.