Falling Numbers in Silicon Valley Foreclosure Listings

by Simon Lindsay on Foreclosure Crisis

Despite the continued downturn and falling home values in Silicon Valley, the supply of foreclosed houses for sale during the spring selling season, including homes in foreclosed listings, has declined.

Realtors in the area said the supply of houses for sale has been declining for 6 weeks. They contended there are two reasons for the continued decline: low-priced pre-owned houses including homes in foreclosure listings are purchased quickly, and higher-priced properties are being held by owners as long as they can, hoping for a recovery in home prices.

This week, there are around 5,110 homes and condos in the Santa Clara County market, including houses in foreclosure listings, a decrease from the 5,890 units available for sale on March 20. In the spring of 2008, there were around 7,340 houses for sale, including homes in foreclosure listings, an increase from the 6,900 available for sale 6 weeks earlier.

The declining supply of houses for sale and falling number of properties in foreclosure listings have led to rising competition among buyers. The decline could also signal the start of housing market recovery in the area, and a signal for owners of high-priced properties to list their homes in foreclosure listings.

James Nichols, a manager of a Keller Williams brokerage in San Jose, said he and other realtors are getting multiple offers for homes within days of adding homes to foreclosure listings. Houses priced at more or less 500,000 are being purchased immediately after they are added to foreclosure listings.

Especially for homes in foreclosure listings that are not bank-owned, houses in the $550,000 price range are being bought quickly. Buyers prefer those not owned by banks because banks oftentimes take a long time in approving short sales or closing sales of bank owned home foreclosures.

However, Creekside Realty owner Richard Calhoun said there have been many home sales transactions that are not being completed because some buyers are unable to get loans while the others are discouraged by the complexities of short sales.

Sean O’Toole, founder of California foreclosure tracking service ForeclosureRadar, said there are around 50,000 properties across the state that have received foreclosure filings but have not been repossessed and added to foreclosure listings. O’Toole estimates that there are 300,000 homes currently available for sale across the state, including California foreclosures.

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