Thursday, June 26, 2008

SubPrime was Sublime Compared to This

As many industry insiders have said for a while, its not just subprime. Evidence of this can now be found in our local market. Subprime just happened to be first, and was concentrated in lower income and newly built burbs. However, no area in Sacramento is immune to the second wave, the Alt-A and Option ARM loans.

With each week I watch with shock and awe, as the number of foreclosures and NODs increase at an increasing rate in both 95762 and 95630 (Folsom and El Dorado Hills). Given that these two zips are more pricey than some other parts of Sacramento, it makes sense that they largely escaped the subprime meltdown. While I knew this second wave would be an issues, I am still taken aback at how pervasive the problem is.

I keep thinking, the pace will start to moderate.....but it hasn't.

In El Dorado Hills, NODS are up 25% and foreclosures are up 194% since March 3rd.
Folsom NODs are up 104%, and foreclosures are up 115% over that same couple months. 25 new NODs were reported in Folsom this week alone (all stats are according to www.foreclosure.com). Ironically I only started looking at this data to make sure our rental was not in jeapordy.

The real shocker came when I compared the stats above to my previous zip in Northern Virginia outside of D.C. The numbers there are a fraction of what I am seeing in Folsom and EDH. The neighborhoods are largely comparable, albeit with a little less new development and more crime in my previous zip.

All this is making me rather grateful that none of our earlier offers were acceptable to the banks. Seems they were doing us a favor. Ironically, all three homes we have put offers on over the last 6 months, are still on the market.

2 comments:

Buying Time said...

Guess I'm not the only one who noticed this.

http://calculatedrisk.blogspot.com/2008/06/alt-defaults-rise-sharply.html

sacramentia said...
This comment has been removed by the author.