Nearly 8,000 Realtors from across the state of California met last week in Anaheim for their director’s meeting and annual expo which featured over 230 exhibitors. Malibu was well represented by their state directors, and local members of the Malibu Association including myself.
My favorite seminar, “Housing Market Trends, What’s Next for Real Estate,” featured a panel of renowned experts who discussed future market trends and important issues facing the market for Realtors and their clients in 2013.
This panel of experts collectively agreed that investors and homeowners should not fear that homes in the “shadows” will affect the future of the housing market. The housing market's "shadow inventory" has long been considered a threat by unleashing an avalanche of discounted foreclosures onto the housing market. Shadow inventory refers to the hidden backlog of foreclosures or potential foreclosures that have yet to hit the market.
"We know that the shadow inventory exists. Will it translate into a volume of properties that will dump on the market at one time? We just don't think so," said Michelle Lenahan of ForeclosureRadar, an online site that tracks foreclosures.
Other members of the panel said distressed homes will continue to trickle back onto the market slowly.
For the Malibu market specifically, the foreclosure rate has been lower than other area cities, so the “shadow inventory” is not expected to have any huge effect on Malibu properties either.
In California, 421,000 homeowners currently are delinquent on their mortgages, Lenahan said. And 168,000 more are in some stage of foreclosure.
“If you’re waiting for that foreclosure wave to hit after the first of the year, I’ve been hearing that for the last four years,” she said. “I just don’t see it happening.”
The number of bank-owned homes coming onto the market is trending down, she said. Seventy-five to 80 percent of foreclosure sales are being postponed.
“As far as the short sale inventory and foreclosure inventory having an effect on the market as far as the number of total sales, I don’t think we’re going to see it,” said Steve Thomas of reportsonhousing.com. “Instead, we’re going to see the corollary. We’re going to start to see more equity sellers.”
There won’t be a spike in bank-owned foreclosures hitting the market without a big increase in default notices and foreclosure notices, and lately they’ve all been trending downward, which was the consensus of the panelists who spoke to the Realtors at the housing market trends seminar.
Joel Singer, CAR association CEO and former chief economist, strongly feels that California's foreclosure process is ranked among the most efficient in the nation, meaning that if lenders wanted to foreclose more homes, they could do it reasonably quickly.
“I do feel good that in the California marketplace is going to give us advance warning,” Singer said. “From the standpoint of there being a huge inventory coming out at a particular point in time, when somebody tells you that, you probably ought to turn and walk away.”
The California Association of Realtors is one of the largest state trade organizations in the United States with more than 155,000 members.