Why Haven't There Been More Foreclosures?

Full Video Transcript Below

Why Haven't There Been Many Foreclosures?

Alice Lema: [00:00:00] Good morning real estate fans. Alice Lema here, Broker John L Scott, beautiful Southern Oregon with another edition of the Weekly podcast. Today we're gonna be talking about foreclosures and short sales, and it's gonna be a good one, and you're gonna wanna stick to the end. So before we start, just give you a quick second to subscribe to the channel. Give us a like, a thumbs up, share with your friends. You can text or call me this weekend if you wanna talk privately about your real estate stuff. My number is 541-301-7980. It's floating up there. Okay. So enough of that. Let's get onto our podcast today.

We're gonna be doing local stats, but we're specifically gonna be speaking about why so few foreclosures and short sales.

So let's start with a chart that was published by Adam Team. And you can see since 2005 to 2022, the foreclosures quantity are very, [00:01:00] very low. So I just wanna point this out right now. Here we are kind of at the end of 2022 and we're not really, we're seeing an uptick, but it's not really very much. And I just, anytime you're worried about foreclosures, we will update this every few months.

So that everybody can see what the data is. But right now we're not in danger zone. In fact, Robin Rothstein of SoFi Learn published this last month that I thought was very interesting. And it says, While foreclosure activity has been on the rise since the expiration of the pandemic relief programs, the good news is that the experts believe repossessions will be even lower than before the pandemic due to the majority of borrowers in foreclosure having positive equity in their homes.

The positive equity comment, it says, This means that borrowers can sell their properties at a profit and avoid foreclosure auctions and lender repossessions. So this is what we've been saying all along, is that [00:02:00] yes, there is a slight uptick in short sales and foreclosures, and we're gonna go to our local stats here in a second. As you can see, most people have so much equity. They're not really in danger of losing money on their house, and if they did, it was extenuating circumstances or some something odd. Okay. We're not, we're not anywhere near looking at the amount of foreclosure starts that we were back even in 2005 and 2005 was the heyday. Right?

Okay. So let's look now at our local Jackson County and Josephine County Stats. So again, Southern Oregon MLS has all these reports on their website. There's too many to talk about, but I just wanna touch briefly on some of the trends. We're seeing that in Jackson County, the five year amount of appreciation, Jackson County is [00:03:00] 49% up in the last five years. What's interesting? The one year mark, this one last year, 6.6%.

What about Josephine County? Josephine County went up in the last five years, 54%. But in the last year, only 2.7. So we're definitely seeing a slow down. But again, like we keep saying these two to six, two to 10% year over year, increase in appreciation, that's sustainable, that's scalable.

That's normal. That's not some kind of a hyper-inflated market or depreciating market. That's a nice sustainable amount. But it's interesting that the five year marks are almost 50% or more, and the one year marks are two to two to six, two to seven, normal sustainable. Now, diving down into a couple of the areas, [00:04:00] Jackson County does have a negative one year change looking at Jacksonville is down 7%. Phoenix is down 3%. West Medford, Southwest Medford is down 2% and White City is down 5%. But that those one year marks for those areas averaging the entire county, entire Jackson County, 6.6%. But it's just kind of fun to start looking to watch how things are changing.

So let's go to Josephine County real quick. The one year changes are all positive. So the 2.7%. Year over year increase that we had at Josephine County is all positive. We're starting to see a little mix in Jackson County. Now let's talk about distress properties. The report is called the REO Short Sale [00:05:00] Comparison Report. It's also known as the existing home distressed sales report.

So going to Jackson County we have five REO is a foreclosure. REO is the bank term real estate owned REO foreclosure. We have two short sales in Jackson County. Now, if you remember, short sale is before foreclosure. So short sale is when you sell the house at a loss. The lender takes the loss, the lender is getting shorted. The term short sale is a bank term. It refers to the lender is taking less money than was owed on the mortgage. So if you had a hundred thousand dollars mortgage and the bank did a short sell for 75,000, that is a $25,000 short sale and then you avoid foreclosure.

Why are we doing all this? It's not because I think there's any kind of crash coming, at least right now. I [00:06:00] don't see that happening, but. I just want people to realize we're tracking the data, so if something is gonna happen, we're gonna know. Okay. But it's also kind of interesting to go back and see that we're just starting to have a smattering of REOs and, and short sales.

We go into Josephine County, Josephine CountyREOs. We have two and we have zero short sale. So isn't that interesting? Josephine County is actually faring a little better than Jackson County. But again, going back to this idea that we're gonna have a lot of inventory, that's the other concept I hear out there a lot this week is that there's gonna be a lot of inventory. Coming from the foreclosure and the short sale world, I just don't see that happening. So here's my prediction. Short sales and REOs are not gonna help the housing inventory. We still have to go and list people's homes. People have to move, they have to sell, they have to get that vacation property or [00:07:00] sell their big ranch and downsize become a first time home buyer.

You know, whatever, whatever it is that makes your world better because you have real estate buying and selling. That's, that's the old fashioned way. We just have to have people buy and sell their houses. And that's where I think our inventory's gonna be coming from, for the most part, for the next 18 months or so.

Once again, we're gonna track it every week. So if something is gonna happen on the short sale or the foreclosure data, then you're gonna know it, You're gonna hear it here first. Okay? All right. If you have any questions, please reach out to me. I would love to be your agent. You can call, you can text 541-301-7980.

I'm around all weekend. Great listing agent. Great buyers agent. Great with investors, first time home buyers, riverfront. Whatever you need, we can do it. Have a great weekend. Hug those you love. We'll talk to you next week bye.