Orange County…the land that brought you Disneyland and the popular TV shows; The Housewives of Orange County, The OC, Laguna Beach and episodes of Beach Patrol and is now a scorched earth land of foreclosures.
I am very familiar with this County, and the following images show properties that are in pre-foreclosure, auction, or are bank or government owned.
The first image below is a small section of Irvine, showing 290 properties in some stage of foreclosure. The small cluster to the right is a brand new development called Woodbury.
Woodbury has roughly 80 properties in foreclosure on the map below. This community is only four years old. The area within the red box is a shopping center and apartments, hence no foreclosure activity.
The image below shows 3,296 homes in the Irvine-Tustin area in some state of foreclosure. To drive across this map, east to west, would take about 15 minutes.
This does not include the 54,651 homes for sale in Orange County. Homes that are invariably listed too high and won’t sell.
There is a perfect storm forming that will create another punishing blow to home prices in 2010:
- A second wave of new foreclosures coming this summer from mortgage interest rates recasting now
- The release of “shadow inventory” into the market (foreclosed homes the banks own that they don’t list for sale)
- Increased “strategic defaults” (as home values decrease, more homeowners will decide to walk away from the property)
- Stagnant sales of current foreclosures
- The end of the federal stimulus credit of $8,000 this spring
- Recent actions by the government to raise the debt ceiling and to remove caps on bailouts for Fannie Mae and Freddie Mac are bad signs
- An increase in interest rates as the government scales back on buying mortgage-backed treasuries which were keeping interest rates artificially low
- Continued unemployment (hard to pay a mortgage with no job)
- Continued stagnant or tepid economic recovery
- Continued rise in personal bankruptcies
- Continuation of the current credit freeze
- Higher taxes
- Tighter controls on FHA loans as the FHA consumes its remaining loan loss reserves and seeks a handout from the government (i.e., us) who will want more controls in return
Map Source: RealtyTrac
Categories: Housing Market