Here is what the market did in 2007.  It doesn’t look too bad, at a glance.  But, it was the first tremor in the coming disaster.

Now the bell curve, bumpy though it is, has flattened out.  It is not higher at the right end like in the previous two years.  The market has stopped growing.

Also, the curve is skewed to the left.  That is, the highest activity was in the early part of the year.  Sales levels tapered off over the balance of the year.  But, notice the spread between the sales and foreclosures.  It is narrowing with the foreclosure trend looking like it is headed up as the sales trend is headed down.  Yikes!

The average sales per month was 522 with the average number of foreclosures per month at 130.  Now we have a 25% foreclosure rate.  Ouch!  How could we endure such a spectacular rate????  Couldn’t get much worse, huh?

The next post will show some nasty statistics.

Ralph K. Olsen, MAI, SRA, IFA

Pacific West Appraisal Services, Inc.

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Continuing with looking at recent past years activity, I have added a view of 2006.  These statistics are based on the same criteria as the previous post.

You can still see the slight upward tilt of the (lumpy) curve over the year.  The average number of sales was 643 and the average number of foreclosures was 71.  That is an 11% foreclosure rate.

What will 2007 look like?

Ralph K. Olsen, MAI, SRA, IFA

Pacific West Appraisal Services, Inc.

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Here is an interesting look into the past.

I took all the residential sales in Clark County noted in the RMLS.  That includes sales of site built houses, manufactured houses, attached houses and condominiums.  It includes sales conducted by Realtors and sales that were categorized by the RMLS as ‘Sold Not Listed.’ The graph below shows the relationship between sales and foreclosures.

The red line represents sales.  The blue line represents notices of trustee sales (foreclosures).  The average number of sales per month was 780.  The average number of foreclosure filings was 74.  That was 9.5% foreclosure rate.  That is fairly high.  A rate of 2-4% would be good.

But, it wasn’t a bad year.  There was a lot of activity, and the residential real estate market was buzzing.

By the way, you might notice the bell curve of activity over the year.  Business is slower in January, faster in July and slower in December.  That is the typical business cycle in residential real estate.  Also, you might notice, the market was heading up.  That is why the curve is tilted a bit to the left.  The right end is higher than the left end.  The market was still ascending.

Ralph K. Olsen, MAI, SRA, IFA

Pacific West Appraisal Services, Inc

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Here is the 2009 year in a chart.  This represents the notice of trustee sale activity in Clark County Washington.  Notice of trustee sales are foreclosures on mortgages.

As you can see, the year started out very high.  Around 65 notices of trustee sales per month is a more typical rate.  So, the year started out at about five and one half times normal.  It rose in June to around seven and a half times normal.  Then it dropped down to an average of about 200 per month for the last five months of the year.  That was about half of what it started out at, being that the first five months of the year averaged about 390 per month.

Progress is being made.  The rate is still high, but far better than it was at the beginning and middle of the year.

I think housing prices will continue to drop for a while.  The large amount of REO will continue to hold them down.  Again, all these foreclosed on properties have to be put back into service.  Buyers must be found, new mortgages created and debt service maintained before prices can begin to recover.

Ralph K. Olsen, MAI, SRA, IFA

Pacific West Appraisal Services, Inc

pwas.net

Popularity: 12% [?]

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