Recent news reports show the foreclosure rate on luxury homes is double the U.S. average, late payments now affect 12% of mortgages over $1M, and many owners are turning to short sales as a way to avoid the negative consequences of a foreclosure.
Last week we saw lots of pressure from the US government to force non-Fannie and non-Freddie lenders to allow short sales…so this seems to follow right along with that information. There is ABSOLUTELY no reason to take a foreclosure if a short sale makes better financial sense.
What does this mean for homeowners in Valley Center? 
There are about 2000 homes in Valley Center…last year 14 homes with defaulted loan balances over $750,000 were taken through foreclosure actions…just a little over 10% of the 107 total homes that were taken back through foreclosure in all of 2009.
Let’s put that in perspective:
- In 2003 246 homes were sold in Valley Center, CA, with only 1 of those homes valued over $1Million
- In 2004 a total of 306 homes were sold, with 11 of those homes valued over $1Million
- In 2005 a total of 224 homes were sold, with 13 valued over $1Million
- In 2006 187 homes sold with 11 over $1Million
During the peak years 2004 to 2006 about 5% of the sales were to Million-plus dollar homes, but we are seeing 10% of those same homes taken in foreclosure actions.
This information closely matches the national data…and suggests a trend that has already started to affect homeowners in this area. Just last night I did the year-end sales numbers for all Valley Center, CA. home sales during 2009.
In 2009 there were only three homes sold for over $1Million. The next highest sale price was $795,000…that’s a HUGE difference. If you omit the over one million dollar sales the average price was just $424,000.
Valley Center homeowners that bought homes after 2003 are now trapped on “Equity Island”, generally unable to refinance or sell without taking a HUGE loss…this is going to drive owners into the short sale and foreclosure markets until 2012.
There’s more to come on this story…please stay tuned…and if you’re facing a problem mortgage, notice of default, Auction notice….or upcoming ARM adjustments…please call me…
I’m here to serve you…phone calls are free…knowledge is priceless
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