Tuesday, February 3, 2009

Pending Home Sales... Foreclosure Boom

The Big Picture reports Foreclosure Sales in the West Drive PHSI

A surge in foreclosure sales and distressed properties was the primary driver behind a notable improvement in the Pending Home Sales Index. In December, the PHSI rose 6.3% from an upwardly revised reading in November. The more important year-over-year reading was a more modest 2.1% increase versus December 2007.

The west bounced back, but as Barry stated:
Given what we know about the foreclosure-driven existing home sales out west, this last data point is no surprise.
Source: realtor.org


  1. I asked this on Calculated Risk as well, since you both have excellent blogs:

    Don the libertarian Democrat writes:
    From 2006:

    http://www.centralvalleybusiness...es/001/? ID=3878

    "Holders of so-called “subprime” mortgages are in danger of losing their homes, especially in the Central Valley, according to a report from the Center for Responsible Lending.

    As much as $164 billion in mortgages is at risk due to foreclosures in the subprime mortgage market, it says.

    With 25 percent of the mortgages issued this year being subprime, Merced County ranks as the nation’s most risky area for foreclosures, according to the report.

    Other Central Valley areas are not much better, it says.

    Bakersfield ranks second in the nation; Fresno is fifth; Stockton is seventh and Visalia-Porterville is 13th.

    In contrast, Yuba City ranks 152; Sacramento 28; Modesto 205; Madera 29; and Hanford-Lemoore( I'M FROM HERE ), 152.

    “We project that one out of five (19 percent) subprime mortgages originated during the past two years will end in foreclosure. This rate is nearly double the projected rate of subprime loans made in 2002, and it exceeds the worst foreclosure experience in the modern mortgage market, which occurred during the ‘Oil Patch’ disaster of the 1980s,” the report says."

    In other words, as the boom went on, the more preposterous loans were sold at higher and higher prices. Probably the worst part of the market for risky buyers to get in. What would be interesting would be a graph plotting this relation. Does one exist?
    Don the libertarian Democrat | Homepage | 02.03.09 - 11:54 am

    I's appreciate any help

    Don the libertarian Democrat

  2. interestingly i detailed merced back in august in a post titled A Subprime Saga: Merced, CA

    the problem lies in that subprime was "the canary in the coalmine" as all loans (high credit borrower or not) were supported by collateral worth 20-50% off in some cases.


  3. i think this is the chart you are looking for:


  4. Jake,

    Thank you. It is, but it's not quite what I expected. I'm going to have to really look it over.

    Thank you so much,