Foreclosure Deception

by Kirk Salisbury on November 30, 2011

A short sale is a home which an owner tries to sale to get out of their hefty mortgage payments. They have incentive to do this because their home is overvalued and they know they are getting ripped off on their mortgage, or they are about to foreclose and they want to avoid that. Foreclosures are when you can’t make your payments anymore

One area that has been under the spotlight as far as foreclosures go is Orange County. That’s probably just because Orange County is always under the spotlight. But if you look at the facts, Orange County is actually doing better than a lot of areas in the country.

Consider this – Orange County is at 10% of their listings being foreclosures. If we travel a large distance north to another metro area, Washington has 11% of their listings as foreclosures. In case that’s hard to grasp, Orange County has fewer foreclosures than Washington.

But this may not be a fair comparison. We also need to make sure to check out the short sale metrics. Washington has about 16% of listings as short sales…. whereas Orange County has 26%.

Here’s where the stark difference begins to show up – Washington only has 16% of their listings as short sales. In contrast, Washington has about one in six listings a short sales, while Orange County has one in four listings as a short sale.

Here’s what a high short sale amount means. People bought homes when they cost a lot of money. Suddenly home values weren’t so high anymore, in fact they slid backwards. So those who had just bought a home, realized they spent way to much for it. So if they get out of their current mortgage, they can buy a home at market price. So that’s what they try to do, sell their home (so they’re not wasting money towards a mortgage), and try to get a different one at a reasonable price. Blame it all on the housing bubble.

This makes for a slow house sale situation. Everybody with their homes for sale are waiting for everybody else to come and purchase their home, and they can’t purchase unless somebody comes and purchases theirs…

What does this all mean for you, the home buyer? It means that next time you stop in Orange County, or you are thinking about relocating, you need to check out the home listings there.

While they’re on your mind, check them out Orange County Foreclosures For Sale and Orange County Short Sales

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