Housing Bubble
Foreclosures.com sees no relief in Bay Area foreclosure activity
July 01, 2003
SACRAMENTO, Calif.--(BUSINESS WIRE) --Foreclosures.com a Fair Oaks Calif.-based foreclosure property data publisher and distressed property investment advisory firm says that negative job growth and protracted unemployment in selected northern California markets will cause more people to face loss of their homes in the second half of 2003.
"The crux of the problem," said Alexis McGee, president of Foreclosures.com is that the job market's disconnection from the economy is getting worse, not better." She cited the fact that while productivity and real personal income were rising, capital investment by businesses was on the increase, and consumer confidence was on the upswing, unemployment rates in major Bay Area communities were remaining stubbornly high. "Not one northern California metro area has posted positive job growth for the last twelve months," said Ms. McGee.
She added that "the percentage of unemployed workers out of work in California for 27 weeks or longer has been increasing steadily for 16 months and now stands at 22.4%. There's no reason why the Bay Area wouldn't reflect those numbers."
Ms. McGee also pointed to cooling housing markets in San Francisco Bay Area marks as a factor in the foreclosure equation. She said their San Francisco data shows a price decline as of mid-May of 3.8% and Santa Clara County a small increase of 1.7%. "Foreclosure activity comes from the resale home market, not from new homes," said Ms. McGee. "In Santa Clara county, the resale median price is down 2.2% for the first four months of 2003."
Foreclosures.com has been publishing foreclosure property data and assisting
investors on their website www.foreclosures.com
for eleven years.
Ms. McGee said that her firm's research had long pointed to a correlation
between long-term unemployment and slowing housing markets that was a catalyst
for a surge in foreclosure activity. "When price appreciation plateaus,"
she said, "people that have been using their homes as ATM machines can't
do that any more. As job loss persists and markets flatten out, we'll see
more defaults later this year. People will simply be unable to afford the
homes they own."
She went on to say that the firm's mission was to help investors locate troubled homeowners who were out of both options and time and enable them to sell their way out of foreclosure instead of losing everything at a trustee's sale.
Source: foreclosures.com
