There has been a lot of discussions about foreclosure properties and articles written about this topic, such as foreclosures hitting record high and how people make money out of distressed properties. I have heard and seen people try to find out how to purchase foreclosure properties, and many of them find the process difficult. So where are these properties? Where can we find them in California? Are they all in the lowest-priced neighborhood, as people seem to think.
Movoto has done some original research on this topic, using data from the MLS system to estimate the magnitude of the foreclosure avaialbility in the different areas. Movoto’s report are drawn from eight different local California multiple listing services across 13 counties (Alameda County, Contra Costa County, Monterey County, San Mateo County, Santa Cruz County, San Francisco County, San Benito County in Northern California, and Los Angeles County, Orange County, Riverside County, San Bernardino County, and San Diego in Sourthern California.
Movoto defines distressed properties as any property that has descriptions in the MLS that defines the property as “Bank Owned”, “In Foreclosure”, “Short Sale” (where the owner is trying to sell at a price below the mortgage balance to avoid foreclosure) or “REO” (a term used to indicate the property is bank owned).
This is definitely not a view of the complete picture, as foreclosued properties may be sold or disposed of without ever entering the MLS sytem. However, this is a good way to summarize the information. Many banks, mortgage companies and distressed owners do sell these properties through specialized real estate agents.
Across all of these 13 California counties, the distressed property rate is 10%. Some of the counties have close to 17% of the properties in the MLS are in this category, and they are Contra Costa and San Benito counties.
Another even more interesting way to look at the data is to look at this distressed property rate by the Zip Code. Some areas have high ratios of distressed properties, with Antioch and Orange reaching 25%. The table below shows the Zip Codes with the highest distressed properties.
So there are no shortage of foreclosure-related properties for sale, as can be searched through MLS systems. The challenge is still to find a good deal out of them.