May 30, 2008

Silver Lake Foreclosures Continue to Languish

A while ago, I wrote about 3 foreclosures in the Silver Lake area that are all owned by Countrywide. I checked back up on them today, and found that all 3 are still languishing on the market—two have only been listed for a couple of months, but the last one has been on the market for 121 days. Part of the problem is the bank-owned process that makes it hard for them to cut prices. Part of it is that these institutions have been unwilling to take bigger loses. All of these are listed at prices below their last sale, but none have dropped the original listing price despite the obvious lack of interest.According to the Wall Street Journal, that’s a mistake. The paper reported this week that in areas where lenders are making significant price slashes to move inventory, home sales have actually bounced back up.

Lenders’ inventory of foreclosed homes has steadily increased in the past couple of years and is believed to total around half a million homes. Many lenders initially were slow to slash prices, partly because they hoped to avoid huge losses. But more lenders have been capitulating as it becomes clear that delays often merely result in lower proceeds and higher costs for taxes, insurance and upkeep.

In California’s Sacramento County, sales of single-family homes totaled 1,669 in April, up 41% from a year earlier, according to DataQuick Information Systems, a research firm. The median sales price was $226,250, down 34%.Alan Wagner, president of the Sacramento Association of Realtors, says the rise reflects more aggressive pricing by lenders. “They’ve got to liquidate inventory. They’re taking that house and dropping $100,000 off the price, and all of a sudden they’ve got multiple offers,” he says. Some homes that sold for more than $400,000 a couple years ago now go for $225,000 to $260,000, Mr. Wagner says.

Maybe local lenders should take note. In the meantime, here’s a recap of those Silver Lake properties that will likely be for sale for some time to come:

• The first two are both on Larga in Silver Lake. This one is a 3/2 with 1,340 square feet, built in 1923. It’s been on the market for 100 days, and last sold in 2005 for $587,000. Currently, it’s listed at $554,900.

• Also on Larga is this 3/3 with 1,186 square feet. It’s listed at $614,900, and last sold in 1993 for $253,000.

• This last one is in Los Feliz, on Fountain Ave. It’s a cozy one - a 1/1 with 960 square feet on a 3.485-square-foot lot. Currently listed at $431,900 with only 17 days on the market. Last sold for $539,000.