During the session, Norris-who is considered to be a top authority on the Southern California real estate market-shared some intriguing insights. He believes the region is in an artificial market and is concerned about the shadow inventory that could flood the market, forcing prices even lower. However, this isn’t the shadow inventory of bank-owned homes you may have heard about; he refers to all the houses that may yet go into foreclosure. The problem will vary by region, but referring to Riverside County in Southern California, Norris presented some pretty alarming statistics:
• 23% of prime borrowers are not making payments
• 47% of non-prime borrowers are not making payments
• 90% of properties are upside down on value-to-loan (60% owe more than
150% of value)
Many borrowers haven’t made a payment in more than two years and have yet to receive a Notice of Default.
Notes from Appraisal Institute’s 16th Annual Summer Conference
Take a look at the article above. Some of the statistics are frightening. I hope it convinces you that housing has NOT bottomed and in fact has a long way to go.
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