Half Moon Bay Foreclosure Statistics & Analysis

My last post on a proposed new law that could alter the timing of Notices of Default was the lead-in to this article.  I’m drilling down to the Half Moon Bay market now so you can see what this could mean for our local neighborhood resales.

First – what the symbols mean:

  • SS = short sale listings currently
  • NOD = Notices of Default on 94019 properties (Half Moon Bay, some of El Granada) – first step to foreclosure.  The lender notifies the borrower that they have not received payment and the foreclosure process has begun.
  • NOT = Notice of Trustee Sale scheduled.
  • REO = Real Estate Owned; The property has been foreclosed upon.  The homeowner who either lived there or held it as an investment property no longer owns the property.  The primary lien holder, usually the lender in first position is the new owner and responsible for tenant eviction and future payments for taxes, insurance, maintenance, etc.
  • REO-NL = bank-owned properties in Half Moon Bay and El Granada that are not listed at this time.
  • REO Listings – banked-owned properties in Half Moon Bay and El Granada that are listed at this time.

Summary of the Graphic below:

The market in general would never know if a property/borrower is in distress if the seller has the funds to cover any shortfall or is able to sell the house and cover his costs of sale.  (Note:  a buyer would know because they would have done their homework.)  If a property requires multiple price reductions the listing may become “short” as the property sits on the market, reducing its price to get an offer.  The Listing Agent will update the MLS to show that the property is now a short sale listing.  At this juncture, the homeowner may, or may not, have missed any payments.  The homeowner will not receive a NOD if they are current on their payments, even if they are underwater on the loan.  If the house does not sell in a short sale, or the homeowner does not want to do a short sale, AND loan payments are stopped, at some point the NOD will be filed and proceed to the Notice of Trustee Sale.  The property can be listed at any time, but the further along the process toward foreclosure the harder to complete a short sale.  Once the bank takes over the property, they will try to get the property listed as quickly as possible (we hope…we think…who knows?!) and at some point in the future it will go on the open market for sale.  Right now, with 19 foreclosures in Half Moon Bay and El Granada, 8 of them are on the market.


What this means for us:

Over half of the bank owned properties in HMB and El Granada are not yet listed.  Fortunately for us these numbers are relatively small, however, distressed properties do decrease the values in a neighborhood.  This is a huge economic stabilization and recovery situation on our collective hands right now.  Thirty-eight Notices of Trustee Sale have been filed which means these homes are most likely also going to foreclosure.  Some of those may be short sale listings right now.  A short sale helps preserve the neighborhood values because the sale takes place early in the process.  The longer a property is on the market, the more it gets a tainted reputation.  Buyers think “what is wrong with this house? and pass it by.  The REO properties on the market now first showed up on the market as far back as January 2011 (e.g. El Granada home was first listed as a short sale Jan 2011 for $589K, then $499K with no sale; now listed as an REO for $454,500, recently reduced to $443,200).  Some of these homes are part of our inventory for up to six months.

Our goals on this front are to get our short sale listings sold, guide our seller clients to make smart decisions about whether to sell now or not, and educate our buyers on the truth behind days-on-market statistics and other confusing numbers that they see.