Going Once, Going Twice, Sold to Nobody!

Wow.
I have been pouring over housing related stories and data since very early in 2004. I can tell you that the popping of this bubble is much worse than the last one which was in the period of 1989-1994. I have read articles spanning the last 20 years, and I am still being surprised by this one.

Here is today's shock: The Modesto Bee, in a December 15, 2007 article entitled Bargain Houses Largely Unsold, reports that of 1336 properties put up for foreclosure auction in California's Modesto, Merced, and Stockton counties in Nov 2007, only 17 of them sold. To repeat, only 17 of 1336 properties sold at foreclosure auctions that month. This happened even though very large discounts were being given on the homes from what the lenders were owed.

Here are some examples:
A home in Merced on West 22nd Street with an outstanding mortgage of $279,785 was offered at $153,000. This discount of more than $124,000 was not enough to draw even a single bid.

"Also last month, a Manteca home on South Sonora Avenue that had an outstanding loan balance of $487,956 was offered for a starting bid of $331,500. No one bid." A $156,000 discount was not enough.

"An Oakdale home on Ranger Street sold new in 2006 for $610,000. It went into default with an outstanding loan balance of $530,892. Last month at the foreclosure auction, the starting price was $395,000. No one bid." This house was offered for over $215,000 less than what is sold for a year earlier, and nobody wanted it. If you live on that street, you should be considering walking away.

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