Seattle Foreclosures: How do we stack up?

A recent report from Property Shark shows that Seattle has the lowest number of foreclosures between New York, Miami, and Los Angeles. Seattle comes in second for lowest rate of foreclosures.

According to the report, the Seattle Area (King County) reported 293 foreclosures during the third quarter. This was well below the 1533 foreclosures which took place in Los Angeles. When the number of foreclosures is compared to the number of households, New York City far and and away boasted the lowest rate of foreclosures, with only .01% of homes going to Trustee Sale.
By studying King County in depth, we find that Auburn and Federal Way, two of the least expensive places to live in King County, experienced the highest number of foreclosures.





Many feel that foreclosure rates will rise in 2007, as tens of thousands of Adjustable Rate Mortgage's fixed terms expire.

Now the stage is set. The nation’s foreclosure total already broke the 1 million glass ceiling in October, and just how high foreclosure levels will go in 2007 is open to
debate depending on how steep one believes the downturn will be.

“When I got into this business, back in 2000, defaults were about 1percent of all first mortgages. Today we’re at 1.5 percent. While it’s not a large number, it’s still a significant move. Do I think the economy is going to crumble? No! Will (the foreclosure rate) go to 2 percent? We’ll have to wait and see,” Saccacio told Doti, an economist and president of Chapman University.

For Esmael Adibi, executive director of the A. Gary Anderson Center for Economic Research at Chapman University, the key concern is all those people who signed up for those “exotic” adjustable-rate mortgages in 2005 and thereafter. In California, for example, 27 percent of all mortgages were so-called “option ARMs,” where the buyer pays 1 percent interest and the underpaid amount gets added to the loan’s principal. (Foreclosure Pulse, 2006, Para. 2-4)

Despite these nationwide scares, Seattle has remained fairly resiliant to busts in the housing market. Will this be able to continue into next year or will next year bring a housing market disaster? I suppose I'll leave it to my friends over at Seattle Bubble to debate that.

Auction your Home?

There are times when people try incredibly hard to sell their home but simply can't. This often puts people in precarious situations. Some are forced to carry 2 mortgages. Others move out of state and have nobody to watch their vacant home. Some simply get in over their head and need to get out of their mortgage before foreclosure proceedings start. In order to produce a quick sale of their home some people in these situations have turned to auctions.

While this is still a fairly uncommon method of selling your home, auctioning is gaining popularity. After sitting down with Randy Wells, Vice President of the National Auctioneers Association and Tranzon Auctioneer, I found out the full scoop on when it is beneficial to auction a home and the process of auctioning a home.

First, auctioning a home has the allure of "I'm going to get a deal," and as we know deals attract crowds. By creating the image of desperation (ie: I have to get out of this house now), crowds gather. It is not that you actually have to be desperate, auctions by default simply create the image of desperation. This is probably because foreclosed homes are usually auctioned.

Second, auctioning a home is not always beneficial. For a person who has ample time to sell and is not financially burdened, using a REALTOR is probably a better option than using an auctioneer.

Third, auctions work well when there is a buzz. Randy usually requests 1% of the sales price of the home for advertising prior to auction. This pays for huge newspaper ads, radio time, maybe even TV time. The more buzz, the more people at the auction.

Fourth, auctions are fairly effective. According to Tranzon, 85% of homes they auction produce an acceptable transaction that will close in a reasonable time frame. I am not sure the statistics on using a REALTOR, but I don't believe it is that high.

Fifth, you can set an undisclosed reserve. In other words you have a minimum amount that you will take for the house. If the bids don't meet the reserve you don't have to sell.

Sixth, most auctioned homes are sold as is. Tranzon notes that many sellers can avoid the timely and sometimes expensive inspection process by having open walk throughs prior to auction. This allows potential buyers to view the home and even have a professional inspection prior to purchase. This usually speeds up the closing process after the auction.

Seventh, most auctions are held live, right at the home. Randy says he likes to create a competitive atmosphere, thus jacking up the price of the home. He said his favorite auction he ever performed came down to a bidding war between 2 Montana cowboys who hated each other. Their testosterone made the property sell for thousands over the expected price.

In the end auctions are a very viable option for selling your home. However, even Randy believes that working with a REALTOR is vital, and usually the best way to sell a home.