Foreclosures & Short Sales — Coming to a Neighborhood Near You?
A recent New York Times story, “The Biggest Defaulters on Mortgages Are the Rich” prominently featured Los Altos. The subtitle, Walking Away from Million Dollar Mortgages, says it all.
Often, we find that the national press tends to over generalize about real estate trends and doesn’t understand our local market conditions. So, we set out to find out the real number of distressed property transactions in Los Altos, Palo Alto and Los Altos Hills. As it turns out, Times writer David Streitfeld is correct.
Until recently, distressed sales were rare in Los Altos, Palo Alto and surrounding areas. Not any more. Currently in Los Altos, 6 of the 48 homes under contract are bank owned or short sales. In Los Altos Hills 2 of the 10 homes under contract are “distressed”. In Palo Alto only 1 of 57 pending sales is bank owned or a short sale.
Typically during the early part of an economic downturn owners of higher value homes usually have more equity or other assets which allow them to ride out the storm without selling. As the downturn continues, we will be watching and commenting on this trend closely because many of the sales appear to be at attractive prices.