Report: Bakersfield fifth worst residential real estate market in country
| Tuesday, Mar 16 2010 06:39 PM
Last Updated Tuesday, Mar 16 2010 06:39 PM
The Bakersfield area was the fifth worst residential real estate market in the nation in January based on mortgage delinquency rates, foreclosures and other signs of a deeply troubled housing market.
That's according to the latest monthly report from First American CoreLogic, a housing data firm based in Santa Ana.
The Bakersfield-Delano market had a 16.38 percent 90-day delinquency rate, a foreclosure rate of 5.25 percent and an REO rate of 1.19 percent. An REO, or "real estate owned" home is a property owned by a bank or other lender.
The REO rate was down slightly from December, but the delinquency and foreclosure rates were up month-over-month.
The worst real estate market was greater Miami, where one-quarter of mortgages are at least 90 days past due.
The company ranked the rest of Florida the second worst, followed by Las Vegas and Riverside.
Lezlie Chaffin, a broker with Roberson Real Estate in Bakersfield, said she isn't surprised.
"I'm certainly busy, and most of it is with foreclosures," she said.
Robert Savage, a broker with Bakersfield Property Solutions, said the ranking was probably inevitable with so much negative equity in town.
"The bulk of the homes here, people owe more than their homes are worth," he said. "I'm regularly seeing homes selling for as little as a third of the last sale price. Not half. A third."
The good news, Savage said, is banks seem to be loosening up a little on negotiating loan modifications and short sales.
In a loan modification, banks agree to lower monthly payments on an existing mortgage.
A short sale is a deal to let home sellers accept purchase offers for less than the sellers owe on their mortgage.
"They're getting better about it," Savage said. "A short sale is not hopeless. I'd really rather see loan modifications than short sales, though. What needs to happen is something that will let people who are upside down, and will be for the next 20 years, stay in their homes."
The federal government is trying to nudge lenders along.
In November, the Treasury Department released guidelines for its new Home Affordable Foreclosure Alternatives Program, or HAFA. The program provides incentives to lenders to do a short sale or a deed-in-lieu of foreclosure.
It's aimed at homeowners who are unable to retain their homes under the separate Home Affordable Modification Program, or HAMP, which is designed to encourage loan modifications.
Asked if the federal incentives would help, Gail Malouf, president of the Bakersfield Association of Realtors, said, "I sure hope so, because that's what we need, for the banks to work with people so they can afford these payments. They've been difficult to work with up until now."
