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“Foreclosure Rebound Pattern”: Foreclosure Starts SUDDENLY Jump 57% in California (And Soar In Much Of The Country)
Wolf Richter www.testosteronepit.com www.amazon.com/author/wolfrichter
From Federal-Reserve-fueled bubble to debilitating return to reality – reality being a financial calamity – to Federal-Reserve-hyper-fueled bubble: that’s the US housing market over the last ten years. There are many places around the country, including some cities in Silicon Valley, where home values are now higher than they were at the peak of the last bubble. Of course, no one at the Fed or in government calls it “bubble.” They’re talking about the housing “recovery.”
But the excesses and speculators are back, and private equity funds and highly leveraged REITs are all over it, buying up every single-family home in sight, and now Wall-Street-engineering firms have come up with a new and improved contraption, a synthetic structured security that on its polished surface looks like that triple-A rated mortgage-backed toxic waste that helped blow up the banks. But this time, it’s different. The securities are backed by sliced and diced rental payments from single-family homes that are, hopefully, rented out [read.... Another Exquisitely Reengineered Frankenstein Housing Monster].
So wither this “recovery?”
Foreclosure filings – default notices, scheduled auctions, and bank repossessions – suddenly jumped 8% to 124,419 in January across the nation, according to RealtyTrac. Which left some people scratching their heads. A mild uptick was expected after the holidays, but 8%? And what about the polar vortices – weren’t they supposed to have slowed things down to a crawl?
OK, foreclosure filings were still down 18% from a year earlier, the 40th month in a row that they declined on an annual basis. But it was the smallest annual decline since September 2012. And the 8% jump from December was the largest such increase since May 2012. Crummy as they were, these national averages covered up some, let's say, interesting phenomena in a number of states.
“The sharp annual increases in some states shows that many states are not completely out of the woods when it comes to cleaning up the wreckage of the housing bust,” said RealtyTrac VP Daren Blomquist. “The foreclosure rebound pattern is not only showing up in judicial states like New Jersey, where foreclosure activity reached a 40-month high in January, but also some non-judicial states like California....
Ah, my beloved state of California. Housing has been booming, and prices in coastal areas have been soaring – along with rents, to the point that mini-rebellions are breaking out. In this hyped and glorified housing market where the Big Money rules and where first-time buyers have been shoved aside unceremoniously, where foreclosure starts in 2013 had plunged 60% from 2012, and had declined year-over-year for 17 months in a row, or with the exception of five months, had declined four years in a row, well, in this wondrously recovered housing market, foreclosures starts in January suddenly jumped 57%.
It’s not just in California. Foreclosure starts rose 10% from December to hit 57,259 properties across the country. That they on average were still down 12% from a year earlier obscured major annual increases in certain individual states, and not just in one or two, like us crazies out here in California, but in 22 states! And California with its 57% jump in foreclosure starts now suddenly seems tame: In New Jersey, they soared 79%, in Connecticut 82%, and in Maryland 126%!
The cynic in me says the sudden and dizzying jump in foreclosure starts, not only in California but in much of the country, must be some kind of data problem. Maybe RealtyTrac’s computers got hacked by some evildoer who was short the housing market or something. But when I contacted RealtyTrac to request permission to republish the chart, there was no word of a retraction, though this would have been a good opportunity, and so the numbers hold.
Maybe foreclosure starts in February and March will somehow, miraculously, plunge and return to trend. Maybe January was just a fluke. But that may be wishful thinking. Instead, it could be the indication of a turning point of sorts, like some of the other indications we’ve already observed, and maybe the strange sound that we’re hearing out there is the hot air hissing out of this whole construct, so carefully inflated by the Fed, and so assiduously taken advantage of by private equity funds and other Wall Street outfits with access to the Fed’s nearly free money.
Meanwhile, my beloved state of California, whose $2 trillion economy is the eight largest in the world ahead of Italy and Russia, has a new problem: it’s awash in cash. It’s projecting multi-billion dollar surpluses for years to come. The feeding frenzy in Sacramento is a sight to behold. Read.... California MUST Have Magnificent, Endless Bubbles in Housing, Stocks, And IPOs – Or Go Broke Again
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The Sam Kinison Scream award, sir!
http://www.youtube.com/watch?v=Czmb6tEwFE8
Weather.
Weather.
Close.
OWNING the weather, actually.
Investment tip: Buy anything Monsanto that discusses aluminium-resistant corn. Investments in companies that are buying up water rights in the Western United States is also a sure thing. SHORT insurance companies that still write policies that cover flooding, freezing, and drought.
HOUSES are not to be owned by the masses, and if drought and flooding and fires and freezes are needed, then SO BE IT!
Here's a report by the USAF back in '96. READ IT.
http://csat.au.af.mil/2025/volume3/vol3ch15.pdf
Excellent Article you referenced Scott. If their censors cleared that for public consumption, imagine what they have censored. It does make one wonder why the weather is so extreme nowdays. Weather modification is definitely a priority of our govt and military. The question is are they playing with something bigger than they can handle? I guess their answer to that would be that they don't give a shit about what happens to anyone in the world, be it flood out or burn up the crops, or blow away in a windstorm. As long as the sheep keep putting the bread and riches in front of the high and mighty govt. It's definitely time for change.
Wether or not, the SHTF today or tomorrow, when hell freezes over (Washington D.C.) we'll see blood flowing down the streets from patriots and kings.
Wether or not, the SHTF today or tomorrow, when hell freezes over (Washington D.C.) we'll see blood flowing down the streets from patriots and kings.
Pardon me, but the game is coming on now. Wife is watching podcast reruns again (NO, I'm NOT going back to the store for chips, you fat bitch!). The kids are up in their rooms (little Johnny has a thing about being interrupted when he's on the web. I don't know why. Have you seen the hair conditioner? It isn't in the bathroom...).
The only BLOOD you will see flowing now is going to be from the WRECKAGE of the houses, where the people were (SOON TO BE) slaughtered as they gorged themselves on the false reality that they built for themselves, powered by the twin demons of GREED and AVARICE, in my humble opinion.
Still, your dream is a nice one.
Whether you like it or not, the game was cancelled due to weather.
I know NJ cannot keep foreclosure hidden in the pipeline any longer. They are coming and in bigger numbers this year. And that doesnt begin to count the people hanging on by their finger nails. Keep raising those property taxes motherfuckers and see what happens. I can't believe people haven't completely snapped ......Yet !!!
I agree, the strangest part is why havent people snapped and become vocal ? My retired neighbors couldnt afford property taxes anymore so they moved from NJ to TX. My taxes have gone from 8 to11 k in six years, and it's not just NJ that has a problem. Our twp cannot pay teachers salaries (thanks to never ending pay increases to unionized teachers) and will have to close a school this year. Add loss of extended benefits, and foreclosures will continue growing. I don't know who is buying homes since everyone i know is just haging on, and our kids are living a hard life. I am in the software business, and I can tell you, prices are being driven down because customers do not want to spend, because their customers and cutting back. I don't see any positive signs in business or the economy.
The only positive sign I do see in the economy is the funny money pinnacle falling over, sad as it all is.
it is all realative. take 98 percent of value of home today and compare to price in 1912, hmmm!
The're being bought by the large investors who are trying to hide their central bank printed money in real assets. This is why so many of the recent purchases are cash-only. This is the transfer of wealth from the middle class to the upper class, in a way that most people will never understand.
This is one of the oldest games fractional reserve bankers play. Centuries.
Maybe this is it. The end - Finally pulling the plug on this planned economic demolition and the banks are making their last moves to secure real assets. Or just the weather.
leverage always compounds faster than growth.
My friend was transferred and bought a house in Cali for $485k a while back...now he was transferred again back East and just sold that same old cramped house for a whopping $995k to some sucker...oops, I mean buyer.
It's some crazy sh*t out there.
..... more like he sold it to a sucker.
If a cash sale, good chance it was a Chinese sucker.
I have 2 friends in So. Cal who sold 7 figure house last year. Both for cash, both to Chinese buyers, both soon after putting them on the market, both for more than they thought they would get. Crazy, indeed.
Fiat money, print that shit up.
Actually the increase in foreclosures is probably due to HELOCs (Home Equity Line of Credit) loans which are just now starting to mature. First offered in about 2007, these have a low interest only rate for the first 5 years, and then convert to regular loans which requires higher payments. Holders can't meet the payments and default.
You ain't seen nothin' yet...
back in 07,Jan. sold my mcmansion for 720,000(in MN) to guess who the couple were...:)
same home now might fetch 600 - lol, hehe, dumb mutha fuks...