An analysis of real estate data from Oakland yielded the following findings:
- there were 10,508 foreclosures from October 2007 through October 2011;
- 42 percent of these properties were acquired by investors;
- of the 30 largest investors, two-thirds were from out of town.
The analysis raises such questions as:
- are the odds stacked against owner/buyers and families;
- what does it mean if a large swath of Oakland is absentee-owned;
- and what would have happened had Congress given bankruptcy judges "cramdown" powers over mortgages (to reduce the principal owed to current market value)?
But there are other ways of thinking about the Oakland findings. These include:
- how like or unlike is the situation in Oakland to conditions in San Leandro;
- have investors stabilized prices and established a bottom to the market;
- and have foreclosures truly slackened off or is there a new wave to come?
The Oakland study is new. A comparable analysis for San Leandro is not currently available.
Meanwhile, here is an educated surmise from one San Leandro real estate pro. I will add other as available. Please add your thoughts in the comments below.
Earle Shenk: My viewpoint - The majority of the Oakland properties purchased by investors were in East Oakland where values were hit the hardest by the recession, easily in excess of 50% loss of equity.
San Leandro has no comparable area, although the large, older subdivisions were hit harder than others: Davis Tract, Marina Faire, Washington Manor, etc. I'd say close to 40-45% loss of equity. There have been numerous all-cash offers placed on homes priced $300,000 and below, 40% or more investor-purchased.
As an example, with the valuation hit Washington Manor took, yet having a top-tier Chinese Baptist School, all-cash offers are now the norm.
Homes that sold for $500,000+ in the heydays are now listed for $299,000-349,000. List prices have easily gone up 15-20% in the last 3-4 months.
Investors were the first to see the market was at the bottom and starting to pick up. I sold a 2-bedroom home in the Davis Tract, listed according to comps at $229,000, for $268,000. A fixer on the Oakland side of Durant, priced at $109,900 sold for $148,000, all-cash and owner occupied.