MikeBolen.com

Pre-foreclosures hit record highs in July 2008 both nationally and in 14 states and the District of Columbia according to new figures from ForeclosureS.com, California-based foreclosure information specialists.

“So far this year, more than 1.25 million Americans faced the risk of loosing their homes to foreclosure, up 7.3% from June 2008, and up 88.62% from July 2007,” says Alexis McGee, real estate expert, educator, and president of ForeclosureS.com.

California-based ForeclosureS.com bases its analysis on the number of formal notices filed against a property during the foreclosure process. That can include notice of default, foreclosure auction, and/or REO (lender-owned real estate after a foreclosed property reverts back to the lender). Pre-foreclosure filings are the first initial notice and do not all end up foreclosed.

Foreclosures and short sales (selling homes for less than their loan value) make up a huge chunk of today’s sales market and those low sales prices are skewing sales values down. Now thanks to the new housing bill recently passed first time home buyers are coming into the market to grab their $7,500 tax credits, FHA reform is easing their loan process, and there is a ton of affordable housing to chose from. Plus, for the first time in a long time you can buy a near-new home for less than its replacement cost and buy multifamily with positive cash flow.

A look at a few of the July numbers from ForeclosureS.com:

-- Pre-foreclosures by region based on filings per 1,000 households

 July 2008 YTD versus July 2007 YTD 2007:

     -- Southwest, 21.4 pre-foreclosures per 1,000 households YTD vs.

      10.5 per 1,000 YTD 2007;

     -- Southeast, 24.1 per 1,000 vs. 11 per 1,000 YTD 2007;

     -- Northeast, 8.4 per 1,000 vs. 6.7 per 1,000 YTD 2007;

     -- Midwest, 11.3 per 1,000 vs. 9.3 per 1,000 YTD 2007.).

-- States with the most pre-foreclosure filings per 1,000 households

 July 2008 YTD:

     -- Nevada (59.1 per 1,000 up 126.44% from YTD 2007);

     -- Arizona (54.9 per 1,000, up 403.67% from YTD 2007);

     -- Florida (48.3 per 1,000 up 176% from YTD 2007);

     -- California (25.2 per 1,000, up 119.13% from YTD 2007).

Until the foreclosure and short sales move out of the market downward pressure will continue on small to medium size multifamily properties. Larger multifamily where foreclosure on commercial loans is near non-existent will have little downward pressure from the foreclosure market with higher cap rates being propelled by tough capital markets.

Now is the time to buy multifamily rents are exceptional, vacancy is at record lows and prices have fallen to record lows when compared to income. Here at the RE/MAX Napa Valley office, RE/MAX Cornerstone I specialize in multifamily property contact me, Mike Bolen at 707-254-9999 or email anytime Mike@MikeBolen.com. I look forward to hearing from you.