Today, foreclosed REO homes and Pre-Foreclosure (Short Sales) make up a large percentage of the Listings and Sales in Orange County, CA. This severe market correction started in the summer of 2006′, and probably has 6 to 12 more months to go. Currently, there are 15,046 homes and condos Active for sale (Listed in the MLS). Of this total, 29.5% are Short Sales and 6.3% are bank owned REO’s. This represents a total of 35.8% of all inventory is a financially distressed property on the market for sale. Below is a table showing these results as well as how these percentages of distressed listings range from City to City.
As can be seen in the table below, this market correction is affecting the lower priced markets much more severely then the highest priced markets. For example, 64% of Santa Ana’s inventory of homes for sale are either foreclosed REO’s or Short Sales. While only 4.4% of the inventory or properties for sale in Laguna Beach, CA are bank owned REO’s or Short Sales.
| City | Listings | Short Sales | Short Sale % | REO | REO % | % Total Distressed |
| Anaheim | 1207 | 615 | 51.0% | 157 | 13.0% | 64.0% |
| Huntington Beach | 699 | 121 | 17.3% | 18 | 2.6% | 19.9% |
| Laguna Beach | 343 | 12 | 3.5% | 3 | 0.9% | 4.4% |
| Mission Viejo | 448 | 159 | 35.5% | 28 | 6.3% | 41.7% |
| Orange | 667 | 211 | 31.6% | 53 | 7.9% | 39.6% |
| Rancho SM | 367 | 131 | 35.7% | 28 | 7.6% | 43.3% |
| San Clemente | 528 | 88 | 16.7% | 15 | 2.8% | 19.5% |
| Santa Ana | 1595 | 815 | 51.1% | 207 | 13.0% | 64.1% |
| Yorba Linda | 426 | 67 | 15.7% | 14 | 3.3% | 19.0% |
| Orange County | 15046 | 4432 | 29.5% | 951 | 6.3% | 35.8% |
Looking at the number of properties sold in the past 90 days reveals some other interesting facts. There are 951 Bank Owned REO properties currently on the market for sale, and 986 REO’s sold and closed escrow in the past 90 days. This results in just 2.9 Months of Inventory which is a Sellers Market ! For those of us working in the field, this chives with experience in which many REO listings are selling rapidly and many with multiple offers. The other interesting fact to not is that there are 4,432 short sales actively listed for sale, but only 556 closed in the past 90 days. This represents 24 Months of Inventory. What is actually going on here is that the Short Sales are actually selling at a much higher rate, but these sales have a high failure rate for many inexperienced Listing Agents are having hard time getting them approved by the Banks in order to close. The moral of this story is that if you are interested in purchasing a Short Sale, make sure you are working with an experienced agent who has a track record of success with these types of purchases.
