High Number of Homes in OC are Distress Sales

One out of every two homes sold in July in Orange County is a distress sale, which means it's either a foreclosure or a short sale.

One home in Mission Viejo at 51 Cantata has been vacant for hours. The homeowners moved out three years ago. They found renters to make the payments on their four-bedroom, three-bath property, until last night. Now, the landlords can't keep the payments up.

Ed Wright, a broker with Help-U-Sell, is trying to sell the home for $584,000. The bank is owed $575,000. Adding in fees and commissions, it becomes a short sale, what is now considered the largest segment of homes in Orange County on the market.

Steven Thomas with Housing.com said the trend is the same throughout Southern California. July sales show nearly one out of every two homes that sold last month was either a foreclosure or underwater. He predicts much of the same will continue.

"Sounds horrific, but we're getting through the mess," said Thomas. "We're getting through all the backlog of all the people that are upside down, that are having problems, that have lost their jobs. We're going to be getting through this. It's something we'll probably be looking at for the next few years."

Thomas said it also takes twice as long to sell a home if it is not distressed.

At the current sales pace, it will take 2.29 months to sell all the distressed homes in Orange County. Equity sellers can expect to have a for sale sign on their homes for 5.12 months.

"The strongest part of the market is the first-time homebuyer," said Wright, answering the question as to who is buying property now. "Those about 35-years-old."

As a broker, Ed Wright said he's noticed that banks are foreclosing on fewer homes. They too, like homeowners, are waiting for the future of the housing market to become more clear.

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