With a 700 billion dollar bailout, a new president elect, and a new year just around the corner, many wonder what 2009 will have in store for Glendale residents and homeowners.
While it can be anyone's guess, there are a few key market factors that we can rely on. Rather than creating more of a spin, let's learn from the past so we can lessen the pains of our future.
Whether you place blame on a greedy homeowner that squeezed every ounce of equity out of their home or a reckless lender that allowed a borrower to purchase real estate that everyone (including the lenders themselves) knew they would not qualify for, we now feel the effects of a bubble deflated.
Mostly predicated on the heels of a borrower employed as a gardener but labeled a "Landscape Architect" making $150,000 a year, or a local hair dresser making "$20,000 a month" etc., all add up to the misery that homeowners are feeling today.
It's simple, million dollar purchases made on beer budgets and 1% loans issued with the hope of a "flip" or with a "don't worry, just refi in a year or two and use your equity." That door slammed shut faster than any homeowner could prepare for.
Most of these purchases were made in neighborhoods that were labeled as "growing communities" such as Palm Springs, Riverside, Sacramento, etc. feeding the false hope of quick profits. The only growth booms those communities experienced were investor booms. One article based out of Palm Springs in early 2006 touted that "40 families a day move to the desert" basing that figure on the number of housing sales. When in fact, it's one investor purchasing a string of 10 homes on the same street and no one was moving anywhere.
The Glendale Difference: very few investor driven purchases were made in Glendale during the past few years.
Glendale is a bedroom community comprised of families with an overall long term plan to live, works, and establish roots within the city. Most homeowners remain in Glendale for decades, not just a one hit wonder. The number of foreclosures today in Glendale stems mostly from 100% financing options and the refi boom rather than investor and flips predictions.
In June 2008, there were 569 homes in Glendale facing foreclosing. As of Nov. 14th, there are 393.
This is a significant decrease and proof positive that the tide has turned in the right direction for Glendale homeowners facing the wrath of a lender. While neighboring cities struggle with the rising numbers of foreclosure filings. (i.e. Pasadena with approx 450 homes currently in foreclosure).
Here's what you should remember:
It's not a 700 billion dollar bailout plan; it's a $3.5 trillion bailout.
$700 billion for federal financial institutions, plus $85 billion to AIG, another $20 billion to Fannie, Freddie, on and on and on.
The party has just begun and the fat lady by far has sung. In fact, she's still warming up her vocal cords.
The numbers add up to over 3.5 trillion, so don't fool yourself. Although it's not the end of the world nor will it mark the economic collapse of the United States, please know that it will take years to recover from this.
It would be unrealistic to hang your hat with one man, one president. One man cannot solve the issues and clean up all the mess left behind.
Homeowners don't hold your breath. Before year end, there would have been over one million foreclosures nationwide.
Currently in Los Angeles County, 1 in every 304 homes are in foreclosure.
Although our work is nowhere near complete, I am proud to live, breathe, and work in a community that is resistant to the lenders abusive schemes. I am proud to represent dedicated homeowners that are willing to go to the mat and fight for what they believe is right. We can certifiably boast that while others attempt to figure out the manner in which a homeowner can keep their home and resist this trend, 176 Glendale families since June already have.
While we celebrate a 30% decrease, we cannot forget those communities that are experiencing a 30% increase. All families deserve the same rights as most cherish the rights of home ownership regardless of what picture the weeping lenders paint. It's nothing more than crocodile tears. Have no remorse. Stand firm and continue to fight for your homes. Anyone that attempts to inform you otherwise can suck rocks.
In Glendale, CA they are more than definitely on the right path.
