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Foreclosure Trends in Danville and Alamo

In some towns, inventory spiked with the foreclosure crisis — not so in Danville and Alamo, but foreclosures are still increasing.

We’ve had a daily dose of foreclosure news in our lives for years now.

I remember watching the towns with a lot of newer homes, where foreclosures were hard hit initially, and seeing the inventory (for example, 1,300+ homes on the market in Antioch in 2007) gradually shrink as the foreclosures sold as bank-owned or short sales.

Towns like Antioch have settled down to a consistent inventory, but does that mean that the foreclosures are winding down?

Foreclosures are a result of people buying more than they could afford. Those who managed to buy a house by utilizing a neg-am loan (negative amortization, where the payments are less than interest-only, meaning that each month, the principal balance grew). This seemed like a good idea at the time because “houses will never go down in value,” with the plan being that they would simply sell or refinance when the equity was plentiful.

With hindsight, that whole scenario is clearly flawed, but a lot of excited people were convinced to purchase homes they couldn’t afford. 

They became the first wave of foreclosures.

The common wisdom is that the next wave of foreclosures are the people that are highly leveraged, but hanging on.

Also, the banks foreclosed initially on their conventional loans (under $429,000) and moved next to their jumbos. Logically, we should see an increase in the value of the homes that are in foreclosure now, over a few years ago.

Looking just at Danville and Alamo (including Blackhawk and Diablo), here’s how the trend looks (I am defining a “distressed sale” as anything that was bank-owned or sold as a short sale):

Jan. to June 2009

  • The total number of sales was 278.
  • 65 were distressed sales (23 percent).
  • Distressed sale home prices: 12 were under $500,000; 44 were between $500,000 and $1 million; and 9 were between $1 million and $2 million.

July to Dec. 2009

  • The total number of sales was 493.
  • 100 were distressed sales (20 percent).
  • Distressed sale home prices: 29 were under $500,000; 56 were between $500,000 and $1 million; and 15 were between $1 million and $2 million.

Jan. to June 2010:

  • The total number of sales was 487
  • 119 were distressed sales (24 percent)
  • Distressed sale home prices: 27 were under $500,000; 70 were between $500,000 and $1 million; 19 were between $1 million and $2 million; and 3 were over $2 million.

July to Dec. 2010

  • The total number of sales was 490.
  • 120 were distressed sales (24 percent).
  • Distressed sale home prices: 34 were under $500,000; 63 were between $500,000 and $1 million; 19 were between $1 milion and $2 million, and 3 were over $2 million.

Jan. to June 2011

  • The total number of sales was 443.
  • 142 were distressed sales (a whooping 32 percent).
  • Distressed sale home prices: 44 were under $500,000; 78 were between $500,000 and $1 million; and 20 were between $1 milion and $2 million.

Certainly there have been some high-end foreclosures, particularly the six over $2 million in 2010, but this trend shows a strong and steady increase in foreclosures in the Danville area in general.

Based on information from the Contra Costa Association of REALTOR’S® MLS. Display of MLS data is deemed reliable but is not guaranteed accurate by the MLS.

Concerned September 10, 2011 at 12:23 AM
So we have a "strong and steady increase in foreclosures" in Danville & Alamo over the last two years, with the latest figure showing distress sales as a full third of all sales! We know that distress sales and foreclosures have an enormous negative impact on our local property values. That is aggravated by the high inventory. And yet Danville goes full-steam ahead on new development! The Town is currently considering a proposal for a major new subdivision of up to 127 dwelling units in the Diablo/Blackhawk area (the "SummerHill/Magee Ranch development"), which will empty it's traffic into Alamo through Stone Valley Road. Why? The arterial roads can't support the traffic. The creek can't support the runoff. And the market can't support the inventory. Our lives, lifestyles and property values shouldn't take the hit! Why would Danville Town Council members inflict this disaster on the residents they're supposed to represent? (Or do they care more about the developers, the development fees, and the revenues it will bring them?) All Danville and Alamo residents should be concerned! Call! Write! Demand that the Town do the responsible thing. Be specific. Let all the Council members know you'll remember whose interests they represent come election time!!! Urge them to reject the SummerHill development, and protect your "small town atmosphere and outstanding quality of life," as they've promised!

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