- Short sales have produced tidier, greener neighborhoods
- Beyond that, there is little more that Stocktonians can do
The City of Stockton, which is also the County Capital of San Joaquin, is one the top-sixty largest cities in the United States and was regarded as one of the State’s fastest growing metropolitan hubs too. It is also a pleasant place to grow a family, with thousands of miles of waterways and rivers forming the California Delta.
A good deal of the crust fell off the Stockton gingerbread the day the foreclosures began around three years ago. In fact, Stockton is the City that gave birth to the term foreclosure brown, used to describe the dead lawns around houses all over town.
When I visited Stockton recently after a gap of two years I was pleased to note considerably less foreclosure brown, and more pleasantly green lawns around well-kept houses. I learned that short sales are the main reasons behind the improvement.
Short Sales take place when a borrower has to sell their home (often following involuntarily unemploymen) but finds that the current market value is less that the outstanding balance on their mortgage bond. In many cases, the lender agrees to forgive the difference, because this is cheaper for them (and a whole lot less messy) than foreclosing and ending up with even more unwanted inventory.
Short sales are becoming increasingly popular because they do not reflect on the seller’s credit record and are also more discreet. In fact, unless the buyer or the seller tells the neighbors, the latter may never know.
These are some of the things that I learned during my recent visit to Stockton:
- During the first three months of 2009, 85% of all sales in San Joaquin County were foreclosure sales
- That rate is now down to 68%. Defaults were 43% down for the second three months of 2010.
- The median price of a Stockton home is now approximately $175,000, which is the highest in 3 years
With the heady days of tax credits passed, sales are down again, and there is talk in town of prices falling back by up to 10%. With I in 6:25 Stocktonians officially unemployed, and 1 in 4 inactive in the labor market, the once booming city still faces a long road back to recovery.
Stockton and San Joaquin County are facing further storm clouds developing far away. Washington is still stuck in the HAMP paradigm and not doing enough about the root cause of the second foreclosure wave – which is looming unemployment. Until the Obama administration shifts gear in terms of HAMP, Cities like Stockton – and their residents – will continue to beat their chests against ongoing recession, which is neither of their own making, nor within their power to reverse.
Find foreclosed bargains at www.foreclosuredatabank.com.
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Written by Alex Rolim.
