Newer Neighborhoods Hit Harder by Bank Repos and Short Sales

I had a discussion about a week ago with a mortgage broker I work with regularly about a trend I have noticed. It seems as if the newer areas of Placer County have been hit harder with sellers who are under water and trying to short sale and with bank repossessions.

The best logic I can come up with to explain this phenomenon is that the newer homes were all purchased during the recent bull market in real estate, while only a portion of the older homes were purchased during that same period. This would mean that the newer homes were bought at a higher price and are more likely to have been bought using the creative financing that was popular during the past few years. They are also less likely to have equity built up over decades, as may be the case with many older homes.

Rather than just leaving my analysis to theory, I thought it would be nice to see the actual numbers. The following tables were compiled by adding up the residential Placer County listings that are either active, pending or sold since January 1st, 2007.

The chart shows that a large percentage of the homes in Placer County were built since 2001. It also shows that the homes built since 2001 are an even larger percentage of the short sales and bank repos than they are for the total market.

Interestingly, the homes built between 1996 and 2000 are actually a smaller portion of the short sale and bank repo market than they are for the total market. This may be due to the fact that these homes were purchased between the peaks of the early 1990's and the 2005 peak.

I was also curious to see what the ratio of short sales and bank repos were when compared to the total market for each age range. The following table will show those figures.

Once again the homes built since 2001 have a relatively high number of short sales and bank repos when compared to the total number of homes in that age range. However, the homes built before 1950 have an even larger percentage of bank repos and short sales.

I'm not sure why the percentage is higher for the 1950 and older homes, but I suspect that it may have to do partly with investor speculation and buyers stretching to get in to the lower priced homes in the area.

Overall, my hypothesis and anecdotal evidence were correct. Newer homes comprise a larger number of the homes selling as short sales and bank repos in Placer County. This is true, even when you account for the fact that they comprise a larger percentage of the total number of homes for sale. I did discover that pre-1950 homes have a larger percentage of short sales and bank repos than the 2001 or newer homes, but they also comprise a much smaller portion of the total market.

To view a current list of all of the homes being marketed as bank repos in Placer County, along with all other homes for sale in Placer County, click Placer County homes for sale.