Tuesday, December 06, 2005

San Antonio Foreclosures Near Peak

As My San Antonio reports, the Texas housing market has been in a funk for years. "Property foreclosures in Bexar County have decreased slightly in 2005 for the first time this decade. The year's average of 699 foreclosures a month reversed a troubling trend and was a significant drop from last year's peak of 740, part of a steady annual climb since 1999."

"The peak in December foreclosures represents tough times for some homeowners, but it's an opportunity for investors, said Gregg Stanley. Most investors make their bids at auction from February to November, he said."

"Decisions on which properties are worth a bid start with the difference between the loan amount on a home and the market value. For the December residential properties, the total loan amount was $56.8 million compared with a Bexar Appraisal District valuation of $70.6 million."

"San Antonio and other urban Texas markets are attractive to investors looking for bargains, Stanley said. There are more foreclosures in Texas than any other state; 20 percent of all new foreclosures in the nation were in Texas."

"Texas is prone to higher numbers because it has the second largest population in the nation, but a low property appreciation rate and a higher-than-average share of higher-risk government-backed FHA loans. Unlike other populous states such as California, Florida and New York, there is often less equity in a troubled Texas property and it is harder for the homeowner to sell before it gets to foreclosure."

"It helps that properties are not substantially overpriced here, Stanley said. He noted that PMI's Market Risk Index had San Antonio ranked 45th of the 50 major urban cities surveyed. PMI estimated the San Antonio market to be 6 percent overvalued, but its Risk Index of 62 was far below the national average of 218."

"By comparison, most California markets had Risk Index measures between 440 and 536 and were considered to be from 19.5 to 33.7 percent overvalued."


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