For every one distressed property on the MLS, you have 5 others hidden in some bank balance sheet. Now when I look at this data what I see is a façade in Southern California real estate. Prices in these areas are still extremely high relative to household incomes. Unless you go out there and buy with an Alt-A or option ARM (no longer available) you will have to show a decent income. But let us dig deeper a bit. How much are those foreclosures selling for in Culver City versus what is off the balance sheet?
This is incredibly important. Banks are listing (what appears) the bottom barrel homes here. The average listed foreclosure price for Culver City is $330,000. This is interesting given the median sale price for Culver City in zip code 90230 is $605,000 and in 90232 is $775,000. Seems like a tiny bit of a discrepancy don’t you think?
I decided to jump deep into the data for this area and pulled up 19 bank owned homes in the area. This is where you actually see bank behavior stand out. The “estimated value” of the 19 bank owned homes in Culver City are $443,281 and the average estimated loan balance on each place is $552,159. These places are massively underwater yet banks seen to be cherry picking which homes they funnel out to the MLS.