WatchEvery post made on Patrick.net showing market improvement gets the same retort:
"banks where holding back on foreclosures due to robosigning scandal. Now, they are starting up and will shortly crush the market"
Ok, let's see what has happened in the past 30 days, at least for the Phoenix market.
Notice of trustee sale (90 days before a foreclosure) 3700
trustee sales (basically, foreclosures in a non judicial state) 1900
Canceled notice of trustee sales 2300.
So, we end the month with 500 LESS homes in foreclosure than we started. there were about 20,000 in the pipeline at the beginning of the month, so instead of ramping up, they are actually shrinking? [even in the best of times, there are always a few thousand homes under the threat of foreclosure, at the current pace in a year and half or so, we'd be back to a market with normal foreclosure rates...]
Anyways, zero evidence for this coming tsunami of foreclosures, to this very day!
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San Jose, CA
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sheltielover1 says
Oh Yeah. Somebody died and left you their inheritance. Have you heard that if things are too good to be true, they probably are?
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Danville, CA
dunnross says
jealous idiot... It's the truth.. A series of factors came into play and we got the house for a great price. End of story.
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San Jose, CA
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sheltielover1 says
Yes, and the house you bought even came with the free U-238 rods skillfully buried under it. Just make sure you don't breath anywhere close to the kids bedroom.
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Danville, CA
dunnross says
No kids... moron...
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Sheesh...it's a real-estate discussion.
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San Jose, CA
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sheltielover1 says
Well, then, you should be fine. Just make sure you don't have any in the future, unless you like 2-headed kids.
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sheltielover1 says
I guess your house doesn't have a kids bedroom, either. What a fine house you got!
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bmwman91's website
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Sweet, two new additions to my p.net ignore list!
It looks like someone's pre-teen kids found their parent's p.net account and are pretending to be them after hearing mommy & daddy argue about the house or something!
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bmwman91 says
Ha Ha Ha.... you beat me to it.... just tell the kids to go outside if they want to fight....
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I'd put in my $0.02 but i need to borrow $0.10
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Madison, WI
When rents went up across the board, that was the end of foreclosures, investors who bailed in 2008 came right on back and are just buying the places outright. Why?, credit is still very loose, and if you have a cash flow and good credit, anyone can get into buying RE. Underwater?, so what, keep holding out for some kind of personal bailout, refinance at lower rates and hope for better days. Property management should be booming going forward. The RE market, in many ways has not changed a bit, flippers are still buying the bottom of the barrel actual foreclosure junk, people are still paying market values. The only thing I'm seeing different is more people living in less house, probably due to rental price increases and wage stagnation. I also see quite a few more campers sitting in driveways, and being used. Two car garages have no room for cars, that's where people store all their crap.
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everything says
Exactly, it's a Tsunami of homeless people and people living in cars, yet, houses and condos are still expensive with mostly investor flips to choose from if you want to buy..
F this. they can keep their properties.
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Emeryville, CA
Wouldn't the retirees & baby boomers be another member of the "shadow inventory"?
They'll have to sell regardless of equity or if they missed the top of the bubble. These houses, long outgrown by the old grinders will further depress housing prices and would have regardless of the bubble.
Underwater mortgages, temporarily modified mortgages, unemployment still very high, savings drained, old folks counting on their houses for retirement, and more foreclosures in the pipeline...
Even if the banks aren't colluding, there's a slow train comin'...n'est-ce pas?
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robertoaribas's website
CL says
Yes, you should definitely not buy a home today, even if your mortgage will be half of rent, because in the next 10 years there may be alot of retirees... good thinking!
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Roberto,
Have a look at the Seeking Alpha piece that Patrick posted today. Phoenix seems way ahead of the curve in terms of how much prices have already crashed, such that a modest rebound could be possible. But I wouldn't argue that Phoenix (or Vegas or Orlando) are the norm in this trend.
Regarding foreclosures, my impression is that it's common knowledge that banks are holding back a very large number of distressed properties in many markets in order to prevent price collapse. It's possible that Phoenix is ahead of the curve there also. The general question is how long can banks sustain the expenses of keeping their distressed inventory off the market before some kind of tipping point is reached.
As a first time home buyer on the pricey east coast, I certainly wish that some rapid deflation in prices might bring prices back to normal values with respect to incomes, since logic says that should occur. But I won't be holding my breath-- I'm more likely to be leaving NYC than going down for a million dollar shoebox.
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HEY YOU says
Send your -8 cents to a Nigerian banker and they'll send you a -million dollars.
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Ignatius, against many people's belief the banks are NOT holding back foreclosures to prevent a market crash. The ONLY reason they take up to 1,2,3,4 or 5 years after you stop making your mortgage payment is that they CANNOT AFFORD to take all the losses at once. If Bank of America would foreclose today on their 1-2 Million non-paying customers the FDIC would shut down Bank of America the very next day. It's all about balance sheets. If you currently owe $800k on your mortgage it shows on their books a beautiful $800k on the asset's side. Once they foreclose and the value of your house is a sloppy $400k they would have to write off an almost half million Dollar loss. And of course they cannot afford to take a million of these huge losses within in a short time period. Banks that are doing really well however foreclose pretty quick, like HSBC bank for example. The "holding back" of the banks is actually only depressing the market further because it encourages people to stop paying their mortgage in order to live for free for a few years.
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robertoaribas says
I think that depends a lot more on other factors than simple numbers of immediate projections. That kind of thinking is what gets people into boom and bust cycles in the first place ("efficiency").
I don't speculate on house prices because nobody is taking any time to consider whether the house they choose puts them where they need to be. They make assumptions (cheap gas to get to work from the exurbs) and take risks based on emotions, then pick and choose one set of numbers over another to justify their illusions about why they made a choice.
It's a lot easier to just imagine some dark conspiracy, because there usually ARE dark conspiracies somewhere.
The customary American Way is to believe in the white picket fence surrounding one of George Bailey's cute little houses where Mr. Potter's accountant killed all the local wildlife ("I used to hunt rabbits there myself"). This has brought us to discussing the 'trends' on a daily, weekly, or monthly basis and people even ARGUING about them, in a field which requires decades to flush reality out of the bushes. (or the Bushes....if you include presidential follies).
When this year's corn crop doesn't come in, I think there is going to be a few more reasons to question the economic philosophy of Efficiency as God, but I don't expect much reason will be applied, either.
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My take on the matter is simple, housing prices during a fake boom are not real so the issue of recovery is ludicrous. There is no recovery when the prices were not real. It has to drop 50% or more.
IMHO example, does any one in their right mind think for a moment a small 1950s house is worth 500 or 700K? Or in some areas regular development houses as seen in Malibu pumped up to over 1.5M? GET REAL.
No one with real money fell for this crap, and in my view no one with real money is interested now.
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Patrick says
Wouldn't there be less cars and traffic lights on the road getting in their way 100 years ago?
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Belgium, WI
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zzyzzx says
Well, if there were, they didn't stop for them anyway.
An argument could be made for Darwinism in the case of safety rules. Most safety laws are influenced by costs of insurance and benefits, though. Leadership doesn't care if people die as long as it doesn't cost them money. Well...they might CARE, but they don't do anything about it until it does cost them money. Back in The Day, they would be concerned about losing votes, but these days votes are simply purchased with advertising money (hence the neck-to-neck political races regardless of platforms or philosophy).
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Tarzana, CA
Few more articles I found from around April 2012:
http://www.zerohedge.com/news/second-foreclosure-tsunami-coming-and-about-kill-any-hopes-housing-bottom
http://blogs.reuters.com/felix-salmon/2012/02/28/why-banks-are-reluctant-to-foreclose-on-expensive-homes/
http://consumerist.com/2012/05/bank-of-america-tells-family-it-wont-foreclose-tries-to-foreclose-anyway.html
http://helpwithforeclosurenews.com/2012/06/06/produce-the-note-most-banks-cant/
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Burbank, CA
Roberto, with all due respect I tried to find these beautiful numbers you are utilizing to make your point, and found the complete opposite of your "point".
June housing for AZ:
Foreclosure Starts: 5,236 (-27.7%)
Foreclosure Sales: 2,998 (-18.6%)
Time to Foreclose: 141 days (+12.8%)
So, while it might make a good message board "fight" on patrick.net's message board, a 30 day data (where is it coming from???) look might seem controversial to the peeps who don't choose to drink the kool aide, it really isn't practical overall in looking at the true situation of housing. The data for June clearly shows that there are still waaaay more foreclosures in AZ than sales, and that the time frame is a minimum of 4 months or longer.
Try again.
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I'd also like to add, it seems like prices in Maricopa County are starting to flat line after rising since October 2011, and sales are down 30% YOY (remember 2011 was an anemic year). So I think there is data that supports a weaker market in Maricopa County.
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Tarzana, CA
Another article from this month, AOL real estate thinks 90% of homes are being withheld from being for sale on the open market. (Will vary by local RE market of course)
http://realestate.aol.com/blog/2012/07/13/shadow-reo-as-much-as-90-percent-of-foreclosed-properties-are-h/
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Los Angeles, CA
Yes its getting CRAZY here in america - 90% of properties with held from sale by some policy or other or loan mod etc.
Its as crazy as China with those brand new cities that could hold 1m people - but totally vacant! (only ours are occupied by deadbeats).
What a nice trick the feds have pulled, interest rates at zero forever and mortgages for everyone (underwater or not) at 3%. You gotta respect thier power - more powerful than nuclear weapons (which are too powerful to actually use).
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mommy1 says
It's useless to show any honest data to the realwhores. They will just deny it, and come up with other BS excuse of why your data is wrong. Been there, done that.
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Burbank, CA
dunnross says
Perhaps. However, I think giving up and not paying attention are two enemies of correcting the overall problem. Housing continues to be in a state of play, or 'gaming collusion' with the financial market and political arena on all levels of those involved.
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male
Look you guys and gals never mind the price of homes it will be more important to hold on to your wealth for what is going to be a third world senario when the US dollar collapses and it will bring pain to so many and those already picking through garbage bins for something to eat will have to compete for a snack at the bottom on the garbage can.This is not funny at all when people realize that the government can no longer feed the 47 million on food stamps because the country just fell off the cliff with insolvency.Those that want to retire will have no money to retire to and the job will dissapear.Can you imgine what the streets will be like when kids go hungry.This will be a depression that makes the one in 1929 look like a picnick.The most important thing right now is the accumalation of non parishable food and secure it so no one kills you for it because they will. Next buy and rifle and a hand gun and plenty of ammunition then get a tent and camping supplies for cooking and sleeping. Forget a generator it may not be practical.Now find a map that will show you some open space near a river or stream and plenty of wildlife and set up camp but in the thick part of a forest for protection from wind and heavy rains and make sure you have a good supply of plastic to help keep the rain off and set up a eating area and to cover your firewood from the elements.Bring a radio one that can run on solar and can charge up during the day.Once you have established your site and everything is set up it is time to wait it out because it will get worse before it gets better.
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Why would there be a constriction in the best selling months of the year? If a leader could hold back foreclosures which made up more than 50% of inventory, the natural supply demmand would lead to higher prices. That lack of inventory would also be good for home builders, and they would start building houses. All this good news, housing is improving, prices are improving, builders are building, people are going back to work, would be welcome news to the president in an election year.
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robertoaribas's website
mommy1 says
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Burbank, CA
robertoaribas says
Your numbers are made up. The numbers I quoted came from here: http://www.foreclosuretruth.com/blog/sean/the-foreclosure-report-june-2012/
Also, I posted foreclosure "starts" and "sales". You are posting what exactly? All sales? All notices? NO source listed? You don't even seem to know what you are looking at, just getting your panties in a wad because on the outset what you appear to be posting makes it look as if the situation isn't so dire? If anything, the situation looks MUCH WORSE with what you posted. No one is being willfully ignorant here but you, sir.
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Scottsdale, AZ
robertoaribas's website
mommy1 says
My numbers can be verified by counting them yourself on the county website: www.maricopa.gov. Calling someone a liar, because you read some other numbers on some blog? seriously you have zero class and manners.
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robertoaribas says
Yes, our friend roberto has much more manners than that. He never insults other people or calls them names.
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everything says
The investors buying and selling now are the same people who sold everything in 2005 to the suckers who read in the paper that they could make money in real estate. These people have cash as there is no easy lending.
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Scottsdale, AZ
robertoaribas's website
Ok, it is after 5pm here, so I counted up the July Foreclosure activity in Maricopa county:
Notice of trustee sales (at least 90 days late on mortgage, 90 days before auction) 3400
Trustee sales (foreclosures) 2150
Cancelled sales 2350
So, we ended July with 1100 LESS homes in foreclosure process than we started with, here in the Phoenix metropolitan area...
Seems like a market on the mend, more than one about to be hit again...
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Scottsdale, AZ
robertoaribas's website
wow, those were good numbers for July... and NOW the numbers of foreclosures and notice of future foreclosures are MUCH LOWER...
were is that tsunami????
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Belmont, CA
I love this guy. A bunch of institutional investors and corrupt china dollars buys the middle class rug out from underneath them dooming them to a lifetime of struggle, and this guy is clicking the champagne glasses celebrating the brutal cost of living brutally increasing.
Seems any and all sense of self preservation - out the window.
And the economy shrunk, so that shrinking and U6 @ 15% means we should pay even MORE for RE and things will get better, right?
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Scottsdale, AZ
robertoaribas's website
Mick Russom says
you're right... instead of studying the market and making investment choices, I should wail away incessantly for some economic utopia that will never exist, like an impotent risk averse whiner...