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RealtyTrac, CoreLogic Confirm Housing Bear Thesis: 85-90% of REOHeld Off Market


By HousingBoom   Follow   Sun, 27 Jan 2013, 12:03pm PST   5,364 views   77 comments
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RealtyTrac, CoreLogic Confirm Housing Bear Thesis: 85-90% of REO Being Held Off Market, Meaning “Tight” Inventories Are Bogus

http://www.nakedcapitalism.com/2012/07/realtytrac-corelogic-confirm-housing-bear-thesis-85-90-of-reo-being-held-off-market-meaning-tight-inventories-are-bogus.html#5y9tQYtW81UaISZe.99

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HousingBoom   Sun, 27 Jan 2013, 12:04pm PST   Share   Quote   Permalink   Like (2)   Dislike     Comment 1

Again, the sheep will get slaughtered when the housing market collapses.

thomaswong.1986   Sun, 27 Jan 2013, 12:37pm PST   Share   Quote   Permalink   Like   Dislike     Comment 2

HousingBoom says

Again, the sheep will get slaughtered when the housing market collapses.

I guess even the powers to be, who ever they may be, understand home price appreciation only keep up with inflation and incomes over the long run ... (R. Shiller facts). Else they wouldnt have allowed further declines in prices.

LOL! how do you explain to millions of all those homeowners (outside of CA) that the higher property tax due to higher market values during the boom years was all BOGUS...

I bet many want their property tax payment back...

Raw   Sun, 27 Jan 2013, 1:01pm PST   Share   Quote   Permalink   Like   Dislike (1)     Comment 3

HousingBoom says

Again, the sheep will get slaughtered when the housing market collapses.

LOL, this was 6 months ago.
Today, there isn't even a shadow of the shadow inventory.
No one wants to sell their home in this ridiculously low price environment. Americans are too smart for that.

Raw   Sun, 27 Jan 2013, 1:35pm PST   Share   Quote   Permalink   Like (2)   Dislike (2)     Comment 4

underwaterman says

Let me make a prediction: Soon you will have the permabulls in the thread here denying reality, ignoring it, or distorting this article and it's risks. They will outnumber the people actually reading the article by 3 to 1.

So far al I see is the perma bears. Anyone who listened to them a year ago are sorry as hell.

HousingBoom   Sun, 27 Jan 2013, 1:41pm PST   Share   Quote   Permalink   Like   Dislike     Comment 5

Raw says

Americans are too smart for that.

LOL

thomaswong.1986   Sun, 27 Jan 2013, 2:13pm PST   Share   Quote   Permalink   Like   Dislike     Comment 6

Raw says

So far al I see is the perma bears.

mid 90s prices plus inflation.. if it hasnt happen yet it will.

Miami, Az, LV and many have seen back to normal..all your seeing
in these metros is volatility and appreciation around rate of inflation. no biggie...
some others like SFBA have not yet correct back to long term trend.

Bigsby   Sun, 27 Jan 2013, 3:14pm PST   Share   Quote   Permalink   Like   Dislike     Comment 7

underwaterman says

Let me make a prediction: Soon you will have the permabulls in the thread here denying reality, ignoring it, or distorting this article and it's risks. They will outnumber the people actually reading the article by 3 to 1. There was another thread about shadow inventory I think by sface and most people simply said there was none.

No, they didn't. People were simply questioning your outlandish numbers.
And this forum doesn't have a single permabull. Everyone on here was bearish up until a certain time (or continue to be so). It just happens that some people have seen that things aren't as bad as you like to make them out to be and have either returned to investing in RE or have bought homes for themselves in recent years.

thomaswong.1986   Sun, 27 Jan 2013, 4:00pm PST   Share   Quote   Permalink   Like   Dislike     Comment 8

chanakya4773 says

perma bears lose money in boom times and perma bulls in bust. its only the rational guys who consistently outperform both.

Yes there is a demand out there and lots of supply even in San Francisco Bay Area.. South Bay.. there is 20-25% non-performance of former tech facilities.. the other side of Silicon Valley ignored by the media lay vacant/empty .. a waste land now for over decade.. these places were busy as hell back in the day.

you can add former airfields Moffet and lots of old 50s factories like Sunnyvale Westinghouse to the list.. plenty of old land to put new housing up....

frankly the owners of these facilities/land are getting shit ZERO IN RENTAL INCOME..i seen some turned into Churches of all things..Former HP buiding of Aques, Sunnyvale.

as such the debt burden by city/county/state will force them to expand them by rezoning all this land into residential homes to increase tax revenues. and put more inventory into the markets.

varmint   Mon, 28 Jan 2013, 5:55am PST   Share   Quote   Permalink   Like   Dislike     Comment 9

According to Zillow there are 20 houses for sale in my town. Exactly zero of them are REO.

There are 17 houses that have been foreclosed, are vacant and not for sale and another 65 that are in foreclosure proceedings.

While I think shadow inventory issue is a bit overblown, it does appear that the banks are holding inventory to a certain extent. In the spring/summer of 2012 when we were looking for a house more than half of what we saw was REO.

Philistine   Mon, 28 Jan 2013, 8:17am PST   Share   Quote   Permalink   Like   Dislike     Comment 10

varmint says

17 houses that have been foreclosed, are vacant and not for sale and another 65
that are in foreclosure proceedings

It's stunning how many foreclosures are in central LA right now. 90% of what's on the market. I'm sure they'll all get bought up by cash flippers and put back on the market for 20% more than comps.

Raw   Mon, 28 Jan 2013, 8:28am PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 11

Philistine says

varmint says

17 houses that have been foreclosed, are vacant and not for sale and another 65

that are in foreclosure proceedings

It's stunning how many foreclosures are in central LA right now. 90% of what's on the market. I'm sure they'll all get bought up by cash flippers and put back on the market for 20% more than comps.

Central LA has that many forecosures on the market? I'm surprised.
I can't imagine why anyone in their right minds would want to even live in such a dump. Half the people there are criminals and the other half are victims of the criminals.

varmint   Mon, 28 Jan 2013, 8:29am PST   Share   Quote   Permalink   Like   Dislike     Comment 12

Philistine says

It's stunning how many foreclosures are in central LA right now. 90% of what's on the market. I'm sure they'll all get bought up by cash flippers and put back on the market for 20% more than comps.

Depends.

I would imagine stuff getting foreclosed this late in the game has LTV >> 100% so it won't sell at auction. Minimum bid is typically the amount owed on the house.

Once they go REO they'll be priced at market so there's probably not a lot there for flippers depending on how much prices have already risen in your area.

Mark D   Mon, 28 Jan 2013, 10:53am PST   Share   Quote   Permalink   Like   Dislike     Comment 13

here's the location massive shadow inventory. have a look:

RentingForHalfTheCost   Mon, 28 Jan 2013, 10:59am PST   Share   Quote   Permalink   Like   Dislike     Comment 14

Raw says

underwaterman says

Let me make a prediction: Soon you will have the permabulls in the thread here denying reality, ignoring it, or distorting this article and it's risks. They will outnumber the people actually reading the article by 3 to 1.

So far al I see is the perma bears. Anyone who listened to them a year ago are sorry as hell.

Sorry why? Because now they have all their wealth in the virtual home equity, that is about as reliable as getting a nice sleep next to the giant printing press of this country. Money anyone? Here is a truck for everyone. Now lets go spend it on housing cause that will make you rich. Go boys and girls, help this country out of the pit.

APOCALYPSEFUCKisShostikovitch   Mon, 28 Jan 2013, 12:38pm PST   Share   Quote   Permalink   Like (4)   Dislike     Comment 15

Of course, some of it can be accounted for by the changes in accounting rules that allow the banks to keep failed notes from being accounted as REO and therefore preserving the fiction that bank is not bankrupt and subject to dechartering.

But I wonder how much of the trouble can be ascribed to the logistical gaga of repatriating a failed from inside of an MBS instrument.

David9   Tue, 29 Jan 2013, 1:11am PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 16

Raw says

So far al I see is the perma bears. Anyone who listened to them a year ago
are sorry as hell.

I'm not 'sorry as hell'. What? Let's see, I could have had:
(All are plural)

1.) Condos that look onto other people's property
2.) Condos that look onto stucco walls
3.) Condos that need $money$ plus mortgage to be liveable.
4.) Condos that that are investor flips
5.) Condos with high HOA fees

Basically, I could have bought the bank's sh*t, or given my equity to an investor.

Quigley   Tue, 29 Jan 2013, 1:22am PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 17

Yes. Those have been the options here too. Buy property in bad location or tiny and overpriced. Or the investor flips which can sell for 10% more than normal.
All options suck for home buyers right now. The market is so bogus if you buy something now you should pay for it with $3 bills.

Quigley   Tue, 29 Jan 2013, 1:34am PST   Share   Quote   Permalink   Like (2)   Dislike     Comment 18

Thanks Obama, it's because of you and your bankster puppeteers that I've lost all hope of owning my own home.
I guess I'm not poor enough or lazy enough to deserve a seat at the table.
F---!

APOCALYPSEFUCKisShostikovitch   Tue, 29 Jan 2013, 1:36am PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 19

Quigley says

The market is so bogus if you buy something now you should pay for it with $3 bills.

hehehehe

Facebooksux   Tue, 29 Jan 2013, 1:42am PST   Share   Quote   Permalink   Like (1)   Dislike (1)     Comment 20

FUCK YOU BERNANKE!!!1

varmint   Tue, 29 Jan 2013, 2:48am PST   Share   Quote   Permalink   Like   Dislike     Comment 21

robertoaribas says

obviously, you don't know anything about foreclosures then. The bank doesn't usually set the minimum bid at the debt owed, or NOTHING would ever get bought at auction; they have have done that in 2006, but they learned. They estimate the value it will sell for. Right now, about 50% are purchased, 50% go back to the bank

Ever think that it's more advantageous for the bank to not sell at auction? Smaller pool of buyers (in CA you need 100% cash on the steps) who will be risk adverse due to no inspections etc.

Yes some are discounted from amount owed but from what I've followed, most are not. I'm sure this depends on the specific market and how much REO the bank is willing/able to take on.

What's true for you in AZ is not necessarily what's true for someone else in CA. As for your tone: get fucked.

varmint   Tue, 29 Jan 2013, 4:55am PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 22

thank you, this data is more helpful than insults

Raw   Tue, 29 Jan 2013, 8:18am PST   Share   Quote   Permalink   Like   Dislike     Comment 23

Quigley says

Thanks Obama, it's because of you and your bankster puppeteers that I've lost all hope of owning my own home.

I guess I'm not poor enough or lazy enough to deserve a seat at the table.

F---!

Obama and Bernanke had a job to do....Get the housing market and the economy back on the path to recovery. They have achieved this with flying colors, and undoubtedly deserve praise, not criticism.
Many home buyers who did not see the bounce in housing coming have missed the boat, but that should not stop anyone from jumping onto the next boat which will come along.

Raw   Tue, 29 Jan 2013, 8:20am PST   Share   Quote   Permalink   Like   Dislike     Comment 24

David9 says

Raw says

So far al I see is the perma bears. Anyone who listened to them a year ago

are sorry as hell.

I'm not 'sorry as hell'. What? Let's see, I could have had:

(All are plural)

1.) Condos that look onto other people's property

2.) Condos that look onto stucco walls

3.) Condos that need $money$ plus mortgage to be liveable.

4.) Condos that that are investor flips

5.) Condos with high HOA fees

Basically, I could have bought the bank's sh*t, or given my equity to an investor.

No mention of $100,000 gain in equity you could have had? I find it hard to believe you would not want it.

David9   Tue, 29 Jan 2013, 8:35am PST   Share   Quote   Permalink   Like   Dislike     Comment 25

Raw says

No mention of $100,000 gain in equity you could have had? I find it hard to
believe you would not want it.

Of course I want that. Why do you think I bitch and complain so much ?

In the low end open market, that much of an equity gain is not a reality.

Now, if I was a cash investor at the courthouse steps..

You betcha ;-)

iwog   Tue, 29 Jan 2013, 9:42am PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 26

HousingBoom says

RealtyTrac, CoreLogic Confirm Housing Bear Thesis: 85-90% of REO Being Held Off Market, Meaning “Tight” Inventories Are Bogus

Wow........do any of these people actually shop for real property?

Confirms a bear market in housing? Seriously??

Go make an offer 5% lower than the market price one year ago today and see how hard the agent/owner laughs at you. Holy crap batman! I've seen denial before but this is getting ludicrous.

inflection point   Tue, 29 Jan 2013, 11:58am PST   Share   Quote   Permalink   Like (2)   Dislike     Comment 27

Raw,

The job Ben Bernanke and Obama (and Bush) had to do was rob honest citizens of their hard earned savings and their future. They are no better than Bernie Madoff. The only advantage they have over Bernie is they have the law on their side.

yup1   Tue, 29 Jan 2013, 12:00pm PST   Share   Quote   Permalink   Like   Dislike     Comment 28

iwog says

Wow........do any of these people actually shop for real property?


Confirms a bear market in housing? Seriously??


Go make an offer 5% lower than the market price one year ago today and see
how hard the agent/owner laughs at you. Holy crap batman! I've seen denial
before but this is getting ludicrous.

Did you actually read the article? Did you even read the headline? Massive REO is being held off the market, simple supply and demand means yes the price will be going up. IT IS ARTIFICIAL DUE TO THE SUPPLY BEING HELD OFF THE MARKET. I know both you and Roberto understand this.........

iwog   Tue, 29 Jan 2013, 12:26pm PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 29

yup1 says

Did you actually read the article? Did you even read the headline? Massive REO is being held off the market, simple supply and demand means yes the price will be going up. IT IS ARTIFICIAL DUE TO THE SUPPLY BEING HELD OFF THE MARKET. I know both you and Roberto understand this.........

Massive REO supply, even if it does exist, can be kept off the market for a fucking decade if the banks want to keep it off that long.

Bank CEO: "OMG!!!! Home prices are sharply higher in 2012!!! Lets hurry up and sell everything and drive prices back down again!!!!"

The premise of the article is bullshit if it's false and is also bullshit if it's true. THAT is the main point.

yup1   Tue, 29 Jan 2013, 12:31pm PST   Share   Quote   Permalink   Like   Dislike     Comment 30

iwog says

Massive REO supply, even if it does exist, can be kept off the market for a
fucking decade if the banks want to keep it off that long.

Not if they are ever subjected to real accounting.

iwog says

The premise of the article is bullshit if it's false and is also bullshit if
it's true. THAT is the main point.

HAHA!

inflection point   Tue, 29 Jan 2013, 12:54pm PST   Share   Quote   Permalink   Like   Dislike     Comment 31

Robert,

You going to bet the farm on a sample of 20? Oh by the way, does the series "property wars" make you feel better or worse about your investments? No sarcasm just a question.

yup1   Tue, 29 Jan 2013, 1:17pm PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 32

robertoaribas says

DESPITE what nitwits misstate about accounting, publicly traded banks are
actually required to report the number of loans 30/60/90 days late or in
foreclosure. The numbers get put out there. Ditto all of the credit reporting
agencies which within a couple weeks or so, get mortgage delinquency notices on
every type of bill not paid on time, including mortgages. These statistics have
all improved remarkably for Arizona and California over the past year.

Go read Calculated risk or LPS if you want to see the actual numbers not your anecdotal evidence. LPS report shows 5.6 Million homes in foreclosure or delinquent. That is a fact. The banks DO NOT have to issue a notice of default at 90 days, they can. Do you want anecdotal evidence. Here are some homes in my neck of the woods.

http://www.zillow.com/homedetails/1111-La-Sierra-Dr-El-Dorado-Hills-CA-95762/18594431_zpid/

Notice of Default January 10, 2013. $135,209 past due. That is much greater than 90 days late.

http://www.zillow.com/homedetails/8029-Marches-Way-El-Dorado-Hills-CA-95762/59929320_zpid/

Notice of default March 2011. $41,579 past due. Foreclosure auction 1 year and 10 months later.

Now you will say I cherry picked a couple places but I could literally link homes all day that are in this same condition. There are 2040 homes in Mesa, AZ that are up for foreclosure auctions.......

yup1   Tue, 29 Jan 2013, 1:22pm PST   Share   Quote   Permalink   Like   Dislike     Comment 33

robertoaribas says

in fact ALL THE DATA says their isn't any real shadow inventory, and all the
shadow believers ever have is, "I drive around and see empty homes..." hell my
house might look empty when nobody is home. People go on vacation too. rentals
sit empty in between tenants.... there are vacation homes too.

On my street banks have been trying to sell 2 foreclosed properties for months. They just pulled one from the market, it did not sell. I went and looked in it when they had the open house. It was priced at a 10% premium to another house just up the street. It has at least 35K in work that needs to be done.

Go sign up for zillow if you want to see some of the foreclosure inventory in your area. I repeat SOME because I know that it is not all the inventory. That is a fact.

yup1   Tue, 29 Jan 2013, 1:25pm PST   Share   Quote   Permalink   Like   Dislike     Comment 34

In fact for Zillow they only show homes in Mesa, AZ that are in fact scheduled to be auctioned, they do not show homes that have a Notice of Default. It is so bad that they are even scrubbing the data to remove the date that NOD was issued.

varmint   Wed, 30 Jan 2013, 2:20am PST   Share   Quote   Permalink   Like   Dislike     Comment 35

robertoaribas says

Also, to be honest, that is a shockingly high rate of cancellations, and if I were considering buying in California, I'd investigate that further.

I looked in the zip where I am specifically searching and the cancellation rate was over 80% for the last few months. I've been scouring the listing pretty hard in this area and recall only one or two short sales over that period.

I think they're putting them off, which makes sense for the bank because prices are rising. Or maybe a ton of people are getting loan mods /shrug

David9   Wed, 30 Jan 2013, 2:32am PST   Share   Quote   Permalink   Like   Dislike     Comment 36

I like this analogy from 2012:

"“Picture a monotonously stormy and foggy day. The rain is pouring..not just down, but sideways and upside down and swirling. It’s so dark, you can’t see six feet in front of you. And right in the middle of this, you’re barreling down the interstate at 100 mph. The water across the highway is so deep that you’re just hydroplaning and twisting and flying straight off the road. And more and more people just keep getting on that interstate, going faster and faster. After hours and hours of this the entire roadway is a scene of carnage and destruction. Bodies and mangled cars lying everywhere. And still the cars just keep on coming. Faster, harder, more of them.
Law enforcement and highway patrol are totally aware of the carnage on the road, but they do absolutely nothing. Worse, they stand there flagging more and more cars onto the interstate…”KEEP ‘EM MOVING!” , “GET IN THERE!” , “GO FASTER!” They shout.
Now, instead of cars on the interstate, understand that this is what’s happening with homes in foreclosure. The banks haven’t even begun to clean up the existing wreckage, but they’re throwing more carnage into the pipelines just as fast as they can spit foreclosure lawsuits out of their computers.
And the best part about all this societal carnage is the victims, the American taxpayer, are paying for all this.
Welcome to Amerika 2012!"

And this explanation of title:

"“A single mortgage may involve several banks or companies — one that made the loan; another that “services” the loan by collecting payments; and another that funnels payments to yet another bank, or “trustee,” that disburses proceeds from mortgage payments to investors of loans bundled together as mortgage-backed securities.
Add to that the recent wave of bank closures and mergers, and you’ve often got a jumble of corporate entities.
Towns have struggled to unravel this chain of relationships to force the banks to act.
“It’s a legal nightmare to figure out who is responsible,” said Raquel Diaz, code compliance manager for Lake Worth.
For example, a house may be titled to “Deutsche Bank c/o Saxon Mortgage Services Company.” Deutsche Bank is a German firm that acts as a “trustee.”
SUN SENTINEL"

Anyone recommend buying top dollar California Real Estate in a shrinking economy?

David9   Wed, 30 Jan 2013, 6:07am PST   Share   Quote   Permalink   Like   Dislike     Comment 37

underwaterman says

Playing in the housing manipulated market is pure gambling. Much better to sit
it out until it deleverages from debt to inventory.

I couldn't agree more.

Even this article states of the danger of an 'asset bubble' from all the Fed pumping.

http://www.reuters.com/article/2013/01/30/us-usa-fed-idUSBRE90T0TF20130130

And someone today at work came up with: "Who would buy a house now, they have to pay double, once with the mortgage and then again with their taxes for all the stimulus"

David9   Wed, 30 Jan 2013, 7:13am PST   Share   Quote   Permalink   Like   Dislike     Comment 38

robertoaribas says

you pay the tax stimulus REGARDLESS of whether you own a home or not...

Yep. But I found it interesting and post worthy that someone who probably does not follow patrick.net would come up with that statement.

postbubblesucess   Wed, 30 Jan 2013, 7:16am PST   Share   Quote   Permalink   Like   Dislike     Comment 39

Trulia says my property went up 17.4% since last January. It was confirmed when my neighbor who bought 10 months ago sold his property 2 weeks ago for $47.5k. He bought for $38k and spent a lil too much in remodeling, but it looks nice. Mine was $43.5k and I've spent $3k remodeling. It's beautiful and wouldn't let it go for anything less than $52k at this point. My plan is to either rent it out or sell when it reaches $65k in a few years maybe sooner. After the next Bubble in about 5 years I'll buy again. Maybe the same place for $25k. Just some of the thoughts going through my head. What do you guys think?

David9   Wed, 30 Jan 2013, 7:21am PST   Share   Quote   Permalink   Like   Dislike     Comment 40

postbubblesucess says

What do you guys think?

Yes ! Just because I and others have not found or pounced on a possible flip here in California does not mean YOU cannot profit from this .. market !

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