patrick.net

Just admit it...

You are sitting on a lot of real estate investments that you can't stand to crash big time...

We know the truth hurts but to deny it is doing yourself a very big disservice.

It doesn't take a Berkeley professor with a Math degree to realize that the banks are withholding inventory. People are allowed to squat in their houses for 3+ years. There are stories of people who have not paid their mortgage in over 5 years, and they still have their houses. Isn't that proof enough?

The fact that a Berkeley Math Professor can't understand the simple concept of why RE hasn't reached it's true bottom due to very obvious shadow inventory makes me seriously lose faith in this country.

It also proves to me what I've believed for a very long time; That college curriculum is for the most part very insufficient & useless in the real world. It's just a stupid piece of paper that ego-maniacs like to boast & brag about.

Better to actually do great things than to merely speak about being able yet
fail at walking the talk.

"And NO, if the market here crashes further, i will happily buy even more properties at that time!"

Good luck happily buying anything after another crash... Because banks all over will have a solvency problem.

Robber Baron Elite Scum says

Just admit it...

You are sitting on a lot of real estate investments that you can't stand to crash big time...

I agree.
He is losing sleep right now.

After the election, I expect a big recession.

xenogear3 says

He is losing sleep right now.

I've lost plenty of sleep over my investments, in my time, but, never did I insult anyone, because of it.

Just google Dean Graziosi.
He has more info than him.

The answer forming in this thread, is that its common knowledge because the perma-bears keep saying it, therefore it must be true.

In our area I have been seeing foreclosures come to market in a matter of weeks after the notice is posted on the door. There may well be reasons (legal issues) that are making the squat times so high in other states.

While the arguments for banks sitting on inventory have merit (massive writedowns, etc), so too does the case as to why banks would not sit on massive inventory.

The one flaw I see in the writedown theory is that while the number of foreclosures is likely to decrease the farther we get away from 2008, there will still be some, so a bank would need to spread their losses out over many many years (current years plus some portion of the prior years). In fact, they'd have to balance the losses out with profits, the latter being MUCH thinner these days. Couple this with having to pay expenses (taxes, HOA's, minimal upkeep), and loss of value due to deteriorating condition. Sitting on too much inventory would destroy your profits just in expenses, not to mention the compounded loss when you did eventually sell it. So the strategy would only work up to a certain inventory load.

There may very well be tax advantages I am not aware of that mitigate some of this, but if you were in that big of a hole, most companies would at least consider putting it all on one years books, do a limited bankruptcy to write off the losses, reorganize, and come back profitable.

Banks look at the same projections we do, the market will be flat at best for the next decade, with perhaps modest growth in line with inflation. Unless they are betting the farm that the projections are wrong (unlikely), or hoping for a Romney presidency and get some massive forgiveness tax break (possible, and I hope unlikely), then there doesn't seem like a huge advantage to sit on property unless you had a TON in a local market that would crater the values. Based on the short supply in many localities, banks would be getting more on the market right now before the seasonal dip in the winter months. This of course assumes they had the inventory and could legally sell it that fast.
They aren't, so what's that tell you?

robertoaribas, you really need to learn more from Dean Graziosi.
He is selling AZ real estate, too, and everyone believes him.

Your selling pitch is not very good.
Everyone here hates you.

robertoaribas says

increasing filings for foreclosures, increasing delinquencies on mortgages. Neither of these are happening at this

Foreclosures starts are rising YOY:
http://finance.yahoo.com/news/foreclosure-starts-rise-040152590.html

Also how do you explain DataQuick, and Corelogic (both firms I believe who have more resources to rely upon for accurate data than "Roberto Aribas) reporting that shadow inventory is still exceptionally high?