bubbleinfo.com

All that is really needed for a double dip is for the arrogance of the sellers (and listing agents) to get so strong that it turns off the buyers, and nobody is left to play:

It could have been that the flippers, all on a good run, decided to go on vacation this week – and didn’t coordinate their plans with each other? If it wasn’t some quirky oddball coincidence, then maybe they’re getting nervous? That’s hard to believe, because this one seems like a no-brainer. A good reminder – be looking when everyone else isn’t:

This sounded like a big move:

Eric Friedman is leaving his post as senior vice president of default servicing for OneWest Bank, formerly IndyMac, and will become president of PREO, an online marketplace for REO and short sales.  Friedman, who held leadership roles with Fannie Mae and Countrywide, told REO Insider that his last day at OneWest is Aug. 13, and a search for replacement has begun. He has spent 20 years in the mortgage banking industry.

“PREO brings lenders, Realtors, homeowners and buyers together to turn distressed property back into family homes,” Friedman said.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Is PREO just another website that combines foreclosure activity with MLS listings?

No, none of the properties checked were listed for sale, but all were on foreclosureradar.com’s NOD or NOT lists.  Most of them have IndyMac loans on them, and their bid prices are different than the amount owed – and usually well under!  It sounded like they have partnered with the lenders to offer these properties to the public, but not sure if it’s a glorified short-sale, or an actual open bidding process before, during, or after the trustee sale.

The website also mentions that it ”encourages defaulting borrowers to allow an inspection and interior photographs in exchange for the promise to relocate within 30 days after a bid is accepted.”

This could be the wave of the future – a website designed and run by insiders to liquidate properties directly to the public.  If the opening-bid amounts are legit, and buyers can get a peek inside the house prior to bidding, it could take off. 

They are realtor-friendly too, put my name down when registering:

www.preo.us.com

Hat tip to Melissa Dale from Alpharetta:

Are the choppy market conditions causing more sellers to give it a go?

Specifically, are new listings on the increase, flooding the market when older reluctant listings are stagnating?  If so, it would sure give buyers another reason to pause.  The new-listing count has been higher than last year, but still historically low – here are the San Diego detached numbers:

No big flood to report, but the water has been rising due to inaccurate pricing. Not enough are selling, and a backlog is forming.

Today’s active inventory is 8,144 detached listings, and 3,908 attached listings, for a total of 12,052, which is 5% higher than it was four weeks ago.

July detached closings are probably going to be 20% to 30% lower than last month.  There were 2,074 detached sales in June, and so far in July we’ve only had 1,238 actually close.  So far there have been 1,656 detached listings get marked pending this month, so closings are going to be modest for the next few months, unless the short-sales can save the day.  Of the 1,238 detached closings this month, 196 were marked as short sales, or 16%, and 226 as REOs, or 18%.

Hat tip to dwip for sending this over, from Yahoo. Full article here, and some excerpts:

For a seller, advertising that you’ve recently painted your house seems like a no-brainer. But in a study that looked at nearly 60,000 residential real estate transactions in Texas, listings that mentioned new paint, new carpet and/or roof work sold, on average, for slightly less than those that did not.

Thomas A. Thomson, the study’s coauthor and the director of the Real Estate Finance and Development Program at the University of Texas at San Antonio, says that buyers aren’t going to be fooled by a problem house simply because it has a fresh coat of paint. “It’s kind of like putting lipstick on a pig,” he says. But even if there’s nothing wrong with the house, an advertisement that touts new features could set off alarm bells. If a seller says everything is new, a buyer might wonder why everything needed to be replaced-and whether there are other defects lurking.

Thomson recommends sellers take the simpler route: Let potential buyers be surprised by the quality of the home, instead of disappointed by how average it is compared with its description.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Do buyers pay more when sellers’ real estate agents are attractive?

Apparently so: Preliminary results of a study from Old Dominion University suggest that, put bluntly, the more attractive a male finds his female agent, the higher the price he’ll probably be willing to pay. Women also seem to be susceptible to attractive female agents, although not to the degree that men are. (Neither women nor men seem to respond much to attractive males.) “I’d like to think I wouldn’t fall prey to it,” says Seiler. “But I think that the people who were in our study would have said the exact same thing.”

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

A big part of any decision to sell a house is where a homeowner thinks prices are heading. So how do owners feel after the brutal market of the past few years? Surprisingly-perhaps naively-optimistic. A recent survey of 479 homeowners in 20 U.S. metropolitan areas found that people were about five times more likely to say their own homes would see their prices increase in the next 12 months than they were to say their neighbors’ homes would do better.

Robert Shiller, a professor at Yale University, and Karl Case, a professor at Wellesley College, survey homeowners every year to gauge how confident they are that their homes will increase in value. Only once, when the housing market was at its worst in the recent crash, did the poll results slide into the negative. In general, the average respondent figured his home was bound to jump in value in the near future. “People don’t change their opinions that quickly,” says Shiller.

Whether they’ll regret those opinions later, only time will tell. If his expectations are out of whack with reality, an overoptimistic seller could wind up waiting for a higher price that will never arrive. But pessimists should tread just as carefully: An overly downbeat seller could wind up dumping a house at a price far below what it could fetch a year or two later.

This swings wildly from Carlsbad bikers to a Covenant REO cheapie, hopefully there is something in here that makes it worth six minutes of your life:

For some background behind the latest prank, click here.

The mastermind behind the epic prank at the Cardiff surfing statue says he can’t stop laughing and smiling.  The controversial statue of a surfer was attacked but not injured by a papier-mache shark in Cardiff on Saturday.

Pranksters constructed the shark’s head around the statue, officially called “The Magic Carpet Ride” but referred to as the “Cardiff Kook” by some locals, without damaging it sometime in the early morning hours, sheriff’s officials said.

“I’m glad that people are having a good time with it,” said Eric, who didn’t want to reveal his last name. “I’m really happy. I’ve heard people say ‘we’re taking pictures for our Christmas card.’ Its great.”

Eric, who is “a waiter by day and sculptor by night,” says he actually came up with the idea a year ago. It took about two weeks for he and about 25 friends to put together the “Jaws-like” creature now getting national attention thanks to the internet. Its made out of newspaper, wood and chicken wire.”

He says about 13 people got together around 4 a.m. Saturday and walked the creation over to the statue. What a sight that must have been. “We were laughing so hard. I couldn’t stop laughing once I put it in,” said Eric. “We were just in hysterics. Everybody was just in such a good mood. It was so funny.”

Yesterday’s radio show (now available on their website) only lasted 32 minutes, and was a call-in Q&A format – so there wasn’t a full exploration of relevant topics of the day. 

There are other topics to discuss, let’s do it here!

1.  San Diego County attached and detached sales are slowing down:

We still have the rest of this week, and there’s always a big rush the last week of every month due to less money needed to close for pro-rations.  But if we tack on the same 974 closings we had between July 25-31, 2009, we’re still going to end up well under any of the monthly totals seen above. 

What will happen?  Will it scare more buyers back to the sidelines?  Perhaps, but hopefully it’ll serve as a wake-up call to sellers that they need to reduce their list price if they want to sell this year.

With servicers being reluctant to foreclose, I think there will be little pressure for sellers to adjust, and we’ll likely see the Big Standoff for the rest of the year. We’ll probably see either sales stagnate and the average $/sf stay above last year’s, or if sales pick up, it’ll be because sellers can live with 2009 pricing. But that’s about as bad as it’ll be.

2.  What is the real threat from the shadow inventory? 

The servicers flat-out tell their borrowers that if they want to be considered for a loan modification or short sale, they need to be delinquent.  This is causing the defaulter counts to swell, but how many are doing it just to get in the adjustment line?  If anything, the defaulter counts are a measurement of the number of future short sales coming over the next 1-5 years, and not a count of those going to be foreclosed in the next six months.

The bank-owned properties not on the open market are a fairly insignificant amount, and if they would push them out faster, it would give home buyers more better-priced inventory to consider – which isn’t a bad thing, when released in limited amounts.

The biggest threat? The borrowers who casually enter the default ranks, then get ticked off at how the servicers treat them, and who then decide to strategically default as a result.  The servicers are on a slippery slope that I don’t think they fully appreciate here.

3.  How much of a discount will be required by lookers, in order to become buyers in 2010?

I think if buyers got a 10% discount combined with 4.5% mortgage rates, they’d be happy.  Would the 10% discount need to be real, or just imagined?  In some areas, if a seller just came off their unrealistic list price by 10% it would be enough to put them well under the other active listings, because they all seem inflated.  Here’s an example:

http://www.sdlookup.com/MLS-100033349-14020_Boquita_Del_Mar_CA_92014

They started June 3rd with a list price of $1,350,000 after several attempts to sell over the last 2 years.  They lowered the list price early and often, now down to $1,179,000, and you’ll see it go pending any minute – and it sounded like it’ll close near the list price too.  The seller was not in distress, just smart - given the market conditions and other listings nearby.

I doubt that many sellers will do it, and as a result, the rest off the year is likely to be very stagnant.

4.  Double Dip.

I think with mortgage rates in the fours, there will be a buyer for every seller who is realistic.  It might take coming off their list price 10% to 20%, but the demand is there.  Will the double dip materialize in the second half of 2010?  Not according to Wells Fargo Securities:

http://blogs.sacbee.com/real_estate/California_Jul2010.pdf 

A couple of excerpts:

Current market conditions appear much too balanced for a repeat performance of steep California housing price declines. We reach this conclusion even as we expect a rising supply of distressed home selling to reemerge over the near term.

So the signs of healing we saw in the California housing market in December have only solidified further over the past six months. It would now take sizable economic or financial shock to fully reverse the progress that has been made. Historically low mortgage rates should provide an important offset to expiring tax credits and a steady supply of distressed properties that are expected to continue to spill onto the market. 

Most likely, only a double-dip recession in California could recreate the conditions necessary for another plunge in California home prices.

I think we can expect more of the same; lots of loitering, and enough sales to get us into 2011, where there will be renewed buyer frustration that things aren’t moving fast enough.

What do you think?

This morning Maureen Cavanaugh and the staff at KPBS were nice enough to include me on their radio show, “These Days”.  They will have the full transcript later today or tomorrow at their website: Link to KPBS website

Here’s how it looked to Jim TV:

Thanks to those who listened, and to shadash for calling in!