Media sources are hoping to get the jump on the foreclosure tsunami:
http://www.latimes.com/business/la-fi-foreclosure4-2009jul04,0,5145254.story
Sales of foreclosed houses soared last year as investors and first-time home buyers swarmed over what were considered bargain houses. This year it’s been unusually quiet, says Jerry Abbott, a broker and co-owner of Grupe Real Estate in Stockton. That doesn’t make sense, he said, because he sees many houses in foreclosure in the city.
But just recently, said the 37-year real estate veteran, there’s been a surge of requests for so-called broker price opinions, or appraisals that lenders often ask brokers to provide just before they put a foreclosed property on the market.
“I think it’s going to be a very big wave,” he said. “Just like what we saw through 2008.”
The effect on prices won’t be as severe, Abbott said, because values already have plunged and there’s hearty demand for such properties.
Still, he said, “It will keep prices low. . . . It’ll just slow the recovery down in general.”
Michael Chee, 43, of Burbank is among those worried about what a rise in foreclosures could mean for his home.
Chee was laid off from a healthcare consulting firm in March. With jobless benefits, he figures he will be able to hold on until he finds a new job. His three-bedroom house, though down 20% to 30% in value, isn’t underwater — for the present.
“We’re OK right now,” he said, noting that his brother’s home in Montebello is in foreclosure. “But going forward, who knows? The way things are going. . . .”
“It’ll just slow the recovery down in general.”
As if the “recovery” ever started.
I look forward to the day when the LATimes articles are nothing more than links to the half dozen websites that had this story 6 months ago.
Remember when I said this last round of flippers had better be early, extra nimble and get their renovations done quick or else face trying to sell into the teeth of a second wave? How’d you like to be jammed up in plan check right about now burning money?
Seriously, I’d love to have the url history from Don Lee’s computer. CR, Bubbleinfo, E.D., etc.
I believe I found Mr. Chee’s house. He appears to have some head-room above his purchase price in ’01, for the time being, assuming he didn’t tap that sweet home equity. I love his ‘Make Me Move’ Price… dare to dream.
Looking at the sea of cookie-cutter houses in his neighborhood, and the prices & estimates they are at, we have a long, long way to go (down). Remember, all those bubble dollars must be returned, one way or another.
The Blur,
That quote jumped out at me when I first read this article. My thought was that the only thing slowing down the actual recovery was the piecemeal, dragged-out approach to getting rid of the foreclosures in general. If they’d just dump them all at market, instead of imposing moratoriums and such, we’d get this thing over with in a jiffy. Pull the damn bandaid off already!
Here’s an interesting point by Mark ‘Mr. Mortage’ Hanson:
“Something to keep an eye on…in every mid-to-high end area that I have studied there is an overwhelming number of once listed properties coming up for rent. The thought process is “lets rent for a year or two and sell when the market comes back”. We know that won’t happen — but what will happen is that the massive supply of mid-to-upper end rentals priced very reasonably relative to the cost to buy and own will pull prices down faster and further.”
http://www.fieldcheckgroup.com/2009/07/03/6-19-may-ca-housing-update-mid-to-high-end-capitulate/
Hope you all had a great fourth.Bummed out that steve mcnair was killed.Still wondering what happened.The night race at daytona was awesome.
Many of the short sales currently listed will become foreclosures.I wonder if there is any data out as to the number of home sales and refinances from 2003-2007.Trying to figure an estimate of how many years it will take to absorb the distressed inventory.Figure at least 50% of all those sales and refi’s will go bust.Take that number and divide by the number of sales we have currently and might get a good idea.
McMansion has the right idea – “mid to high end rentals renting below cost”. . .agree, I live downtown SD, and in my building of 248 units, 50% are rental (from the HOA info). Most other buildings downtown are in about the same shape. The rents listed on Craigslist, and anecdotal from friends here, are WAY too low to cover costs. Rents are in the $2400 to $3400 range, while purchase prices were in the $650k to 2 million range. Even a 30 year fixed on a 700K unit (renting for $2600) could not make money with $780 HOA fees, and equal property tax per month.
Poolside conversations are still, “when the market recovers, I will sell.” The other day, I did hear, “God, this has been going on for 3 years, when will it end?”. . .
I think it is finally starting to sink in that there IS no quick recovery, and five years from now, home prices will be about what they are today. . .those option-ARMS will have reset – so lookout below!
In that article, and in those poolside conversations Mark in SD mentions, people keep talking about “when the market recovers”. If by that they mean when prices will return to the 2006 levels relative to current income, then the market will recover when:
* Tulips again hit 10 times the annual salary of a skilled craftsman
* Pets.com (the sock puppet guys) once again reaches $1B market capitalization
* The Nikkei 225 hits 39,000 again
Personally, I’m not holding my breath.
It is absolutely true that the market will recover in the sense of having normal sales volume in the mid and upper tiers, but prices (adjusted for income) required to generate that volume will not match the bubble heights in our lifetimes.
People have very short memory when it comes to bubbles.Greed will be back.
http://abcnews.go.com/Business/Economy/story?id=7988874&page=1
America’s Most Troubled Luxury Neighborhoods
The Collapse in Prices Has Finally Come Home to the Rich
Has the housing market scraped bottom? Not in some of the wealthier neighborhoods — places like New York City’s Greenwich Village, Santa Monica, Calif. and Chicago’s Lincoln Park. They held up nicely while the rest of the country slumped last year. This year such Tiffany zip codes are on track to fall 15 percent to 25 percent.
Why haven’t you heard about this? Statistics lag. With relatively low unemployment, high-end addresses don’t have foreclosures to hasten capitulation. …
There is a still-growing supply of wildly overpriced, unsold homes–60,000 U.S. properties priced above $2 million listed on Realtor.com. Experts get these gloomy vibes by dividing inventory by the current monthly rate of purchases.
“Any result over seven months generally means falling prices,” says David Stiff, chief economist at Fiserv in Brookfield, Wis. In some tony neighborhoods the level of glut is higher than the national average of ten months.
By far the scariest part of this article:
“We’re very unlikely to implement another moratorium,” Wheeler said. But he noted that Treasury would closely monitor how many foreclosed homes were dumped onto the market, suggesting that officials could take other steps to prevent a flood of lender-owned properties.