There is more hub-bub at cnbc about December being full of distressed sales.
NAR had reported that 36% of December sales nationally were REOs and short sales, and the new report from Campbell Surveys said 47%.
How about North San Diego County Coastal?
December Detached Sales and Price-per-SF:
| Type | 2009 | 2010 |
| REO | 25/$295 | 18/$320 |
| SS | 17/$267 | 19/$315 |
| Reg. | 197/$428 | 167/$400 |
| Totals | 239/$403 | 204/$385 |
No change year-over-year in NSDCC – an identical 18% of December sales were distressed.
Overall, the YOY sales were down 15%, and pricing down 4%, but when you look around, or talk to some of these listing agents, you’d think it was 2005 all over again!
http://www.cartype.com/pages/1590/reo
Jim,
With SS in ’09 going for close to 40% off and now in ’10 the difference is closer to 20%, do you think there’s much chance of a double dip if the banks have a (relatively) large amount of inventory to move and have to compete against the regulars who seem to have gotten more realistic in their pricing?
This is assuming the trend of REO+SS PPSF going up while Regular PPSF goes down. What’s the buyer’s expected discount for dealing with a REO or SS? I would think as the gap closes, more buyers would go for organic sales to avoid any headaches, but if the discount is good enough…
A slight chance of a double dip in general, but if it happens I think it’ll be because the baby-boomer-exodus, not the banks.
The old-timers have equity to burn and aren’t as liquid as banks. If they need to go to assisted living or pass away, the kids will want/need the money and sell for whatever they can get.
The distressed inventory seems so tightly managed that I think they’ll just turn down or turn off the flow if REOs aren’t selling for enough.
“The distressed inventory seems so tightly managed that I think they’ll just turn down or turn off the flow if REOs aren’t selling for enough.”
I think this will continue to be true for awhile but with a lot of lawsuits coming against the banks from the MBS holders we might see a different situation in the next couple of years. Right now the banks are just servicers for the most part. If they get this stuff put back on them they may be much more willing/forced to liquidate.
Retirements/Pensions can afford to try and wait it out, but banks would suffer from cash flow problems much sooner. The legal system moves really slow but a major put back case win in the next couple of years will dramatically change the picture.