Is the new year bringing more REOs to market?
Though everyone wants to “steal one from the bank”, if you’re looking to buy in North SD County Coastal (Carlsbad-to-La Jolla), you’ll find few opportunities to snag an REO sale.
Have there been more REO listings coming on the market in 2010?
| Detached | 2010 REO listings | 2010 Total listings | REO Percentage |
| All SD County | |||
| NSDC Coastal |
No flood yet. What’s the difference in pricing?
| Detached | 2010 REO listings | 2010 Total listings |
| All SD County | ||
| NSDC Coastal |
Buyers see the REO listings, and dig the improved pricing – but there aren’t enough to go around. We don’t necessarily need more REO inventory, just more REO-type pricing on regular listings.
From George C:
The Case-Shiller Home Price Index for November 2009 shows that San Diego was one of the four out of 20 regions in the United States that has seen housing prices actually increase in the past 12 months. Granted, the increase was small — 0.4 percent — but it certainly beats the heck out of some regions like Las Vegas, Detroit, Miami, Phoenix, Seattle and Tampa, which saw prices drop double-digits in the past year. San Diego prices, according to Case-Shiller, have actually advanced for seven consecutive months.
The Case-Shiller report is very complex and there was plenty of data to support both bullish and bearish attitudes about the housing market. And, of course the media focused on the negative. An article from CNN/Money said “Home prices declined for first time in seven months.” Writer Les Christie said, “The loss was unexpectedly large.” What does that mean? Well, Les reports the index dropped 5.3 percent in the past year, then says, “Experts had forecast that prices would be off 5.0 percent.” Actually, the consensus was that prices would drop by 5.1 percent. So, an actual drop of 5.3 percent is “unexpectedly large” compared to the anticipated drop of 5.1 percent? I wonder what Les would have said if the drop had been only 4.9 percent. Would that have been “unexpectedly small?”
George Chamberlain is a shill plain and simple.
He’ll try to spin even the smallest smallest glimmer of hope into grand recovery. Whatever AM channel he’s on during my drive into work I immediately change.
I’m all for hoping things get better but this guy is over the top.
* It’s amazing how much control banks have over the market simply by limiting supply.
So what percentage of total listings are short sales? is REO + short sale > 50% yet?
“We don’t necessarily need more REO inventory, just more REO-type pricing on regular listings.”
The only sellers that have the equity to compete with the banks on price are ones that bought pre-bubble and did not HELOC. These same sellers are the ones with the equity to ride out the storm and hope for better pricing down the road.
Down in my area (92103) we have short sales harpooning the comps at $305 and $277 a foot while virtually every other home is going for $400+ a foot (the average listing PPSF is $502). It really is a tale of two markets. Not much REO activity at all down here unless you want the I-5 in your back yard. Also, although there have been a few deals on the shorts not many of them seem to be making it to close.
What is this “slinky” you mention? 😉
I’m thinking there’s some magical inertia at the high end that allows them to coast in the exosphere despite no air under their wings.
Kingside-The real question is, out of total sales (not listings), are short sales + REOs + trustee sales > 50%? I think in many areas, perhaps most, this is accurate.
I’m back, been watching and waiting.
Here is another excerpt from the U/T article; http://www.signonsandiego.com/news/2010/jan/26/local-home-prices-on-the-upswing/
“San Diego is 56.1 percent ahead of where prices were in January 2000 and ranks fourth in 2000-2009 price appreciation, behind Washington, New York and Los Angeles. ”
And,
“San Diego was up for the seventh straight month after having dropped every month since December 2005.”
This means there actually is equity out there, and homes are selling at around 2003 prices now and going up.
Also, 92013 is up 44.6% YOY.
http://www.dqnews.com/Charts/Monthly-Charts/SDUT-Charts/ZIPSDUT.aspx
Geotpf, I think that both questions are relevant and of interest for areas in question. I suspect short sale percentages for both listings and closings will be increasing substantially this year.
Not that we are trying to assign you additional homework JTR! This is voluntary for extra credit.
http://www.nytimes.com/2010/01/27/business/economy/27econ.html
Nothing is simple about real estate these days, however. Jim Klinge, an agent in northern San Diego who keeps a close watch on sales trends, recently published on his blog comparative statistics for the first 15 days of January going back 12 years.
There were 61 closed deals in the two weeks this year, which places 2010 roughly between the 1999 peak of 125 and the 2008 nadir of 36. But the price buyers are paying per square foot — one of the most accurate measures of pricing trends — is still falling. Last year it was $410 a foot; this year, it is $368.
The local market “is blazingly hot,” Mr. Klinge said, but only for sellers who want to get rid of their place, quickly.
“These sellers feel like they’re giving the house away, which is what buyers want,” he said. “If the sellers price the house too high, no one will even look at it.”
The only sellers who can do this, of course, are ones willing and able to take a big loss. Mr. Klinge showed a house Tuesday that was for sale for $800,000. The owners had paid $975,000 a few years ago, so they will lose nearly all their down payment. “It was a second home, and they just wanted to be rid of it,” the agent said.
good job on getting on the NYT!
wasn’t George C. the same guy that proclaimed Case Shiller to be a “Permabear Index?”
There’s a home down towards the end of Park Village Road in Rancho Penasquitos I passed by with a “Bank Owned” on the for sale sign. I’ve looked on line in various spots, (zillow.com etc.) but haven’t seen it pop up. Is there a lot of hidden inventory like this?
Welcome back Mozart!
Welcome back Robert, fresh from his convincing come-from-behind senatorial campaign he did for Mr Brown.
Yes, Dan Tanner, many REO agents are planting their signs a month or two prior to listing, and then marking them pending immediately upon MLS input. I just complained to the presidents, and a committee is forming.
“It’s amazing how much control banks have over the market simply by limiting supply”
(From post#2)
I have a feeling this refrain will be repeated many times, with increasing anger.
John,
In the early/mid nineties I worked as an intern at the SBA (Small Business Administration) in Denver. At the SBA I worked with accountants from the RTC/Resolution Trust Administration that were in charge of auctioning off over priced (book value) bank assets when the S&L junk bond banks folded. They worked for around 4 years auctioning houses, cars, boats, offices, planes, etc usually getting 20% of the “book value”. It can be argued that this is why houses were so “cheap” in the late 90’s.
Banks should have been closed and their assets auctioned off. It would have allowed regular people to buy houses at more realistic prices. It would have also rewarded banks that didn’t invest recklessly by providing them the markets share of those that did and are now out of business.
Instead we gave banks our tax dollars so they could stay in business. And now these same banks are rewarding us by not foreclosing to keep bad assets off their books. Why sell a bad investment at a loss to stay in business when you can up your fees and get government money.
“Banks should have been closed and their assets auctioned off. It would have allowed regular people to buy houses at more realistic prices.”
Auctioned off to whom? Cash rich investors? Isn’t this essentially already happening down at the courthouse? We are not quite at 20 cents on the dollar but if you are patient and have the cash you can probably buy for 30-40 cents on the dollar.
JTR is working hard to provide “regular” buyers access to these deals. Even with his help I imagine that it is going to be difficult and require a ton of patience and risk tolerance. But then again nobody is just going to hand you the sweetness.
pemeliza,
“Auctioned off to whom? Cash rich investors? Isn’t this essentially already happening down at the courthouse? We are not quite at 20 cents on the dollar but if you are patient and have the cash you can probably buy for 30-40 cents on the dollar.”
Yea I agree. In this case something is better than nothing.
But, as Jim has stated several times in his videos a very low percentage is actually being auctioned off. Combine this with all the roadblocks the state and feds are doing to slow the foreclosure process and you can start to see what the future will bring. Either banks are going to rape their customers with fees to stay in business or the gov/fed will give them money to stay in business. Auctioning properties at a loss is a last ditch effort to raise money.
It will be interesting to see what happens when the Fed stops buying MBS banks debt. Will the banks have skimmed off enough tax dollars to stay in business with traditional revenue sources? Or will they start to fail dumping properties on the FDIC to auction off.