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Old 11-05-2011, 10:18 AM
Location: Calgary, AB
681 posts, read 1,172,377 times
Reputation: 742


Banks in Arizona shift to short sales

Interesting... and all signs point to the positive, just as Captain Bill has been saying. My apologies to all of the negative nellies out there....
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Old 11-05-2011, 02:37 PM
Location: Gilbert - Val Vista Lakes
6,069 posts, read 11,933,083 times
Reputation: 3787
Default Shadow Inventory

The shadow inventory has always been a myth perpetuated by some who had no idea of how many homes were in that category. Some couldn't even define the categories.

Some were double counting and may or may not have realized it.

Any home that was 30 days in arrears on the mortgage, on down to those that already having a Notices of Trustee Sale was counted as a "shadow inventory".

There were several problems with that:

  • The ones that were only 30-60 days late may have been just late on the payment with every intention of catching up.
  • Some were doing workouts with the banks.
  • Many of the homes that were late, or had a Notice of Foreclosure were already listed on the mls as a short sale, hence the double counting.
They would also include every lender owned home, whether it was listed on the mls or not. It takes 2-3 months from trustee sale to the bank getting the home listed on the mls. The only ones that can be counted as "shadow inventory" are the ones that the banks have held for more than 3 months.

However, as we've already seen, the number of NOTS have been declining, and the number of REO's have been declining drastically.

I'm glad that Catherine Reagor apparently attended that seminar and published the facts. Here is one statement from the meeting.

The number of pending foreclosures in metro Phoenix is half of what it was last year, according to the Phoenix-based data service Information Market. The number of bank-owned homes listed for sale is almost a fourth of what it was a year ago, according to the Cromford Report. And because of a record number of short sales closing, the number of houses listed for short sale is down 72 percent from October 2010.

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Old 11-05-2011, 06:34 PM
Location: Phoenix AZ
5,621 posts, read 9,136,013 times
Reputation: 8389
Originally Posted by Captain Bill View Post
The shadow inventory has always been a myth perpetuated by some who had no idea of how many homes were in that category. Some couldn't even define the categories.
I was really hoping we would start seeing some of that "shadow inventory" over the winter - The wife and I have a "pet" neighborhood where we own one rental home, and would really like to purchase another. So far this year in that neighborhood, there have been 30 sales and there are 11 "pending" or "AWC" homes on MLS. There's exactly ONE (1) home that is "Active" with no offers.

Looking back ten years in MLS, the average number of completed sales in any year was about 30 homes - one year (2007) there were only 14 homes sold, and you can imagine what the prices were then.

I'm not sure how that area can decline in value any further if there are (effectively) zero homes to pick from. I suspect the "party" is over in that particular neighborhood if you're a buyer.
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