[horseplayer]

The bank is financing their own house, captain?

[olecapt]

Originally Posted by horseplayer

The bank is financing their own house, captain?

Trying to unload a construction loan. In the particular case I would guess they have close to a million dollars tied up. Client may well pursue it including perhaps peeling off part of the surrounding properties. I think he could likely get half the developmemt for 25 cents on the dollar and get it 30 year financed at 4.5%. You normally can't get a bank to touch uncompleted lots...but when they want to get rid of the big one...who knows?

[MomMom]

From the Las Vegas Sun

Southern Nevada home sales jump for 12th straight month - Las Vegas Sun

[Kaiminani]

Perhaps this explains the discrepancy between what olecapt reports seeing and what the media and other sources have reported about increasing numbers of REOs:

Foreclosure Moratorium Ends Without Any Media Coverage - Good News? or Bad News?

There was a second part of the moratorium that no one knew about. Fannie also put the brakes on releasing new property that they already owned to the market. The banks are sitting on an enormous inventory that hasn’t been put out to market yet. The moratorium for releasing new inventory ended today.

[olecapt]

Originally Posted by Kaiminani

Perhaps this explains the discrepancy between what olecapt reports seeing and what the media and other sources have reported about increasing numbers of REOs:

Foreclosure Moratorium Ends Without Any Media Coverage - Good News? or Bad News?

There was a second part of the moratorium that no one knew about. Fannie also put the brakes on releasing new property that they already owned to the market. The banks are sitting on an enormous inventory that hasn’t been put out to market yet. The moratorium for releasing new inventory ended today.

That is simply not true. At least in Vegas. It is very simple for any RE Agent to firgure out how many homes the lenders are holding. It is not a significant factor...and it is not growing.

If there is a REO slug coming it is not here yet. I am very skeptical. Simply because the banks are quite incapable of supporting a slug...Maybe they can double their rate but that is about it. That is not enough to prevent us runniong out of REOs.

And it is getting pretty public. One of our mucky mucks just put out a blog to the troops about the REO inventory running down. When it gets noticed in that arena it is pretty obivious.

I think I am going to start a blog page that lets us all watch this go down. Whoever proves to be right it should be interesting.

[tony soprano]

Originally Posted by olecapt

That is simply not true. At least in Vegas. It is very simple for any RE Agent to firgure out how many homes the lenders are holding. It is not a significant factor...and it is not growing.

Not growing...yet. It's going to take time for the March NODs to work their way through the system.

If there is a REO slug coming it is not here yet. I am very skeptical. Simply because the banks are quite incapable of supporting a slug...Maybe they can double their rate but that is about it. That is not enough to prevent us runniong out of REOs.

No one has to worry about running out of REOs. All they have to do is exercise some patience. The moratorium may have put a temporary kink in the supply, but now it's back to business as usual. It should be quite obvious that if you increase the number of NODs, and simultaneously ratchet up the rate of unemployment, that you're going to see a larger foreclosure number. It takes some really creative thinking to think that you can look at a particular foreclosure rate, increase the two inputs mentioned above, and believe that the foreclosure rate isn't going to increase.

Here's my own anecdotal experience during a recent Vegas house hunting trip - I looked at so many REOs, I got tired of looking at them. I ultimately made offers on three of them, all under list. One accepted the offer immediately. The second countered with a number slightly higher than my offer, but still less than list. The third, and my first choice, countered back with the full list price. My response to the third was my original offer, but I said I'd pick up the customary buyer's closing costs. Deal accepted.

I will add this; very few bear markets go straight down, although the Vegas housing market has certainly tried. Early on in this debacle, the Vegas housing rebounded on at least one occasion. It turned out to be a complete headfake. It's very possible that we see another one of those headfakes. Until the job market improves, it's difficult to see any sustained recovery in the housing market.

Lastly, I close escrow in 2-3 weeks, so I hope that everything I've said above is proven wrong. I vacillate between being happy with the deal I struck and feeling like a moron for buying right here.

[jwt8070]

Originally Posted by tony soprano

Here's my own anecdotal experience during a recent Vegas house hunting trip - I looked at so many REOs, I got tired of looking at them. I ultimately made offers on three of them, all under list. One accepted the offer immediately. The second countered with a number slightly higher than my offer, but still less than list. The third, and my first choice, countered back with the full list price. My response to the third was my original offer, but I said I'd pick up the customary buyer's closing costs. Deal accepted.

This is interesting. I wonder if you would disclose the price range of the properties you bidded on. I hear that at the low end, it is common for a property in good condition to receive multiple offers and buyer has to pay above list, but this seldom happens to properties, say, above 250k. This is why I am asking about the price range.

Originally Posted by tony soprano

Until the job market improves, it's difficult to see any sustained recovery in the housing market.

Completely agree. And I doubt very much after a crash like this, the housing market will bounce right back. Most probably it will linger around the bottom for some years before it heads north again. Keep in mind that the price level in 2006 was not supported by any economic fundamentals, just as the 5000 points on Nasdaq in 2000 wasn't based on any economic fundamentals. It has been nine years since tech stocks bubble bursted, where is Nasdaq at today?

[gtbguy]

Originally Posted by tony soprano

Not growing...yet. It's going to take time for the March NODs to work their way through the system. No one has to worry about running out of REOs. All they have to do is exercise some patience. The moratorium may have put a temporary kink in the supply, but now it's back to business as usual. It should be quite obvious that if you increase the number of NODs, and simultaneously ratchet up the rate of unemployment, that you're going to see a larger foreclosure number. It takes some really creative thinking to think that you can look at a particular foreclosure rate, increase the two inputs mentioned above, and believe that the foreclosure rate isn't going to increase.

Excellent post, I believe there are plenty more foreclosures to hit the market. As indicated in previous article there are 1 out of 27 homes that are/will be foreclosed in Las Vegas. Any financial advisor would suggest an owner who bought or refinanaced around 2006 would be best to walk away from a home that has dropped drastcially in value. It will be years before prices see those levels again.

As for the banks playing the game by controlling the number of homes put on the market remains to be seen. Eventually they have to sell those homes. In the meantime, the longer they wait the more the homes looks neglected and bring down the neighborhoods which in turn affects the selling price of the home.

I've made offers on homes only to find myself in bidding wars and I won't play that game. I have cash and I'll just wait until the right deal comes along. Plenty of opportunities await for the patient investor.

[gtbguy]

Originally Posted by jwt8070

This is interesting. I wonder if you would disclose the price range of the properties you bidded on. I hear that at the low end, it is common for a property in good condition to receive multiple offers and buyer has to pay above list, but this seldom happens to properties, say, above 250k. This is why I am asking about the price range.

For a home to cash flow you need to stay below $200k in this market. And yes, these are the homes seeing the multiple offers and above list price especially in better areas. I am personally finding this to be the case with my offers.

[olecapt]

Tony lives right or has specialty needs.

Below 100K virtually everything is multiple offers.

In the 100K to 150K...which I consider the sweet spot for investors virtually everything has more than one offer but often a number are low balls from investors looking for a cheap deal. They are going at list or about there.

Someplace around 200K things become more rational. You actually have to start figuring what the place is worth before offering.