[ruready1st]

Aren't there still builders building too?

[rpachigo]

Originally Posted by olecapt

Well no. First off virtually every property that was purchased in 2006 is well under water...so any remaining equity would be because the owner came in with more than a third down. I doubt very much there are more than a small handful of places listed above their value in 2006. And note the pricing of non-distressed properties has been coming down faster than REPOs recently...so at least some seller are blinking.

There appears to be a developing shortage of REPOs. There are lots and lots of shorts but they still are selling at dismally small percentages.

And there is certainly still a steady stream of REPOs. But it appears smaller than the stream flowing out.

I doubt you will be hurt at all by waiting some more. But watch the market.

Something has to give soon.

There will be plenty of inventory for a few years in terms of repos. Already, the properties I bought at 2/3 off, I checked a few of the neighbors, and it seems a few are in default - either they were headed that way or they saw the price that I paid and decided to walk. I'm not sure but either way add this to the growing inventory of REOs. Also, not enough investors to soak up the property with high FICO, 25% down, stable income in this economy. Some cash buyers but not enough. More pain and misery ahead.

[olecapt]

Originally Posted by rpachigo

There will be plenty of inventory for a few years in terms of repos. Already, the properties I bought at 2/3 off, I checked a few of the neighbors, and it seems a few are in default - either they were headed that way or they saw the price that I paid and decided to walk. I'm not sure but either way add this to the growing inventory of REOs. Also, not enough investors to soak up the property with high FICO, 25% down, stable income in this economy. Some cash buyers but not enough. More pain and misery ahead.

That is simply not true. The inventory of REPOs is dropping relatively fast in the face of soaring demand. That is how it is. As the REPO inventory drops to 1.5 months or so, which it looks like will be in May or June something has to give. Either the banks open a new vein of REPOs or price goes up.

Beginning as well to see a new phenomena. Fronts that are apparently picking up the trustee sales for the banks, doing a doll up and selling well above REO levels. One guy has a 100 homes he is working.

[tony soprano]

Originally Posted by olecapt

That is simply not true. The inventory of REPOs is dropping relatively fast in the face of soaring demand. That is how it is. As the REPO inventory drops to 1.5 months or so, which it looks like will be in May or June something has to give. Either the banks open a new vein of REPOs or price goes up.

I decided to go back and check in case I was mistaken, and I wasn't. You've been singing this same tune of increasing sales volume and decreasing REO inventory, signaling a market bottom for over a year now. You've been dead wrong with prices sinking lower and lower the entire time. Repeat the mantra long enough and eventually you'll get it right. Then we'll all be treated to your crooning of calling the market bottom. The question remains how many buyers will you have put upside down in the interim?

[olecapt]

Originally Posted by tony soprano

I decided to go back and check in case I was mistaken, and I wasn't. You've been singing this same tune of increasing sales volume and decreasing REO inventory, signaling a market bottom for over a year now. You've been dead wrong with prices sinking lower and lower the entire time. Repeat the mantra long enough and eventually you'll get it right. Then we'll all be treated to your crooning of calling the market bottom. The question remains how many buyers will you have put upside down in the interim?

Nope. Only over the last 4 or 5 months. I adopt my views all the time as the market changes. Last spring I expected that the heavy volume increases would serve to stabilize pricing...which every ECO 101 book indicates would happen...I was incorrect as the lenders proceeded to drive REO prices to levels that kept everyting going down.

These being relatively unique I don't feel particularly bad about that. I try to adopt to what is actually happening.

I would note that I have become more cautious. I claim the situation can't continue...which is reasonably trivial to demonstrate...but I avoid projecting the actual outcome.

[rpachigo]

Originally Posted by tony soprano

I decided to go back and check in case I was mistaken, and I wasn't. You've been singing this same tune of increasing sales volume and decreasing REO inventory, signaling a market bottom for over a year now. You've been dead wrong with prices sinking lower and lower the entire time. Repeat the mantra long enough and eventually you'll get it right. Then we'll all be treated to your crooning of calling the market bottom. The question remains how many buyers will you have put upside down in the interim?

He has been horribly wrong this whole time and his word is not to be believed pure and simple regarding real estate or foreclosures, etc. He is no better than a snake oil salesman. Check zip, realtor.com, housing tracker, housing watch, and realty trac and the evidence is right there.

[olecapt]

Originally Posted by rpachigo

He has been horribly wrong this whole time and his word is not to be believed pure and simple regarding real estate or foreclosures, etc. He is no better than a snake oil salesman. Check zip, realtor.com, housing tracker, housing watch, and realty trac and the evidence is right there.

That opinion kind of figures. Doomers can never deal with real data. And primary data is particularly impossible for them to deal with.

And how about a little more salt in the wounds...Try my latest blog...

http://www.city-data.com/blogs/blog5...re-spring.html

[tony soprano]

Originally Posted by olecapt

Nope. Only over the last 4 or 5 months. I adopt my views all the time as the market changes. Last spring I expected that the heavy volume increases would serve to stabilize pricing...which every ECO 101 book indicates would happen...I was incorrect as the lenders proceeded to drive REO prices to levels that kept everyting going down.

Yes, you were incorrect last spring, and I'd say it's very likely that you're going to be incorrect this spring as well. Which will likely lead to spring of 2010 when you'll be telling the board again how the increasing volume will lead to higher prices. The basic principles of Econ 101 remain safe, it's the incorrect interpretation of them that create problems. During a given period, regardless of what the sales volume is, if price continues to fall, then supply is overwhelming demand. Price equilibrium occurs at the intersection of the supply and demand curve. It really is that simple. While you may have access to current MLS inventory numbers, it's been demonstrated for over a year that you have no idea what inventories are going to do going forward.

Here's a post of yours that's over 13 months old. Your response is to someone that indicated they were going to sit it out a bit and wait for a price correction -

Originally Posted by olecapt on 3/2/2008

It is an interesting gamble. Little time left. It appears pricing is stabilizing. Volume is up over 10% and inventory is down a bit. Note that the big homes did not go up nearly as much as the smaller ones. In some markets it was no more than 20% at the peak. They have now come down most of that. The premium houses in Sun City Summerlin (more than 500K) went from $200 per SF to $240 per SF and are back down to around $210. That market of course was built out and had virtually no speculator action. There are also almost no foreclosures.

I would agree that a 10% price reduction would increase sales....but note that an area wide increase of sales by a 1/3 or so may have the same impact without a price reduction. Buyers fear missing the bottom...

The highlighted portions of that 13 month old post is indistinguishable from something you would have posted yesterday; volume up, inventory down, prices stabilizing, the situation can't continue, etc. Did any of it prove accurate? What's pricing done over the last 13 months? How far underwater would the OP be had he ignored his original thought to wait on the sidelines for a bit, and bought instead because volume had ticked up?

[olecapt]

Originally Posted by tony soprano

Yes, you were incorrect last spring, and I'd say it's very likely that you're going to be incorrect this spring as well. Which will likely lead to spring of 2010 when you'll be telling the board again how the increasing volume will lead to higher prices. The basic principles of Econ 101 remain safe, it's the incorrect interpretation of them that create problems.

Nothing wrong with ECO 101. It is however not a free market. And as long as an agency can and does manipulate price unnatural things happen.

During a given period, regardless of what the sales volume is, if price continues to fall, then supply is overwhelming demand. Price equilibrium occurs at the intersection of the supply and demand curve. It really is that simple. While you may have access to current MLS inventory numbers, it's been demonstrated for over a year that you have no idea what inventories are going to do going forward.

Not in the least true in a controlled market. The price is set to realize certain short term goals of the lenders...and is actually funded with our tax dollars.

Here's a post of yours that's over 13 months old. Your response is to someone that indicated they were going to sit it out a bit and wait for a price correction -

The highlighted portions of that 13 month old post is indistinguishable from something you would have posted yesterday; volume up, inventory down, prices stabilizing, the situation can't continue, etc. Did any of it prove accurate? What's pricing done over the last 13 months? How far underwater would the OP be had he ignored his original thought to wait on the sidelines for a bit, and bought instead because volume had ticked up?

Actually if you go to the blog it appears at least some communities are in fact stable. More to follow? Perhaps, in time. Those comments presumed the context of a free market. As has been well demonstrated it was not a free market. There are lots of other differences. The inventory is in no way the same inventory. Now it deals with the inventory that matters currently...that is the inventory of lender owned property. Thirteen months ago it presumed the free market and all inventory. They are utterly different parameters even if similar words are used.

Volumes are very high and going much higher. The crucial inventory is shrinking...both in absolute terms and relative to the sales. It is a cusp forming.

Going to be an interesting time.

And you know it could again go off in some unpredicted direction.. This whole situation is unique...so who the hell knows what happens next.

[tony soprano]

Originally Posted by olecapt

Nothing wrong with ECO 101. It is however not a free market. And as long as an agency can and does manipulate price unnatural things happen.

But of course, prices continued to plummet after your volume/inventory down/stabilization/time running out call, so the market must be manipulated. Yes, all the banks and lenders have formed an evil cabal and are colluding to drive prices lower so they can record bigger writedowns. That makes perfect sense.

Actually if you go to the blog it appears at least some communities are in fact stable. More to follow? Perhaps, in time. Those comments presumed the context of a free market. As has been well demonstrated it was not a free market.

No, it hasn't been demonstrated. It's an unsupported conspiracy theory advanced by you to explain why after telling someone 13 months ago that pricing was stabilizing, volume was up 10%, inventory was down, and there was little time left, that you're repeating the same message this evening. Don't get me wrong, you're going to get it right one of these times simply because you've been repeating it for so long.

There are lots of other differences. The inventory is in no way the same inventory. Now it deals with the inventory that matters currently...that is the inventory of lender owned property. Thirteen months ago it presumed the free market and all inventory. They are utterly different parameters even if similar words are used.

You ever think of running for political office?
"This inventory is different than that inventory. I was talking about that inventory and a non-manipulated market. This inventory didn't matter then, now what matters is lender owned inventory, not that inventory...if it's not manipulated."

Originally Posted by olecapt on 3/3/2008

Little time left. It appears pricing is stabilizing. Volume is up over 10% and inventory is down a bit.

Originally Posted by olecapt on 4/5/2009

Volumes are very high and going much higher. The crucial inventory is shrinking...both in absolute terms and relative to the sales. It is a cusp forming.

If you didn't know those two posts above were made 13 months apart, you'd swear they were spoken in the same conversation.

And you know it could again go off in some unpredicted direction.. This whole situation is unique...so who the hell knows what happens next.

Well, after hearing the same message repeated by you for so many months, and with such conviction, I would have thought that you had access to some crystal ball unavailable to most of us. Imagine my surprise to find out just how wrong I was.