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I think that it is certainly correct that this foreclosure thing is going to run on for some years yet.
We still however have the rate issue which nobody seems to have a handle on...at what rate will these foreclosures appear in say Las Vegas?
The present trend is illustrative. We are simply selling a lot more REOs than are being created. Does this continue or will there actually be some increase in the rate in time?
The present trend has to eventually lead to rising prices. Any rise in price decreases the foreclosures in the next time period. Can we get a feedback thing starting that self limits the foreclosures?
Hey olecapt sometimes I disagree with you,but recently saw a great post you made from a few years back with dire predictions for Lake Las Vegas.
I like the Platinum Condos but right now they are way to high for the cash flow. I did make an offer on one a few days ago but sellers are holding out for higher prices. I figure I could try again in 6 months or a year.
It is way too soon to call a bottom, even though the banks will be releasing more inventory they have been sitting on there are home owners still getting foreclosed on.
1 in 8 home owners in Las Vegas are behind in their mortgages and this isn't just folks who borrowed without down payments and lied about what they make.
This is folks who did it right that either are now currently out of jobs or they got those arm loans that are resetting and can't afford their homes any more. Also there are those that are struggling with themselves whether to keep their homes or walk away. Lets face it if you paid $400,000 for your home and it 's now worth $150,000 would you keep it.
Do you realize how long if ever you would be even in your home?
And god for bid you were transfered or lost your job and had to sell there is no way.
So those folks will probably cut bate and run. And the banks aren't working with folks that want to stay in there homes, they are modifying all right. I spoke with a couple of ladies one a retired professor from Dartmoth an her daughter that worked for CBS that the banks contacted them for a loan modify and this is what the bank did.
They owed $398,000 on their home the bank had the home appriased and it appraised for $250,000 so what the bank did they gave them a first and second one for $249,000 to be paid off in 30 years at 4% intersest a a second for the rest at 2% interest with a balloon in 15 years.
Yes their payments are lower but the daughter is in her 50's and the mother is in her 80's how does that help them if either one dies and leaves the other to pay it off those loans there is now way.
Until they figuire out what to do with homes in Nevada,phoenix, florida, CA this housing market isn't going to correct itself. Plus unemployment is at 10.4 % in Nevada and until you fix that who can afford to purchase a home much less rent one.
If you think I am being negagtive, I'm not it's called being a realist and you dont' keep from being duped if you don't let yourself to be lulled into thinking everything is great.
I hope things turn around but it 's going to take along time.
I got up early and that scam artist Dean Graziosi was pushing his books about making money in real estate. It is greedy people like him and other speculators who have caused the whole mess. Moderator cut: inappropriate
Housing is one of my few liberal issues and I believe that EVERYONE should be able to have affordable homes to live in. Unfortunately the last decade prices have risen from stupid to ridiculous and most people were either priced out of homes, or forced to spend far more than they could afford for a house thus causing the mass of foreclosures.
The price of homes has dropped down to where they should be. Even up to a year ago, I did a search for homes $100k and under and got nothing. Now I get lists daily of homes for $50 to $80K. This is where prices should stay. Unfortunately the greedy people are back at it and are buying up the cheap homes for speculation. I think the government should tax any home bought and sold over the primary residence at 50% (or higher) unless they are kept for 20 years. This would slow the speculators down tremendously and keep prices down. Plus I would like to see rent caps put on to keep rental prices down and stop the greedy from screwing those who rent.
Personally I hope the Real Estate Market never recovers. I like it where it is. I got a kick out of one of the listing... It was being sold for about $60K or so..it said "Previously sold for $250K"... Kind of tells you something doesn't it? That some greedy person screwed some poor home buyer real bad.
Last edited by lvkewlkid; 06-14-2009 at 09:37 AM..
Reason: Getting Around Profane Word Filter
Gomez- Don't let the bottom feeding speculators worry you about increasing prices. They will have to rent them or sell them to make money - and they may be soon dumping. When they do dump it will depress the market. People buying those houses who will really live there are another story.
Olecapt is wrong on this -there will be more waves of foreclosure and prices will trend lower for sometime.
Gomez- Don't let the bottom feeding speculators worry you about increasing prices. They will have to rent them or sell them to make money - and they may be soon dumping. When they do dump it will depress the market. People buying those houses who will really live there are another story.
Olecapt is wrong on this -there will be more waves of foreclosure and prices will trend lower for sometime.
Olecapt agrees that there will be more foreclosures. Maybe even "waves" of them whatever that means...
But the rate issue is the important one. How many per month in Las Vegas?
The REO chart still shows the inventory going down at about 500 per month and well under one month. In fact the REO sales may be dropping now...limited by too little inventory. REOs in June are now at 74.1% down from 80% earlier in the year. The SFR median is at the same value as last month and the average is down about 0.5%. This all looks like pricing is stabilizing.
So I don't see any big changes in the market soon. But I expect any changes will be small upward movements.
The olecapt walks out on the plank..whips out his saw and begins cutting between he and the boat...
It appears the end is upon us. We are in the valley. We prophesy that the resale prices of Single family residences in Las Vegas will go up in May over April.
For those more conservative than Olecapt...it could be a seasonal variation.
But Olecapt thinks not. There is more than one variable in play and a couple say we are turning the corner.
Now the mythical 22,000 bank owned could appear in the next week. Or interest rates could pop up a point...or City Center could be destroyed in an earthquake (or imploded by a consortium of bankers)...but short of a catastrophe it appears the numbers suggest an end of the downward trend.
Now remember no one...including olecapt...should announce such a thing without months of data...but by then all would have noticed.
So olecapt stands on the end of the plank and saws away...
Won't it be fun to arguue about how long until we get back to 2004?
There's more pain to come, according to the analysts While the majority of mortgage defaults so far have been subprime borrowers, more middle- and upper-income homeowners are starting to walk away from their mortgages.
Roughly one-fourth of homeowners with a mortgage owe more than the home is worth, making them much more likely to default. Among those who purchased in the past five years, 30 percent are underwater. The figures are worse in bubble markets such as Las Vegas, where 61.4 percent of buyers in the last five years are underwater,there are according to analysts 5 waves of default.
1. is the early wave of defaults came from fraud and speculation, starting in late 2006 when home prices started to fall
2.The next wave was borrowers who went into "payment shock" when their adjustable mortgage rates reset. Two-year teaser subprime loans written in early 2005 started to reset in early 2007, though those defaults are tapering off as low interest rates mitigate the shock however with rates raising that could change things.
3. Banks are now seeing is now seeing the third wave of prime loans defaulting due to job losses and home price declines. Prime loan default rates have jumped from 0.5 percent to 4.5 percent in the last year.
4.A wave of prime jumbo loans, second liens and home equity lines of credit started to swell in early 2008, again created by job losses and home price declines.
5. involves losses among loans outside the housing sector, the largest being $3.5 trillion in commercial real estate. Commercial mortgage delinquency rates have doubled since early 2008
"The key question is whether housing prices will go crashing through the trend line and fall well below fair value and no body has a crystal ball to know for sure what or where the bottom is.
It is a fact that prices are at a all time low and even if you purchase now ant the go down more if you plan on holding on to the property for 5 years or more there is a likely hood that you will be fine.
There's more pain to come, according to the analysts While the majority of mortgage defaults so far have been subprime borrowers, more middle- and upper-income homeowners are starting to walk away from their mortgages.
Roughly one-fourth of homeowners with a mortgage owe more than the home is worth, making them much more likely to default. Among those who purchased in the past five years, 30 percent are underwater. The figures are worse in bubble markets such as Las Vegas, where 61.4 percent of buyers in the last five years are underwater,there are according to analysts 5 waves of default.
1. is the early wave of defaults came from fraud and speculation, starting in late 2006 when home prices started to fall
2.The next wave was borrowers who went into "payment shock" when their adjustable mortgage rates reset. Two-year teaser subprime loans written in early 2005 started to reset in early 2007, though those defaults are tapering off as low interest rates mitigate the shock however with rates raising that could change things.
3. Banks are now seeing is now seeing the third wave of prime loans defaulting due to job losses and home price declines. Prime loan default rates have jumped from 0.5 percent to 4.5 percent in the last year.
4.A wave of prime jumbo loans, second liens and home equity lines of credit started to swell in early 2008, again created by job losses and home price declines.
5. involves losses among loans outside the housing sector, the largest being $3.5 trillion in commercial real estate. Commercial mortgage delinquency rates have doubled since early 2008
"The key question is whether housing prices will go crashing through the trend line and fall well below fair value and no body has a crystal ball to know for sure what or where the bottom is.
It is a fact that prices are at a all time low and even if you purchase now ant the go down more if you plan on holding on to the property for 5 years or more there is a likely hood that you will be fine.
All possibly true but likely irrelevant to Las Vegas. We are simply in a different situation driven by the devastation that has already occurred here.
The question is whether or not we will see any substantial increase in the rate of foreclosure from the present level.
It apears very unlikely this year. And if it remains at existing rates or similar we are not going to have any further price erosion. It appears that such diversve places as Lake Las Vegas and norther Summerlin have stabilized and show prices trending slowly upward.
While I like your premise Gomez, that everyone deserves affordable housing, I have to disagree. First, What is affordable to some, is not to others. Second, If you spent your late teens and early twenties hitting the books and earning that degree, you're probably going to have a higher paying job and be able to afford a home and what comes with it. If you took it easy through high school, maybe you didn't finish, now you feel entitled to have a home, I don't agree. The American Dream isn't a hand out, it's working for what you want.
I'm not unsympathetic to those who can't buy a home, I just feel that the choices that are made from the time you are a young teenager ultimately affect how you'll end up.
Olecat I beg to differ on the stats that they are irrelavant to Vegas. Here is a link to the GLVAR that gives the current year to date stats and every one of the zipcodes still are declining in Value.
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