Epicenter of Housing Crisis (Phoenix, Surprise: real estate market, rent, credit)

[Zippyman]

Originally Posted by Captain Bill

A while back I reported that the number of REO's was 19191
Today the number has declined to 15803

That includes the ones that are listed on the mls; the ones that will be listed within the next 2 months; and the ones that are being held back.

The supply of REO inventory is declining steadily.
Today I reported that around 40% of the Trustee sales are being purchased by the wholesale investors instead of the bank taking them back.

That means the inventory of REO's will most likely continue to decline.

Regarding the pre-foreclosures:

Maricopa County issued 4,015 residential Notices of Trustee Sale in July 2011

They issued 7,802 NOTS In July 2010.

That means that the Foreclosure notices are down about 48%, to the lowest level since December 2007.

There were 3,176 residential Trustee sales in July 2010; That's down 31% from July last year and 36% below March this year.

That data, from the Cromford Report shows a strong downward trend in the infamous "shadow inventory".

These are Phoenix Metro numbers. The national, and other area numbers are different.

Everyone knows the time to BUY in Phoenix is when the Republic says it's "safe".

Everyone buying now is clearly a "knife catcher"...

and they're "doomed"... doomed, I say!

dooooOOOOOOoooomd...

Moderator cut: copyright issues

[oldtrader]

CNBC News Report

#2. Highest Foreclosure rate-- Arizona---Rate: One in every 205 households Properties with filings in June: 13,447 Change from May 2011: 2.48% Change from June 2010: -6.77%

What is not being considered is the underwater mortgage factor. As more people finally give up waiting for the prices to restore, there will be more just walking away, or foreclosures, especially as they see the value of homes is falling even more putting them even more underwater.

#3. Under Water Mortgage City--Phoenix---Percentage of homes with negative equity: 67.6 percent Homes with negative equity: 504,481

Consider that the Banks don't want too many homes foreclosed at one time, or they will flood the market driving values even lower. They are keeping from foreclosing as long as they can, to regulate the foreclosure rates and try to hold up prices as much as they can. Banks have to keep the percent of their assets in relation to REO properties (foreclosed), to meet banking rules. Another reason, they are not pushing the foreclosures any more than they are. .

Zillow Home Value Index: $122,800 Year-over-year change: -10.4 percent

Forbes Magazine---Places Phoenix #6. Projected biggest price decline--Phoenix, AZ: 9.4% price decrease y/y----- Phoenix and Tucson among the 10 areas expected to see the highest price declines in 2011 - Phoenix, No. 6 with a 9.4 percent drop and Tucson at No. 3 at 11.9 percent for the year.

Phoenix is projected to fall 1.4% more in 2011 by the end of the year, than it did in 2010.

If they are right, then watch for foreclosures go pick up as people become even underwater on their loans.

From abc news: Expert: Home prices to drop in 2011 (http://tinyurl.com/3knuwo9 - broken link)

How lenders are looking at the Phoenix market.

June home sales robust in Arizona, Nevada | Intercontinental Capital Group Blog (http://tinyurl.com/439crwm - broken link)

http://tinyurl.com/3qoyvg8 (broken link)

[MN-Born-n-Raised]

There is a saying that was coined long ago which said "you are what you eat". I have a saying: "you are what you google".

Instead of typing negative words into your google search box like "Phoenix, worst, crash, dismal, decline, shadow inventory, end of the world, Madmax, double dip, walk away, apocalypse etc", try typing "Phoenix current housing numbers" so that you can get an accurate perspective. You will see that it's not all bad news.

The Valley RE market isn't out of the woods yet. There are a significant number of families that are still underwater and the job market will be struggling for the foreseeable future. There is no doubt that there will be more foreclosures to follow. But at the same token, there are positive signs in the Valley like a steep decline in inventory and some towns like Phoenix itself show price increases.

I suspect if I looked at OldTraders browser history, his google search box would be rather negative. Remember, "You are what you google".

So for fun, I psated in the google search bar Phoenix, worst, crash, dismal, decline, shadow inventory, end of the world, Madmax, double dip, walk away, apocalypse .

Here is what I found. See http://albertpeia.com/June102011posts.htm

There are literally 1,000's of negativity factoids to feed a person's doom-and-gloom soul. So the next time anybody feels up and sees a sign of a recovery, go read that last link (which I predict most of them are true by the way) so you can feel as bad as you want. Don't look at the bright side, look at the doom-and gloom side. Because together, we can bring ourselves and the country down by ignoring when there are positive signs in a negitive situation.

[jimj]

Originally Posted by oldtrader

CNBC News Report

#2. Highest Foreclosure rate-- Arizona---Rate: One in every 205 households Properties with filings in June: 13,447 Change from May 2011: 2.48% Change from June 2010: -6.77%

What is not being considered is the underwater mortgage factor. As more people finally give up waiting for the prices to restore, there will be more just walking away, or foreclosures, especially as they see the value of homes is falling even more putting them even more underwater.

#3. Under Water Mortgage City--Phoenix---Percentage of homes with negative equity: 67.6 percent Homes with negative equity: 504,481

Consider that the Banks don't want too many homes foreclosed at one time, or they will flood the market driving values even lower. They are keeping from foreclosing as long as they can, to regulate the foreclosure rates and try to hold up prices as much as they can. Banks have to keep the percent of their assets in relation to REO properties (foreclosed), to meet banking rules. Another reason, they are not pushing the foreclosures any more than they are. .

Zillow Home Value Index: $122,800 Year-over-year change: -10.4 percent

Forbes Magazine---Places Phoenix #6. Projected biggest price decline--Phoenix, AZ: 9.4% price decrease y/y----- Phoenix and Tucson among the 10 areas expected to see the highest price declines in 2011 - Phoenix, No. 6 with a 9.4 percent drop and Tucson at No. 3 at 11.9 percent for the year.

Phoenix is projected to fall 1.4% more in 2011 by the end of the year, than it did in 2010.

If they are right, then watch for foreclosures go pick up as people become even underwater on their loans.

From abc news: Expert: Home prices to drop in 2011 (http://tinyurl.com/3knuwo9 - broken link)

How lenders are looking at the Phoenix market.

June home sales robust in Arizona, Nevada | Intercontinental Capital Group Blog (http://tinyurl.com/439crwm - broken link)

http://tinyurl.com/3qoyvg8 (broken link)

It's my understanding that most if not all lenders are being "backstopped" by the feds on these repo losses so why would they much care about flooding the market? It seems they don't stand to lose much of anything, we as their insurance company do though. How else could any lender survive thousands and thousands of losses up 'till now?
Personally I think that the "shadow inventory" term was a complete boogie man idea to sell a point of view and newspapers.

[MN-Born-n-Raised]

Originally Posted by jimj

It's my understanding that most if not all lenders are being "backstopped" by the feds .

Some of the loans are also backstopped partially by PMI Insurance. BUT
PMI Group mortgage losses mount; bankruptcy fears loom

So in reality, PMI is in trouble. Some irrational decisions by the banks could be explained because the bank knew that PMI was backing them up. This could be a game changer as to how homes are priced if PMI dissolves. I don't know all of the impact but I do know someone who works at PMI who can give me the skinny.

[SeaG]

About a month ago Forbes also published a story about the top ten next 'boom' towns. Phoenix came in at number 9, pretty good IMHO.

Part way down the page is where they talk the positives for Phoenix (apologies if this has already been posted)

The Next Big Boom Towns In The U.S. - Forbes

[Zippyman]

Originally Posted by SeaG

About a month ago Forbes also published a story about the top ten next 'boom' towns. Phoenix came in at number 9, pretty good IMHO.

Part way down the page is where they talk the positives for Phoenix (apologies if this has already been posted)

The Next Big Boom Towns In The U.S. - Forbes

The problem with Forbes (& most other "McNews" websites that blindly reprint Forbe's drivel ) is that one week they'll have "The best buyer's markets", and the next week they'll post "The worst places on earth to buy"...

Like this...

Where Home Prices Are Falling Dangerously - Yahoo! Real Estate

We were "in a free fall" a couple of months ago...

Housing has these ten cities in a free fall - Business - Forbes.com - msnbc.com

My favorite quote in that article...

Places like Phoenix and Riverside may take even longer to recover because people might just pick up and leave to go to places doing better," says Fratantoni. "It may make more sense to leave, rather than wait for jobs to return

But now... we're a "future boom town".....

[SeaG]

What I was trying to get across was exactly what you have said (to relate to the other Forbes article) - we put too much faith in what we hear or read. It's like the 'cherry-picking' of stats to support whatever view you have.

If you put it all together the truth is somewhere in the middle.

So yes, there are tough times ahead, but I certainly don't believe the 'doomers' that Armageddon is coming either.

SeaG

[jimj]

After reading massive amounts of information and processing copious amounts of data and speaking to many who are tops in their fields I've determined 3 things that are certain.
1. Prices are down by well over half of what they were at the peak.
2. Prices may or may not recover in the near or long term.
3. Prices may or may not drop a bit more then stabilize.

Too much depends on too many things we've got no control over, one of the biggies is the fat heads in D.C....

[whodiman]

[quote=oldtrader;20391170]CNBC News Report


Zillow Home Value Index: $122,800 Year-over-year change: -10.4 percent


quote]

One thing people can do is change their points of comparison. YOY housing is down big. But since December housing is up big and rents are up 8%

It's like comparing the stock market. It's down since the start of the year and even more since the peak of 2011 but up HUGE since 2009 escpecially if you werent just buying US stock markets.