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So Capt. What is your prediction?? Sept 2010. Do you think that the Phoenix market will be up, down, or where it is today (late Feb 2010)??...
Although I think 26% decline is not going to happen, I'm not going to predict anything because there is a lot of uncertaintity in the economy.
I'll continue to watch the statistics to see what changes.
Quote:
Originally Posted by MN-Born-n-Raised
In early January, this site showed Bank Owned Bargains Home under 4000 foreclosures. Now we are over $5K and building by the week...
I believe you're talking about bank owned properties (REO's) when you say 4000 foreclosures.
Just for clarification purposes for anyone reading the forum who needs to know the difference:
Properties that are in the foreclosure process, prior to being sold at the trustee sales, are referred to as either foreclosures or pre-foreclosures.
If the banks buy them back at the trusee sale, then it becomes an REO (meaning Real Estate Owned, or bank owned property)
My numbers are a little different than yours: (Source: Cromford Report)
DATE...................ACTIVE REO'S (bank owned for sale)
Feb 10, 2009.........12,965
Nov 10, 2009..........4,960
Jan 10, 2010...........5,786
Feb 10, 2010...........5,816
DATE.................PENDING REO SALES (bank owned under contract)
Jan 10, 2010..........4,004
Feb 10, 1010..........4,595
DATE.................SALES PER MONTH - REO SALES
Feb 10, 2009...........3,286
Nov 10, 2009...........3,548
Jan 10, 2010............3,056
Feb 10, 2010............2,822
DATE..................SALES PER YEAR - REO SALES
Jan 10, 2009..........28,209
Feb 10, 2010..........52,078
I only know from the blogs (the real info that is not in the mainstream media). Bloggers tell me there are a lot of empty houses that are obviously specuvestor homes and they know those houses do not show up in the MLS listings. For example, lots of emptys in Queen Creek.
Ben Jones' Housing Bubble blog - The Housing Bubble Blog has had a lot of input from people in bubble centers such as Las Vegas, Florida, Phoenix, San Diego, the central Valley of California, the Inland Empire, and so on. These people have identified facts several years before the mainstream media picked up on them.
Phoenix, in particular, has a few bloggers who discuss the real estate issue. This is all uncensored of course. I do not trust the AZ Republic, which gets a lot of ad revenue from Real Estate cheerleaders. The AZ Republic has covered up the problem of mortgage fraud. The HBB knew about the widespread fraudsters for years.
Quote:
Originally Posted by Captain Bill
Howard, I didn't "conveniently" forget to mention the "shadow inventory".
I didn't mention it because I've never seen it. I don't know that it exists. People talk about it, but it has never shown up. So far it's only supposition.
Can you show me where that shadow lurks?
What is the shadow inventory?
Who has it?
How much is in the inventory?
When will that shadow appear?
What I showed is what has actually happened during the last year in foreclosures. I can only go by facts, not something unknown.
Until I see that "shadow inventory" I'll continue to believe that it "may" be only an apparition.
You have a dog in the fight as an potential "investor" in a home and so I have to take you with the same grain of salt as you suggest we take the realtors. No need to deny, I am not going to believe you anyway. I've read enough of your posts that I have made my mind up about your intentions. Maybe there is some sincerity in that you are still on the sidelines while every other investor with a wad of cash has jumped into this market head first with both feet. I do think you are above the schadenfreude which characterizes the posts of some of the other housing doomers.
In any case, only time will tell how it all plays out. I can't say I wish you well as you will only do well if the rest of us suffer more losses on our home values. So I'll just wish you the best of luck in timing your purchase correctly.
If I am really honest as to why I post, I’m simply attempting to predict that I have a better handle on the topic than someone else. Plus, it’s kind of fun to debate the topic. Like any debate, you can learn from an honest argument from the other side. To date, that argument is pretty darn weak.
Additionally, I find the topic interesting as it unravels because we are seeing history in the making that our children’s children will be studying about. I also know some of the “players” at the highest levels. I politely gave my thoughts back in 2004 to a couple of them (predicting a crash and why). No one could have predicted the magnitude of the fall but I “knew” it was going to correct.
My interest on the topic is also heightened because I had three homes (thankfully one less as of last month). Finally my income is directly tied into the top end of the housing market. So if I know what is going on in housing, I know what is going on with my company, my net worth in property values, and the place I want to semi-retire at.
So in reality I’d LOVE for the housing market to go up!! If you read any euphoria in my voice, it is only related to who is “right”. The net-net is I'll be hundreds of thousands ahead with a recovery versus picking up $50K better price on a Goodyear golfcourse home.
Re: Realtor’s. They don’t have any better idea of what is going to happen than a guy on the street like you or me. So if someone took their advice to buy a home in 2007 or 2008 in Phoenix, they are-where-they-are because they “trusted” the expert. Simple…
I only know from the blogs (the real info that is not in the mainstream media). Bloggers tell me there are a lot of empty houses that are obviously specuvestor homes and they know those houses do not show up in the MLS listings. For example, lots of emptys in Queen Creek...
I'm sure you're aware of this, however, not everyone is, so I'll explain for their benefit.
In AZ it takes up to 180 days for a home to be sold at the trustee auction.
First the homeowner has to be 90 days in arrears before the bank can issue a NOTS (notice of trustee sale).
Then 90 days must pass after the NOTS is issued before the scheduled trustee sale.
Sometimes the homeowners will abandon the house as they begin missing payments.
Others will abandon it after a month of harassing phone calls from the bank.
Others will move out after the NOTS.
(These are the homes that are not listed as a short sale, and the owners just decided to abandon them. Probably because they don't have a hardship but want to dump the mortgage.)
Therefore, the large majority of those vacant homes may very well be the homes that are in Foreclosure List of homes that have been abandoned prior to the trustee sale date.
When a bank takes the home back, they send a bpo agent out to check occupancy. If the home is vacant, they will re-key the locks and place a sign on the home with the contact information of a service agent, until they place the home on the market.
Maybe the banks are holding back some REO inventory so as to hold the prices up to reduce their losses. I don't know that to be a fact, and I certainly wouldn't want to speculate.
I don't know anything about bank operation, but I don't believe that having non-revenue producing real estate assets on their books is good for their borrowing ability.
The question is: How long have these houses (example, the ones in Queen Creek) been abandoned as a result of jingle mail? Are they weed-infested now? Is grafitti a problem yet? Are squatters breaking in the empty dwellings? Are copper fixtures being torn out of the places/
At some point there has to be depreciating costs of that empty inventory gnawing at the back of the heads of each bank shareholder. At some point, cutting the losses would be better for the banks and put the places up for sale at 25 cents on the dollar relative to peak price.
The problem I have with threads like this is it generalizes too much and every person's individual situation is different. I would hate if someone put off buying a house because they are assuming everything is doom and gloom because they heard the bottom of the market won't reach until the third quarter of 2010 as Money predicted 1.5 years ago. People may not even look into buying a home until 2011 as a result. I think it varies tremendously. I know from personal experience that two friends got very good deals on homes and that I missed out on a home that was only on the market for a week that sold immediately. I caught that home just 2 days prior to it being pulled off the MLS. I agree with the general trends but those trends should not force people to make assumptions. I'm not a realtor so I have no reason to encourage people to buy homes. I would hate for someone to miss out on a deal like I did. I assumed that houses won't bottom until some time next year and didn't even bother seeing if there were any good deals in the areas I was interested in. I think people should be educated but they should also not give up on the idea that they could get a great deal right now.
Maybe the banks are holding back some REO inventory so as to hold the prices up to reduce their losses. I don't know that to be a fact, and I certainly wouldn't want to speculate.
My old boss there (Realtor) worked with an asset management company listing REOs and she stated that they were indeed holding A LOT of them. However, it was last spring that she heard this was happening, so they could have released them since then. I stopped working for her last September, though, and they hadn't as of that time. So, they could be holding even more; who knows?
I am guilty of mentioning that if you can purchase the entire house, if the house is your dream house, if your job won't be outsourced and if you can handle living in that house for at least fifteen years, then by all means buy that house.
For the rest of us, it's better to wait.
Quote:
Originally Posted by zox
The problem I have with threads like this is it generalizes too much and every person's individual situation is different. I would hate if someone put off buying a house because they are assuming everything is doom and gloom because they heard the bottom of the market won't reach until the third quarter of 2010 as Money predicted 1.5 years ago. People may not even look into buying a home until 2011 as a result. I think it varies tremendously. I know from personal experience that two friends got very good deals on homes and that I missed out on a home that was only on the market for a week that sold immediately. I caught that home just 2 days prior to it being pulled off the MLS. I agree with the general trends but those trends should not force people to make assumptions. I'm not a realtor so I have no reason to encourage people to buy homes. I would hate for someone to miss out on a deal like I did. I assumed that houses won't bottom until some time next year and didn't even bother seeing if there were any good deals in the areas I was interested in. I think people should be educated but they should also not give up on the idea that they could get a great deal right now.
I am guilty of mentioning that if you can purchase the entire house, if the house is your dream house, if your job won't be outsourced and if you can handle living in that house for at least fifteen years, then by all means buy that house..
You are generalizing again. They shouldn't purchase a home even if they meet your qualifications if their desired location is continuing to drop in price. For the home and neighborhood I was interested in, it was prudent to purchase now, but for someone else, their desired area may still be dropping in price. The point I was making was to be vigilant but not adhere to generalizations. People should do their research and learn about the trends in their area of interest instead of being consumed by an overall market trend. The problem with these threads is its so binary, it's either a thumbs up (market has hit bottom so buy) or thumbs down (market is continuing to drop so wait). That's not how the real world works
The problem I have with threads like this is it generalizes too much and every person's individual situation is different. I would hate if someone put off buying a house because they are assuming everything is doom and gloom because they heard the bottom of the market won't reach until the third quarter of 2010 as Money predicted 1.5 years ago. People may not even look into buying a home until 2011 as a result. I think it varies tremendously. I know from personal experience that two friends got very good deals on homes and that I missed out on a home that was only on the market for a week that sold immediately. I caught that home just 2 days prior to it being pulled off the MLS. I agree with the general trends but those trends should not force people to make assumptions. I'm not a realtor so I have no reason to encourage people to buy homes. I would hate for someone to miss out on a deal like I did. I assumed that houses won't bottom until some time next year and didn't even bother seeing if there were any good deals in the areas I was interested in. I think people should be educated but they should also not give up on the idea that they could get a great deal right now.
I hear what you are saying but I can only speak for myself. I don't "need" a winter home right now as my youngest is in high school. So if the home isn't appreciating, it's simply getting older as I feed it taxes, up keep, utilities, and my opportunity cost of doing something different with my $$'s. That's my rational for waiting. Since I don't need it, (for me) why not wait??? I'm not looking at this property exclusively as "an investment". But why not keep that in the back of my mind when buying anything that costs so darn much. It seems rational to me.
Saying all of that, I spend a bundle on vacations every year. I don't try to compute the return on investment. If I did, I'd have to conclude multi-thousands of dollars gets "wasted" (no pun intended) every year.
But for most people, homes are a major chuck of their net worth. In this extremely volatile economy, homes can go up and down because many are listed lower than the relacement cost. But potentially to SOME people who study this topic to death (Mark Zandi), they think it can go down another 28%!! That's something to consider if you are planning on putting down 3% and cannot afford to lose $60K on a $300K Phoenix home.
In the short run, you might lose out on a "steal". Trust me, there will be others. There is a lot of sense of urgency as homes are bid up. But according to some, that urgency can quickly turn. Everyone needs to figure out what is best for them. If you can afford to lose $60K on a $300K home, buy it. I "lost" $20K in vacations this year.
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I'm not looking at this property exclusively as "an investment". But why not keep that in the back of my mind when buying anything that costs so darn much. It seems rational to me.
