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Old 07-21-2012, 10:13 PM
 
5,409 posts, read 10,331,858 times
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Quote:
Originally Posted by TechGromit View Post
You got that right. There has been some price recovery in some markets due to a shortage of houses available for sale, but it's mainly due to the fact banks are holding onto them, not making them available for sale, so it creates a shortage thus higher prices. In the short run it's a stroke of genius by the banks, to get the most profit (or least amount of loss). I do however question just how long they can keep houses "not for sale" on there books before the houses will be nothing better than tear downs. When houses are left vacate for years, the tend to suffer damage from thieves, squatters, vandals, animals and weather related damage.
All true dat . . .

but that is why you are a tech guy -- not a business guy.

The banks just want to keep the balance sheet clean. It could bags of horse-sheet they are pretending to have value in. As long as they do not have to show a loss, the make-believe money system works.

To sell an Owned Asset at a loss forces a loss on the ledger. Typical losses are 10% for short sales, and 30% for foreclosures. Better holding make-believe on the books and letting it turn to garbage sometime in the future rather than having to deal with a present time loss.

However, Country Wide / Bank of America is rumored to be planning to start dumping onto the market in early 2013 -- after the election.
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Old 07-22-2012, 10:39 AM
 
Location: Vallejo
16,250 posts, read 18,197,030 times
Reputation: 14485
Quote:
Originally Posted by Philip T View Post
All true dat . . .

but that is why you are a tech guy -- not a business guy.

The banks just want to keep the balance sheet clean. It could bags of horse-sheet they are pretending to have value in. As long as they do not have to show a loss, the make-believe money system works.

To sell an Owned Asset at a loss forces a loss on the ledger. Typical losses are 10% for short sales, and 30% for foreclosures. Better holding make-believe on the books and letting it turn to garbage sometime in the future rather than having to deal with a present time loss.

However, Country Wide / Bank of America is rumored to be planning to start dumping onto the market in early 2013 -- after the election.
That was an accounting change. Now you can follow the more "conservative" practice of valuing at purchase price. So banks are sitting on houses valued at $400k that are worth $250k, if they are in good condition without all the copper stripped out and the inside trashed. On the books, it's still a $400k asset. Once it gets sold, well there goes your debt/equity ratio. The Libor scandal was basically manipulating interest rates to make it look like the debt/equity ratio wasn't in ranges were regulators start talking about receivership.

There is also the more good faith side of it as well. Flooding the market all at once isn't good for prices. It took banks some time to realize that since traditionally they aren't in the business of particularly caring what prices do. They're lenders not land speculators, after all. That reversed itself around 2008-9. They stopped lending and were only speculators.
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Old 07-22-2012, 11:02 AM
Status: "Looking forward to President Harris" (set 1 day ago)
 
Location: Berkeley, Denver, CO USA
15,537 posts, read 23,357,581 times
Reputation: 26729
Default Not just the WSJ

Calculated Risk: The Housing Bottom is Here

Bill is conservative and he called it in February.

I think your outlook depends very much on where you live.

Examples:

1. Denver, CO - inventory has plunged to the point where we are down to a 2-3 month supply. Very much below our typical 5-6 month. Prices are rising. It is no longer a buyers' market. If you see a house you like, you need to make an offer within 10 minutes of seeing it. And, no one seems to be able to find the "shadow inventory". It appears not to exist.
Data sources are:
http://www.dept of numbers.com/asking-prices/colorado/denver/ (I can't link due to the TOS)
Denver average and median listing prices - Trulia.com
Bank Owned Properties (834 REO in the entire state and this number has been moving down)
Inside Real Estate News

2. Sacramento, CA - lots of distressed properties
Calculated Risk: Sacramento: Percentage of Distressed House Sales lowest in years in June

3. Chicago, IL - still sliding down
Calculated Risk: Case Shiller: House Prices increased in April

4. Austin, TX - what downturn?
Austin average and median listing prices - Trulia.com
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Old 07-23-2012, 10:32 AM
 
Location: Ontario, NY
3,053 posts, read 6,773,694 times
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Quote:
Originally Posted by davebarnes View Post
4. Austin, TX - what downturn?
Texas never really had much a bubble to begin with, lending restrictions prevented the refinance cash outs. So people were not able to tap there houses equity and get ever larger mortgages. Since people did not have huge mortgages compared to house values, there wasn't massive foreclosures that flooded the market with inventory when price started to go down. Texas also banned balloon loans and interest only loans. Texas house values/prices topped out 30% higher than in the year 2000 level. Some areas in California on the other had saw prices increase 250% in the same time period.
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Old 07-23-2012, 10:51 AM
 
22,770 posts, read 27,735,748 times
Reputation: 14617
Quote:
Originally Posted by liquidicevapor View Post
The folks over at WSJ are showing their true colors. This article is most likely another attempt to drum up some consumer confidence and boost home sales. The evidence they site barely supports their own conclusion.
agreed. WSJ has some decent news articles, but they are willing to give any old hack some space for propaganda.
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Old 07-23-2012, 11:49 AM
 
Location: Sierra Vista, AZ
16,516 posts, read 21,969,821 times
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There is still a massive shadow inventory which should burst and bubbles
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Old 07-24-2012, 09:59 AM
 
Location: Vallejo
16,250 posts, read 18,197,030 times
Reputation: 14485
Quote:
Originally Posted by le roi View Post
agreed. WSJ has some decent news articles, but they are willing to give any old hack some space for propaganda.
That has been the story since Murdoch took over. It is a shame. The one guy with the pockets deep enough and respect of print news, as opposed to infotainment (emphasis on the entertainment) like on TV, is Murdoch.
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Old 07-24-2012, 05:21 PM
 
5,586 posts, read 9,863,139 times
Reputation: 4921
Quote:
Originally Posted by Boompa View Post
There is still a massive shadow inventory which should burst and bubbles
Where is it? Many markets would sure like an opportunity to get access to it. The shadow market is theoretical and gets overstated and understated regularly based on one's persuasion. Demand is still lacking because so many buyers remain scared after the bust, but sentiment is a very fickle thing and all those renters now seeing near double digit increases annually could quickly become interested in buying. If they buy and values go up at all, pre-foreclosures could turn into non issues and many who might have walked away might work to stay in their homes.
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Old 07-24-2012, 05:52 PM
 
Location: Wartrace,TN
6,464 posts, read 10,150,083 times
Reputation: 12731
I don't buy it. Historically median home values have averaged 2.5X median household income. Using Nashville as an example - Current "median home value" 160,000 dollars. Current median household income 48,000. Do the math.

Another factor to consdider is wages are DECLINING which isn't going to do much to help housing values.

If anything the term should not be "bottomed". A "bottom" implies that there will be a "recovery".......
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Old 07-24-2012, 08:59 PM
 
2,592 posts, read 4,859,163 times
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This is only the 14th or 15th bottom according to these so-called experts. Eventually they may get it right, but it isn't this time.
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