[olecapt]

Originally Posted by gulfer

Folks,
Please don't think I am jumping in between this conversation, but I read a very interesting article about a couple trying to buy a house in Las Vegas recently.

Lunacy in Las Vegas Housing - Realty Check with Diana Olick - CNBC.com

It's amazing when you get a personal view how difficult it is to hunt down a foreclosure.

That said, I honestly don't know one way or another, but it does appear that a lot of homes go very quickly to people with cash. What I think should be Illegal, is that banks actually would rather take the cash money for less then what a person would pay for it that needs to finance.

I understand it's all about the bottom line, but when a bank would effectively be out of business if not for government intervention, I think a business model needs to be looked at and changed drastically to become more of a 'Home Town Lender'. What I mean by this is, now maybe not so much for the stock holder, but more for a person. Why should a person that wants to buy a house for 150K that has to be financed and likely will yield a couple hundred thousand dollars if kept for the entire 30 years, not be allowed to purchase. Instead, a bank will sell for cash for say 120K just to get it off the books.

I don't have the answer for this one, but it is frustrating to me that people that can and want to buy lose out to a lower price for immediate payment so someone else can make money. Is that against capitalism, well...maybe. Sorry about that. I do believe in the American Dream to make money, but I go back to my comment that a lot of these banks, mortgage providers, etc... would be OUT OF BUSINESS if not for the American Tax Payer.

Actually Gulfer across the bottom of the market the cash buyer pays a higher price than the financed buyer can pay. The lenders are not taking lower cash offers...they are taking higher cash offers. And the financing owner really can't compete unless he or she has substantial cash available to augment the appraised price.

Even in the $500K area we are running into cash offers exceeding the appraisal value. That neans the financed buyer must put up more cash or let it go.

The real problem is that the cash buyers are clearly valuing places higher than the appraisers...which effectively cuts anyone who needs an appraisal to buy out of the action.

Weird world ain't it?

[tony soprano]

Originally Posted by olecapt

That is true in Vegas and 50 is a perfectily reasonable sample to determine that owned property have a small role in the LV market. I gather your understanding of statistics is right up there with your other knowledge.

Your entire argument is ridiculous on the face of it. If mark to market weren't a "significant thing", Congress wouldn't have lobbied to have it suspended. And to further suggest that the foreclosure capital of the US was somehow immune to generating bank loan losses, is in a word, absurd.

The ABA in September joined Blackstone Group LP Chairman Stephen Schwarzman and 65 members of the U.S. House of Representatives to urge that FASB-mandated fair-value accounting be suspended. William Isaac, chairman of the Federal Deposit Insurance Corp. from 1981 to 1985, has called fair value “a major cause” of the credit crisis.

And then there's you -

Originally Posted by olecapt

More nonsnese. The mark to market is not a significant thing in Las Vegas. Just ain't.

Doubt it is a significant thing anywhere.

Don't quit your day job.

You are incredible. Even in the face of absolute evidence the we have "run out" of REOs you continue to deny the truth.

There is insufficent inventory to support the demand and price has leveled and is likely increasing slowly at this point. In fact once the appraisers turn around it will likely head up more strongly.

I would think one can wait until perhaps spring...but perhaps not. I would watch really closely for the start of a sustainable rally.

Maybe the economy and unemployment are bad enough to depress it a bit more....but not clear.

Read the above. Now, read the passage below. They're basically indistinguishable; soaring demand, insufficient inventory, something's got to give. Oh, unless there's more bad news.

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.

Those two messages were made six months apart. There was no new vein of REOs, just a continuation of the same supply.So, what did prices do over those six months?

April SFR median - $141.7K
Sept SFR median - $138K

As I've said before, if you call the bottom often enough, eventually you're going to get it right.

[J78Jason]

Even if the banks aren't doing what was talked about in the video and that the inventory levels are accurate, the fact remains that the Vegas economy is weak, and that the people buying up all these foreclosed homes are investors with large sums of cash. They aren't going to live in these homes. They will rent and try to flip.

Vegas needs local people with good paying jobs to be buying these homes. We've already seen what happens when floods of investors come in and buy up all the supply. They may bring the price back up for a while, but it's temporary unless the job market turns around and there is a real demand from people who will live in the homes, not just flippers.

[jaunespinoza]

Be thankful for the investors; unless you think a vacant home is better.......

[J78Jason]

It's not better, but a lot of those vacant homes are from all the investors who bought before 2007. And they had a large part in the ridiculous price increases during that period because they were buying up houses like they were candy, driving up the prices, and then normal people bought at those inflated prices created by that fictitious demand.

So yes, be happy they're sustaining the housing market where it's at in the present and providing demand, but it's not all roses.

[jaunespinoza]

Everyone should look at buying a home like an investment; not buying based on what a guy in a cheap suit tells them they can afford every month.

[JohnG72]

Originally Posted by jaunespinoza

Everyone should look at buying a home like an investment;

Vegas market has not come close to bottom yet, provided the unemployment rate continues to flourish.

Rents aren't sustainable in markets with unemployment in excess of 10%, let alone ones like Vegas with a 25%+ ACTUAL unemployment.

If rents don't sustain, recent investors will bail, particularly if another investment opportunity presents itself. If they bail, it will depress the housing market further.

And that means years(decades?) before houses recover value. Making a home anything but an investment.

[RCCCB]

Originally Posted by MadManofBethesda

Yeah, because Bear Sterns, Lehman Brothers, and all the investment bankers and hedge fund managers who played with credit default swaps were mostly liberal democrats.

The Government through DEMOCRATS to be honest changed laws forcing financial institutions to make loans to people who couldn't pay to help acorn and minorities acquire housing they didn't earn.
Government in this case made bad law creating a RE bubble, the collapse of the economy and 10%+ unemployment.
Since Obama was elected the government under his administration I'm hearing has been reported to confiscated 30% of the private sector businesses (supposedly). I was shocked to hear that one, but I am interested to read a direct article about that.

Look, if you had a used car to sell, wouldn't you sell it to someone who could pay for it?
Would you like a law forcing you to sell it to someone who couldn't pay for it so they could use it, trash it and leave you with no money? That is kind of what government does.

Now regarding big hedge funds, Presidents of big companies and what corporations in general might do...
Most of the so called big-boys are not stupid and they play as best around the laws that exist the best they can for their own profitability. (Much the same way you take your tax deduction if you can).
Not being stupid, some companies (banks, hedge funds or what ever other entities) bundled the loans (for bad or good) for sale to those who perceived them as a good buy. Some thought values were going to rise for another ten years and thought there was no risk and these were a bargain. others didn't feel that way and tried to sell things.

Where things went bad was with illegal accounting practices that busted accounting firms back in the Clinton days of Enron that the Bush administration prosecuted.

IMO knowing the Enron and other accounting scams that went down, when I hear this term of FUTURE VALUE as being what you want on your books instead of reality, I was spooked.

PS, more big businesses have been donating far more to Democrats over Republicans. Does that mean more big businesses are run by liberals? Haven't a clue.

Thanks.

[RCCCB]

Originally Posted by olecapt

Simply untrue. The Lenders own very few houses. It is easily verified. Mortgages are held by various financial syndicates and Fannie and Freddie. BofA, Wells et al simply service them. And the financial syndicates own virtually nothing other than the securitized loans.

Foreclosure activity peaked in June/July and has dropped off significantly since. I would believe the drop is at least partially driven by the mediation requirement. I would think that is a permanent kink in the hose that will lower foreclosure rates.

Virtually no rentals are bank owned...and such as exist are deals with specific owners to stay in their homes....it is doubtful there are one hundred of these in Las Vegas.

this is simply another version of the mythical bank inventory that has been cited again and again over the past year. The fact that it does not exist never causes any lack of belief in it.

Wrong, had an actual conversation about this with a good friend who is a prominent tax and estate lawyer/accountant. He said how I explained this was nearly perfect.

[geos]

The hits just keep on comin'

U.S. FORECLOSURE ACTIVITY INCREASES 5 PERCENT IN Q3

Nevada, Arizona, California post top state foreclosure rates in third quarter
Nevada continued to document the nation’s highest state foreclosure rate in the third quarter, with one in 23 housing units receiving a foreclosure filing — nearly six times the national average. Foreclosure filings were reported on 47,925 Nevada properties during the quarter, an increase of nearly 10 percent from the previous quarter and an increase of nearly 59 percent from the third quarter of 2008. Nevada REO activity in the third quarter increased 29 percent from the previous quarter and scheduled auctions increased 26 percent from the previous quarter, but defaults decreased 8 percent from the previous quarter.