San Diego Housing Bubble News and Analysis

Don't know but with the pathetic inventory this winter it would have been a totally bonehead move by banks to do that for San Diego County.

One of the agents who has the right idea is Greg Scott. He lists REO properties at a steep discount compared to comps.

Does he have a website with the properties?

Here is a comment that was posted to this board a few months ago from a guy who claims that just that is being done in the Bay Area.

http://patrick.net/phpBB3/viewtopic.php?...

Just curious Adam, Are his listings then getting bid up? Is that the strategy.Listing low doesn't seem like anything that any REO person wouldn't do if the banks let them. Why does Scott stand out?
Are buyers opposite his listings getting better deals?
Is it this man?
http://www.zillow.com/profile/GRSPacific...

That is an anectdotal circumstance being theorized as a national conspiracy, I'm not buying it. The banks are slow to foreclose because they are busy and because they are encouraged/hindered by the governement to find alternatives and work out loans. The redefault rate is high on workouts and ultimately most are foreclosed and sold. The year long process is frustrating and the banks see it as a last result but 70% of the inventory isn't sitting vacant as part of a conspiracy. Most banks held off on December kick outs but if you run the nods/nots for January, you will see they are heating up again. I spent 18 months tracking the nods/nots and curbside analysis of a particular zip code in my maniacal quest to beat the system. The conspiracy theories were fun but every data anomolie had an explanation. The California forcing banks to jump through some hoops before foreclosing caused about a 6 week drought in foreclosures and December always slows down, but the data gets corrected in most cases and evens out. That's the beauty of the invisible hand, you can;t always see it but it's always there. Of all the properties I tracked from nod to not to list, they all made eventually, they just had different timelines for reasons that I was not privy to.

Rus he had a listing on Chapalita in Encinitas recently. Comps were in 500's and perhaps a bit higher and he listed at 360k. I would imagine the bidding pushed the home into the 400's if not 500's. He has another current listing in Southpark and the comps are I believe in the high 200s if not 300s and he priced it at 220k I think.

All his listings do get put on the MLS.

So yeah the listings that I know of do get bid up. As far as REOs getting priced right I agree that most of them do indeed get priced correctly but in his case they seem to get priced exceptionally low.

I compare him to like Earl Gervais who seems to get ALOT of REO properties and Earl doesn't price as aggressively, but he still does price well and his homes also do get bid up.

That's what I thought. So it's a good strategy for himself but doesn't necessarily help buyers.In fact with bidding wars it could be problematic. Hopefully he, and others doing this,do move them along quickly so as not to string out potential buyers too long.

There are over 11,000 bank-owned detached and attached properties in SD County currently, according to a title company search last week.

Number of them on the open market?

There are 1,136 in the MLS that are marked as REOs.

But the REO listing agents aren't required to mark that box, and it is relatively obscure at the bottom of the listing input screen.

I'd guess that less than half of the 11,000+ are on the market though.

Jim
Big fan of your posts and your site.
If you were making an end of year prediction on percentage appreciation depreciation of Carlsbad what would be your best guess?

There were two by me, I watched them from the NOD all the way to the sale. From the courthouse steps it took the banks 3-4 months to prep them for sale, another 2-3 to sale.

No secret Bush conspiracy, just lazy/slow banks.

Jim I have seen a variance from trustee sale date to a property being active on the MLS from a few weeks to a few months.

My assumption has always been that the processing component varies from lender to lender and even from property to property within the same lender. However I never really believed, (and still dont) that it is a concerted effort by the lenders to hold inventory off market so they don't flood the market.

I still feel that way.

What do you think?

Listing agent doesn't determine the listing price, the selling bank does. Listing agent submits their valuation, then an appraisal ordered and another agent valuation for the bank to determine where (value) they would like to list it. Unless the listing bank agrees to a strategy of lowball listing price to attract multiple offers, which I doubt, the agent is probably coming in with a low value on the original valuation. Some banks will fire you for repeated low ball values as they rely on the agent to give them honest information on what price the asset will sell at in roughly 30-60 days.

I think the lowball listings are exactly what's needed to fix the housing mess.

If a house is priced low, we have ample evidence to show it gets quickly bid up to market price: what buyers are willing and able to pay at that particular time.

Why would that be a bad strategy? Seems like the banks could clear their inventory, we could get true price discovery, and strong buyers would be able to buy homes for their families -- instead of waiting for years as all the stuck flippers and banks come to the realization that the bubble isn't coming back to save them.

Because if one sells for below market closings in that area they have to answer to the investors who own the paper as to why they accepted a price significantly below market value. I agree it's not a bad strategy but many times asset managers will take the first offer in if it's at the listed price and move on to another file, in that instance the listing agent did a disservice to the owner of the asset.

Hi Jim

My bad for wording my postings so poorly. So let me try to word it better, does the listing agent have any input into the lender for the original list price? Since I do not get any REO listings I don't want to post something that I do not know about. You seem to be more connected with obtaining REO listings and per your earlier post it seems that the appraisal and BPO are 100% the determining factors.

So with that said it seems that the Chapalita list price was way way way out of whack. I don't see how the heck a BPO or appraisal could have come in at 360k.

Now I am positive the listing will sell for much higher but would you classify the list price on that home as a boner by the appraiser and BPO? Also if you check out the other Greg Scott listing (search by list agent) would you say the same thing?

Hard to say, could be a low appraisal, both BPOs are low, full of mold, bank error etc.... (Chapalita)

Listing agent submits his BPO and suggests a value he believes it will sell at, hopefully he is close to the final sale price as he is rated on his performance.

Yeah I know Chapalita had problems but man that 360k pricing was out of whack even with alot of remediation. I have not checked out his other listing though.

For some reason I always thought the BPO was done by an independent (other then listing agent) brokerage. I always assumed the lender would definitely ask the listing agent for a suggested price.

My guess, and you can correct me if I am wrong, is that there is some variance on how much the lender weights the BPO verses appraisal, verses listing agents suggestion. I guess it all depends on the relationship of the asset manager to the listing agent.

Again, just my guess.

They give me the illusion of having impact - they won't list a property without the broker's price opinion.

But get this, they usually ignore it and list lower, and the times I've addressed it with them it's because they think they're smarter than me.

I have never gotten the impression that they are holding back properties, or intentionally pricing them below market.

I have gotten the impression that they're completely overwhelmed, with the asset managers having 400+ files to work at a time. But myself, and I know of two other realtors, haven't been assigned any new REO listings for two months, and I think it's because they (CHL) are going to out-source them instead, which isn't good news because they'll go to the huge robot realtors who don't take calls and give generally bad service to all.

As usual you seemed to have pegged it. I was pretty much thinking the exact same thing...

Those robot organizations are such fun to deal with....

They're listing below the BPO?! Interesting. So, then the property should go very fast, right? Is this the case?

Jim,

CHL is coming out of their self imposed moratorium and should be releasing waves of assets shortly.

Thanks jimg111, I was just starting to shake off the effects of the "mold farms" they've been sending me - can't wait to get back in!

peterb,

Yes, they go fast and all have multiple offers when priced right, though I'll be happy to add that you don't have to be an REO to price right!

Any decent property with the right price is selling quickly these days, there are plenty of buyers.

Just had an interesting experience with a Robot Realtor. Perhaps the biggest one. Last month submitted an offer and couldnt even get a live voice from any of his droids. Last week Darth Realtor himself called me and asked me to re-submit my offer which was 10% below the asking price which was 10% below the competition. He even left me his personal cell phone. Nice guy and its a shame he doesnt deal with more people on a personal level but I guess thats what 200+ REO listings will turn you into.