How much of the sales volume slack are new homes picking up?
My big question, since I don’t remember is when in the last cycle did the banks finally capitulate on the REOs and start slashing prices? When did they decide they had to move inventory?
Looking at the Innovest’s handy statistics, looks like ’91 they hovered around 150 a month, then hopped to 300/month in December and stayed there all of ’92, then moved to mid-400s in ’93 and stayed there for the next three years ratching up to low-500s, rapidly moved back to mid-300s in ’97. Then 200s, then 100s in ’98-’99.
In 2006, we started out with 62 foreclosures in Jan after about four years of foreclosures being in the 30-60/month range. In 2006, ran from 62 to 300. Pretty much just a straight line acceleration. In the first six month of 2007, we’ve doubled to 600+. This month, we’re looking at an additional 30% month over month gain.
When are the bank REO offices going to get in gear? If REOs hop to 800+ and keep climbing, if they don’t start to liquidate, how are they ever going to clear the pile when they need to move a third the MLS resales volume just to tread water?
