“JTR asked me to stop posting on his blog when I said, he was selling optimism. SDR thinks that the RE market is on fire right now. That implies there are a lot of people who are optimistic about the future and enough of them have money to spend.”
The market is on fire right now. I should have added the caviot with the exception of high end but if you talk to any serious buyer who has submitted offers on homes, I bet you they will express EXTREME frustration of multiple bids, getting outbid, and HORRENDOUS inventory selection. I also feel that active pending ratios in many of the zip codes we study are attrocious and more then half of any short sales you see already have offers on them. I am not saying they will close, I am saying they have offers on them. So yes I do believe that many zips are on fire.
As to optimism about the future I am not sure I would assume that. I would simply say that people have found a home they want to buy rather then rent. In fact most all of the buyers (at least those who I have been working with) feel that the economy is going to continue to sputter and unemployment will grow and that the housing market will continue to depreciate. They have the resources to outlast it, and they have made the choice to buy. Trying to figure out why people are buying is close to an exercise in futility.
UR, tracking the trust deeds shows that there is a significant reduction in the number of homes going to foreclosure. Whether that is happening because of the legislative efforts by the government, or because of staffing problems at the lenders themselves, or because of sheer lack of motivation makes no difference. All I know is, if I am a bean counter at a lender, and I can dump that property off so some investor at an inflated price instead of going through the legal hassle of foreclosure, it is a no brainer. Even if I have to sit on the property for months, so what if it is not performing. I get to dump it. No sale, no broker, no commission, no market, no foreclosure proceeding, no trustee sale. The best thing is that everything is backed by our tax dollars. Isn’t that sweet?
Really now, this is possibly the most manipulated market we have ever experienced and it should be painfully obvious to people.
As to the number of homes that are actually bank owned and not yet on the market, the same holds true but yes most of them are coming on the market. Prices are sufficiently low so that those to will sell quickly.
At least for the moment, at least here in San Diego, the effort of constraint combined with low interest rates and price reductions has been IMO wildly successful. Fundamentally this is in no way what a bottom should look like and I know you are not claiming a bottom.
