[quote=sdrealtor] . . . The short sales arent pulling your value down. Its clear you feel victimized by them but the market is now speaking across all sales and normalizing values albeit in an inefficient haphazard way but over time we are getting where we should and need to be.[/quote]
My opposition to SS’s and principal reductions isn’t about me. As far as I am aware, there haven’t been any transactions in this regard in my immediate area. There have been a handful of REOs sold around me since 2007, however.
However, I AM concerned about the (likely in the thousands) lurking “shadow inventory” EVERYWHERE whereby one or more NODs were filed on an “owner” 18 mos to 3 years ago and the affected lenders are “sitting on their hands” while the home-debtor is likely still squatting or paying regularly? on an I/O mod or 40-yr mod and never gaining any equity. IMO, these cases are time bombs waiting to explode when the home-debtor realizes his/her mod isn’t getting them anywhere or the reason for taking out their mod is moot (their kids graduate from HS, for instance).
This whole “squat-mod, squat-SS syndrome” is keeping ALL market values down by affecting EVERY owner’s mobility and is and will cause the thousands of longtime prudent owners (like myself) to have to rent our properties out instead of sell in the coming months/years when we want to retire elsewhere. Owners in this situation aren’t asking for the moon. Just a reasonable sales price which reflects a well-maintained property where it was purchased 10 – 45 years ago, the owner did NOT use his/her property as an ATM machine and put perhaps $10-$50K on average of improvements in it in the last ten years. These owners number in the many thousands locally, btw.
Why should an owner like this NOT be compensated for what they actually have IN their property (+ enough for closing costs) if they are NOT bubble-purchasers?? A lot of buyers today seem to think they’re entitled to get all these improvements for “free” but cannot actually do this in practice unless a seller is a distressed position (the buyer is successful in a “bidding war” for an “improved-but-not-stripped” REO or engaged in a very long escrow in a SS). If they are first-time buyers, they typically have NO IDEA of the time and money it takes to even maintain a home properly, let alone make (expensive) improvements to it.
All of this “market distress” (which is now playing out into oblivion due to lender malaise) is completely unnecessary. It’s artificially created and serves no one. We could have been done with these foreclosures 1-2 years ago (yes, ALL of them) and the resulting REO’s could have been long sold. Multiple-property deals in less-desirable newer inland tracts (in high-distress areas) on zero lot lines and in condo complexes could have been sold to REITS who promptly turn them into rental properties. Contrary to the MSM posturing that current and future household formation is/will be low, there has actually been a dearth of inventory in CA coastal counties in recent years. Gen Y wants to live in these areas (that’s where the good jobs are) and most are still renting. I don’t believe that the buyer pool is dwindling. If all the shadow inventory in CA coastal counties was foreclosed on forthwith, it would be repurchased very quickly by Gen Y pent-up demand, IMHO.
Instead, the vast majority of longtime owners are still “stuck” (unless they want to “take a bath”) and their mobility hampered by the “squat-victim mentality” of FB’s and other self-made home-debtors being systematically “coddled” like two-year olds by their lenders.
There’s absolutely no excuse for this in CA. None at all.
