This graph is nice to know in Jan 2007, but I have a feeling a lot of people who area already underwater and will give up anyways when time comes, will stop paying much earlier than their reset date.
I think what he is trying to hint at is the second ‘bulge’ of resets on neg-ams/option-arms that will be happening starting 2009. People are underwater on these, but they can make the current payment which is probably less than renting. They have the walk&rent vs. pay into the sinkhole and hope for a congressional bailout of underwater buyers syndrome. We are at line 17 in that graph right now.. but the peak foreclosure sales from NOD/NOTs have not yet made it through the system.. factor in close to 9 months for such a thing to occur. That means we are looking at the results of resets from line number 8 and earlier right now.
In reply to “schizo2buyORnot”, the data is badly structured, though the graphs are pretty. We have already covered that ‘median’ or any raw priced based comparison is meaningless. For the real comparison, you want something closer to price per square foot.. If you look at the graphs, we already know that the drops in price per square foot are more significant than the drop shown in your graphs. Effectively, people are paying a little bit less, but getting a lot more of a house at the same time.
One thing to realize about inventory, is that as inventory is taken down, so are the number of available and qualified home buyers (they bought their house, don’t need to buy another). This is part of why the sales numbers are not so great. The other problem with the inventory numbers is that the numbers may be skewed by “hidden” inventory making its way through the NOD/NOT/REO process. Some of the inventory may have been people trying to get out from under with a sale, but are now getting foreclosed upon. Because banks were slow on short-sales, many of those listed were probably not true short-sales (short was not approved by the bank/lienholder).
