Foreclosures affecting the market — coming soon to a town near you

[PD]

Good post, Perry. I think lenders are trying support the market, hoping for a rebound. When the tide turns and they realize that there will be no rebound and they start trying to unload at any cost, it is going get bad really fast. All the lenders are going to reach a tipping point sooner or later.
I just found out that a family member has recently bought a home in bubble market. They got a “good price.” They don’t realize that a “good price” relative to last year is going to a “bad price” relative to next year.

[PD]

Good post, Perry. I think lenders are trying support the market, hoping for a rebound. When the tide turns and they realize that there will be no rebound and they start trying to unload at any cost, it is going get bad really fast. All the lenders are going to reach a tipping point sooner or later.
I just found out that a family member has recently bought a home in bubble market. They got a “good price.” They don’t realize that a “good price” relative to last year is going to a “bad price” relative to next year.

[sdrealtor]

Yes, each bank has a handful of Realtors that sell their REO’s. I have a few friends that do it. It is a very tough job as they also become property managers.

[sdrealtor]

Yes, each bank has a handful of Realtors that sell their REO’s. I have a few friends that do it. It is a very tough job as they also become property managers.

[NotCranky]

Perry; Your analysys on this post is excellent your theory is very plausible.

Hi sdr,
SDR put you on the tab for our first round of beers. He is the best!

“Yes, each bank has a handful of Realtors that sell their REO’s. I have a few friends that do it. It is a very tough job as they also become property managers.”

From appearances they don’t take the property management part too seriously:).

[NotCranky]

Perry; Your analysys on this post is excellent your theory is very plausible.

Hi sdr,
SDR put you on the tab for our first round of beers. He is the best!

“Yes, each bank has a handful of Realtors that sell their REO’s. I have a few friends that do it. It is a very tough job as they also become property managers.”

From appearances they don’t take the property management part too seriously:).

[hipmatt]

I agree, with the above time line. This will go on until around 2011 or so. I think after this summer is over, and sales numbers are mediocre, and the inventory is still high, thats when you will see the resale market drop down noticeably.

[hipmatt]

I agree, with the above time line. This will go on until around 2011 or so. I think after this summer is over, and sales numbers are mediocre, and the inventory is still high, thats when you will see the resale market drop down noticeably.

[sdrealtor]

Buy your own damn beer!;)

[sdrealtor]

Buy your own damn beer!;)

[Bugs]

Just for kicks, I looked through all the sales for May 2007 in Oceanside’s zips.

92054 (which includes the beach areas) had 45 sales, of which 8 were foreclosures and 1 probate.

92056 (s/east) had 39 sales, of which 5 were foreclosures and 1 was a probate sale.

92057 (n/east, including the back gate Pendleton area) had 56 sales, 4 of which were foreclosures, 5 were advertised as short sales, 2 relocations, and 2 probate sales.

Based on these numbers, the ratio of forced sales to total sales for 92054 was 22%; for 92056 it was 15%, for 92057 it was 23%, and the average for Oceanside altogether was 20%.

By the way, the sale prices on the foreclosures represented loan losses (not counting holding costs and transaction costs) averaging about $100,000 or so, almost regardless of price. There were a couple foeclosures where it appears the lender might have actually come out ahead (!!), but $75,000 and $125,000 losses were almost as common as the $100,000 losses.

As I’ve said before, I think when these must-sell properties comprise 30% or so of the market they will run it and it will be every man for himself.

[Bugs]

Just for kicks, I looked through all the sales for May 2007 in Oceanside’s zips.

92054 (which includes the beach areas) had 45 sales, of which 8 were foreclosures and 1 probate.

92056 (s/east) had 39 sales, of which 5 were foreclosures and 1 was a probate sale.

92057 (n/east, including the back gate Pendleton area) had 56 sales, 4 of which were foreclosures, 5 were advertised as short sales, 2 relocations, and 2 probate sales.

Based on these numbers, the ratio of forced sales to total sales for 92054 was 22%; for 92056 it was 15%, for 92057 it was 23%, and the average for Oceanside altogether was 20%.

By the way, the sale prices on the foreclosures represented loan losses (not counting holding costs and transaction costs) averaging about $100,000 or so, almost regardless of price. There were a couple foeclosures where it appears the lender might have actually come out ahead (!!), but $75,000 and $125,000 losses were almost as common as the $100,000 losses.

As I’ve said before, I think when these must-sell properties comprise 30% or so of the market they will run it and it will be every man for himself.

[NotCranky]

This is a link for an article on short sales. I think it relates to Perry’s topic and that a few other posters on this thread might like ot look at it.

http://www.realtor.org/rmomag.NSF/pages/Feat1200706?OpenDocument

[NotCranky]

This is a link for an article on short sales. I think it relates to Perry’s topic and that a few other posters on this thread might like ot look at it.

http://www.realtor.org/rmomag.NSF/pages/Feat1200706?OpenDocument

[AKguy]

Perry–

I think your assumption that ‘rates continue to move up’ is suspect. If the tsunami you forecast should come to pass, or threaten to, I expect rates to go down as the Fed tries desperately to keep the economy afloat. No one knows the future, but it’s not exactly a perfectly free market out there. Not that lowering rates will keep prices from falling, but it might drag the whole process out.

[Author]

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