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  • August 5, 2008 at 10:55 PM #13527
    socrattt
    Participant

    I am far from an economist, but as I start to watch our country unravel from this mortgage and financial crisis I start to ponder the what ifs.

    Obviously we are in a current position to continue this downward real estate cycle. The simple supply and demand chart would say that we aren’t stabilizing any time in the near future. Now comes my questions, which may sound a bit off.

    If the dollar continues its’ downward trend and real estate continues to be more appealing to the foreign investor what will stop an investment group from Europe or Middle East to work a deal out with multiple banks to buy foreclosures in bulk at 70-80 cents on the dollar. This would obviously change things overnight, but obviously a far fetched idea.

    I am not a conspiracy theorist, but trying to stay ahead of the trend. I don’t see this being a part of a typical real estate cycle due to the amount of issues this country is currently facing. I am also interested to know how an inflation or stagflation period may or may not affect home prices.

    I am on the fence of not wanting to buy, but needing to buy, but deep inside of me I know we have more room to correct in the real estate market. I would appreciate it anyone could enlighten me on this silly idea I have construed.

    August 5, 2008 at 11:12 PM #253135
    SD Realtor
    Participant

    It is a good question. Currently investors looking to make bulk purchases do not do a 70-80 cents on the dollar. Back it down to around 50 cents and you are getting in the door to the party. I am not sure that it would change things overnight though. It is likely that the homes purchased by the investors would be flipped back on the market. While perhaps they could be put on the rental market that would then create a very rapid glut of rentals that would then hurt the rental income for these investors.

    In reality your idea is not silly and make no mistake, there will be bulk purchases. It doesn’t matter if it is by foreigners or domestic groups. There is so much money on the sidelines it is crazy. As long as the banks feel they can get more money selling REO stock over a huge bulk lowball offer they will continue to do so. At some point, if they gather enough inventory and an offer comes in that is just enough… they will take it.

    August 5, 2008 at 11:12 PM #253369
    SD Realtor
    Participant

    It is a good question. Currently investors looking to make bulk purchases do not do a 70-80 cents on the dollar. Back it down to around 50 cents and you are getting in the door to the party. I am not sure that it would change things overnight though. It is likely that the homes purchased by the investors would be flipped back on the market. While perhaps they could be put on the rental market that would then create a very rapid glut of rentals that would then hurt the rental income for these investors.

    In reality your idea is not silly and make no mistake, there will be bulk purchases. It doesn’t matter if it is by foreigners or domestic groups. There is so much money on the sidelines it is crazy. As long as the banks feel they can get more money selling REO stock over a huge bulk lowball offer they will continue to do so. At some point, if they gather enough inventory and an offer comes in that is just enough… they will take it.

    August 5, 2008 at 11:12 PM #253365
    SD Realtor
    Participant

    It is a good question. Currently investors looking to make bulk purchases do not do a 70-80 cents on the dollar. Back it down to around 50 cents and you are getting in the door to the party. I am not sure that it would change things overnight though. It is likely that the homes purchased by the investors would be flipped back on the market. While perhaps they could be put on the rental market that would then create a very rapid glut of rentals that would then hurt the rental income for these investors.

    In reality your idea is not silly and make no mistake, there will be bulk purchases. It doesn’t matter if it is by foreigners or domestic groups. There is so much money on the sidelines it is crazy. As long as the banks feel they can get more money selling REO stock over a huge bulk lowball offer they will continue to do so. At some point, if they gather enough inventory and an offer comes in that is just enough… they will take it.

    August 5, 2008 at 11:12 PM #253306
    SD Realtor
    Participant

    It is a good question. Currently investors looking to make bulk purchases do not do a 70-80 cents on the dollar. Back it down to around 50 cents and you are getting in the door to the party. I am not sure that it would change things overnight though. It is likely that the homes purchased by the investors would be flipped back on the market. While perhaps they could be put on the rental market that would then create a very rapid glut of rentals that would then hurt the rental income for these investors.

    In reality your idea is not silly and make no mistake, there will be bulk purchases. It doesn’t matter if it is by foreigners or domestic groups. There is so much money on the sidelines it is crazy. As long as the banks feel they can get more money selling REO stock over a huge bulk lowball offer they will continue to do so. At some point, if they gather enough inventory and an offer comes in that is just enough… they will take it.

    August 5, 2008 at 11:12 PM #253297
    SD Realtor
    Participant

    It is a good question. Currently investors looking to make bulk purchases do not do a 70-80 cents on the dollar. Back it down to around 50 cents and you are getting in the door to the party. I am not sure that it would change things overnight though. It is likely that the homes purchased by the investors would be flipped back on the market. While perhaps they could be put on the rental market that would then create a very rapid glut of rentals that would then hurt the rental income for these investors.

    In reality your idea is not silly and make no mistake, there will be bulk purchases. It doesn’t matter if it is by foreigners or domestic groups. There is so much money on the sidelines it is crazy. As long as the banks feel they can get more money selling REO stock over a huge bulk lowball offer they will continue to do so. At some point, if they gather enough inventory and an offer comes in that is just enough… they will take it.

    August 5, 2008 at 11:20 PM #253312
    peterb
    Participant

    I think some funds just bought some tranches for about 5% to 22% of their marked value. And I think that many of the assests behind these tranches are real estate. So in effect, they’ve bought them for a little over 5 cents on the dollar. This was just in the news a few days ago.

    August 5, 2008 at 11:20 PM #253321
    peterb
    Participant

    I think some funds just bought some tranches for about 5% to 22% of their marked value. And I think that many of the assests behind these tranches are real estate. So in effect, they’ve bought them for a little over 5 cents on the dollar. This was just in the news a few days ago.

    August 5, 2008 at 11:20 PM #253150
    peterb
    Participant

    I think some funds just bought some tranches for about 5% to 22% of their marked value. And I think that many of the assests behind these tranches are real estate. So in effect, they’ve bought them for a little over 5 cents on the dollar. This was just in the news a few days ago.

    August 5, 2008 at 11:20 PM #253380
    peterb
    Participant

    I think some funds just bought some tranches for about 5% to 22% of their marked value. And I think that many of the assests behind these tranches are real estate. So in effect, they’ve bought them for a little over 5 cents on the dollar. This was just in the news a few days ago.

    August 5, 2008 at 11:20 PM #253383
    peterb
    Participant

    I think some funds just bought some tranches for about 5% to 22% of their marked value. And I think that many of the assests behind these tranches are real estate. So in effect, they’ve bought them for a little over 5 cents on the dollar. This was just in the news a few days ago.

    August 5, 2008 at 11:20 PM #253317
    socrattt
    Participant

    My guess is the banks have to start pondering these ideas of a larger bulk sales due to the fact that the holding costs including property taxes, maintenance (I am told there are some cities that are making banks keep up on landscaping), mello roos and of course the commissions paid out to agents. It seems as though the banks just can’t afford to watch these homes continue to sit on a market with few buyers.

    I just think it is a matter of time before we hear of some type of larger transaction that may actually change the shape of the real estate market. The banks just can’t continue to sit with this inventory because it just doesn’t make sense.

    August 5, 2008 at 11:20 PM #253326
    socrattt
    Participant

    My guess is the banks have to start pondering these ideas of a larger bulk sales due to the fact that the holding costs including property taxes, maintenance (I am told there are some cities that are making banks keep up on landscaping), mello roos and of course the commissions paid out to agents. It seems as though the banks just can’t afford to watch these homes continue to sit on a market with few buyers.

    I just think it is a matter of time before we hear of some type of larger transaction that may actually change the shape of the real estate market. The banks just can’t continue to sit with this inventory because it just doesn’t make sense.

    August 5, 2008 at 11:20 PM #253155
    socrattt
    Participant

    My guess is the banks have to start pondering these ideas of a larger bulk sales due to the fact that the holding costs including property taxes, maintenance (I am told there are some cities that are making banks keep up on landscaping), mello roos and of course the commissions paid out to agents. It seems as though the banks just can’t afford to watch these homes continue to sit on a market with few buyers.

    I just think it is a matter of time before we hear of some type of larger transaction that may actually change the shape of the real estate market. The banks just can’t continue to sit with this inventory because it just doesn’t make sense.

    August 5, 2008 at 11:20 PM #253388
    socrattt
    Participant

    My guess is the banks have to start pondering these ideas of a larger bulk sales due to the fact that the holding costs including property taxes, maintenance (I am told there are some cities that are making banks keep up on landscaping), mello roos and of course the commissions paid out to agents. It seems as though the banks just can’t afford to watch these homes continue to sit on a market with few buyers.

    I just think it is a matter of time before we hear of some type of larger transaction that may actually change the shape of the real estate market. The banks just can’t continue to sit with this inventory because it just doesn’t make sense.

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