April 25, 2006 at 11:21 AM #6524powaysellerParticipant
Inventory in Omaha has doubled since last year, while sales are the same.
The realtor told he doesn’t know why inventory is double.
He attributes the rise in foreclosures to people refinancing during the exotic loan boom, and now being stuck with higher payments they cannot afford. He has 118 active foreclosures in Omaha. The trouble is, the banks will not take even one dollar less than their asking price, so these REOs languish on the MLS for 90-120 days. He read me off the DOM for some REOs: 265, 109, 108, 194, 195, 146, 172, 137…Every few weeks, the lender drops the price a bit, until it sells. One of his investors made a $60K offer on a $120K house in January. The bank refused, and has dropped the price of the house by $5K increments since then. Today, that house is listed at $89K. Once it gets to where they want it, they’ll make the offer again. Funny, how the lender just holds out for the price they think they must have. But Omaha has a lot of HUD homes, so the rules must be different.
So the point is: all over the US, exotic lending is causing foreclosures. Next year, it will really heat up.
And why are inventories double even in Omaha? Are people trying to evade their adjustable mortgages?
Like I’ve said for weeks: this is a nationwide bubble. A nationwide lending bubble. And since consumer spending drives the economy, this pop will affect us all, whether we work directly with consumers (retail), production/manufacturing, or capital spending. Let’s not take on any new debt, and be prepared for the bear market.
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