Just trying to understand some of this data

[Rich Toscano]

Hi Adam — I always appreciate if someone wants to dig into the data better, but I’m not quite sure I understand the issue here because the disparity you cite seems pretty explainable.

One answer is that a disproportionate number of foreclosures are in the low end areas, and a disproportionate number of sales in the high end areas — so it makes sense that the number of total REOs sitting there per total sales would be lower than the number of SOLD REOs vs sales (ie, more REO inventory is stacking up).

Another answer if I’m understanding is that you are tracking closed REO sales, while I am tracking recorded NODs and NOTs. The lag time between an NOT and REO closing is probably 2 months bare minimum (3 wks to get from NOT to REO, another month or more to close the sale), and probably a lot longer with that. With NOD it’s far longer than that by many months.

RE. the data sources: I’m not sure what foreclosure.com is. I get the data from the San Diego Daily Transcript, who gets it from the country recorder’s office. I used foreclosureforum.com for the historical data (since they had it in tabular format) but extensively spot checked and found a 100% accuracy rate between foreclosureforum.com and the Transcript. So since both sites are independently getting this from the country, I’m pretty sure they are reporting what they get from the county correctly. I don’t have any explanation for why the county numbers would be different from your title database.

Rich

[CavalierLion]

One other thing to keep in mind is that people are very sloppy in entering info into the MLS. I personally looked into buying two REO properties. However, you’d never be able to tell they were REO properties based on the MLS information. (Note: there also tends to be a lot of errors in numbers enterred in the MLS – sold price, sq. foot, etc., whether its sloppiness or deceitfulness on the part of the person entering the data (i.e., the realtors) I do not know).

[CavalierLion]

One other thing to keep in mind is that people are very sloppy in entering info into the MLS. I personally looked into buying two REO properties. However, you’d never be able to tell they were REO properties based on the MLS information. (Note: there also tends to be a lot of errors in numbers enterred in the MLS – sold price, sq. foot, etc., whether its sloppiness or deceitfulness on the part of the person entering the data (i.e., the realtors) I do not know).

[CavalierLion]

One other thing to keep in mind is that people are very sloppy in entering info into the MLS. I personally looked into buying two REO properties. However, you’d never be able to tell they were REO properties based on the MLS information. (Note: there also tends to be a lot of errors in numbers enterred in the MLS – sold price, sq. foot, etc., whether its sloppiness or deceitfulness on the part of the person entering the data (i.e., the realtors) I do not know).

[CavalierLion]

One other thing to keep in mind is that people are very sloppy in entering info into the MLS. I personally looked into buying two REO properties. However, you’d never be able to tell they were REO properties based on the MLS information. (Note: there also tends to be a lot of errors in numbers enterred in the MLS – sold price, sq. foot, etc., whether its sloppiness or deceitfulness on the part of the person entering the data (i.e., the realtors) I do not know).

[CavalierLion]

One other thing to keep in mind is that people are very sloppy in entering info into the MLS. I personally looked into buying two REO properties. However, you’d never be able to tell they were REO properties based on the MLS information. (Note: there also tends to be a lot of errors in numbers enterred in the MLS – sold price, sq. foot, etc., whether its sloppiness or deceitfulness on the part of the person entering the data (i.e., the realtors) I do not know).

[robson]

My explanation would mimic Rich’s. I will add a short run through some numbers though. January REO sales correlate with November or earlier NOTs. November NOTs correlate with July NODs (a quick regression shows that NODs lag NOTs by 4 months more accurately than 3 months).
There were 2033 NODs in July 07. Of these, about 50% become NOTs, meaning there should be about 1,000 foreclosures potentially being sold in January. This is what is TRYING to be sold. My question is what’s a standard ratio of what sells vs. what is for sale? Maybe 1/4, if those listings are priced aggressively? 1000*.25=251
This last ratio is key. Even if there was 1 foreclosure per sale, that only means maybe 1 REO sale per 4 other sales.
I believe the data is correct, but the assumptions/projected implications are shortsighted.

[robson]

My explanation would mimic Rich’s. I will add a short run through some numbers though. January REO sales correlate with November or earlier NOTs. November NOTs correlate with July NODs (a quick regression shows that NODs lag NOTs by 4 months more accurately than 3 months).
There were 2033 NODs in July 07. Of these, about 50% become NOTs, meaning there should be about 1,000 foreclosures potentially being sold in January. This is what is TRYING to be sold. My question is what’s a standard ratio of what sells vs. what is for sale? Maybe 1/4, if those listings are priced aggressively? 1000*.25=251
This last ratio is key. Even if there was 1 foreclosure per sale, that only means maybe 1 REO sale per 4 other sales.
I believe the data is correct, but the assumptions/projected implications are shortsighted.

[robson]

My explanation would mimic Rich’s. I will add a short run through some numbers though. January REO sales correlate with November or earlier NOTs. November NOTs correlate with July NODs (a quick regression shows that NODs lag NOTs by 4 months more accurately than 3 months).
There were 2033 NODs in July 07. Of these, about 50% become NOTs, meaning there should be about 1,000 foreclosures potentially being sold in January. This is what is TRYING to be sold. My question is what’s a standard ratio of what sells vs. what is for sale? Maybe 1/4, if those listings are priced aggressively? 1000*.25=251
This last ratio is key. Even if there was 1 foreclosure per sale, that only means maybe 1 REO sale per 4 other sales.
I believe the data is correct, but the assumptions/projected implications are shortsighted.

[robson]

My explanation would mimic Rich’s. I will add a short run through some numbers though. January REO sales correlate with November or earlier NOTs. November NOTs correlate with July NODs (a quick regression shows that NODs lag NOTs by 4 months more accurately than 3 months).
There were 2033 NODs in July 07. Of these, about 50% become NOTs, meaning there should be about 1,000 foreclosures potentially being sold in January. This is what is TRYING to be sold. My question is what’s a standard ratio of what sells vs. what is for sale? Maybe 1/4, if those listings are priced aggressively? 1000*.25=251
This last ratio is key. Even if there was 1 foreclosure per sale, that only means maybe 1 REO sale per 4 other sales.
I believe the data is correct, but the assumptions/projected implications are shortsighted.

[robson]

My explanation would mimic Rich’s. I will add a short run through some numbers though. January REO sales correlate with November or earlier NOTs. November NOTs correlate with July NODs (a quick regression shows that NODs lag NOTs by 4 months more accurately than 3 months).
There were 2033 NODs in July 07. Of these, about 50% become NOTs, meaning there should be about 1,000 foreclosures potentially being sold in January. This is what is TRYING to be sold. My question is what’s a standard ratio of what sells vs. what is for sale? Maybe 1/4, if those listings are priced aggressively? 1000*.25=251
This last ratio is key. Even if there was 1 foreclosure per sale, that only means maybe 1 REO sale per 4 other sales.
I believe the data is correct, but the assumptions/projected implications are shortsighted.

[DWCAP]

I am not a conspiracy theorist, but doesnt it seem that a listing agent would want to leave REO outa the MLS listing? They are there to sell that property for the maximum possible. Their comissions and the banks $ recovery all depend on them selling fast, and at full price. Anything labeled “REO” is gonna get hit with a -10% off listing offer in this market, if not more. My poor and unMLS accessing memory tells me that this happened even with some of the few nice houses that have come up REO. So shouldnt the bias be to “accidently” not release that info as long as possible?

And dont tell me that agents are following all the rules about disclosure. How many times have you seen a house at 100+ days, or even 200+ days on market get removed from MLS, only to be relisted at 0 days on market the next day and have a note saying “priced to move…. get it before its gone”. Note the list price didnt move a wink and it’s still the same agent. (This is usually used in conjunction with the standard “we are expecting 3 offers tomorrow, so bid now” line. It is kinda hard to use that line if the house has been sitting for 8 months).

So, I guess if I was gonna question data, I would look to where the observed bias and inconstiancies in reporting are first. Especially if multiple independent spot checks of the .com data sets seems to hold up.

[DWCAP]

I am not a conspiracy theorist, but doesnt it seem that a listing agent would want to leave REO outa the MLS listing? They are there to sell that property for the maximum possible. Their comissions and the banks $ recovery all depend on them selling fast, and at full price. Anything labeled “REO” is gonna get hit with a -10% off listing offer in this market, if not more. My poor and unMLS accessing memory tells me that this happened even with some of the few nice houses that have come up REO. So shouldnt the bias be to “accidently” not release that info as long as possible?

And dont tell me that agents are following all the rules about disclosure. How many times have you seen a house at 100+ days, or even 200+ days on market get removed from MLS, only to be relisted at 0 days on market the next day and have a note saying “priced to move…. get it before its gone”. Note the list price didnt move a wink and it’s still the same agent. (This is usually used in conjunction with the standard “we are expecting 3 offers tomorrow, so bid now” line. It is kinda hard to use that line if the house has been sitting for 8 months).

So, I guess if I was gonna question data, I would look to where the observed bias and inconstiancies in reporting are first. Especially if multiple independent spot checks of the .com data sets seems to hold up.

[DWCAP]

I am not a conspiracy theorist, but doesnt it seem that a listing agent would want to leave REO outa the MLS listing? They are there to sell that property for the maximum possible. Their comissions and the banks $ recovery all depend on them selling fast, and at full price. Anything labeled “REO” is gonna get hit with a -10% off listing offer in this market, if not more. My poor and unMLS accessing memory tells me that this happened even with some of the few nice houses that have come up REO. So shouldnt the bias be to “accidently” not release that info as long as possible?

And dont tell me that agents are following all the rules about disclosure. How many times have you seen a house at 100+ days, or even 200+ days on market get removed from MLS, only to be relisted at 0 days on market the next day and have a note saying “priced to move…. get it before its gone”. Note the list price didnt move a wink and it’s still the same agent. (This is usually used in conjunction with the standard “we are expecting 3 offers tomorrow, so bid now” line. It is kinda hard to use that line if the house has been sitting for 8 months).

So, I guess if I was gonna question data, I would look to where the observed bias and inconstiancies in reporting are first. Especially if multiple independent spot checks of the .com data sets seems to hold up.

[DWCAP]

I am not a conspiracy theorist, but doesnt it seem that a listing agent would want to leave REO outa the MLS listing? They are there to sell that property for the maximum possible. Their comissions and the banks $ recovery all depend on them selling fast, and at full price. Anything labeled “REO” is gonna get hit with a -10% off listing offer in this market, if not more. My poor and unMLS accessing memory tells me that this happened even with some of the few nice houses that have come up REO. So shouldnt the bias be to “accidently” not release that info as long as possible?

And dont tell me that agents are following all the rules about disclosure. How many times have you seen a house at 100+ days, or even 200+ days on market get removed from MLS, only to be relisted at 0 days on market the next day and have a note saying “priced to move…. get it before its gone”. Note the list price didnt move a wink and it’s still the same agent. (This is usually used in conjunction with the standard “we are expecting 3 offers tomorrow, so bid now” line. It is kinda hard to use that line if the house has been sitting for 8 months).

So, I guess if I was gonna question data, I would look to where the observed bias and inconstiancies in reporting are first. Especially if multiple independent spot checks of the .com data sets seems to hold up.

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