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no_such_reality
ParticipantHow much of the sales volume slack are new homes picking up?
My big question, since I don’t remember is when in the last cycle did the banks finally capitulate on the REOs and start slashing prices? When did they decide they had to move inventory?
Looking at the Innovest’s handy statistics, looks like ’91 they hovered around 150 a month, then hopped to 300/month in December and stayed there all of ’92, then moved to mid-400s in ’93 and stayed there for the next three years ratching up to low-500s, rapidly moved back to mid-300s in ’97. Then 200s, then 100s in ’98-’99.
In 2006, we started out with 62 foreclosures in Jan after about four years of foreclosures being in the 30-60/month range. In 2006, ran from 62 to 300. Pretty much just a straight line acceleration. In the first six month of 2007, we’ve doubled to 600+. This month, we’re looking at an additional 30% month over month gain.
When are the bank REO offices going to get in gear? If REOs hop to 800+ and keep climbing, if they don’t start to liquidate, how are they ever going to clear the pile when they need to move a third the MLS resales volume just to tread water?
ParticipantMy anecdotal take is that actual selling prices have come down 10% – 20% from the very peak but houses are getting snatched up very quickly if they are at these prices.
I’ve seen that too, I think however that it only appears that way is because those that are “right priced” are so obvious. They’re the 5-10% of the market that is selling, 80% of the market still thinks it’s 2005, and the remaining 20% think it is 2007 which means 2006 wishing price +20%.
The right priced ones, come on and they sell in 30-60 days. In the better areas, maybe less. While everything with a wishing price languishes there for a year+. That makes it appear like snapping up.
The reality is, we still have 3000 sales a month of which ~2400 are resales. I’d guess only about 1000-1500 a month have “the right price” to start and are gone quickly and the rest “find the right price”. Hence, a right price is still going to move quickly because their is so much denial in the sellers on what the right price is. Literally, there’s a 10-20% price difference between them and the majority of the market and a 30-40% difference between them and those with wishing prices.
If the market ever gets back to the people trying to sell actually being in the ballpark for prices that will sell, that snapping won’t be obvious. And I suspect it will really drive prices down. If you have 2 homes priced at $800K in a former million dollar neighborhood, they move, when all the sellers figure it out and there’s now 20 for sale at $800K, $800K isn’t going to move’em.
ParticipantMy anecdotal take is that actual selling prices have come down 10% – 20% from the very peak but houses are getting snatched up very quickly if they are at these prices.
I’ve seen that too, I think however that it only appears that way is because those that are “right priced” are so obvious. They’re the 5-10% of the market that is selling, 80% of the market still thinks it’s 2005, and the remaining 20% think it is 2007 which means 2006 wishing price +20%.
The right priced ones, come on and they sell in 30-60 days. In the better areas, maybe less. While everything with a wishing price languishes there for a year+. That makes it appear like snapping up.
The reality is, we still have 3000 sales a month of which ~2400 are resales. I’d guess only about 1000-1500 a month have “the right price” to start and are gone quickly and the rest “find the right price”. Hence, a right price is still going to move quickly because their is so much denial in the sellers on what the right price is. Literally, there’s a 10-20% price difference between them and the majority of the market and a 30-40% difference between them and those with wishing prices.
If the market ever gets back to the people trying to sell actually being in the ballpark for prices that will sell, that snapping won’t be obvious. And I suspect it will really drive prices down. If you have 2 homes priced at $800K in a former million dollar neighborhood, they move, when all the sellers figure it out and there’s now 20 for sale at $800K, $800K isn’t going to move’em.
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ParticipantGood points Bugs. The listings even if they are not selling have a peer pressure of conformity. If everybody else is listing at $800K, even if they aren’t selling, must people will think the market is at $800K, instead of seeing the 1 in 10 that is selling at $700.
For “must sell” inventory, I wonder if we won’t get an additional spike this fall. When I look at the ARM reset chart, I see the option ARMs sitting out starting at month 30 and going on. To my knowledge, most option ARMs were written with 5 or 7 year reset windows and equity reset that trips at 110% or 115% of value which is the timebomb on the option ARM. People using the option ARM minimum payment, that’s the majority why else do you get an option ARM, hit their loan limits on average in 29 months.
I eyeball the teal, map that to a 60 month original reset period and then move it up to a 29 month equity reset, and that teal hump that starts as a small trickle in month 30, slides all the way over to month 1. Which puts currently about at where the teal part starts to get thick and then get real thick this fall/winter.
I think the chart would have been made using the time bound reset parameters and not the optional reset parameters of excess equity burn.
http://piggington.com/arm_reset_timeline
Anybody else have thoughts on that?
ParticipantGood points Bugs. The listings even if they are not selling have a peer pressure of conformity. If everybody else is listing at $800K, even if they aren’t selling, must people will think the market is at $800K, instead of seeing the 1 in 10 that is selling at $700.
For “must sell” inventory, I wonder if we won’t get an additional spike this fall. When I look at the ARM reset chart, I see the option ARMs sitting out starting at month 30 and going on. To my knowledge, most option ARMs were written with 5 or 7 year reset windows and equity reset that trips at 110% or 115% of value which is the timebomb on the option ARM. People using the option ARM minimum payment, that’s the majority why else do you get an option ARM, hit their loan limits on average in 29 months.
I eyeball the teal, map that to a 60 month original reset period and then move it up to a 29 month equity reset, and that teal hump that starts as a small trickle in month 30, slides all the way over to month 1. Which puts currently about at where the teal part starts to get thick and then get real thick this fall/winter.
I think the chart would have been made using the time bound reset parameters and not the optional reset parameters of excess equity burn.
http://piggington.com/arm_reset_timeline
Anybody else have thoughts on that?
ParticipantThe flaw in your argument is the base assumption that profit is bad. Greed is bad, profit provides incentive to do it better and less expensively than the next person.
Your provider won’t approve a treatment that could save your life — can you switch to another provider? Of course not, YOU HAVE CANCER and you’ll never be approved
A red herring, in you only have the NHS, you can’t switch either, and courtesy of NICE, they don’t approve every treatment.
It would be very expensive here, but we are already spending the money via insurance premiums and taxes.
How will it improve the system? The core problem with the British and any other health system remains the spiralling demand for the services. Our obesity and diabetes epidemics aren’t going away becuase of universal health care.
ParticipantThe flaw in your argument is the base assumption that profit is bad. Greed is bad, profit provides incentive to do it better and less expensively than the next person.
Your provider won’t approve a treatment that could save your life — can you switch to another provider? Of course not, YOU HAVE CANCER and you’ll never be approved
A red herring, in you only have the NHS, you can’t switch either, and courtesy of NICE, they don’t approve every treatment.
It would be very expensive here, but we are already spending the money via insurance premiums and taxes.
How will it improve the system? The core problem with the British and any other health system remains the spiralling demand for the services. Our obesity and diabetes epidemics aren’t going away becuase of universal health care.
ParticipantNo Concho, we’re just tired of the smear and slander debate technique. In God we trust, everybody else bring data.
Unfortunately, everybody is learning to debate like the elementary students in bible camp to refute evolution. Cry ridiculous, that’s not so!, state they can’t disprove your point and smear any source, while presenting none.
Universal healthcare is a potential solution, however, it is not panacea.
The NHS has a budget of $104 billion GBP. Or the equivalent of $210 Billion US dollars. There are three other health plans in the UK. And private insurance for those that want it to cover on top.
Their population of 60.7 Million people, not quite twice California, and a mere 1/5th of the USA. Their area is 224K km^2. Slightly over 1/2 the area of California. 1/40th of the area of the USA.
At equal spending per capita, we will have a NHS budget of $1 Trillion dollars. That does not include the equivalent of the other three plans or private insurance on top. It also assumes no diseconomies of scale for trying to cover 40X the area with 1/2 the density.
At the core of the health care problem is a macro-economic fundamental. Public goods, those goods that are consumed without direct perceived cost to the end-user, have no incentive to prevent inefficient and excessive consumption.
ParticipantNo Concho, we’re just tired of the smear and slander debate technique. In God we trust, everybody else bring data.
Unfortunately, everybody is learning to debate like the elementary students in bible camp to refute evolution. Cry ridiculous, that’s not so!, state they can’t disprove your point and smear any source, while presenting none.
Universal healthcare is a potential solution, however, it is not panacea.
The NHS has a budget of $104 billion GBP. Or the equivalent of $210 Billion US dollars. There are three other health plans in the UK. And private insurance for those that want it to cover on top.
Their population of 60.7 Million people, not quite twice California, and a mere 1/5th of the USA. Their area is 224K km^2. Slightly over 1/2 the area of California. 1/40th of the area of the USA.
At equal spending per capita, we will have a NHS budget of $1 Trillion dollars. That does not include the equivalent of the other three plans or private insurance on top. It also assumes no diseconomies of scale for trying to cover 40X the area with 1/2 the density.
At the core of the health care problem is a macro-economic fundamental. Public goods, those goods that are consumed without direct perceived cost to the end-user, have no incentive to prevent inefficient and excessive consumption.
ParticipantThe argument that if we were to have a universal system, then everybody would be going to the doctor for every little ailment.
Ask the British: Health Care Rationing “British doctors will take the historic step of admitting for the first time that many health treatments will be rationed in the future because the NHS cannot cope with spiralling demand from patients.”
Or ask about “Nice” Court challenge over Alzheimer’s drugs
Of course, they’ve made great improvements since the late 90s, when in 1998, there literally wasn’t an intensive care bed available in a hospital anywhere in the country. Or surgery waits were at 2 years. Remarkable Recovery Now they’re down to 2 weeks.
They do have their own King Drew horror stories as recently as 2005.
But in a parting shot from the NHS leader published today, maybe the doctors there aren’t as dedicated to the patient as we think. Hewitt cautions Brown against NHS policy change “Leaked correspondence revealed yesterday that she said the NHS remained a “paternalistic” service which too often served the “tribal” interests of doctors and managers instead of patients’ needs.”
ParticipantThe argument that if we were to have a universal system, then everybody would be going to the doctor for every little ailment.
Ask the British: Health Care Rationing “British doctors will take the historic step of admitting for the first time that many health treatments will be rationed in the future because the NHS cannot cope with spiralling demand from patients.”
Or ask about “Nice” Court challenge over Alzheimer’s drugs
Of course, they’ve made great improvements since the late 90s, when in 1998, there literally wasn’t an intensive care bed available in a hospital anywhere in the country. Or surgery waits were at 2 years. Remarkable Recovery Now they’re down to 2 weeks.
They do have their own King Drew horror stories as recently as 2005.
But in a parting shot from the NHS leader published today, maybe the doctors there aren’t as dedicated to the patient as we think. Hewitt cautions Brown against NHS policy change “Leaked correspondence revealed yesterday that she said the NHS remained a “paternalistic” service which too often served the “tribal” interests of doctors and managers instead of patients’ needs.”
ParticipantI don’t offer because what I consider homes to be worth and where the general market is, is too far apart. It would waste my time, the sellers time, and our agents time.
Also, should one accept my offer in the current market, I’d be instantly concerned that I don’t know something that they know about the property.
As for insulting offers, well, yes, you are insulting them to point. If the home is at or near market and the seller isn’t distressed needing a quick sale, an offer that is 30% below FMV, is an insult that says “I think you’re stupid and lazy”. IMHO. A home listed at 10% below FMV will move.
Of course, FMV has absolutely nothing to do with what 90% of the homes on MLS have for an asking price. FMV is the price that the homes that have sold are going for given their condition, location and tangibles.
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