So no such thing as shadow inventory, eh?

OKAY! Had to do it! I had to register to defend the arguments of the previous forum.

"It's part of the so-called "phantom inventory" of foreclosed homes being held by banks as they work out loan modifications and negotiate short sales, two of the more desirable alternatives to foreclosure."

I don't think anyone was ever arguing against the belief that more homes would be on the market if it wasn't got modifications or short sales. I did argue the fact that I thought shadow inventory had such a loose definition, which included modifications and short sales, that there was no wonder statistics were that high. You cannot count a property as shadow inventory if it's not available for sale and there is someone living in it, working the problem out. There has always been modifications, so has there always been shadow inventory?

I also argued that banks were not holding back properties in hopes of future appreciation or to save their balance sheets. And I still believe that.
 
First off... welcome to TI rolar... we need dissenting voices like yourself.

Second:

[quote author="rolarusc"]
I also argued that banks were not holding back properties in hopes of future appreciation or to save their balance sheets. And I still believe that.[/quote]
So all those auctions that keep getting postponed are what? Wouldn't they be anxious to get rid of those things... because I'm sure they tried to do a mod or whatever but it just didn't work so it had to go to auction... or something else.
 
Banks might have held property for some time, but there is only so much they can hang on to until the dam finally breaks. The number of failures is likely so high that it simply has become a losing bet for banks.

If HUD is saying that FHA loans can be used for flipped property purchases while at the same time HAMP mods are coming to a close in April/May, then BofA says they are beginning to release properties in Nevada (where they seem to always test things that might go thermonuclear...), I'd say the signs are pointing towards a very difficult time ahead of the market.
 
Speaking of shadow inventory... who will hook me up with the REO sales in OC for December from the MLS?
 
[quote author="graphrix"]Speaking of shadow inventory... who will hook me up with the REO sales in OC for December from the MLS?[/quote]

Per SocalMLS:
December
Total resales in Orange County - 2450
Total resale short sales - 592 (24.2% of total)
Total resale REOs - 409 (16.7% of total)
 
[quote author="IrvineRealtor"]
[quote author="graphrix"]Speaking of shadow inventory... who will hook me up with the REO sales in OC for December from the MLS?[/quote]

Per SocalMLS:
December
Total resales in Orange County - 2450
Total resale short sales - 592 (24.2% of total)
Total resale REOs - 409 (16.7% of total)[/quote]

Can we at least get a "thanks" button for Deuce?
 
I mentioned this in another thread.....speaking of shadow inventory, there are 272 properties in Irvine that are short sales either in "back-up offer" or "pending" status (some for 4-6+ months). That's about 1.5 months of supply right there.
 
[quote author="25inIrvine"]how many short sales that are not pending or in back-up offers?[/quote]

In Irvine,

105 listed as "active"

33 listed as "hold (do not show)"

171 listed as "accepting backup offers"

102 listed as "pending sale"
 
I've seen a bit of a trend developing based on Realtor comments at both the OCAR Laguna Hills and OCAR RSM broker preview meetings I've attended.

The conversation starts out how to put status updates in to the MLS, but then swings around to "how can we encourage more offers when we are in back up?, You (meaning the attending Realtors) all know that once your in escrow on a short sales the buyer is all excited, then 30 days later they fall out". Seems like from some of the aggregated comments that accepted SS buyers aren't as "sticky" as they used to be which is causing many Realtors to be a bit on edge.

On a side note, at the LH meeting two weeks ago one of the Realtors who pitched his buyer's needs said out loud that he won't show any of the "1 percent commission listings". He later started berating Realtors asking that "we need to defend the 3% commission structure", becoming ever more strident with each red-faced breath. Sure, 1.0% listing are tough for Realtors to show and at the same time make a decent living on, but come on, NOT showing a client a home simply because you feel underpaid? That's no way to rescue an industry. Most Agents on the board here know that a 1.0% listing is likely a problem property to begin with. The odds of closing on a home with such a low commission is not high after the buyer gets a good look at these homes. Anyway, back on topic....
 
SGIP:

I like that side note story. Stuff like that is interesting to hear. 1% of something may be better than 3% of nothing.
 
[quote author="irvinehomeowner"]SGIP:

I like that side note story. Stuff like that is interesting to hear. 1% of something may be better than 3% of nothing.[/quote]
Exactly! The system needs an overhaul in the commission structure.
 
USC - Agreed. But the "how" question is a biggie.

Since I'm in a yarnspinning mood, how about this:

Presented at one of the local preview meetings and invited someone from CotoHousingBlog to come along for shiats and giggles. During the "pitch portion" of the meeting an Agent interrupts her Coto home pitch and says "Has anyone heard of the Coto Housing Blog? They really say some pretty whacked stuff about our industry (I'm summarizing) and yadda yadda yadda." After about a good two minutes of beration the Agent sat down. I was caught completely off guard as was the CHB person. Very funny to be a part of without revealing either of our blog ID's.

Wonder if this has happened before with anyone else. I'm sure in the Irvine previews the "blog that shall not be named" has also been besmirched by Agents at some point.
 
[quote author="Soylent Green Is People"]USC - Agreed. But the "how" question is a biggie.
[/quote]
Well, I'm trying to do my part. Based upon what I learned from my operations management class you need to better align the agent's incentives with the client's incentives. The tricky is that you also need to somehow align the commission to the work put in by the agent which makes a perfect alignment of incentives between agent and client nearly impossible (as with most sales based commission jobs).

My question is...does a Orange County agent deserve to get paid 3+ times more than an agent in Texas for the basically the same amount of work? Hell no! I also have a problem with the national brokerages, but that's a whole other rant I can go off on (Prudential Real Estate Affiliates used to be my audit client back in the day).
 
[quote author="Soylent Green Is People"]Yes...it's Nevada, but Bank of America/Countrywide has plenty of properties to deal with. Consider the article confirmation that higher inventory may be on it's way.

http://tinyurl.com/bofashdwinv
[/quote]

Yesterday, my hubby had an interesting chat with an agent sitting on a Ladera Ranch open house about shadow inventory. The agent spoke of a recent conversation he had with a friend that works at B of A. The friend mentioned that in all of 2009, B of A released 100,000 REO's for sale in the U.S. The friend went on to say that B of A is on track to release 500,000 to 600,000 in 2010. It will be interesting to see if this really does happen? ?
 
With the majority of distressed homes located in AZ, CA, FL, NV, and MI, that's going to be a huge number of properties. People don't often visualize the REO problem as a 5 state issue, but assume it's a 50 state condition. Imagine 20% of 600,000 homes coming into the CA market in 2010 - just from BofA's inventory!
 
Can't find the "shadow inventory"? Here it comes...

http://online.wsj.com/article/SB10001424052748703562404575067452797224606.html?source=patrick.net

Foreclosures Seen Still Hitting Prices

This "shadow inventory" of homes expected to hit the market is enough to last about 10 months, based on the average sales rate over the past decade, the Irvine, Calif., firm says.

The problem is largely concentrated in Arizona, California, Florida and Nevada. The shadow inventory is equivalent to 27 months of sales in Orlando, 24 months in Miami and 18 months in Las Vegas, the study estimates.
 
Pay no attention to that inventory behind that curtain!....

O.C. has 13 months of unlisted foreclosures

Irvine-based John Burns Real Estate Consulting Inc. made national news this past week with a study showing that a new wave of foreclosures will hit the U.S. housing market in the next few years.

According to the Wall Street Journal, Burns Consulting's study forecast that despite loan modification efforts, the nation has a "shadow inventory" of 5 million units that will be added to the housing market as their delinquent owners lose their homes. This shadow inventory is equal to about 10 months supply of homes.


http://lansner.freedomblogging.com/2010/02/19/loan-mods-wont-halt-foreclosures-study-shows/56801/
 
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