Bank Owned Inventory is Rising

By | Housing Market

DataQuick release their April sales report today for CA which showed a 26.8% increase in sales over the previous month. Great news and confirms the reports I’ve been getting from my Realtor friends that things are picking up.

But is the worst really behind us?

Some believe so, in this CNBC report respected investment researcher Charles Biderman predicts that all the REO inventory will be gone by June. Click here to watch.

Thanks to a new addition to DataQuick’s monthly CA Sales Report which tells us the percentage of monthly home sales that are bank resales, we can now quite easily see just how well banks are actually doing on getting rid of inventory.

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Death Spiral? How to find the bottom in your market

By | Housing Market

I spend all day every day looking at, and working on, foreclosures. At times it can be downright depressing. Given that the primary cause of foreclosures is price declines, brought about by excess inventory, created in part by foreclosures, it is easy to see how the doomers argue that we are in a self-reinforcing death spiral with NO bottom.

In reality, nothing could be further from the truth. There is a bottom, Let me explain.

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You can handle the truth about the market

By | Housing Market

I’m frankly amazed every time I see another report from the National Association of Realtors given their recent track record (also here). You’d think they would throw in the towel and get out of the prediction business.

That said, the latest headline “Sales to Stabilize before Upturn in Second Half of 2008”, might not be that far off – but probably not for the reasons they cite. To be clear, I see increasing foreclosures, rising inventories, and other ugliness ahead. But many that hang in there will find a silver lining. During the boom, folks like David Leraeh said that affordability was a “growing concern“, while simultaneously forecasting future price increases. These two views, of course, are diametrically opposed. As we learned in economics 101, you can’t increase price when people already can’t afford the product.

The NAR needn’t have perpetuated this fallacy. For while many Realtors cling to the idea of homes as investments, in reality they are far better served by affordability. People want to be homeowners. Even as I saw the housing market disaster coming and sold nearly 20 properties, I couldn’t bring myself to sell my own home though I was certain it would decline by 25% or more. Why? Well, I didn’t buy my home as an investment, I bought it as a place to live — one that I happen to really like. So while everyone is focused on the very real and serious pain that this correction is causing, the reality is that it has also created new, and more sustainable, opportunities for buyers, investors, and, yes, Realtors.

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Stoking consumer hopes at the expense of Realtors

By | Economy, Home Sales, Housing Market, Realtors

Foreclosure information services are not new. Some local services have been in business for more than twenty years. Surprisingly though, there has been almost no innovation in this space since the dawn of the Web. These service providers do little more than collect and distribute foreclosure notices that are available free from the County Recorders Office.

Most of these services share another trait: the not-so-subtle scent of hucksterism. Promises to get rich quick, save 50% on your next house, or buy with no money down are rampant. Recently, this has produced a counter-trend, so called “white knight” investing. But the chivalry is only skin deep. Many who would train you to be a white knight will also tell you to press homeowners for at least 30% off, and talk in shrill tones about all the money you can make.

Give me a break.

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