Wednesday, February 20, 2008

Sacramento Regional Real Estate Trends for February 16, 2008

Way too late this week. Let's just say there's a lot of event planning going on at the moment in non-blog world. :)











5 comments :

Bubble Sitter said...

Max, I believe there are changes in lender strategies which will make it harder for you to track the distressed inventory moving forward. I have been taking a closer look at the market based on your indications of a "hidden" inventory. I have witnessed two characteristics of these changes in the last week:

Option One, for example has multiple houses in default, but they have not filed public NOD's. They are keeping the defaults private and "working" with the FB's to effect short sales. Evidently, when one loan is in default, it is the FB's problem. When 1,000's of loans go into default, it is the banks problem, and they prefer to keep their problems private and bleed the FB's to the last drop.

The second item of interest is reguarding a house that was refinanced in early 2006 and the fraudster pulled out $100,000 and went into first payment mortgage default. The lender ultimately foreclosed in June 2006 for $650,000. The house has been sitting vacant, unattended and unlocked since for 9 months! I truly beleive the paperwork has fallen thru the cracks and the lender does not even know they own the property!

So there you have it: The lenders are softening their hard lines with FB's and slowing the foreclosure rates, plus they are losing track of their REO inventory. There is so much froth in this market it will take years to find the true bottom. Many people may think we will be hitting a bottom if we see some "improving" stats later this year. Don't bet a nickel on it.

Max said...

I believe there are changes in lender strategies which will make it harder for you to track the distressed inventory moving forward.

While I agree, I do think the lenders will have to resort to using the MLS eventually. That might reduce some predictive aspects of my data set, but knowing when banks finally cave and start listing their REO will be a powerful signal. For one, that event will mean we're nearing a bottom. Also, it will tell us that banks are finally willing to realize their losses.

This time of year, the market moves especially slowly. Hopefully by Spring, we'll have a better clue.

Patient Renter said...

Should I say congrats with your event planning?

I agree with Max, that while there is clearly a shadow inventory at the moment, the banks will have to capitulate eventually. For me though, I'm not convinced it's going to happen soon.

Anonymous said...

I live in Temecula and I'm surrounded by vacant foreclosed homes. Some are on the market and some aren't. The house across the street for me went back to the lender a couple of months ago and nothing's changed since then. It's not on the market and junk mail keeps piling up at the front door. People think there are a lot of homes listed but there are a heck of a lot more that the banks appear to be sitting on and will eventually have to sell. Just wait them out - that's what I'm doing. I know what they're holding.

Mike said...

I would love to know...
Broken down by zip codes in the Sacramento area, how many homes have sold and how fast they have sold over the last few months. The more current the better. Does anyone know where I can find that information?

Thanks,
Mike