There is probably even more excess housing inventory gumming up the market than current statistics indicate, thanks to a wave of foreclosures that has yet to hit the market.I'd like to commend Lawrence Yun for his honesty on this matter. I have nothing against Lawrence Yun personally, or the organization he works for. What I dislike is dishonesty. When he is honest about the outlook for housing, I will treat him with respect.
The problem: Many foreclosed homes and other distressed properties that are now owned by banks have yet to be listed for sale. The volume of this so-called 'ghost inventory' could be substantial enough to depress already steeply falling prices when it does go on the market. ...
RealtyTrac, the online marketer of foreclosed properties, recently discovered that it has far more foreclosed properties listed in its database, which the company compiles using courthouse records, than there are listed in the multiple listing services (MLS) maintained by real estate agents. ...
The National Association of Realtors calculates official housing inventory statistics using data from the multiple listing services. By that measure, there were 4.2 million existing homes for sale in November, an 11.2-month supply at the current sales pace, up from a 10.3-month supply in October.
But now it seems quite possible that these figures, which are already at record highs, are underestimating the situation. And if that's the case, it could take much longer for the housing market recovery than analysts currently expect.
Until supply can be brought down to a more normalized level of six to seven months, home prices will continue to come under pressure, according to [National Association of Realtors chief economist Lawrence] Yun.
"It could be a worse problem than we think," he said.
Monday, January 26, 2009
MLS underestimates the number of foreclosures
The multiple listing service underestimates the number of foreclosures. This means the MLS also underestimates housing inventory numbers.
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Words from Mish on ripping into Peter Hyperinflation Shiff:
ReplyDelete"However, let's assume for a moment that hyperinflation is going to happen. Where then could one get the most bangs for their buck to take advantage? The answer to that question is in real estate, where one can buy on 5% down. Nowhere else can one easily get such leverage.
Note that there has never been hyperinflation in history where real property declined in value. Therefore, if Schiff really believes in hyperinflation, he ought to be suggesting that his clients buy houses.
However, Schiff thinks housing prices will continue to crash. So do I. And if they do, you can kiss hyperinflation theories goodbye."
http://globaleconomicanalysis.blogspot.com/2009/01/peter-schiff-was-wrong.html
Food for thought for those here who believe we will have $1,000 loaves of bread, and yet, somehow, hundreds of thousands of homedebtors will still be underwater.
I think there are still some good opportunities to invest in real estate. I just requested information from the Taylor Morrison website (and entered to win a dream vacation - http://dreambig.taylormorrison.com/?utm_source=bc) and they have a great group of financial professionals who are helping me figure out how to buy a home. I don’t think we should rely too much on projections, rather, we should buy when it feels right for us.
ReplyDeleteHA - I just refid out of my ARM loan - you know, the type that was supposed to reset and bring doom to the core areas?
ReplyDeleteClose in, its still possible to refi and appraise for very very close to the peak prices.
Thanks to the ungodly low interest rates, my payment now dropped $700 a month!
Bottom line - I am very glad I was irresponsible and bought during the peak of the bubble. Turns out it was the best decision I ever made!
Rents falling in many areas according to this from Businessweek.
ReplyDeletehttp://finance.yahoo.com/real-estate/article/106480/Rents-Drop-Nationwide-as-Vacancies-Spike
Anon ..."Turns out it was the best decision I ever made!
ReplyDeleteJanuary 26, 2009 12:45 PM"
Then why are you on this blog. Go live your life .. be happy.. piss off.. etc
Then why are you on this blog. Go live your life .. be happy.. piss off.. etc
ReplyDeleteI will. I think Ill go take my 700 a month and go stimulate the local economy.
Thank God he's gone, now we can get real info from each other without the liar around.
ReplyDeleteI'm glad someone else has confirmed my suspicions. I keep watching 5-10 homes at a time that I would be interested in should they get to my price point. I keep noticing that a lot of them disappear from the market. No one bought the homes and they are still empty.
ReplyDeleteWell, someone's buying ...
ReplyDeleteHome Sales Soar as Buyers Look for Deals
By Renae Merle
Washington Post Staff Writer
Monday, January 26, 2009; 3:00 PM
www.washingtonpost.com/wp-dyn/content/article/2009/01/26/AR2009012601612.html
And prices tank...
ReplyDeleteHows that investment of your going Lance. By that I mean your basement rental. With rents dropping you should refinance, what do you owe 475,000. If you could get 4.5% interest that would save you about $650 a month. ;)
Lance said...
ReplyDeleteWell, someone's buying ...
Interesting article there Lance. Home prices tank, sales go up. I wonder what we could extrapolate from such an event.
Lance,
ReplyDeleteThat link you gave, Im wondering if you read it? Cause this is what it said:
Bargain hunters are making their way through the backlog of homes, but the market remains weak, analysts said. The recession is weighing on potential buyers, making a market recovery -- or even stabilization -- unlikely soon, the analysts said.
Thats hardly strength to any argument that things are going well.
Anon,
ReplyDeleteI wasn't making the argument 'that things are going well'. I was simply responding to the poster who said:
"I keep watching 5-10 homes at a time that I would be interested in should they get to my price point. I keep noticing that a lot of them disappear from the market. No one bought the homes and they are still empty."
Anonymous said...
ReplyDelete"Words from Mish on ripping into Peter Hyperinflation Shiff:
...
Food for thought for those here who believe we will have $1,000 loaves of bread, and yet, somehow, hundreds of thousands of homedebtors will still be underwater."
Personally, I think Peter Shiff is a nut.
James...keep up the good work.
ReplyDeleteIt's a nightmare looking for a home...what a mess. Where to start, where to look, who to use.
What a headache.
People that couldn't afford and bought any way, should loose there home, and go live within your means. For thoses of us that are buying stop over biding on these homes! There is no deals out there, just selfish investors!
ReplyDelete