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More real estate doom and gloom

dante

dante

Unabomber
Feb 13, 2004
8,807
9
looking for classic NE singletrack
Pesqueeb said:
^^^^^^^^^^That sucks.

Zillow says my place is now worth 1300 more than I paid for it. 2 weeks ago when I checked last we were 10k below. Something don't jive, seemed like it was pretty accurate for my hood before.
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Yeah, that's my thoughts on it as well. I wouldn't care except for the fact that I was just asking my banker about an easy-refi, and used Zillow as an example of what our house was (theoretically) worth. :rant:

<shrug> I'm with Mark, a house isn't an "investment" but rather a place to live and hopefully have a rent-free retirement in. It's forced savings as you pay down your principle, and hopefully when you retire (if necessary) you can always downsize and buy something smaller outright and have a little cash left over.

In other news, even if our house has lost the 12% (or so) that Zillow thinks it's gone down by, the DJIA has lost 13% since then. Suddenly our house doesn't look like such a bad investment.
 
Pesqueeb

Pesqueeb

bicycle in airplane hangar
Feb 2, 2007
40,410
16,934
Riding the baggage carousel.
Bohica

home foreclosures, after slowing to a crawl over the past year, seem to be gaining momentum again, a sign that heralds both pain and perhaps eventual relief for the housing market.

The number of mortgage-default notices filed by banks climbed 33 percent between july and august -- the biggest single-month increase in four years, according to the data provider realtytrac. Default notices are the first step in the foreclosure process, and the uptick in august may mean that lenders are beginning to clear the logjam that has held up home foreclosures since 2010.

Last year's discovery of the widespread practice of "robo-signing" -- mortgage paperwork that had been authorized with forged signatures, or signed by people who hadn't read the documents in question -- set back the foreclosure process on a national scale, as lenders were forced to go back and re-examine thousands of filings.

The damage wrought by robo-signing is still evident in realtytrac's figures for august 2011. Although default notices were up sharply for the month, they were still down 18 percent from a year ago, suggesting the process hasn't gotten back up to full speed. Meanwhile, the actual number of repossessions was down 4 percent from july to a six-month low.

A return to delay-free foreclosures is expected to bring grief to the housing market, as banks process hundreds of thousands of foreclosed homes and put them up for sale. This massive influx of houses is likely to saturate the market, forcing prices down and suppressing construction activity.

Still, analysts say the market needs to get worse before it can get better, and an increase in foreclosures may be the first step toward that. Home prices are expected to touch bottom eventually and then begin to climb again, though experts are divided on how soon this could happen. Some predict a recovery as early as 2012, while others don't anticipate it until 2013 or 2014.

A measure in president obama's jobs bill, which is being considered in congress this week, could relieve some of the downward pressure on the housing market caused by the abundance of foreclosures. The measure, known as project rebuild, calls for $15 billion to be set aside for refurbishing foreclosed and vacant properties, including residential buildings.

However, analysts emphasize that project rebuild will only be effective in the context of a broader economic recovery, since national employment is closely tied to the health of the housing market.

Due to the delay in foreclosure processing, a notice of mortgage default doesn't necessarily mean that the house will be repossessed any time soon. Many homeowners are still living in foreclosed homes that could take months or even years for the banks to reclaim.

http://www.huffingtonpost.com/2011/09/15/home-foreclosures-august_n_964338.html
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Toshi

Toshi

Harbinger of Doom
Oct 23, 2001
38,469
7,826
Pesqueeb said:
Bohica
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I really hope that foreclosure proceedings speed up (without the errors of the past, of course). Clearing out the dead wood and letting the market adjust down to whatever it will bear in the long term is necessary to let people like me--it's all about me, after all :D--get in the market and get the money flowing again.
 
stoney

stoney

Part of the unwashed, middle-American horde
Jul 26, 2006
21,679
7,364
Colorado
Toshi said:
I really hope that foreclosure proceedings speed up (without the errors of the past, of course). Clearing out the dead wood and letting the market adjust down to whatever it will bear in the long term is necessary to let people like me--it's all about me, after all :D--get in the market and get the money flowing again.
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With you. I've got a chunk of change just sitting for a down payment, but it's not going anywhere until the housing market falls even more.
 
X3pilot

X3pilot

Texans fan - LOL
Aug 13, 2007
5,860
1
SoMD
The Joker said:
With you. I've got a chunk of change just sitting for a down payment, but it's not going anywhere until the housing market falls even more.
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I have a house in PA that I'm willing to make a deal on, let's get your money into my economy.
 
mandown

mandown

Poopdeck Repost
Jun 1, 2004
20,317
7,867
Transylvania 90210
The Joker said:
Don't call the hand until you know the flop.
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Just hope you got your 6 months of mortgage payments in the bank, and property taxes, and other living expenses, as you would advise. If you do, that is awesome . . . If you don't, well that is a different brand of awesome, but awesome, nonetheless.
 
amishmatt

amishmatt

Turbo Monkey
Sep 21, 2005
1,264
397
Lancaster, PA
dante said:
Oh, and our local rates for a 30y just hit 4 flat. Wonder if WF will allow us to do an easy refi (no appraisal, no paycheck)?

(and FHA loans hit 3.875 for a 30y!!)
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We did a refi... wow, almost a year ago now, with a local bank that still needed income verification, but we didn't need an appriasal. We were originally told it would take months, due to the back up from all the refi's, but it went through super fast and easy.
 
stoney

stoney

Part of the unwashed, middle-American horde
Jul 26, 2006
21,679
7,364
Colorado
mandown said:
Just hope you got your 6 months of mortgage payments in the bank, and property taxes, and other living expenses, as you would advise. If you do, that is awesome . . . If you don't, well that is a different brand of awesome, but awesome, nonetheless.
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We are set for over a year. When I got my last job, we lived off of my income alone and saved wife's entire paycheck.

This is also why I was not concerned about being on unemployment. I had plenty of money in the bank and we live to be comfortable on one income. When I left the bank, we knew that we could comfortably live on Wifey's income alone. Hell, with the extra cash from unemployment paying our rent we are still saving, albeit at a lower rate.
 
SkaredShtles

SkaredShtles

Michael Bolton
Sep 21, 2003
65,884
12,862
In a van.... down by the river
The Joker said:
We are set for over a year. When I got my last job, we lived off of my income alone and saved wife's entire paycheck.

This is also why I was not concerned about being on unemployment. I had plenty of money in the bank and we live to be comfortable on one income. When I left the bank, we knew that we could comfortably live on Wifey's income alone. Hell, with the extra cash from unemployment paying our rent we are still saving, albeit at a lower rate.
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That's how the wife and I worked when we were kidless. In fact, we were BOTH unemployed voluntarily a number of times during that fun period... :thumb:
 
KavuRider

KavuRider

Turbo Monkey
Jan 30, 2006
2,565
4
CT
I hate to say it and already feel horrible for thinking it, but lately I've been considering walking away from my mortgage and just letting it go to foreclosure.
After 7 years, I'm not sure how much more money I want to bleed out for this place. And the neighborhood is getting progressively worse. I don't foresee this getting better anytime soon.

So I'm in an ethical dilemma. Take the hit and move somewhere I actually want to live. Or keep pumping money into this place that will never approach what I owe on it. (Keep in mind, I owe $68K and I'm still nearly 50% underwater). Its tough, because I want to do the right thing, I never miss payments on bills.

(PS, Phoenix sucks)
 
dante

dante

Unabomber
Feb 13, 2004
8,807
9
looking for classic NE singletrack
Fvck "doing the right thing", look at it from a purely financial standpoint. *Every* corporation in the world has shed debt when it made the most financial sense to do so. They're called junk bonds for a reason, they're issued at high interest rates with a pretty high chance that they're never going to be repaid. Any corporation that's filed for Chapter 11 bankruptcy has defaulted on it's debt obligations: Just about every major airline, Chrysler, Donald Trump, etc.

I've yet to see a corporation do something fiscally disadvantageous just because it's "the right thing to do".
 
Pesqueeb

Pesqueeb

bicycle in airplane hangar
Feb 2, 2007
40,410
16,934
Riding the baggage carousel.
dante said:
Fvck "doing the right thing", look at it from a purely financial standpoint. *Every* corporation in the world has shed debt when it made the most financial sense to do so. They're called junk bonds for a reason, they're issued at high interest rates with a pretty high chance that they're never going to be repaid. Any corporation that's filed for Chapter 11 bankruptcy has defaulted on it's debt obligations: Just about every major airline, Chrysler, Donald Trump, etc.

I've yet to see a corporation do something fiscally disadvantageous just because it's "the right thing to do".
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:stupid: :stupid: :stupid:

DO NOT move out though. Especially where you live, foreclosures in your area are through the roof. I'd be willing to bet you could stay in your place upwards of 18 months before they even get close to legally being able to move you out. Think of how much money you can save in that time. As discussed previously in this thread, I've gone full 180 on the "its unethical/moral obligation blah blah blah" aspects of this. Dante puts it pretty succinctly, and all of the finical reading I've been doing about the housing mess has made me VERY unsympathetic to mortgage lenders/bankers/wall street etc. Were the shoe on the other foot, believe me, they would be putting the screws to you, morality be damned. Take advantage of the situation, save a ton of cash, wait a couple years, buy another place for a better price at probably a better rate. Just make sure you stay on top of your other bills and don't get crazy with the extra cash.
 
Pesqueeb

Pesqueeb

bicycle in airplane hangar
Feb 2, 2007
40,410
16,934
Riding the baggage carousel.
IH8Rice said:
18 months?? really?
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Give or take, depends on the area and if the bank thinks it can move the foreclosed property. In Kavuriders area, I would think so, I've read/heard about people in Vegas staying over two years rent/mortgage free before the bank has them evicted. Remember, the bank assume responsibility/has to account for the property when they foreclose, its in the banks finical interest a lot of times to not take that responsibility until they either clear other stuff off the balance sheet and/or think they can move the property. It doesn't happen here because investors snap up property to rent to military members. Kavurider has the "luxury" at this point to investigate a little it sounds like right now, but I would HIGHLY recommend doing a little digging into how long the average foreclosure is taking out in Phoenix.


*edit: A little of teh google turned up a couple things.
For example, the average time it took to foreclose on a home in Maricopa County in March, the most recent month available, was 191 days - more than twice the minimum notice requirement of 90 days. That's up 33 percent from the average of 144 days in March 2010, according to ForeclosureRadar.
http://www.azcentral.com/arizonarepublic/business/articles/2011/04/17/20110417biz-insiders0417anderson.html
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So, thats on average, 191 days after the bank starts the foreclosure process. If the bank doesn't start legal proceeding for say, a year, thats 18 months, worst case 6 months rent/mortgage free.
 
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KavuRider

KavuRider

Turbo Monkey
Jan 30, 2006
2,565
4
CT
Pesqueeb said:
Give or take, depends on the area and if the bank thinks it can move the foreclosed property. In Kavuriders area, I would think so, I've read/heard about people in Vegas staying over two years rent/mortgage free before the bank has them evicted. Remember, the bank assume responsibility/has to account for the property when they foreclose, its in the banks finical interest a lot of times to not take that responsibility until they either clear other stuff off the balance sheet and/or think they can move the property. It doesn't happen here because investors snap up property to rent to military members. Kavurider has the "luxury" at this point to investigate a little it sounds like right now, but I would HIGHLY recommend doing a little digging into how long the average foreclosure is taking out in Phoenix.


*edit: A little of teh google turned up a couple things.


So, thats on average, 191 days after the bank starts the foreclosure process. If the bank doesn't start legal proceeding for say, a year, thats 18 months.
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Thanks Pesqueeb, Dante. Good info.

I would definitely do the research before even thinking of doing something like that. But I can say, in my condo complex - lots of empty houses. Heck, you could expand that to my whole neighborhood.
 
Pesqueeb

Pesqueeb

bicycle in airplane hangar
Feb 2, 2007
40,410
16,934
Riding the baggage carousel.
http://www.foreclosureradar.com/arizona/maricopa-county/phoenix-foreclosures/listings

Foreclosure time lines and an abundance of distressed home sales are causing wide fluctuations in shadow inventory across the country.

The National Association of Realtors released state-by-state data on shadow inventory Monday, calculating the data in relation to distressed property sales. On the whole, Capital Economics estimates there are 5.3 million homes in limbo between foreclosure and the sales market. Standard & Poor's states it could take up to 49 months to clear the shadow inventory books. However, the NAR numbers indicate which states are in better shape to unload these properties based on the respective proportion of distressed sales.

Florida holds the largest shadow inventory across the U.S., with more than 441,000 residential properties caught between foreclosure and the sales market, according to NAR. California is a far second with almost 228,000 residential properties constituting the shadow inventory. Shadow inventory properties are sold as distressed sales.

NAR attributed growing shadow inventories to the ramifications of recent disruptions to foreclosure time lines. Some states are having more trouble than others in moving these properties into foreclosure. For example, a mortgage in Florida is delinquent 638 days on average, the second longest time line in the country. The only state that tops that is New York where the average loan is delinquent 644 days before its cleared through the foreclosure process. New York currently holds the fourth largest shadow inventory of 107,500, according to NAR.

NAR reported that the length of the foreclosure process in Florida and California jumped 156% and 157%, respectively, since 2008.

Still, two states commonly seen as poster children for the foreclosure and housing crisis are faring much better in terms of clearing out shadow inventory. Nevada and Arizona both rank in the top 26 states with the largest shadow inventory. However, among those 26 states, they rank 11th (Arizona) and 16th (Nevada) for their level of shadow inventory, behind many states that are supposed to be in recovery, including Texas.

"This is largely due to their shadow inventory moving somewhat faster through the pipelines and comprising larger share of existing sales," NAR said. Distressed sales comprised 69% of existing home sales in Nevada in the fourth quarter of 2010 and 55% in Arizona. (Full national stats available by clicking chart below.)



NAR reported early Monday that distressed sales nationwide increased to 39% of all existing purchase transactions in February. The median sale price is hurt by this type of sale, as well as the number of cash transactions that took during the month. The median sale fell 5.2% compared to one year ago to $156,000, NAR said.

NAR determined it will take 29 months to clear shadow inventory in Florida, 11 months to clear in California, 34 months to clear in New York, seven months to clear in Nevada and nine months to clear in Arizona.

In Wyoming, the state with the smallest shadow inventory, it will take 13 months to clear the 1,837 homes in limbo. Nevada ties Mississippi for the shortest time frame to clear the shadow inventory at seven months. New Jersey has the longest time line at 51 months, according to NAR.

http://www.housingwire.com/2011/03/21/statewide-shadow-inventory-rocked-by-foreclosure-snafu
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