Good news. We're at the tail end of a wave of subprime resets.
Bad news. Round Two of approximately $230 billion in resets that will hit home within the next year. Alt-A mortgages and Option ARMs.
The most opportunistic forecast I have seen is a 20 percent reduction in foreclosures for 2009 considered a “good year”. :yikes:
Add 750,000 in the active REO database. 17 percent of the inventory of existing homes for sale reported by the NAR in June. So we know that number is too low, let's add 8% to get to One in Four.
At current levels, there are more foreclosed homes than new homes sold in this country. 😱
25 percent of all sales will be foreclosed home sales, selling at a deeper discount to the market at an average of 33 percent discount to today's prices compared to 20 percent the previous year.
Builders can only compete with REOs by building custom from scratch rather Regardless, builders can't afford to compete against foreclosures at 40 percent to 50 percent off.
Pushing REOs through the FDIC-Asset Manager-Realtor pinhole is hardly any answer at all.
To Shoot The Messenger, aim at the stockings. :angry:
Replies
140Beach Fanatic
I know what you're saying Bobby. Seems like most of them are getting multiple offers. There are a couple that I can't believe are still on the market though. Banks are pricing very aggressively on the foreclosures. There are a lot of short sales in the pipeline right now. Should make for some great buys in 2009.
All those "great" buys from six months ago, one year ago, two years ago, etc. aren't looking like such great buys anymore. Prices continue to plummet, especially on raw land and there is a ways to go. As long as the price of land continues to fall, so will the price of the houses and condos.
I saw a pending lot sale in WC PH II for $145k (ask price, not pending price) that is 80% off the high water mark based on a the sale of the lot next door in 2005. Some asking prices in Watersound Beach are well under $250k and not selling, the preserve under $100k, cypress dunes under $100k, etc.
With prices continuing to fall, foreclosures will continue to hit the market as more people finally decide to throw in the towel as their properties languish on the market.
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Beach Fanatic
I've been involved in 3 this year. They all closed shortly after.
Did they show you offers or did you bid against yourself? As a former Bank Officer I know what the banks are doing.
Beach Fanatic
All those "great" buys from six months ago, one year ago, two years ago, etc. aren't looking like such great buys anymore. Prices continue to plummet, especially on raw land and there is a ways to go. As long as the price of land continues to fall, so will the price of the houses and condos.
I saw a pending lot sale in WC PH II for $145k (ask price, not pending price) that is 80% off the high water mark based on a the sale of the lot next door in 2005. Some asking prices in Watersound Beach are well under $250k and not selling, the preserve under $100k, cypress dunes under $100k, etc.
With prices continuing to fall, foreclosures will continue to hit the market as more people finally decide to throw in the towel as their properties languish on the market.
You are correct.
Beach Fanatic
Did they show you offers or did you bid against yourself? As a former Bank Officer I know what the banks are doing.
I was told they can not tell me anything or show me anything. Yes, we are bidding against ourselves.:bang:
Beach Fanatic
Ask the bank to show you the offers. They can black out the names etc. I find it hard to believe that any bank in this country right now are getting multiple offers on real estate.
Believe it. I would have no reason to put this in a post. I am extremely frustrated. Not to mention many of these big banks are letting out of town agents list these properties. They know nothing about the area and then all the money they make off their no brainer deal goes back up north to be spent in another area!:bang:
Beach Fanatic
Did they show you offers or did you bid against yourself? As a former Bank Officer I know what the banks are doing.
We lost the bid and they closed so I guess there was someone else bidding.
Beach Fanatic
All those "great" buys from six months ago, one year ago, two years ago, etc. aren't looking like such great buys anymore. Prices continue to plummet, especially on raw land and there is a ways to go. As long as the price of land continues to fall, so will the price of the houses and condos.
I saw a pending lot sale in WC PH II for $145k (ask price, not pending price) that is 80% off the high water mark based on a the sale of the lot next door in 2005. Some asking prices in Watersound Beach are well under $250k and not selling, the preserve under $100k, cypress dunes under $100k, etc.
With prices continuing to fall, foreclosures will continue to hit the market as more people finally decide to throw in the towel as their properties languish on the market.
I think the foreclosures that are selling for 2002 prices will still be great buys 5 years from now. Only time will tell.
SoWal Insider
In the last 6 months, what's the ratio of properties selling in foreclosure vs. short sale vs. "regular" sales?
What's the price points of these properties that people are falling over themselves for?
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What's the price points of these properties that people are falling over themselves for?
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SoWal Insider
I think the foreclosures that are selling for 2002 prices will still be great buys 5 years from now. Only time will tell.
Didn't they say this in 2002? :cool:
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Banned
Didn't they say this in 2002? :cool:
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Prices from the year 2000 look correct right about now.
Beach Fanatic
Didn't they say this in 2002? :cool:
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I know what you're saying, but it's a different situation. You can't compare a rapidly appreciating market with a market that has tanked for 2+ years now. There has to be a bottom somewhere. I think overall prices are still somewhere in the 2004 range. It would still be a very significant drop for the overall average to hit 2002 pricing.
Beach Fanatic
I just showed another foreclosure this morning. I called the agent as I was leaving and was told they are in a multiple offer situation. They told me to get my offer in asap!:bang:
Beach Fanatic
It appears that home prices are above replacement cost. Wouldn't this situation have to correct itself before any meaningful recovery can occur?
SoWal Expert
Are people jumping on the foreclosures because they don't want to deal w/ the hassle of a short sale, because the prices are reasonable, or other?
Beach Fanatic
I know what you're saying, but it's a different situation. You can't compare a rapidly appreciating market with a market that has tanked for 2+ years now. There has to be a bottom somewhere. I think overall prices are still somewhere in the 2004 range. It would still be a very significant drop for the overall average to hit 2002 pricing.
Lot sales and asking prices in many areas are already WELL BELOW 2004 prices and many are approaching 2000 levels. Check out this sale in Watercolor (assume it was arms lenght but not sure) http://64.234.218.210/cgi-bin/walton_display.cgi?KEY=15-3S-19-25450-000-0010 or this sale in Watercolor http://64.234.218.210/cgi-bin/walton_display.cgi?KEY=15-3S-19-25406-000-0010&. Both of these prices suggest 1999-2001 or earlier price levels. ASKING prices for several lots in Watersound are lower than the original 2003 Joe release prices. You can't give away lots in places like Cypress Dunes, Cypress Breeze, The Preserve, etc etc.
Beach Fanatic
It appears that home prices are above replacement cost. Wouldn't this situation have to correct itself before any meaningful recovery can occur?
Many homes we are showing are well below replacement cost. Not sure what you mean.
Beach Fanatic
Are people jumping on the foreclosures because they don't want to deal w/ the hassle of a short sale, because the prices are reasonable, or other?
The prices are better and they get a real quick answer. There is nothing short about a short sale!
I also think agents are beginning to steer away from them(short sales) as the foreclosure are beginning to show up in the market. We like to get paid.😀
SoWal Insider
I also think agents are beginning to steer away from them(short sales) as the foreclosure are beginning to show up in the market. We like to get paid.😀
...so today's short sales will be future foreclosures coming down the pipe and all those bubble-priced "regular" sales will be future short sales which will be future foreclosures....nope, this thing is still far from over.
Then again, banks may be more unwilling to accept these short sale requests and just go straight to foreclosure to get this thing over and done with. I'm safely assuming the majority of these properties are second/investment properties that don't qualify for any of Uncle Sugar's giveaways.
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Edited
Beach Fanatic
...so today's short sales will be future foreclosures coming down the pipe and all those bubble-priced "regular" sales will be future short sales which will be future foreclosures....nope, this thing is still far from over.
Then again, banks may be more unwilling to accept these short sale requests and just go straight to foreclosure to get this thing over and done with. I'm safely assuming the majority of these properties are second/investment properties that don't qualify for any of Uncle Sugar's giveaways.
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You are correct Shelly. The beauty of Real Estate is it is constantly changing! I love it!
In an hour short sales may be the direction to go. Right now foreclosures are looking good. Keep posted. That may change. 😀
Beach Fanatic
Many homes we are showing are well below replacement cost. Not sure what you mean.
As an example, there is a 1,725 SF resale in Grove by the Sea listed for $799,000. According to AAbsolute, you can build a 1,725 SF home in Watercolor for approximately $250K. You can buy a lot in Summersweet for $100K for a total price of $350,000. I personally would prefer to have a new home in WC as opposed to Grove especially at less than half the price.
SoWal Expert
As an example, there is a 1,725 SF resale in Grove by the Sea listed for $799,000. According to AAbsolute, you can build a 1,725 SF home in Watercolor for approximately $250K. You can buy a lot in Summersweet for $100K for a total price of $350,000. I personally would prefer to have a new home in WC as opposed to Grove especially at less than half the price.Just make sure you are comparing apples and apples, not apples and horseapples. Just because someone says they can build a house for $145 a sqr ft in WC doesn't mean you can build a good quality house in WC for that price. :roll:
Beach Fanatic
Just make sure you are comparing apples and apples, not apples and horseapples. Just because someone says they can build a house for $145 a sqr ft in WC doesn't mean you can build a good quality house in WC for that price. :roll:
Okay, what number do you want to use? $200 per SF? That would yield a total price in WC of $450,000, or $350,000 less than Grove. Please tell me if I am wrong with these assumptions. I am trying to learn the market. I know in Atlanta, new homes fetch more than resales. Is it the same in SoWal?
Banned
Just make sure you are comparing apples and apples, not apples and horseapples. Just because someone says they can build a house for $145 a sqr ft in WC doesn't mean you can build a good quality house in WC for that price. :roll:
ScooterBug, tell us all what the total cost of materials only is for a nice home in Watercolor. Pick any home in the neighborhood, I'll wait.
It'll be a long while before ScooterBug gets us the base information for us to have some educated dialogue from. In the mean time I'll tell you that we just closed on the sale of a beautiful home in Watersound Beach. It had all the comparable material features of the other homes selling in Watersound Beach. My company can buy the lot next door which is in Lis Pendens. It is acceptable with the sellers to buy it for 2003 pricing. At that rate we could build the same home we just sold and all in we would be about $180,000 under the price we just sold our home for. The lot on the other flank of our model is a little higher priced so it may be break even.
Beach Fanatic
Many homes we are showing are well below replacement cost. Not sure what you mean.
Please provide some example of homes (newer homes, not 15 or 20 year old dumps) selling for below replacement cost in areas where there are lots available for sale.
Banned
What say you Camp Creek Kid? Surely you must have some math for us to analyze about replacement costs and hard costs of materials.
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