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Thursday, April 15, 2010
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41 comments:
Happy tax day. Please make your checks payable to Black Hole.
Check out this classic Hail Mary Pass
Last sold May 2006 for $605K.
Asking $610K.
Comps (same street) are in the $370K range.
Hidden comments: "Buyer must be brain dead and have $610K cash"
novahog, yikes, that is a BIG drop.
"The agent is related to the seller." Possibly one spouse divorcing the other for "getting in before they were priced out forever"?
Calculated Risk detailed report from Tom Lawler on the statements BofA and Chase made about the state of second liens and the argument against principal reductions.
Well worth the read, and I think makes the case against principal reductions cogently. Also very interesting to note just how well 2nd liens in general are actually performing.
Novahog -
I saw that townhouse a few days ago. You can just about get that same townhouse in Vienna for that price.
My whiny reaction to such listings is, why did sellers go through such pain in the past few years, and why have so many buyers had to wait on the sidelines for so long....just to come back to the height of the bubble?
I guess it goes without saying that the seller will either take the house off the market, rent it out, or, until they can bear the payments no longer, short sell.
"I guess it goes without saying that the seller will either take the house off the market, rent it out, or, until they can bear the payments no longer, short sell."
Yup, unless there's about 13 pounds of gold hidden in the attic. That's the only thing that would make this place worth $610K today.
As far as i'm concerned, this shouldn't even be counted as an "active" listing.
RealtyTrac's Q1 2010 report is out
Record breaking REOs, but a high concentration in a handful of states:
"Ten states account for more than 70 percent of nation’s first quarter total"
And we're not one of them. 10th was Colorado with 16,023 total. All this really tells us is that we were under that. We could have been at 16,022 for all we know...
Hopefully more location specific information will be forthcoming.
Cara-
The calculated risk article is a good read. It really shows how absurd it is to claim that there is no value in home equity loans. I assume you can break up the portfolio by year, location, and reason for loan and find some pockets that have little value, but most loans in general are still performing...
tbw,
Following up on your comments yesterday about the percent of investor interest increasing. Alot of this could be considered "dumb money". They are too late on the lower tier as far as I can tell. Prices have risen dramatically and the real bargains are few and far between.
List prices are not too reliable; it's the solds we need to look at. I've seen prices bouce considerably (even 100%) off the bottom. Perhaps the numbers still work for some people - both flippers and long term LL's. Clearly, the bottom has come and gone and unless you are extremely fleet of foot AND the bank doesn't require a minimum market exposure, one could get a '09 or '08 price.
Whenever I see these come up as "sold" for some truly low price it usually had 0 or 1 day on the market.
Va_investor,
Based on the RealtyTrac numbers I'm guessing there will be another batch of opportunities soon. Although as I said, Herndon was under represented in WaPo notices. (using Herndon as the canary for Reston).
There may indeed be too many people fighting over them this year though.
Do you have something like an in with any REO specialist realtors? Is that something you'd consider? Would it help with getting those 0-1 day deals?
Va_investor,
Sorry I belatedly realized that question may have been to personal, my apologies if so. I was just curious if you were amongst those who had an inside track. Which is kind of irrelevant. Obviously some people do, it doesn't really matter to the market whether you happen to be one of them.
Again, sorry for prying.
Google is your friend:
Bizjournal DC area foreclosures
The scary news about foreclosures last month is that they rose to the highest total since RealtyTrac began tracking them in January 2005. The comforting news for homeowners in the Washington area is that Virginia, Maryland and D.C. accounted for just 3 percent of the record-setting total.
Virginia had 5,924 homes in foreclosure in March, while Maryland had 5,293 and D.C. had 156, according to the Irvine, Calif.-based foreclosure research company. Nationally, there were 367,056 foreclosures in March.
Compared to the 12,000 in VA in Q1 2009, it sounds as if we may be comparable to last year's rate (since January and February were much lower than March in both years nationally, anyway).
Cara-
I assume foreclosures will continue to rise slowly for at least a year and will not fall to "normal numbers" for ~4 years. The inventory is enormous and banks and the government want it released slowly. The shadow inventory will end up being a non-story assuming I am right and it gets liquidated over several years
hb,
Last year quarter 2, FFX, PWC, Loudoun, Alex and Arl had 5374 foreclosures out of 11,966 in Virginia, or 45%.
(from WaPo foreclosure overview)
Assuming this fraction is representative, that gives 45% of 5,924 March foreclosures or 2661 in NoVa in March.
Even if this didn't rise (which you and I anyway think it will) that would be 32,000 this year. With it rising, put it at 50k.
Year end sales summary annoyingly doesn't inculde PWC/Manassas etc. but puts last years total sales at 19k.
PWC should add about another 23% (based on March total sales....)
which would make total 2009 sales in the 23k range.
In other words, one better pray for bulk sale deals like CRT was the lawyer on, otherwise, we're swamped.
Have I messed up somewhere on the math or logic?
cara,
No, I don't really have any "in". I may get a heads-up ocassionally that something is coming on, but rarely is it anything I want.
I rely on the alerts like everyone else. I have gone directly to the lister at times in the hope of getting an inside track. Many lenders are requiring a certain number of days of market exposure before they will review contracts.
That said, I am quite sure some are getting an inside track.
As far as Herdon, that was one of the first areas to get creamed. I recall TH's going reo and selling for 70K +-. These were once in the upper 200's to mid 300's. The surnames were almost entirely Hispanic. These people were sold down the road. These units now go for mid 150's and up.
Virginia foreclosures graphed only goes through January so far, :(
At the same time, if you look at the 1-year rolling average, we've been at the current level since 2008. March numbers are just in line with what we've already absorbed in some way or another. So whatever it is that's happening, is already ongoing. So it's really just a matter of what will the coming increase do, and what fraction of those will actually effect the retail market.
Somethings getting double counted here. Perhaps this is counting all the NTS's not actual sold at auctions. Which since most homes get 2-4 times through the NTS circuit before being sold would explain a lot of it.
On NPR this morning RealtyTrac was saying that 3 million homes would recieve foreclosure notices and 1 million would be sold. Perhaps that 5,000 for March should be cut down to a third to get the real number appropriate for inventory purposes.
Yes, I am. A quicker correction is better IMO.
Saved without comment in the event of inevitable deletion:
"contrarian said...
1) There are about 1 million foreclosures currently in the pipeline (beginning with the 300,000 BoA mentioned yesterday) as a result of all the programs delaying foreclosures for the last 18 months.
2) There is the second wave of foreclosures such as the record 932K mentioned on CR today.
3) Then, there are those who are currently 25%+ underwater, and are about to become 50%+ underwater (a.k.a., future foreclosures).
Simply put, there are three classifications of foreclosures: Those who have not made a mortgage payment for the last year (squatters); those who are about to have their mortgages reset/recast; and those who bought during the bubble and are now underwater, many which will eventually walk away.
After all of these foreclosures, watch for another leg down in housing a few years from now when FRE and FNM close their doors.
4/15/10 4:58 PM"
Anonymous, get off of your high horse and go grind your axe somewhere else.
Whats the matter Kev? You still upset your "time for Arlington to take a nosedive" comment didnt come true?
Contrarian-
I am pretty sure it will take longer for the foreclosures to hit the market than you think. My guess is they get spread over at least the next 4 years if not longer. This should help keep the pain on the down on the housing market. I do think that prices will fall slightly, but nothing that exciting. I also doubt FNM & FRE will die more likely the government will either take them over fully or if they are shut down the feds will create a similar entity.
c, cara,
I spoke with the SIL today. He is in no rush to buy. He hopes to salvage the bad family situation, if possible.
tag,
I see no harm in waiting. The bottom on the low end has come and gone. The bounce has happened and I expect flat prices for a few years. Since they are paying cash, higher rates may benefit them.
Contrarian, the vast majority of what you say about me is true. Its true, I really relish the opportunity to grind your absurdist views and credibility up into a pulp. And look at my posts of the last few months -- I have been getting snippy here simply because I really dont care much anymore. Again, all true.
That said, you FINALLY, FINALLY, FINALLY admitted to the one core issue which we all suspected was the case:
"Contrarian said:
When I recently deleted my previous comments in an attempt to stop Anon from copying and pasting them"
THERE IT IS FOLKS, the closest thing you will ever see to Contrarian telling us the truth.
So let me ask you, once again, for the record, why, WHY would you delete them, simply because I would "copy and paste them"? Really? Whats wrong with that? After all, you said it -- I merely repeated it.
What you just said in a nutshell is "how dare The Anon repeat to everyone else what I once said". Seriously Contrarian? Thats your rationale?
LOL -- couldnt you have come up with something better than that???
The Anonymous said...
Whats the matter Kev? You still upset your "time for Arlington to take a nosedive" comment didnt come true?
No, I can accept being wrong now and then. I just think you're an obnoxious douchebag that can only make posts that say "I'm going to bookmark/save this" or "GLUG GLUG GLUG". You're an opinionless troll.
Contrarian-
Its not that we don't know what going on between you and Anon we just don't care. You can not accept the reality that although there are a lot of problems out there we are in a recovery and things look much better now than they did a year ago. Every prediction you made in the past has not come to fruition.
Anon is a huge bully that is holding a huge grudge against you and for some reason he feels better by making fun of your predictions. Myself and I assume most of the rest of the board just don't care about your fights. Why should we get in the middle of both of your bickering when it it is generally much easier to ignore it and move on.
About Cara's link to graphed foreclosures,
I think that it is interesting that even as general concensus on this blog has moved more bullish over time, there has been an assumption that has generally gone unquestioned that while virginia is past the worst, in MD and DC ... watch out the worst is yet to come.
This has been supported by inductive reasoning based on what is known about the mechanisms of foreclosure in each of the jurisdictions. The difference in laws was said to equate to a delayed increase in foreclosure activity. From that site though, one can see that all 3 jurisdictions experienced their peak increase in YOY foreclosure activity in Dec 07. While the rest of the curves aren't identical, there is no generalized delay.
All of this is not to say that I know what will happen in any of these jurisdictions going forward, just that I'm not sure that local laws really played much role in the kinetics of the drop. I really don't think there is any difference at all between MD and VA. I think there is a difference between close and far, and between wealthy/less wealthy areas. Such that Arlington is much more similar to Bethesda than Bethesda is to Hyatsville.
Why do any of these assumptions matter? Because I have seen them used to justify thinking that can explain away ominous national or local data... along the lines of "Sure xyz looks bad and nationally, or regionally housing will drop/stagnate/whatever, most of those drops will occur in MD or DC because they are behind us". Well, I'm not sure that is true, so if you think that drops are in the cards, you might reconsider how they will be distributed.
Thats it Kev. When things arent going your way, go ad hominem on your opponent. Nicely done!
Anonymous, I think you need to look up the definition of ad hominem before you next use it.
People,
If you can't afford what you want, then too bad. Who ever said "life was fair"?
I'm reminded of 2 yr olds having temper tantrums.
Kev -- I guess you are right, since you did answer my question. Who knew that if you called someone "douchebag" its not an ad hominem attack if you also answer the question. Good to know.
It's ad hominem if I am attacking your position, point of view, or opinion BECAUSE you are a douchebag. You're not stating an opinion, just doing your usual "GLUG will save this conversation for a date in the future" that you do on a weekly basis.
Again, go look up the definition of the term, you're not using it correctly.
See #2
"Main Entry: 1ad ho·mi·nem
Pronunciation: \(ˈ)ad-ˈhä-mə-ˌnem, -nəm\
Function: adjective
Etymology: New Latin, literally, to the person
Date: 1598
1 : appealing to feelings or prejudices rather than intellect
2 : marked by or being an attack on an opponent's character rather than by an answer to the contentions made"
http://www.merriam-webster.com/dictionary/ad+hominem
You didn't make any contentions, you were taunting. GLUG GLUG GLUG isn't a contention. Go look up that word as well.
eponymous,
Good point. As those previous deductions were largely based on the legal differences we really could only speculate as to how they would play out. Now or soon is indeed the time to revisit this.
But isn't it the case tha PGCounty fell in price later than PWC? I would think that's a sign of the differences in timeframes.
At the beginning of this discussion I pointed out that there were two possible conclusions. One that the lack of non-judicial foreclosures would have kept lenders more cautious in MD and DC, protecting them from the worst excesses of the bubble and limiting both the rise, the damage and the eventual foreclosures. You're right though that the concensus reached was the other alternative, that the longer process would mean delayed pain for MD and DC.
I think it's pretty clear that it's not going to touch Bethesda anymore than it will touch Georgetown. I think on the VA side, people are as underestimating of the poshness of Bethesda as I coming from MD underestimated the cache of Arlington.
(I can't afford either of them and they're both too far from my work, so I don't really have a horse in this race).
OTOH, wasn't the downturn in foreclosures due to external national forces, i.e. pressure from the White House? Thus the timing for peaking should have coincided. Perhaps MD and DC do still have a larger reservoir of delinquencies because they hadn't worked through them as quickly as they otherwise would have. But given that this also kept their price declines more modest, it's not clear to me the slower process won't also prevent some of the tertiary level of defaults from underwaterness. (where I have just now defined the following for the sake of discussion: primary level-> stupid loans, secondary level -> income loss, tertiary-> underwater and need to move or strategic defaults).
I do also think that it's PG County that people are referring too when saying that some of the price declines for the DC metro area can be attributed to other sections and may not reflect NoVa. I think this is probably valid because they're hurting pretty badly, but we should examine this more closely.
Perhaps we should restart this in a new bucket if anyone's interested.
contrarian,
You deleted your posts so that the Anonymous couldn't parrot them back to you. This does not seem to have worked out very well since the bullying has gotten worse not better. (most of us who receive these by email can look up old posts, I generally only do so to find useful stuff that's been discussed before like websites or looking back for how wrong or right my own predictions were, but I could do it for comments, not because I'm a pack-rat, but just because well I'm an email pack-rat...)
But seriously, housebuyer has it right, most of us probably really don't care. We know you've been a doomer all along and that so far we can't recall any of your predictions coming true. Lately, actually you've kept your dire warnings to things already under discussion like the BofA revelation via irvine renter and CR. Generally I've been beating you to the punch in pointing these out.
I personally like being able to go back and see what I said a year ago, and see where I was right and where I was totally naive. Apparently this is not interesting or important to you.
I disagree with both dc2 and the Anonymous that every comment one has ever mad in anger or in frustration can be brought back out of context verbatim and used as ammunition, because, (1) people do learn and change their views, and (2) people (me in particular, but people in general as well) do get pushed to hyperbole in online conversations.
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