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Q3 Foreclosure Sales Volume Plunges As Discount On Foreclosed Homes Hits 5 Year High
RealtyTrac has just reported that even though the volume of foreclosed homes plunged by 25% from Q2 to Q3 and 31% from Q2 of 2009, the discount on foreclosed homes has hit a five year high, as interest in even ultra bargain properties has collapsed following the expiration of the homebuyer tax credit, and confirming yesterday's bad Case Shiller (remember that one?) number. Per RealtyTrac: "foreclosure homes accounted for 25 percent of all U.S. residential sales in the third quarter of 2010 and that the average sales price of properties that sold while in some stage of foreclosure was more than 32 percent below the average sales price of properties not in the foreclosure process — up from a 26 percent discount in the previous quarter and a 29 percent discount in the third quarter of 2009." Yet despite the major price drop, buying interest has evaporated as nobody there is no longer any purchasing power left in the lower and middle sections of the housing market: "a total of 188,748 U.S. properties in some stage of foreclosure — default, scheduled for auction or bank-owned (REO) — sold to third parties in the third quarter, a decrease of 25 percent from the previous quarter and a decrease of nearly 31 percent from the third quarter of 2009. The average sales price of properties in some stage of foreclosure was $169,523, down 2.46 percent from the previous quarter and down 0.44 percent from the third quarter of 2009." And while the average price of non-foreclosed homes posted a slight uptick in Q3, the volume drop was even worse: "The average sales price of properties not in foreclosure was $249,721, up 6.42 percent from the previous quarter and up 4.36 percent from the third quarter of 2009. Sales volume of non-foreclosure properties decreased 29 percent from the previous quarter and nearly 31 percent from the third quarter of 2009."
More from RealtyTrac's Jim Saccacio:
“The expiration of the homebuyer tax credit in the second quarter created a substantial dip in overall buyer demand in the third quarter,” said James J. Saccacio, chief executive officer of RealtyTrac. “Demand for foreclosures also dipped in the third quarter, but those who did purchase a short sale or REO during the quarter were able to get an average discount of more than 32 percent — the highest average foreclosure discount we’ve seen since the fourth quarter of 2005.”
“The foreclosure-processing controversy, which was brought to light at the very end of the third quarter, could chill demand even further — particularly for foreclosure properties,” Saccacio continued. “A quick but responsible resolution to that issue would be ideal to help the market continue to properly clear out foreclosure inventory and get distressed properties into the hands of qualified buyers and investors who will likely add value to those properties and the neighborhoods they are in.”
We hope that Jim Cramer, who predicted that fraudclosure would lead to higher prices, reads the bolded text above, as it confirms once again that the bald comedian may need to retake Econ 101, where while they will not teach you how to manipulate stock prices, one may actually learn about the consequence of dropping demand on equilibrium price.
And some more details from RealtyTrac:
Foreclosure sales by type
A total of 113,933 bank-owned (REO) properties sold to third parties in the third quarter, down nearly 26 percent from the previous quarter and down nearly 35 percent from the third quarter of 2009. REO sales accounted for 15 percent of all sales in the third quarter, the same as the previous quarter and slightly below the 16 percent of all sales reported in the third quarter of 2009. REOs sold for an average discount of nearly 41 percent, up from an average discount of 34 percent in the previous quarter and an average discount of nearly 35 percent in the third quarter of 2009.
A total of 74,815 pre-foreclosure properties — in default or scheduled for auction — sold to third parties in the third quarter, down nearly 24 percent from the previous quarter and down 24 percent from the third quarter of 2009. Pre-foreclosure sales accounted for nearly 10 percent of all sales, up slightly from 9 percent in the previous quarter and 9 percent in the third quarter of 2009. Pre-foreclosure sales, which are often short sales, sold for an average discount of 19 percent, up from an average discount of nearly 13 percent in the previous quarter and an average discount of 18 percent in the third quarter of 2009.
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Shhhh, no one cares unfortunately....and saddly. This video of TSA in bus terminals has been eating at me all day.
http://www.youtube.com/watch?v=X4G-0g9PRrE
This is the future. Some shill cracker on a bench at a terminal explaining how awesome it is no to get blowd up while taking a greyhound.
Like terrorist give a shit about a bus yet. The media has already been played and to be honest I'm not sure if there really is an extremist terrorist anymore. Just seems a little too played out now to keep even pretending like foreclosures mean anything anymore, or the fact the fed is printing money out the wazoo.
It just seems like a time to wait and watch it burn because one's arms get very tired from throwing buckets of air at a fire that's eating everything. Suggestions.
///wait on deck chair, collect names, wait for fire to die off and find said names for removal.
Yes, it is funny how the problem of having to 'save the world' disappears once one realizes the world in its current form ain't worth saving. America has been gutted by de-industrialization. The Executives did it gladly, as they were promised bonuses for increased short-term profits, the damage to the Middle Class be damned.
The two things I have NOT heard enough of in the discussion:
1) debt default
2) re-industrialization of America
PsychoNews: Exposing the Oligarchy, one Psycho at a time.
http://psychonews.site90.net
1) debt default
2) re-industrialization of America
Here are the two subjects we should be addressing over and over. The strategic defaulting on China should be first. Wresting back production through anti-mercantile policies while stifling militant greens in our country that would stand in the way of re-industrialization.
If Obama were what he claims to be he would give us the Kennedyesque speech regarding our failed experiment in off shoring production and the necessary reinvention of American production, mines, factories and all.
This effort should start with massive building of standardized nuke plants across the country. I may not totally agree with peak oil but the advantages of nuclear are undeniable and better to hedge your bets.
Spot on, redirect..
... our failed experiment in off shoring production ...
Offshoring has not failed the businesses that are using it. So long as that is true, offshoring will be difficult to extinguish.
Your right, but proper policy can work toward ameliorating this situation.
Not in a world without a single world government...
1. Glass-Steagall
2. NAWAPA
But you are going to have to use 25th ammendment to get NerObama out. No way this fascist fake democrat will do anything to save this country. He's a post election Rand Paul Fascist Repubilcan. Yep. A creative destructionist. He's a fool. Obama is just as stupid as Bush, you just have to look at certain responses and catch him without his teleprompter.
Also look to the character of his butt buddy, LeNero James. Look at how he's whitewashing his coach Spolestra.
Of course fixed exchange, American Credit System, in lieu of Fedreal Reserve, and British imperialist monetary system that is now incorrectly known as globalization and free trade. Along with supply side, those are three worst idiot economic non-ideas ever championed by the chimpanzees from Project X.
Inch by inch they rob you of your pride.
Who do you think won the war ??........
I have to say it!
They did.
They did it with fear in a country that has never feared until it rolled over.
It sucks to see it. It hurts to feel a freedom of travel taken away. It pains me to contemplate how far this could go. Unreasonable, yes protection from Unreasonable search and seizures has been buried.
I'm keeping count
1st amendment died yesterday with Wikileaks
4th amendment died 9/11
Truth died in Texas November 22 @ 12.30 pm central time.
Hope and love exist but are an endangered species.
Was there ever an extremist terrorist, or were we just told that there was?
+ 1 google
Of course you need TSA at the bus stations, you might end up with buses that can't slow down.
http://www.youtube.com/watch?v=dsA4FnwrR7E
double post... D'Oh!
Only a fool thinks thinks they can catch a falling knife yet I see houses in my area that sat on the market for up to 2 years being snapped up at a rapid pace. This country is infested by moronic sheep. I will get to upgrade my living quarters soon enough at the expense of another generation of morons.
I see the opposite in this area. Empty/For Sale signs multiplying like a petri dish experiment.
Youngest daughter recently moved back to this area from Boston burb. She rented a beautiful 4 bed, 3 bath home, on corner lot, with big oak shade trees, etc, for $800 per mo with a 6 mo lease.
Here is the stunner; the realtor told her that he could get her the keys to numerous similar homes and she could move into her choice, turn on the power, water, and simply live there for free. The banks are doing nothing because to have a resident is to have the REO home protected from formation of mold, thieves stripping copper and appliances, etc.
This is a real world anecdote, not bs.
I see the opposite here (northeast arkansas). Essentially, most of our housing is from $75k - $175k. The poorest of the poor are still getting loans, paying too much for these homes, and living vastly cheaper than comparable rents. The end result is the same, these people will default on the loans, but the amount of the default is substantially less than elsewhere...
Another trend I am seeing is that the money on the sidelines (we actually did have money on the sidelines) piled out of CDs, bank accounts, etc. and into rental property at the first wave of distressed sales. Simply put, the return (at least in the short term) far exceeded the interest on the money that any bank would dare give. However, we're starting to begin seeing the second wave of distressed sales and I do not see the "organic" demand, rather I see more credit picking up the slack. We literally have people piling in here from three other states... they can get loans and cheap houses and sit on their hands all day... pretty fucked up really. [in their defense, we are still adding jobs here and have throughout the depression, so I suspect many are getting jobs (most likely healthcare), but the influx is larger than the available jobs for certain].
I know at least one local bank taking unofficial possession of homes and turning previous buyers into tenants at rental rates under what their mortgage payments were. The bank is avoiding having to go to court for foreclosure, keeps the houses off the REO lists, keeps the cash flow going, and is keeping the property occupied.
How long can the bank keep that juggling act up?
I would be curious about two things from this arrangement: (1) are the banks recognizing the loss on the mortgage; and (2) what implications does this have for securitized interests? [is the servicing bank pocketing the rent and not passing it down the pipe?].
This is clearly the most reasonable conclusion... handle the mess yourself, let them rent, and take the haircut on the difference between the rent and the note payment. If the haircuts eventually start taking skin and bones, then go ahead and throw yourself off the unoccupied high rise and we'll scavenge your corpse. (actually, the principal actors of the fraud against america and the 1% club will scavenge the corpse, while having armed guards ensure none of the rest of us get a piece).
I do wonder if the old parts of the country can maintain their prices. All of the jobless people in the South West may move back to the East Coast where their parents came from. All of the paper shufflers in NYC and DC may flood outward to the small towns when they realize their jobs were part of a ponzi scheme.
solution? pump harder.
I've been looking for a new home for about 2 yrs. now. It's amazing how little home prices have fallen from the 2006-07 highs. Still see homes being listed in nice neighborhoods for a good 20% more than what I would pay. Up until about 6 mos. ago, the homes would sit for only 3-4 mos. before selling, usually after a modest price reduction. For last 1/2 yr., nothing's moving. Seen homes sitting w/ no showings for month after month. Sellers still refuse to meet the market by dropping list prices. The houses just sit there. I wait.
Same for me here in Las Vegas. I looked pretty hard a couple of dirt-cheap condo foreclosures that I would have paid cash for ($25,000 range). A couple of new appliances and a little paint and they'd be ready to go.
But once the whole idea of clouded titles gained momentum, I said, "Screw this." I'll wait it out. Those places aren't going anywhere, and there will be hundreds more as we go.
Same here. Hard to think these condos will go for a drop again, but when you have seen Detroit, you know everything is possible.
I wait. There's really no hurry.
I went though this last year. People are bull-headed and refuse to take a loss. They can't pay their mortgage but they refuse to lose any money. You have to identify a property you want (or group of them) and monitor them. Contact the sellers and ask about a short sale. You might even make an unsolicited offer to a bank.
Everyone is acting like they have a straight flush and all they're holding is a pair of 2's.
Pair of 2's--the hidden question is whats hidden under the hood . The quality of most of the boom/bust homes built are actually junk--sub par exterior coatings, osb sub floors, 3 tab shingles/stapled, 2' OC rafter sets, no pearlin, pre-hung stapled split jamb doors, foundations that were not cured before weight, finger joint everything. I could go on and on but you get the point.
This country will not come back for a long time without construction which according to GDP was apparently ONLY about 10% of GDP---WRONG--it was and should be classified around 20% of GDP.
The first and foremost is that most folks dont see is that a percentage of all properties sold /now foreclosed on were purchased by the construction trades people.
Good luck with any house of cards.
Sellers who purchsed homes w/n the last 8 yrs. border on psychosis when listing their homes. About 2 yrs. ago, I looked at townhome in an upscale development. The most recent comp was $305k, which sold 6 mos. prior. The Sellers listed the unit I was interested in (3 bed, 2.5 bath, 2 car garage, 2100 SF, finished basement, hardwood floors) at $355k and wouldn't budge. I made an offer of $295k, reasonable in light of the comp, and the Sellers never even responded. I upped the offer to $305k, and they still wouldn't talk to me. The Sellers moved out and the unit stayed on the market for 4 mos. w/ 1 price reduction. Then they took it off the market for 2 mos. (keep in mind they've already moved out). When the unit was re-listed it the ask price was $10k more than the previous list price! After being on the market for over 1 yr., the Sellers ultimately sold it for . . . $310k. $5k more than what I offered to pay a year earlier. During that entire period, the listing agent never reached out to me. An old beat-up mini van w/ out of state plates is parked in its driveway constantly, I assume the new owners. They're welcome to it.
I've heard many, many similar stories. One thing to consider is that a lot of sellers who purchased their homes in the last 8 years don't have any equity. They can't sell for less than they paid, because they'll have to pay the difference and they don't have the money to do that. They're better off losing it to foreclosure, than giving up the house and having a hard $50,000 (at minimum!) that they still have to pay, and not having a place to live on top of that. If they lose it to foreclosure, at least they're more or less even at $0 and no place to live.
This will be spun as bullish. Rally on!
Lot of sellers, high prices, no buyers. The very definition of a frozen market.
Sellers don't lower their prices until they're desperate to sell, because the lady at CNN told them 5 years ago that home prices can never go down, and thus they don't understand why they should lower their prices.
a whole bunch of NOTHING is coming folks.
Scott Brown (JFK) 2012
Sarah Palin Glenn Beck Barack Obama Scott Brown Ron Pal Valdmir Potter Puten Putin Kung Jung ung
China is about to POP like a baloon.
Marc Faber 2012!
Bank of America continues to postpone all foreclosure sales in Utah. A thousand sales scheduled for October were postponed to November, then December, and now the December sales are being postponed to January.
That's because the mormon state has other liabilities and a very powerful almamater to protect the state and it's users/citizens.
------------
so how do they spin this one into GOOD news?
Here's how: http://www.reuters.com/article/idUSTRE6B10Z620101202
bollocks
Seems as if a party is missing in that discussion... THE PEOPLE WHO WERE HURT BY THE BANKING FRAUD!!!!
How can they have a settlement discussion without the victims? Oh, right, the SEC is there to protect fraud and not the victims... and Mary Shapiro is paid an $8 million annual unearnerd bribe to be a useless banking shill and sit on her hands doing nothing.
Our biggest event kicks off officially on Friday but we have a "sneak preview" tomorrow. Sort of like our Black Friday. People line up to get in. We're expecting massive crowd. I wish I could post pix - although it would contradict everything doomish here when you see the crowd of very successful small business owners smiling ear to ear.
More after the show. It it's better than last year, I'll post. If it's worse, I'll post. But I gotta say odds are way in favor of it being our biggest 3 day event in company history.
Never mind the fact that people are being put out of homes in record numbers, all that matters is your comic book convention is going well.
Harry, have you ever considered that people of small business owners you talk about would rather do something else in life, but are left being self-employed against their own will? Since all paying jobs left in the US are for banksters and gov't workers (being quickly laid off), what are people to do who refuse welfare? I would also guess these successful business people number well less than a hundred over several states.
self directed "employment" is the direction of economic evolution. No one likes the cube-farm and the asshole boss... but most are afraid to leave the "security" of them for that steady paycheck. I read this prediction back n 2000 and didnt believe it... well here it is.. You can bitch and cry about not be able to get a job or you can do something about it.. and create a job. Isn't that what has made the US strong in the past? Creating jobs? Create your own, get off the welfare tit, quit freaking crying about: the end of the world, no one is hiring, the TSA saw my junk, etc and do something about it. Create your own job, find a way to do something you really like doing, and quit FUCKING BAWLING. Everyone junks the hell out of Harry because he is taking a different perspective than all you fear loving cry babies. I dont think the economy is good... for someone who refuses to shift their attitude and perspective. But those who refuse are having a blast junking any thing and everything that they can. I for one feel like we all KNOW things are bad. All of us here on ZH KNOW the govt is full of shit and lies about the color of the sky. Everyone on the forum KNOWS the housing market is bad and getting worse.. ok.. so what. What are you gonna do about it? What's your plan? Ammo and gold? Awesome... because violence and revolution has worked so well in the past. Stupid! Harry is working his plan... and his plan is working for him. How is your plan working for you, junkers? Or, do you even have a plan? The junkers are jealous.
I dunno, call me crazy but I am not sure the current regulatory environment favors job creation... in general...
Bravo! Ese Pinche, an excellent riposte on the current mental condition of the "job" mentality. People are just so conditioned to working for a "boss" at a big company (usually an a-hole) and the security of the weekly or bi-weekly paycheck, complete with all the requisite deductions. The morons don't realize that a successful small business can operate at very low cost, especially if working from home (duh! computers and the internet make this possible, profitable and desirable).
I have been operating my own business for most of the last 30 years. Within that time, I have had other jobs, but they have been either bartending or house painting, two areas at which I have skills and require little to no supervision, so when I did those, it was almost like working for myself.
Anybody who is on unemployment has the added advantage of having some income during the startup phase, but most of the people collecting haven't got the balls to venture out on their own or the imagination to start their own business. They just collect checks and pay bills for 99 weeks and then wonder why their life sucks.
I junked the previous poster for opaque idiocy, but I'm glad there are still people looking for jobs and collecting UI checks because that means the market is wide open for rich thinkers and risk takers like us.
While the economy crumbles, we shall thrive and overcome!
I must add that my business is doing well, have no employees (and will never hire one - if I need extra help, it will be as a subcontractor or as project work), and am literally sitting in front of my computer in my underwear. As I told a friend about working for oneself, "my biggest question of the day is usually, pants or no pants?" I love it. Go get dressed up, spend on gas to get to and from work, eat crappy lunches at overprices places. I do my own thing, on my own time. Life is fucking great.
Right On Rick! This is what I am talking about. I do the same. I am writing right now with my PJs and slippers on. If you want to thrive not just survive you have to adapt.. pure and simple. As you pointed out, people like us aren't affected much by crude sky rocketing... because our commute consists of a walk from the kitchen to the home office. We dont have to worry about, thus cry about, no one hiring... cause we hire ourselves... We get to eat what we kill vs. have some one hand it to us after we trade a portion of our life/freedom. I work three different "jobs" yet I have so much freedom I have to actively look for things to fill up my spare time. Life is "fucking great"! I appreciate your post!
Coin and bullion dealer convention, eh Harry?
Good news, I cut a deal with Breakpoint Trades they are allowing me to post the full-on not watered down version of their stock market newsletter.
You get it for free, visit Hawaii Trading for the link!
http://oahutrading.blogspot.com/2010/12/full-paid-newsletter-for-free- from.html
Freddie Mac online rent versus buy calculator doesn’t even allow for a 1 percent annual price decline.
Once mortgage rates get above 6% the residential real estate market is going to be nuked for a generation.
http://partners.leadfusion.com/tools/freddiemac/home10/tool.fcs
plug in appreciation rate of -1 and lolz the results.
We recently looked at a foreclosure on a country road in the Hudson Valley. Unfortunately, the country road also boasted at least three other abandoned properties that are NOT on the market, out of a total of around ten houses on the road. Lots of shadow inventory up here.
We recently looked at a foreclosure on a country road in the Hudson Valley. Unfortunately, that particular stretch of road also boasted at least three other abandoned properties that are NOT on the market, out of a total of around ten houses in the area. Lots of shadow inventory up here.
next step buses driving into the concentration camps...............................
Let's send an open letter to Bill Gross and his mega millionaire friends. They can buy up foreclosed houses. Since Gross's PIMCO was absolutely complicit in the entire MBS mess, his lawyers should have a way to figure out how to unwind such inconvenient details as trusts without notes. In point of fact, PIMCO was all but a slum lord already. Yes Bill, buy them up. You can then rent them. Turn the shopping malls into factories. Pay the workers a wage much closer to the ten cents on a dollar the Chinese worker is making now. You know, make stuff, not paper.
Oh wait, if the guy is only making $5000 a year in the new scheme and not $50,000, he is surely competitive in the global market, but how is he going to pay Bill the rent? Hmmm. Let's see. Government subsidies perhaps ... or maybe Bill can help to develop the Chinese Yuan bond market and recycle debt directly from China to the US Treasury. Vendor financing 2.0.
brilliant radio on Bloomberg this AM - Faber followed by Shilling
Faber interview just happened (Shilling coming up) and ended abruptly as he said "to not own gold is to trust the government and with the wikileaks revelation we all now know just what kind of 'scumbags' government leaders are"
Faber also provided his standard reco - avoid cash and bonds - hold gold/equities and farmland
China is ahead of Faber's advice. I found this on Bloomblab site....
"China’s Gold Imports Soar Almost Fivefold on Inflation Concern"
"Dec. 2 (Bloomberg) -- China’s gold imports jumped almost fivefold in the first 10 months from the entire amount shipped in last year as concern about rising inflation increased its appeal as a store of value, said the Shanghai Gold Exchange.
Imports gained to 209 metric tons compared with 45 tons for all of 2009, Shen Xiangrong, chairman of the bourse, told a conference in Shanghai today. China, the world’s largest producer and second-biggest user, doesn’t regularly publish gold-trade figures and rarely comments on its reserves."
http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aoRe7zvm6Oac
The true fire sale comes in the next 12 months.
When it's common knowledge among the masses that central banking policy can't replace job creation as a sustainable method of economic survival, let alone stabilzation, the average Joe and Jane who are still working and solvent tuck all their future savings away -
- and make bids for assets other than the absolute necessities obsolete.
The End.
Every day I get closer and closer to adverse possession as Bank of America refuses to move foreclosure action forward. I pay no rent, I wear no pants. I will pay property taxes (can't win 'em all). In another six months I may file motions for dismissal of the action for failure to proceed (a year? dunno), or lack of standing (BofA, FKA Cuntrywide, started action, then submitted fraudulent assignment - from MERS to BofA after foreclosure was started). Dip shits. Then there are the lawyers who, here in NY, have to verify all information or face sanctions from the courts. I can only imagine the conversations between the ass holes at BofA and the crooked lawyers:
BofA: What do you mean you can't proceed?
Lawyer: We're on the hook for your bogus assignment. If the homeowner brings it to the court's attention, what are we supposed to say? Oops, missed that one? Sorry?
BofA: Hey, we're paying you good money. Proceed, get the scum out of our house.
Lawyer: Uh, where's the note?
BofA: What note, the promissory note? That's not an issue.
Lawyer: Really? Tell that to judge Schack.
BofA: Fuck.
Lawyer: Fuck you. Pay us another $3000 and re-do the assignment and maybe we won't sue you.
BofA: Sue us? WTF!
Lawyer: We're lawyers, suing is what we do.
How can you adversely possess something you own? Further, presuming you do not, there is generally a very strong presumption against adverse possession stemming from consensual usage. Meaning, your evidentiary burden is likely going to be very substantial in the event your legal theory is to claim you adversely possessed a home after the bank gave you permission to stay. In addition, your time of adverse possession cannot possibly, under any remotely reasonable measure, accrue while an action is pending to remove you from the property... this is pretty fundamental.
Failure to prosecute is generally, here anyway, a matter raised by the courts... if you want to proceed with suit, you are free to arrange a trial setting... deposition... you name it.
Lack of standing is your race horse. Throw your money on her and hope the jockey starts whipping her sooner if she's a late starter. Because you did not default, you need to raise all of these issues this time around. Fraud is your buddy too.