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Unconstitutional Patriot
Join Date: Apr 2000
Location: volunteer state
Posts: 5,620
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More RE News
For the first time in a LONG time, I'm seeing some real deals start to hit the market. Foreclosure pricing is more reasonable, bids are fewer, and properties are NOT being snatched up by owner-occs. That said, I do not think the worst has hit. The foreclosure backlog is huge. That inventory is huge. At the same time, demand is flat, especially after the homebuyer credit has expired. This suggest pricing will be weak.
In other words, I think it is a good time to dip a toe in the water. Keep your cash close, as the deals should get better. I'm not talk and no action. I just signed a contract on a fixer. Considering land value and the value of the bare structure, I am in well under cost. After repairs, I'm still in for well under current cost to build, and the location is prime. In other words, the time nears when nice returns are accompanied by modest risk. BTW, dealing with Fannie Mae is an absolute pain in the ass. Their incompetence and inefficiency is staggering. Fannie Mae is eating a good $100k loss on this property. That's a lot, considering I paid $60k for it. Thank you, fellow taxpayers, for subsidizing this inept agency and system.  Jurgen in TN |
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06-10-2010, 07:19 PM
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Dog-faced pony soldier
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I'd love to know how many properties are sitting empty right now waiting to be trickled back onto the market. "Shadow inventory". Bet it's in the tens of millions.
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A car, a 911, a motorbike and a few surfboards Black Cars Matter |
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06-11-2010, 01:00 AM
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Unconstitutional Patriot
Join Date: Apr 2000
Location: volunteer state
Posts: 5,620
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Varies by region, I'm sure. The latest number is 19 million vacant homes today, or roughly 1 in 9. Only a portion are for sale or for rent. Others are second homes. Nevertheless, it is a drag on the economy and the housing market.
Unknown is whether the inventory of non-performing loans is considered in the statistic above. FHA, Fannie, and Freddie are sitting on well over 200k homes, and have a ton in the pipeline ready to be foreclosed. Word is private banks have an even larger backlog. The question is how will these properties by unloaded. There is no funnel to restrict supply. As REO portfolio grows, the for sale inventory must grow, and by my eyes, the market cannot handle a huge influx without seeing remarkable price declines. |
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06-11-2010, 04:01 AM
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