Yes even if you move the closing graph back two months, it’s still out of whack that about 500 pending sales don’t close every month. (anyone know how many of them are short sales?) My point was it’s just not as dramatic as 1150 discrepancy in April currently shown.

I think the one and only saving grace there might be that the loans are so big the banks might actually think about it and negotiate extensions, etc. That’s quite a long shot though because it assumes banks will make rational decisions.

That’s a for sure. But so did stocks right before the 1929 crash and then after the post 1929 crash suckers’ rally, stocks really sold well….only to crash again.

Watch commercial RE very carefully, when the banks are stuck with a bunch of empty buildings and IOUs, the debt manure will really hit the fan…..my prediction, in a year or two watch for another stock market crash due to bad loans in commercial RE.

No one’s talking about the commercial RE toxic loans now, the i.e., hotel owners, are like using their own stimulus savings account cash to keep a few workers employed and the heat on….but when that dries up soon…..granny bar the door.

I never really looked at pendings in that way before anyway. Rather than look at the number of new pendings each month, I would look at the number of outstanding pendings at a given point in time. The short sale issue has made that deceiving too, so now I don’t look at pendings at all other than recording the median pending in my database, and I only do that now because I did it in the past. All the pending data is irrelevant right now.

“To compare apples to apples, you would have to take all Active – STI plus Pending under previous accounting to get all Pending under current accounting. ”

Do you agree or disagree?

Is the number of pending short sales increasing?

There has always been some background number of short sales, foreclosures, and so on, but if the quantity of short sales suddenly increases, then that might affect the overall success rates of closures. As always, we must consider the rate of success of the other sales. If the two rates are equal, then the combined rate would be the same no matter the mix. And whenever we are analyzing ratio data, we have paradoxes to consider, such as Simpson’s Paradox.

I believe there are over 1000 pending short sales right now, and less than 150 that closed last month (King Cty SFR). It’s not possible for me to easily get any kind of handle on how many short sales there were in the past six months that flipped, but that’s probably a sizable number too. And, it’s also possible that many of those short sales went pending more than once, which would also inflate the number the way the NWMLS track them.

They’re counting pendings waaay earlier in the process so you’re going to have a lot more fall outs. Some homes will fail on the inspection, some owners get cold feet at this stage, and some buyers will find out they really aren’t approved for a loan.

The conspiracy or thing of interest is that the NWMLS changed the definition, didn’t tell anyone, then loudly promoted the increase in pending sales YOY. The fact that there are more pendings not making it to closing is much less of a story.

Active – STI is now counted as Pending.

I used to track ACTIVE – STI to get an estimate of Pending, the ratio was approximately 1 Active – STI for every 3 Pending.

If you want to see the ratio of Pending Inspection to Pending (all others), you can now see this on CBBain or John L. Scott website.

Doesn’t this explain some of the discrepancy?

To compare apples to apples, you would have to take all Active – STI plus Pending under previous accounting to get all Pending under current accounting.