Posted by: The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

16 responses to “Foreclosures Back on a (Very Slow) Upswing?”

  1. softwarengineer

    We Need Another Chart Tim

    Label it Cumulative “Shadow Inventory” of FC Stock to Date in the Seattle Area

    This would help us understand what past years’ FC stock waits to impact us today in Seattle and in the future too.

    Here’s an example, scroll down to the 2 years past due chart nationally, I especially like that one:

    Rate this comment: Thumb up 0

  2. Scotsman

    Forec;losures turned to rentals?

    “The “New Normal” American Dream Of Renting Is About To Become Very Expensive”

    “Much has been made recently of the government’s renewed efforts to spark the housing market from its dismal slide, however we fear there are yet more unintended consequences lurking just around the corner. The various ideas being posited for a broad REO-to-rental program is one of these steps as BofA points out in accommodating the dramatic shift from ownership to renting (with 4.2mm new renters and 1.2mm fewer homeowners since the end of 2006). Of course removing foreclosures from the for-sale market reduces competition for voluntary sellers – which should help to support prices for non-distressed homes but here is where the crux of the unintended consequence lies. We have a squatter epidemic. There are millions of ‘homeowners’ currently living mortgage-payment-free (by choice) who will soon be forced (as the foreclosure process ramps up post-settlement) to pay rent (since they will not qualify for a mortgage). This will have the double whammy effect of reducing overall discretionary consumption spending (as rent is greater than ‘free’ – unless the cardboard box is preferable) and driving inflationary forces into rental costs ”

    Rate this comment: Thumb up 0

  3. No Name Guy

    Good to see they’ve gone back up. The slow down since March 11 and date has been unacceptable delay in getting back to a functional market.

    Wipe out the bad debt.
    Banks take the loss.
    Sell the resultant REOs ASAP.

    It’s the only way to clear the hang over. Hurry up and get it over with. We saw what that STUPID tax break did – nothing, to the long term trend. It just delayed the reset. Same thing here – quit the “saving home owners” crap – HAMP, cram downs, etc.

    As the saying goes, the sharp knife cuts the quickest and hurts the least. What we’ve been getting instead from the policy makers is pandering and the resultant slowly pulling off of the band aid. Man up people.

    Rate this comment: Thumb up 0

  4. softwarengineer

    RE: Scotsman @ 2
    Or….Its Just the Opposite

    When “rent free” ends and the sherriff arrives with eviction papers; the millions of squatters need rent money in a scarce job market…..they theoretically make the job market much worse as a result, this lowers wages because employers can pick and choose from the hoards and the last impact housing prices/rents plummet too….

    Rate this comment: Thumb up 0

  5. ray pepper

    I only wish my Cholesterol would drop off as much as these Trustee Sales. Incredibly slim pickens…Last week 2 properties sold at Trustee sale in Pierce county and 4 in King. Its been like this for 4 months and it worked out perfectly due to basketball season.

    The funny part is what I got in my email this morning and I KNEW this would happen. In an effort to stay afloat companies like Data Snap now want 500 a month to be a member and then when you purchase a property they do NOT charge you the usual 3% of tax assessed value…I say two things….Good Luck with that………..and anyone who pays this is a fool because the information is readily available to ALL anyway…..

    Rate this comment: Thumb up 0

  6. patient

    RE: No Name Guy @ 3
    Agree fully. Even if we know that banks will not take the loss. It will be put on the back of the tax payers, one way or another.

    Rate this comment: Thumb up 0

  7. Jason

    Could this be a consequence of banks getting their foreclosure business in order after the robosigning scandals? I seem to remember a general expectation that foreclosures would drop until mortgage servicers had set up completely legal forclosure operations and after that they would increase to reflect the true number of loans in default.

    Rate this comment: Thumb up 0

  8. softwarengineer

    RE: patient @ 6

    You’d Think With All The Past Stimuluses and QEs They gave to the Banksters Like Candy

    Trouble is, even Bernanke says no more QEs, his rationale is the economy is functioning good enough in low gear anyway, whatever the Hades that means.

    Which brings up the most salient point of all, if you 2012 Seattle real estate price bottom callers are so sure now’s the year, why are you alleging we need more government price props??????

    You’re convincing me now’s not the year, not at all.

    Rate this comment: Thumb up 0

  9. softwarengineer

    RE: Jason @ 7
    A Contract is a Contract

    Robo-signing is a moot point, Hades, the delayed defaults of 2 year+ default squatters goes well before the robo-signing anyway.

    Rate this comment: Thumb up 0

  10. John Bailo

    Hope, again, triumphs over expectation.

    But even then…only for so long.

    Rate this comment: Thumb up 0

  11. MM

    But for the herd is now BUYING time. Don’t loose your very last chance to buy at bubble prices, get on the train raiding down the hill, maybe it will not stop again until it hits bottom and it will go to fast for you to be able to get on.
    They did it again(the gov) and if was not out of stupidity. Stopping foreclosures for years, allowing owners to stay in and not pay even rent, using taxpayer money to subsidize the banks in the process, promising the herd that they will give them big payment cuts on their mortgages, has created the perfect market for the big guys.
    Every cow in the herd sits on the fence and waits for that big gov handout, nobody wants to sell until they cash it first. They’ll have a big surprise when they’ll go to the bank to ask for it, but a cow is just a cow :) :)

    Rate this comment: Thumb up 0

  12. David Losh

    RE: No Name Guy @ 3RE: Scotsman @ 2

    Foreclosures won’t fix the market, and every foreclosure needs to come back in some form, either with a home owner, or renter.

    The problem is that no one wants to spend the cash needed to make the foreclosure market function. There are just too many foreclosures.

    People may rent for a while, but all the properties will be sold, and paid for. There are just too many housing units for any one to want to manage. Rents will fall as more apartments are built.

    What I have been saying since about 2008 is that more properties will be traded by Principles Only with owner financing terms. People could, and should, buy properties by wrap around mortgages through a blind escrow trust to pay down principal balances.

    We need to get the banks, and mortgages, out of the middle of Real Estate. They are controlling the market place today, but we can fix that. If we are in a period like Japan, then more properties will be bought, or sold, for cash.

    Cash pricing will drive property prices down. That’s how the foreclosure market would work, so banks aren’t to keen on moving forward with that.

    Rate this comment: Thumb up 0

  13. turf

    Ha! You guys make me laugh. The bottom was last year. That is if you wanted a good buy. If you want a place with no backyard, on a major highway or located beside a trash collector, I’m sure there will be plenty of opportunities to purchase some of those. The banks have already been bailed out and while I’m sure none of you are on first name terms with Tim Geithner, the bankers are! So what’s the reason to firesale houses? Rents are on the way up not down.

    Rate this comment: Thumb up 0

  14. The Desponder

    KUOW ran a story yesterday featuring our very own The Tim. The story ran with the tag line that the Seattle area had entered into a seller’s market once again (NOT Tim’s words, but KUOW’s). Then today NPR noted that foreclosure processes are variable from state-to-state, but that foreclosures look like they are bumping up again. I have a hard time describing this as a sellers market. It might be that the market is crappy for everyone, buyers and sellers. Limited supply, YOY price declines, foreclosure shadow inventory with impending downward pressure… this is the gutter and it doesn’t matter if you are just getting into the gutter or you’ve been here a while, it’s still the gutter.

    NPR posted this map of foreclosure rates, looks like the west has been hammered:

    Rate this comment: Thumb up 0

  15. ray pepper

    RE: turf @ 13

    Ha…bottom last year? You will find Mr. Turf that this “bottom” will be for a VERY VERY long time. Buyers going forward in this decade, AT LEAST, do not forget you should always hold the deck and never let anyone play your hand. Everyone needs to sell far more then you will need to buy………….Find that GEM!

    Rate this comment: Thumb up 0

  16. What’s Happening! 3/16/2012 - Rainier Title

    [...] Seattle Bubble chronicles the very slow upswing of foreclosure activity in King, Snohomish, and Pierce Counties. [...]

    Rate this comment: Thumb up 0

Leave a Reply

Do you want a nifty avatar picture next to your name, instead of a photograph of Tim's dog? Just sign up with Gravatar, and make sure to use the same email address in the form below. It's that easy!

Please read the rules before posting a comment.

You have 4 comments remaining on this post.


Find us on Google+