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.

32 responses to “December Stats Preview: Foreclosure Surge Edition”

  1. Kary L. Krismer

    On the inventory issue, I ran some numbers a few hours ago, and King County apparently lost a net of about 300 active SFR listings in the past 3 days, but gained 7 in the past 24 hours. So early on, no surge in the new year.

    Numbers from NWMLS sources, but not compiled by or guaranteed by the NWMLS.

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  2. Ray pepper

    Foreclosures r on FIRE. Much more inventory but tremendous competition. Suspect it will b like this for years to come

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  3. Kary L. Krismer

    RE: The Tim @ 3 – If you’re really planning on timing it for a weekend, Thursday would be as late as I’d want to go to list. But we’ll see.

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  4. Ira Sacharoff

    When was the last time we had less than 3000 active listings in King County?

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  5. Kary L. Krismer

    RE: Ira Sacharoff @ 5 – Tim had a chart a while back that went back to 2000, and it was always above 3,000 during that time. I’m not sure how far back you’d have to go.

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  6. Erik

    By Ray pepper @ 2:

    Foreclosures r on FIRE. Much more inventory but tremendous competition. Suspect it will b like this for years to come

    Do you think the low inventory will increase the price of foreclosures?

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  7. softwarengineer

    RE: Kary L. Krismer @ 1

    Another Reason for Low Mortgage Inventory in Seattle

    The banks aren’t lending money to home buyers, we’re WAY too risky [the Rolling Stone had a good recent article on this anomaly too]:

    “..In other words, they’re borrowing from one federal institution to turn a profit from lending to another federal institution. Nice work, if you can get it.

    And government debt is more or less risk-free right now, as the Fed is out buying Treasury bonds and Fannie and Freddie debt in its effort to turn the economy from a lumbering caterpillar into a beautiful butterfly.

    In contrast, it’s riskier to lend money to a home buyer or a small business — some poor slob, in other words, who is not lucky enough to have the backing of the federal government and the Federal Reserve. Banks can charge more interest, but only so much, and people sometimes don’t pay loans back….”

    http://www.huffingtonpost.com/2012/03/12/banks-sit-on-cash-instead-of-lending_n_1339821.html

    Its probably the main reason the new car inventory can’t keep up with replacement car demand too. borrowers don’t qualify for new car loans; hence used cars get jacked up in price for riskier lending to avoid repossessions….

    .

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  8. David S

    Come on Kary everyone knows the only day to list is Friday.

    http://blog.redfin.com/blog/2011/10/what_day_of_the_week_should_i_list_my_home.html

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  9. David S

    RE: softwarengineer @ 8 – One the other hand, if you are not a risk you get all the Toyota Financial Services free money for 5 years you care to take on. New or used.

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  10. softwarengineer

    RE: David S @ 10

    The Bad News

    All the limited new car money goes to fund engineers and college grads in Japan if its Toyota….and mark my words; if [or should I say "as"] sales plummet even lower, they’ll close all their “non-union” blue collar assembly shops in America first….Detroit’s Big Three will do the same thing too….ya want the last of your production near your motherland’s engineering headquarters.

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  11. Macro Investor

    By softwarengineer @ 11:

    RE: David S @ 10

    The Bad News

    All the limited new car money goes to fund engineers and college grads in Japan if its Toyota….and mark my words; if [or should I say “as”] sales plummet even lower, they’ll close all their “non-union” blue collar assembly shops in America first….Detroit’s Big Three will do the same thing too….ya want the last of your production near your motherland’s engineering headquarters.

    Seems you guys are pretty bearish. Not at all like what the “experts” on teevee are saying. I wonder who’s right?
    /sarc

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  12. drshort

    RE: softwarengineer @ 8

    Banks aren’t making more mortgages because lenders at operational capacity. Tons of capacity has left the mortgage space since 2006 and we now a refi boom because of low rates. Add onto that the new regulations and rules that take more time. Loan processors and underwriters are at their max.

    The mariginal borrower isn’t getting the loan because its more profitable for lenders to use their operational capacity on highly qualified (i.e., less docs required) and higher balance refi customers. Once rates go up and the refis stop, the less qualified borrowers will become attractive again to lenders.

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  13. Mike

    RE: softwarengineer @ 11 – Where are you seeing new car sales are plummeting? Plummeted since the peak, but still?

    http://www.calculatedriskblog.com/2013/01/us-light-vehicle-sales-at-153-million.html

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  14. whatsmyname

    Sure, King County inventory is down 2,500 YOY, but we got a 700 increase in NOTS and 13 more Trustee Deeds. So, well, nevermind.

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  15. ARDELL

    RE: drshort @ 13

    There is some crazy activity going on by very large institutional lenders competing for market share of Jumbo Loans. Crazy low rates on Jumbo Loans. The Brokers can’t touch them. Chase, Wells Fargo, B of A. Their Jumbo Rates for the last few months have been insanely low.

    So I can’t agree with your statement “Banks aren’t making more mortgages…”

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  16. ARDELL

    RE: Ira Sacharoff @ 5

    I think it was when we had that big ice skating party and you helped me up when I fell on my bum. I think the party theme was Hell Froze Over party and we were trying to skate over hell.

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  17. Kary L. Krismer

    By ARDELL @ 16:

    So I can’t agree with your statement “Banks arenâ��t making more mortgages…”

    Statements like that apparently come more from news reports than reality. The press will report a stat from the NAR that 1 in X Realtors have had a deal fall through in the past year due to financing. That’s a meaningless statistic.

    I’ve seen very few deals fail due to financing, and almost all of those have been in the last few months. When it does happen, most likely it’s due to an incompetent loan originator. What it takes to qualify for a loan still doesn’t seem to be that high of a bar.

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  18. Ira Sacharoff

    RE: ARDELL @ 17
    How far back do the monthly stats go as far as active listings? I don’t remember inventory of active listings ever being below 3000, except right now.
    As far as ice skating, I did it every winter growing up, and always fell on my rear end. So much so, in fact, I was nicknamed after that dinosaur species, the megasaurass.

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  19. ray pepper

    RE: Erik @ 7 – prices of trustee sale properties are up up up…everyone has cash now or cash to lend. bids are up up and away. opening bids get bid up so fast on aggressively priced properties that they only make sense if you are gonna live in them. ……..

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  20. softwarengineer

    RE: Mike @ 14

    We’ve Put Off Buying New Cars Since 2008

    The increase in domestic/foreign engineered sales hasn’t even got close to filling the vacuum….hence shortage of used cars at horrifying prices, hades, they’ll give me in trade what I paid new for my 2011 Charger, probably two years from now too. BTW, I never bought new cars until recently, it wasn’t cost effective…..it is now.

    The used car vacuum is getting worse too, population increase in America is now at an all time high and they all want cars when they get here. This is irrespective to the legal citizen 1.7 birthrate the last 3 years, immigration flushed that American depopulation dream for more jobs at higher wages [higher home prices too] down the toilet.

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  21. Kary L. Krismer

    RE: Ira Sacharoff @ 19 – I just checked the NWMLS site, and for active listings they apparently only go back to 2000, which is the same as what Tim’s chart was. Finding older data apparently would be difficult.

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  22. Kary L. Krismer

    By softwarengineer @ 21:

    BTW, I never bought new cars until recently, it wasn’t cost effective…..it is now.

    I’m considering leasing for the first time, when I put the 89 Ranger into retirement.

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  23. Erik

    RE: ray pepper @ 20
    Good to know. Thank you.

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  24. Erik

    RE: Kary L. Krismer @ 23
    Aren’t you a real estate agent? Don’t you need a vehicle that will facilitate more people that a ford ranger will?

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  25. ray pepper

    RE: Erik @ 25 – not even Kary puts people in his car anymore Erik. That is so archaic.

    Agents meet clients at their properties of interest. Agents have found the more they talk to their clients the more the clients realize THEY know more about the property of interest then the one behind the wheel. So it is far better this way. In addition so many agents LOST their BMW’s during the BUST that they are quite happy to be driving their “89 ranger.”

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  26. Kary L. Krismer

    By Erik @ 25:

    RE: Kary L. Krismer @ 23
    Aren’t you a real estate agent? Don’t you need a vehicle that will facilitate more people that a ford ranger will?

    We do have another vehicle, so if I need to carry more than one other person I can usually use that. If not, there’s always renting a car, or having them follow me. Some people prefer to follow in any event, or if there are small kids involved that may be necessary in any event.

    In any event, I get the same IRS mileage allowance for an 89 Ranger as someone gets for a 2012 Lexus, so I’m making out pretty well on all my previewing mileage.

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  27. Kary L. Krismer

    By ray pepper @ 26:

    Agents have found the more they talk to their clients the more the clients realize THEY know more about the property of interest then the one behind the wheel. So it is far better this way.

    LOL. Some agents may have discovered that–if they don’t know squat about real estate and don’t prepare.

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  28. Tim McB

    Perhaps the foreclosure surge could be related to the Mortgage Forgiveness Act Act being set to expire at the end of last month?

    http://money.cnn.com/2012/12/24/real_estate/mortgage-debt-forgiveness/index.html

    It ended up being extended, but I have a brother who just had a bank take back one of his properties after almost a year and a half of non payments. He and the bank were sufficiently motivated to do so because they thought the Act was going to expire which would have complicated the matter for both parties (not to mention perhaps five-figure tax consequences for my brother.)

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  29. Kary L. Krismer

    RE: Tim McB @ 29 – How would the expiration of the act affect the bank in any way? It doesn’t seem like that would be a factor that they would care about at all.

    I would think the Bain v. Mers decision could be affecting the numbers, particularly the NTS if that decision required them to start again.

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  30. corndogs
  31. Seattle Bubble • Foreclosures Spike Up to Close 2012

    [...] time once again to expand on our preview of foreclosure activity with a more detailed look at December’s stats in King, Snohomish, and Pierce counties. First [...]

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