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.

18 responses to “Bank-Owned Sales Skip Usual Winter Boost”

  1. sniffy

    I’d like to see the actual number of sales and not just percentages so we can compare apples to apples, but with the recent record-low inventory I’ll assume that the number is a small fraction of last year’s.

    So I’ve asked before but still don’t know–where’s the mythical shadow inventory? Wouldn’t now seem to be a great time for banks to unload? Foreclosures seem to be continuing apace, so where are the houses?

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  2. Todd Miller

    Its interesting, because we have about the same numbers in Las Vegas, with maybe a bit more REO and short sales, but not like it was a few years ago.

    With regards to shadow inventory I don’t believe that it really exists per se. There has always been “Shadow inventory” of some kind. What about the people who are “getting ready to move” but they haven’t put their homes on the market yet, but they’re coming for sure.

    I work with about 20 banks, and the only ones with assets right now are Fannie and Freddie and the rest will get a trickle for the next few years most likely.

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  3. Pegasus

    RE: Todd Miller @ 2 – One in 10 people are behind on their mortgage. Don’t believe the baloney. I think many are going out the door in private transactions that never hit the MLS. The corporations buying pools are part of that.

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  4. David Losh

    RE: Pegasus @ 3

    I agree that there are solutions for homeowners outside of the Multiple. I have heard, that some sales, like in the form of a lease purchase don’t close right away, it may take between three to five years.

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  5. David Losh

    By Todd Miller @ 2:

    I work with about 20 banks, and the only ones with assets right now are Fannie and Freddie and the rest will get a trickle for the next few years most likely.

    RE: Todd Miller @ 2

    I’d like to hear more about what “the rest will get trickle means.”

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  6. whatsmyname

    By Pegasus @ 3:

    RE: Todd Miller @ 2 – One in 10 people are behind on their mortgage. Don’t believe the baloney. I think many are going out the door in private transactions that never hit the MLS. The corporations buying pools are part of that.

    You mean that the number of sales is even stronger than we think?

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  7. Pegasus

    RE: whatsmyname @ 6 -No. All sales are eventually recorded but claiming there is no inventory when using only the MLS listings is flawed.

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  8. Blurtman

    Up whar I live, they are selling like hot cakes:

    http://www.buchanhomes.com/buchan/communities/chestnut-estates

    You pikers couldn’t carry Coco Carino’s balls.

    http://www.murrayfranklyn.com/homes/sammamish/greenbriar/contact.php

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  9. whatsmyname

    By Pegasus @ 7:

    RE: whatsmyname @ 6 -No. All sales are eventually recorded but claiming there is no inventory when using only the MLS listings is flawed.

    In a big picture sense, I agree; it is flawed. On the other hand, it seems a decent reflection of what is available in inventory…… for you.

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  10. Kary L. Krismer

    By sniffy @ 1:

    I’d like to see the actual number of sales and not just percentages so we can compare apples to apples, but with the recent record-low inventory I’ll assume that the number is a small fraction of last year’s.

    I’m showing over the past two years King County SFR REO peaked at almost 400 in 2011, and were just over 100 in December. Short sales, on the other hand, didn’t get over 200 units until April, 2012, and have only had three months over 250. So REOs are dropping and short sales are finally ramping up a bit. The combined volume over that time has been somewhat steady in comparison, at 400 plus or minus about 100.

    What’s interesting is some of the entities are finally getting the process down to where it’s not such a PITA to deal with the bank on an REO. We recently closed a Freddie transaction which was a piece of cake. The only hang up was getting the existing FHA appraisal out of the prior lender’s hands, but that wasn’t the seller’s fault. But that’s only some of them. Other bank-like entities remain a royal PITA.

    Numbers from NWMLS and other sources, and not guaranteed by the NWMLS or the other sources.

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  11. David Losh

    RE: Blurtman @ 8

    “Kim Golick has been recognized in Seattle Magazine as a Five Star Best in Client Satisfaction Real Estate Agent 6 years running.”

    Seriously builders are ramping up. It says so in the Financial Section of all the papers. There are plenty of buyers who are standing in line because inventory is so low.

    This has got to be good news, right? What could go wrong?

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  12. corndogs

    RE: Pegasus @ 3 yeah Todd don’t believe those 20 banks that you’re dealing with listen to a shemale with an affinity for flying horses.

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  13. softwarengineer

    RE: sniffy @ 1

    It Will Take About 3 1/2 Years to Clear All the Shadow Inventory Foreclosures

    From a May 2012 Bank Tracking Article:

    “…It will take 46 months to clear the market’s supply of distressed homes, or the shadow inventory, according to estimates from Standard & Poor’s Rating Services based on first-quarter 2012 data….

    The volume of these distressed U.S. non-agency residential mortgages—which excludes loans from government sponsored entities, such as Fannie Mae and Freddie Mac—remained extremely high at $354 billion in the first quarter, according to S&P. The agency does note, however, that the industry’s distress volume has declined in each quarter since mid-2010.

    To put the shadows into perspective, S&P says this latest number, which is based on the original balances of the loans, represents slightly less than one-third of the outstanding non-agency residential mortgage-backed securities (RMBS) market in the United States…”

    http://www.dsnews.com/articles/shadow-inventory-update-46-months-to-clear-supply-of-distressed-homes-2012-05-14

    This is a national picture, albeit with Seattle’s double priced risky market, compared to the toned down national $190K home price averages….I’m sure we have a bigger share % of ‘em per capita.

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  14. softwarengineer

    RE: David Losh @ 4

    Couple You and Pegasus Comments Together

    With the 46 month to clear the shadow inventory of foreclosures and squatter previous owners living rent/mortgage free [for years???]….its a perfect storm for a lot of homes needing $100K repairs before they’re livable….

    Thank God my home owners association fees are relatively low [$170/mo includes water/sewer]; no squatters allowed next to me devaluing the neighborhood stock….they pay their HOA fee or a sherriff is evicting them pronto [unpaid fees allow the HOA to lean and do that per my HOA contract].

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  15. ChrisM

    Hmm, you could start a new “fill in the blank” thread here using the topic “You will know things are fully recovered when ________”

    I’ll go first w/ 2 entries:

    1. interest rates are above 5%

    2. banks initiate foreclosure proceedings when mortgages are 120 days past due

    Please contribute, assuming you haven’t ruined your keyboard by laughing up your beverage

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  16. No Name Guy

    RE: sniffy @ 1

    Look around your neighborhood and you’ll find that “mythical” shadow inventory.

    Look for the empty houses, the ones that have been empty for months or years. Get on Redfin or Zillow (or some other similar site) and look at the last sale (lots of them from 2005-2007 at peak pricing). Remember when these places were for sale for a bit back in 09 or 10, but then the sign went away? Look at the Zillow where it was listed for 10, 20, 30% under the last sale price….with no sale. Yup….failed attempt at a short sale.

    And see how these places are sitting empty, bank owned and not on the market for months or years.

    If you’re paying attention, the “mythical” shadow inventory is staring you in the face. All you have to do is open your eyes to see it.

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  17. Kary L. Krismer

    RE: No Name Guy @ 16 – I was a lot more of that before the peak in 2006-2007 than now.

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  18. Blurtman

    RE: David Losh @ 11 – The economy is roaring back! Green shoots and all that.

    I want to know where these folks who can buy $800,000 homes in Chestnut Estates (in which I have not seen one chestnut tree) are working? Are they all indecently paid Microsofties? I assume as these folks are buying 4,000 sq.ft. homes that there are more than DINKS living there. And are they maximally leveraged, refusing to yield to the Joneses, i.e., real ‘Mericans? Are they pod people? I sense a Dateline expose here.

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