January 2009 Foreclosures
1/1/2006 - 1/31/2006: 249
1/1/2007 - 1/31/2007: 264
1/1/2008 - 1/31/2008: 429
1/1/2009 - 1/31/2009: 909
111% increase over last year.
I think this is a high water mark for at least the last ten years.
The last few months:
12/1/2008 - 12/31/2008: 660
11/1/2008 - 11/20/2008: 540
10/1/2008 - 10/31/2008: 643
9/1/2008 - 9/30/2008: 607
8/1/2008 - 8/31/2008: 575
7/1/2008 - 7/31/2008: 728
1/1/2007 - 1/31/2007: 264
1/1/2008 - 1/31/2008: 429
1/1/2009 - 1/31/2009: 909
111% increase over last year.
I think this is a high water mark for at least the last ten years.
The last few months:
12/1/2008 - 12/31/2008: 660
11/1/2008 - 11/20/2008: 540
10/1/2008 - 10/31/2008: 643
9/1/2008 - 9/30/2008: 607
8/1/2008 - 8/31/2008: 575
7/1/2008 - 7/31/2008: 728
Comments
See: September Foreclosure Data (w/ Long-Term Chart)
Seriously though, it might be interesting to graph forclosures per capita.
What about the people who borrowed equity to put a child in college? What about the people who bought in the past five years, or traded up, or down, and are now losing value.
It's the family home. Critizing people for doing what they have always been told was the responsible, right thing, of buying a home is a ridiculous way to bring sanity into an insane situation.
If everything is happening the way I think it is going we will have to return to almost 1998 prices. Foreclosure won't get us there. Foreclosure puts properties back under bank control and I don't see them helping the situation.
The government will have to step in and give the banks incentive to let go of mortgage values. The cram down plan is looking to be more in line, but I think it will have to be across the board.
I can see it better than I can explain it. Banks, the investors ultimately, are losing money in the foreclosure process. I don't see why they wouldn't rewrite mortgages to get them cashed out. Let's say they forgo some interest income to amortize a loan quicker.
The investor gets full value quicker and moves on to the next scheme, I mean investment. Getting to a cash basis is the only way i see prices rebuilding.
First, we pass a law outlawing mortgages for more than 50% of the price of a home and any non-fixed-rate mortgages. Also, set the maximum terms for a mortgage to 20 years. Next, the state should seize all houses, wiping out bond holders. Then, the state should start auctioning off homes to the public. "Desirable" homes are auctioned first (big, fancy, and close to water), and any citizen can bid on any property so long as they meet the downpayment requirement of 50% down and the payments on a 20 year fixed mortgage are less than 25% of their income, and they haven't already purchased an auctioned home.
So, my problem minimizes home values to the absolute, it creates more home owners than this nation has ever seen, and it actually rewards those of us with savings.
OK, admittedly the part where all homes are seized looks like a nonstarter, but that's the only step on my list I don't think is brilliant.
I don't get rewarding people who refuse to take a risk, hide in a job, collect a pay check to pay rent and bank what they don't spend. It makes no sense.
I ask on this blog in particular "how many jobs do you provide?"
I come here because Tim has started a business out of a passion. He's done a great job here and by the way the job he left has laid people off.
Business is about money. Investors want to make money from the money they invest. In mortgages that's not happening. Foreclosures are a net loss and will continue to be for years to come.
The investor will want to recoup his money to do something else. Foreclosures just aren't getting the number of suckers they used to. Why buy at auction when there are plenty of REOs to chose from, financable, inspections, and banks will take much less for because there are so many.
If investors allocate a portion of the interest payments to principle reduction more people would be inclined to continue to pay. Investors should want to get as much as they can. The current owner, if given a chance to actually own the home in say ten or fifteen years might be more motivated to keep making payments.
As more properties get to a lower principle balance more properties have a chance to sell, change hands, and churn dollars. The investors should be able to figure this out and come up with a system to get prices lower while preserving thier principle return.
1. Savers lend their money to the bank for a 3% return.
2. Banks lend that money to businesses and homeowners for a 5% return and keep the difference.
3. Businesses and homeowners create and sustain jobs.
In review, it all starts with savers.
Bingo. You could call savers unwise for giving up -30% gains in the stock market for 1.5% rates on savings. But then most savers are putting money into stocks. If you don't understand how this activity drives the economy, you should read up dave. Regardless, it's nuts to call saving irresponsible. Such people are the only reason this crash isn't already infinitely worse.
Savers are feel good, sleep through the night kinds of people that are just a drain on society. Risk makes the world go around.
You should bone up on how the banking system works.
Most risk is taken with borrowed money.
Who do the risk takers borrow their money from?
The savers (through fractional reserve banking).
It takes both kinds to make the world go round.
The world has grown way too complex.
My original comment was in response to a great number of people who think that working a job and saving money is a contribution. Maybe they'll even buy a house if we are all real good.
This thread was about foreclosures. I don't think foreclosing on properties will get the job done from this point forward. Investors, the people who share the risk with a home owner, need to contribute. The home owner is either making payments or not. The loan is either performing or not.
The conclusion I've come to is that the investor will need to take less or amortize the loan quicker. That is the only way for prices to come down. The current home owner has an incentive, is taking the lumps right now, but in the long run houses become more affordable.
They are. You simply have no clue what a contribution actually is. Bill Gates is important, but without employees he would be nothing. If you think a world of only entrepreneurs would be better than one with a mix of entrepreneurs and employees, then you're flat out nuts.
Sure, Tim has done a great job on this website as (mostly) just one guy. Tell me how you write an operating system as just one guy. Or how you build an aircraft or even a large boat as one guy. Forget the big stuff. Show me a one man outfit that can produce 45nm integrated circuits.
Dave, you are not even wrong.
That's the point. It's a risk to hire people.
Most companies can be profitable with less by doing less. It's just a fact that each business goes through cycles of having more or fewer employees and discussing which direction those employees should be directed in order to be more profitable.
Telling me that there is a virtue to working your job and saving your money seems very wrong. Rewarding that type of behavior even seems to be the thing science fiction novels are made of.
I'll research a little more about who contributes more, a person on welfare or a person doing thier job and saving thier money. In my opinion it's about the same. You know we do have the welfare to work programs now.
It really makes no difference. The point is that foreclosures won't lower the price of properties.
This is like being told that everything I know is wrong. I always assumed that on a block with a number of boarded up foreclosures, it might actually make the surrounding homes seem less desirable...
I know that being a 'debt economy' is the reason we are in this mess.
Everyone maxing out their credit cards and levering up on real estate is great until there is a bump in the road. Then it's a cycle of bankruptcy/foreclosure. The current bubble occurred because too many people took too much risk (and probably didn't recognize or acknowledge it). Buy the biggest home you can because it's your best investment was the mantra. Pop! Taking on high risk doesn't guarantee high return. Actually, more people who do this fail. That's why it is called risk.
I'll bet the banks which stuck to the old simple model of borrowing money for savers and lending it to business and homeowners who could pay it back.are the ones still solvent.
You know, I bet most of those savers are renters too! Just too poor and lazy to buy a house, or even worse -- waiting until they can afford it! Even saving for a down payment! Now we know the true culprit of the bubble collapse! Dirty savers!
/sarcasm off
Congratulations, you've hit a new low in my respect for real estate agents. This is a prime example of why people should not listen to agents for financial advice of any kind. Sounds like David is a jealous bitter debtor.
Saving is the entire basis of a healthy, functioning economy, the buffer between earnings and investment opportunity, the basis for a fractional fiat money based banking system, the foundation of individual responsibility verses government largess. It's the set of rechargeable batteries that power the whole works. Read some basic economic texts instead of just trying to figure it out on your own... in a vacuum.
Take the rest of the day off, and start life over tomorrow. /sarc off
Bank-Owned Listings On the Rise in Seattle
The conclusion was that the incidence of foreclosures/bank owned in our market is still too low to have much of an impact - 1.3% of listings in Seattle and 0.8% of listings on the east side (versus 11% national average and 40% + in California)
Can I nominate this entire post for worst post of 2009 (so far)? Please?
Let's break the two things you have a problem up in to separate problems first. Which part is wrong? Working your job, or saving. If Bill Gates runs Microsoft (in the past), is it a virtue for him to save money, or should he send every penny out the door the second it hits his hot little hands?
Next question. Robert Shiller is a professor of economics for Yale, and he is also one of the minds who brought us such useful things as the CS index. If he works his job (teaching economics, writing books, disseminating knowledge), is that also not a virtue?
Just so you don't have to do the research. A person working their job and saving money contributes more in almost every way (a welfare mom might be providing tomorrows workers however...assuming her children don't follow suit). Don't bother looking it up. It's axiomatic that someone participating in economic activity is producing more of an economy than someone taking handouts.
Wake UP!
Waiting and watching for something that will happen tomorrow.
What I object to is the mindless banter of how smart everybody was to not do something. People wait, they save, they play the game, then call that responsible.
People who bought houses also think they were doing the responsible thing. They are paying that price. They took a risk and now they are paying for it.
Even in foreclosure they will be barred from certain types of employment, banks will make it difficult to open those precious savings accounts, and let's not forget that insurance rates are now tied to your credit score.
Wake UP!
There are 16 million vacant houses in America. Foreclosure won't get the job done. Banks will not lower prices because you want them to. As a matter of fact your advocating giving banks more money in the form a savings. How nuts is that?
Honestly keep your savings for yourself, no body cares, no body needs you. Money exsists. Your government collects money, saves, and spends it. I think government is the true source of money so how is your money better than the government's money?
Let me help you out with welfare. A welfare mother spends all her money. It circulates. The WIC program, which I fought for, reduces surpluses. Did you know that your government used to hoard cheese rather than give it away? Shocking? It was to help your supply and demand equation.
Banks are the problem. Let me say that again so it's more clear: Banks are the problem. Credit, consumer credit, is the problem. Homes that were run up in price need to be addressed by the people holding the Notes. There are fewer and fewer buyers out there for the vast number of foreclosures there are and will be in the coming years.
Anyway you slice it banks, the investors, the Note Holders are going to have to take less across the board. They should start with the people who are still making payments, the responsible ones if you will.
Wake UP!
Wait...no...I don't.
Especially the part where you say that a person who went through foreclosure will have a tough time opening a savings account.
When has a bank ever not taken your money?
But what you're really saying is that...in the end...we're all just a bunch of useless eaters anyways. You and I included.
If money moves through the system the system is expanding, once it stops it collapses. Foreclosures have stopped being viable barometer of future pricing declines because there is no money. Every one is saving, hoarding, waiting, and watching, some in glee.
Welfare that so many people vilify is a constant steam of money in money out. Money flows through that system. Working a job is kind of the same. Some jobs are better than others, but a lot of jobs are just useless expenditures of energy with a pay check attached.
If properties just stay vacant, and the banks are waiting and watching for something to happen, nothing will change.
The foreclosure mechanism is as broken as the banking system, and the banks aren't "fixing" anything. I think their waiting for the government to give them more welfare.
only problem is that this might now be the absolute worst post of the year (so far). Also by Losh.
It manages to directly insult asians, people who like safe neighborhoods, and pioneers. Depending on how you read the context, you might also be insulted if you are any other minority or just plain poor. Congrats Dave.
but you are reading them. that is what I don't understand
Depending on how you read the context, you might also be insulted if you are any other minority or just plain poor.
Can you define poor for me?
I'm unfamiliar with the term.
What do you mean minorities? Asians are the largest population on earth, they are the driving economic force, and they do gamble.
Heck, China even hepled out the United States by investing a few billion dollars. Boy, did they take a risk.
Would you care to elaborate on this cryptic statement?