see that this is NOT a free, open, competitive RE market...
From there being not funding from anyone, not even FMaeORFMac in July 08...
to a total collapse of home prices in the Sand States...
to now, where everybody is holding back...
banks are not lending to U.S., banks/lenders are holding back foreclosed homes off the market...
and a flood of home owners who WANT to sell, but cannot due to price declines and no jumbo RE loans.
thousands of "investor" purchased foreclosed home now being rented, in competition with apartments..
This is a dislocated RE market.
Giving a whole new meaning to.... "location, location, location"...!!!
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Real estate's new problem: Not enough homes
This so-called "shadow inventory" comes from two main sources: properties lenders have not yet repossessed or have not yet put back on the market; and homeowners who want to sell but who have refrained because of low prices.
Lenders are also holding back on foreclosing at all, either because they're having trouble handling the volume of repossessions or because they want to sell off some of the inventory they already have.
"Notices of default are filed, but they're not taking the properties back,
there's a big pool of homeowners who have wanted to sell their homes during the past three years but market conditions either prevented sales or kept them from trying. The company estimates that 8% of homeowners are very likely to try to sell their homes in the next twelve months if they see signs of improvement in their local markets.
"These sidelined sellers closely watch the market for signs of a possible turnaround and rush in if there's a hint of good news,"
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Housing market diagnosis: Bipolar
On one hand, sales and prices are rising, indicating recovery.
On the other hand, so are interest rates and repossessions, which most certainly do not.
And then there are the millions of foreclosures that need to be sold but haven't yet been listed -- so-called shadow inventory -- that could derail a real recovery if they hit the market in floods.
The prognosis? Negative short term but turning positive by the end of 2010.
there are some strong negatives dragging on the market:
1. Interest rates have been intermittently creeping up. Although nobody expects 6% until at least 2011, the days of 4.5% mortgages are behind us.
2. Bank repossessions are on track to surpass a million homes in 2010. But at least foreclosure filings fell in April, the first time since RealtyTrac began reporting.
3. More than a quarter of borrowers are "underwater," meaning they owe more than their homes are worth.
4. "Strategic defaults" -- where underwater homeowners walkway even when they can still afford to pay -- accounted for 31% of all foreclosures in March, according to a recent study.
But there is one factor that has experts really scared:
homes that are ready to be sold but haven't been put on the market.
Right now, there could be more than 4.5 million homes in "shadow inventory,"
But now, with home prices so low and so many foreclosures on the market, both homeowners and banks have been waiting to put properties on the market.
"These sidelined sellers closely watch the market for signs of a possible turnaround and rush in if there's a hint of good news,"
But as more sellers put their homes up for sale, supplies increase, which will depress prices again. Rinse and repeat ad infinitum.
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