March 2009 NOD’s have reached their highest number during the last three years and with more coming down the pipeline they are expected to escalate. How will they be dealt with? Trustee’s Deeds are running at a similar pace. March also brought the highest number of pending sales since July 2005 which could be a good indicator for good things to come.
click on the chart below to enlarge
BanteringBear
Many individuals, including some on this blog, have been seduced by the current bear market rally, and seemingly low housing prices, believing we are well on our way to economic recovery. As is evidenced by these ever increasing NOD’s, the worst is yet to come. The worlds largest mania doesn’t culminate with a year or two of moderate discomfort. Only when the pain has become so grinding and familiar that most fear we’ll never get through shall we, perhaps, be on the mend.
Martin
Not quite sure I understand what the good things are that may be coming,JoAnn. Is it the accelerating number of NODs that you are referring to? Or the accelerating number of trustees deeds? Or is it the increased number of sales, 80% of which are REOs and short sales that you are referring to? Or is it the still sinking median, now down to $190K if we stay consistent with our sample.
What is it exactly JoAnn?
Raymond
JoAnn, a full one half of all pendings are short sales. I believe that Guy has said on a past thread that at least one half of all short sale pendings fall out of escrow and don’t go to close.
And, 92% of all pendings are for houses priced under $400K. Almost 60% of all pendings are for houses priced under $200K. If these pendings do go on to close in any appreciable number at all, the median is going to fall further.
Is this the “good news” ?
PollyP
While I really doubt that JoAnn the Realtor would ever suggest that increasing NODs and increasing trustees deeds, and increasing short sales, and a steadily falling median are “good things”, there are in fact many of us who very much think these are good things. There are many of us who don’t think foreclosures are the problem, but that they are the solution. There is not a single neighborhood in Reno/Sparks where prices have yet stabilized. Prices (and comps)are still very much deteriorating all over town. And to that I, and many others, say hurray!!
Walter
Polly is correct in that the market is no where near stablization. When 50% of sales are under $200K and 93% are under $400K, increasing sales numbers are nothing to shout about. All that is happening is that with every sale today the market takes another step down. With every sale, the comps are moving down, not up. This is no more than the real estate version of the notion that we can lose money with every sale but make it up in volume.
downtownjunkie
It seems like it doesn’t really matter as taxpayer money will just keep propping the banks up. I am wondering if my BAC/WFC play will pay off in the long run. Now back to the RRB channel.
Konarina36
We are watching the falling prices with some interest but agree that they haven’t yet hit bottom. We think that there is still a long way to go before the excess is wrung out of the Reno housing market.
We are interested in purchasing either a condo or house in Reno but are not yet ready to make the move, as long as prices are still unstable and the economy is still in the tank.
We may not buy at the bottom but we hope to come close, so we are just keeping our options open and watching the market. I know that you realtors don’t like to hear that but it’s our money and we want to get the most we can for the price we pay. If we have to wait awhile, that’s OK too, since we aren’t in any hurry nor do we nned to make an immediate decision. I believe that time is on our side and we will see still more price reductions in the future.
smarten
A bit off topic but the REO SFR at 16865 Delacroix Court in Montreux has fallen out of escrow [MLS #80013234] and is now listed at a mind bogging $619K! We’re talking 3,589 of high end almost new construction in a subdivision that boasted several $1.1M sales.
If I were looking to live in Reno proper, I’d probably purchase this home. Currently there are listings in the same subdivision ranging anywhere from $799K-$900K+ so this will be the lowest resale by far.
Also this answers the thread started a couple of months ago which declared there were supposedly four $1M+ sales/pending sales in Montreux. As we can see…
Otto
Smarten,
Why would you buy this house today, when you can purchase it for 470K next year?
Ben M
>> Why would you buy this house today, when you can purchase it for 470K next year?
Very true. I don’t want to see the price keep going down, but that is where we are heading.
billddrummer
In another year, you might be able to buy that house for $350,000.
smarten
In another year you might be able to buy that house for $550,000 which is what I’d offer if I were going to offer. Then again, you might not be able to purchase it for that price. You can ALWAYS ask why anyone would buy anything today because it might cost less tomorrow. But at some point you have to pull the trigger and believe you’re at or sufficiently close to the bottom. For me $550K for a near new upscale home that sold for $1.2M two years ago is a sufficient drop in price; especially when comparable homes are currently priced some $250K-$400K higher. Yes, the comparable homes may be delusionally priced. But IMO, this one isn’t.
inclinejj
Prices won’t come back till
1. banks clear out all the bad debt
2. the sick banks closed, merged
3. Banks start lending again
4. Fannie & Freddie and FHA the only lending going on
5. Jumbo Loans come back
6. all the bad paper..residental loans work thru the system, credit card losses, and commerical loan losses work thru the system
DonC
JoAnn — When you can see light at the end of the tunnel you’re still in the tunnel! LOL
inclinejj — Some interesting developments on this front this week with the Wells shocker. On the surface it signaled the banking sector was not as bad as most had thought. Dig a little deeper and there are a lot of loans being written out there. Wells did $100B in the quarter (25% new 75% refi)and has another roughly $100B in the que.
But perhaps the most interesting point was that Wells made a great deal of its $3B in net based on the Wachovia acquisition. If you remember Wachovia was the bank so laden with toxic assets that the FDIC was going to guarantee all the loans so Citi could buy it for a buck a share. Of course Wells showed up, said it didn’t need no stinkin guarantees, and offered $7 per share. Obviously Wells had figured out that a lot of these toxic loans were not so toxic …
Long way of saying that there is a lot of lending going on and the volume will probably increase.
inclinejj
Wells Fargo..I never liked them..never did, never will..
World Savings bought out by Wachovia was one of the 2 go to lenders when you couldn’t get a loan funded..The other is WAMU and we all know what happened to them..
World Savings had a huge exposure to Option pay arm loans..They sold out to Wavhovia who had a huge exposure to Commercial Real Estate loans..
Wells is one of two banks who are still in Wholesale lending..Wells and Citi..
World had a huge portfolio of CD’s that Well’s got in the Wachovia buy out..
Keep in mind all these loans that World made always stayed in the portfolio..They never sold loans..some may have been sold when Wachovia took over..
GratefulD
Two things….
Smarten: “16865 Delacroix Court in Montreux”
—FYI — There is another house, two to three over, listed for $680k. REO. 5925 Cartier. So don’t be so certain this will be the “lowest resale by far.”
DonC:
Whippee doo. Wells Fargo announced it’s making money. Should be no suprised as it was just approved a few weeks ago that they could LIE on their balnce sheets about the valuations of their holdings. The financial accounting & standards board just made a change to no longer require companies to value their holdings at Market rate, rather they can value them at some imaginary number that they would like it to be. does anyone think this has something to do with WFargo posting huge Q109?
Forheaven sakes doesn’t anyone remember how much nicer things were when we lived in a imaginary economy?