Record Declines in Real Estate Values

[Matt Price]

I saw a bit of news today:

http://www.foxbusiness.com/story/markets/home-prices-suffer-record-declines-october/

Where real estate values have plummeted again at a record setting pace.   I think about two weeks ago, I saw a press release from the NAR saying that they believe that they have seen the bottom during the summer and that they believe that it will work it's way back up into positive territory.

So which is it?  Is it a record loss or is the NAR just marketing to put people in homes again just to foreclose?

[heartg]

NAR saying we've hit the bottom doesn't make it so. As always the market will tell us.

Are there still a large number of buyers out there, you bet. It goes back to what I always say, "I can sell any property at anytime reguardless of the market, It's just a matter of price!"

A lot of sellers have gotten realistic (or desperate) and we've had our best year ever selling real estate. Are we giving property away, No. I even had an REO that they listed with me at $12,900, it brought $21,000.

Granted we're selling more low end properties right now, but business is business.

[Matt Price]

I do think that it is funny that the marketing campaigns that I have seen are shainy and happy when the rest of the world knows better!

[AAREAuctioneer]

I have a question or problem.

How do you tell people now is the time to sell without scaring them?

http://latimesblogs.latimes.com/laland/2009/01/reos-to-flood-t.html

"Banks to unleash flood of REOs" at Inman News looks at the effect of foreclosures on the housing market this year:

Inventories of unsold homes are likely to swell in coming months as lenders begin to push a growing backlog of repossessed homes up for sale -- often in communities already awash in distressed properties....

 Because it can take weeks or months for lenders to put repossessed homes on the market, the impact of real estate-owned (REO) properties on inventories lags behind foreclosures. Government efforts to recapitalize banks through the Troubled Asset Relief Program (TARP) and other bailout measures may also have taken some of the heat off of lenders to unload REO properties at fire-sale prices.

But with the emphasis of TARP and other government relief efforts now expected to shift to creating jobs, helping troubled borrowers avoid foreclosure and providing incentives for home buyers, lenders could soon unleash a torrent of real-estate owned, or "REO" properties -- even in markets already flooded with an oversupply of homes for sale.



"It's almost like a tsunami -- you can see it coming and you know it's going to hit but you can't get out of the way," said Ann Stickel, vice president of affiliated services with Sarasota, Fla.-based brokerage Michael Saunders & Co.

Seems government delaying tactics have been just that:

Fannie and Freddie both stopped foreclosing on loans they own over the holidays (Fannie's moratorium is in effect throughout the end of January) and several states have passed legislation that's intended to slow down the foreclosure process. Lenders are also stepping up their efforts to do workouts and loan modifications with troubled borrowers, rather than foreclosing on them.

But those measures may only be slowing down the foreclosure process for many borrowers, and the downturn in the economy and rising job losses have many convinced that foreclosure filings will continue to rise.

So how many bank-owned properties aren't even on the Multiple Listing Service yet? RealtyTrac senior vice president Rick Sharga puts the number at 75%. That's a lot of houses.

-- Lauren Beale

[Jim Ford]

Well, it's either time to sell or time to hold... for a long time before the price may recover its' present value.
Of course, most folks that are going into foreclosure, don't have the resources to market and sell their property quickly, and the conventional real estate agent can't get most of them sold within 3-6 months anymore, so the banks will probably end up owning it anyway.
As long as the government is giving the banks money to stay solvent (forget the bailout, as it isn't going to work), they can sit on them and hope to find a buyer at yesterday's price (yeah, right!).

It's time to let the market correct and start growing again... that's called "capitalism" and it works best in a free economy. When the government starts trying to govern the economy, it's called socialism... a two class society with the majority being poor.

If any of them knew what they were doing, they would have already called in the auctioneers... turn the assets into cash and start reinvesting again!

Jim Ford
Professional Auctioneer & Auction Marketing for the 21st Century