So what impact does this distress selling have on the average home price?
What was the discount on the foreclosed homes? 33% or so?
How about the homes that were in foreclosure paid for in cash? 40%?
That means "normal" homes prices are being understated by at least 13% because of the foreclosure affect.
Remember when this Atlanta "White House" was in foreclosure?
Last year it took prayer and an activist group to force the bank to do a modification:
Milani was expecting the Atlanta White House to be auctioned on the steps of the DeKalb County Courthouse on Tuesday morning; he's fallen behind on paying back a $1.7 million note. He credits an Atlanta faith-based group, and prayer, with convincing his bank to re-finance rather than foreclose."They [lenders] want to work with me and modify the loan. My house is not in foreclosure" any longer. The faith-based coalition of churches and community activists calls itself "A Mighty Move of God," or AMMOG. The group sets up on the steps of county courthouses every month on auction day offering help to homeowners who are facing foreclosure -- offering them time with attorneys and even offering them money, trying to prevent them from losing their homes at auction.
Now that the Administration is getting serious about modifications, and real estate prices are going to surprise in their increase, just like next months unemployment number, that could print +150,000 jobs.The job and real estate recovery will surprise all the pundits who still don't buy into the "nascent" strength of the recovery.
Just like they ridiculed the green shoots of the stock market back in April.
When this rally was just supposedly, driven by "technicals!"
Supposedly!
3 comments:
Wow, homes prices may stabilize.....at dramatically lower values.
Update....here in Mi. I just got my assessment for '10. -20% from last year. And thats on top of a drop of 10% last year and 5% the year before. According to numbers, my place is valued lower now than when I bought in '94. And from what I and my neighbors see, we are still above the going values for houses by a good 10-15%.
We had a historic credit bubble in the 00s that pushed values way beyond anything reasonable.
Today, no more liar loan nonsense ( save for the gov taking 2% down fha loans ) and money based on real, proven income.
Housing is based on credit availability and incomes, neither of which are going to return to easy credit bubble levels anytime soon.
If your right, then we should have a new credit bubble immediately. If all you get from the popping of this last bubble is 18 months of bear market and recession and then off to the races again for years, well, hell, lets have 'em all the time.
Unfortunately MI doesn't matter for Wall Street. What concerns Wall Street is FL, AZ, CA, and Las Vegas and all of those housing markets have already bottomed, and are going up.
MI prices don't matter--only to those who live in Michigan.
right on!!
Post a Comment