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How long will supply be constricted?

By 033   Follow   Thu, 18 Oct 2012, 11:28pm   3,313 views   38 comments
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Foreclosures are 80 percent down, six SFRS are being offered in the neighborhood. Only 2 are short. Prices are up 10-15 percent year to year.

When do you see inventory increasing?

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1. E-man Follow Befriend (31) 34 threads 2,552 comments San Jose, CA Premium

   1   11:53pm Thu 18 Oct 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   Not much supply in the next 4-6 months. Notice of default is down 50% YoY, and last year NOD was also low due to the robo-signing scandal. Real estate agent will be hurting in the next 6 months. How do you buy or sell when there is no inventory. :) Sean O'Toole of Foreclosureradar mentioned that there will not ba a wave of foreclosures since late 2009. People were skeptical of his comment, but it turns out Sean has been right 3 years in a row. Sean recently stated that the housing inventory will remain low for the foreseeable future. It's good if you got in housing market in the last couple of years. You can make a lot of money if you know when the housing inventory will be increased. :)

2. 033 Follow Befriend 7 threads 63 comments

   2   12:08am Fri 19 Oct 2012   Share   Quote   Permalink   Like   Dislike   Next year, people will be getting 1099's for discharged debt again, lowering their likelihood to sell. I suspect that the supply constriction will be sustained until sale values will approach the senior loan debt, and perhaps to the point where the second is in the money. At that point, more NODs will go out, fueling short-sale propositions. Increases in inventory tend to depress prices, as do higher interest rates. Being able to take advantage of either would be profitable.

3. PockyClipsNow Follow Befriend 19 threads 1,534 comments Los Angeles, CA

   3   10:32am Fri 19 Oct 2012   Share   Quote   Permalink   Like   Dislike   There will be tight inventory for a long time, everyone can see that. Its Obamas plan to 'put a floor under house prices' (exact quote) and he has succeeded. Democrats rejoice! Your guy is doing what he said he would. Yay high house prices, go, go, go! /sarcasm

4. iwog Follow Befriend (48) 274 threads 12,572 comments 47 male Lafayette, CA Premium

   4   10:38am Fri 19 Oct 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   Supply doesn't go up significantly until you see this graph return to historic norms. Right now we're at recession levels of construction.

5. gregpfielding Follow Befriend (9) 43 threads 288 comments Danville, CA gregpfielding's website

   5   10:49am Fri 19 Oct 2012   Share   Quote   Permalink   Like   Dislike   War says There are 20-30 MILLION excess empty houses in the US today. I thought there were only 50+ million housing units total.... or not too many more than that. Though I guess it's got to me more for 300 million people. Anyone know the correct number?

6. Quigley Follow Befriend (6) 17 threads 524 comments Huntington Beach, CA

   6   10:59am Fri 19 Oct 2012   Share   Quote   Permalink   Like   Dislike   GregFielding says, "I thought there were only 50+ million housing units total.... or not too many more than that. Though I guess it's got to me more for 300 million people." Given approximately 400 million people in the US, 50 million housing units (assuming apartments and condos count individually) would mean that an average of eight people live in each American house. Personally I don't know anyone with a household that size, so even if you count all the immigrants living six families to a garage, the math still doesn't work. Not unless there's a ton of people living in caves or under bridges. A lot of people live one or two people to a unit. Figure 60million kids, leaves 340 million adults at say 2 or 3 per unit, gives us 115-170 million units just to meet demand.

7. Quigley Follow Befriend (6) 17 threads 524 comments Huntington Beach, CA

   7   11:02am Fri 19 Oct 2012   Share   Quote   Permalink   Like (2)   Dislike   War says, "130 MILLION houses in the US today..... and growing." Assuming that number is correct, then at my lower number of 115million needed to meet demand, we have 15 million "excess" housing units.

8. Call it Crazy Follow Befriend 229 threads 2,781 comments

   8   9:53am Sat 20 Oct 2012   Share   Quote   Permalink   Like (1)   Dislike   Quigley says War says, "130 MILLION houses in the US today..... and growing." Assuming that number is correct, then at my lower number of 115million needed to meet demand, we have 15 million "excess" housing units. Now add in the people who have walked away from their houses and foreclosures that have moved in with "extended", multi-generational families, and the empty house number climbs...

9. Bigsby Follow Befriend 2,826 comments Monterey, CA

   9   10:02am Sat 20 Oct 2012   Share   Quote   Permalink   Like (2)   Dislike (2)   War says Quigley says War says, "130 MILLION houses in the US today..... and growing." Assuming that number is correct, then at my lower number of 115million needed to meet demand, we have 15 million "excess" housing units. Census Bureau shows 20-30 MILLION excess empty housing units. Just take a drive around and look. Empty houses everywhere. And I suppose you have a link for that particular piece of 'data'. Quite the figure. And quite the range.

10. Quigley Follow Befriend (6) 17 threads 524 comments Huntington Beach, CA

    10   10:08am Sat 20 Oct 2012   Share   Quote   Permalink   Like (4)   Dislike (3)   Bigsby you are such a troll. This site is for people who are trying to figure out the housing market and make wise financial decisions. Not for people who just come and make snarky comments without any possible redeeming value. If you have any actual information or any reasonable speculation even to share, then please do so. If it's just more of the same: dissing on everyone who posts things that go against your pro-housing pro-realtor, pro-status-quo agenda, then kindly stfu.

11. Bigsby Follow Befriend 2,826 comments Monterey, CA

    11   10:18am Sat 20 Oct 2012   Share   Quote   Permalink   Like (5)   Dislike (2)   Quigley says Bigsby you are such a troll. This site is for people who are trying to figure out the housing market and make wise financial decisions. Not for people who just come and make snarky comments without any possible redeeming value. If you have any actual information or any reasonable speculation even to share, then please do so. If it's just more of the same: dissing on everyone who posts things that go against your pro-housing pro-realtor, pro-status-quo agenda, then kindly stfu. How is it trolling to ask for a link to an outlandish claim? It's not speculation or made up information I'm interested in, it's facts. I'm not pro-housing or pro-realtor or whatever next you want to claim. Show me where I've been actively promoting housing. I'll be waiting. That doesn't mean I can't see through War's complete and utter nonsense. It's obviously a good time to buy in some places and still expensive in others. And what the hell has all that got to do with an actual troll like War posting up a bullshit piece of information? And no, why the hell should I stfu?

12. Bigsby Follow Befriend 2,826 comments Monterey, CA

    12   10:56am Sat 20 Oct 2012   Share   Quote   Permalink   Like   Dislike (2)   War/Darrell/Realtors... you're a known and proven user of Hotspot Shield or variation thereof and a repeated deleter of your own posts.

13. iwog Follow Befriend (48) 274 threads 12,572 comments 47 male Lafayette, CA Premium

    13   2:45am Sun 21 Oct 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   Quigley says This site is for people who are trying to figure out the housing market and make wise financial decisions. Apparently not since the person you are defending has never and will never support any claim he makes on this board with actual data. No one learns anything when someone makes up a number like 20-30 million excess homes.

14. Mark D Follow Befriend 64 threads 486 comments Simi Valley, CA

    14   10:08am Sun 21 Oct 2012   Share   Quote   Permalink   Like (1)   Dislike   there will be more foreclosures after the election when another recession hits.

15. iwog Follow Befriend (48) 274 threads 12,572 comments 47 male Lafayette, CA Premium

    15   11:07am Sun 21 Oct 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   War says 20-30 MILLION excess empty houses out of 130 million total houses is alot of empty houses. Yes you said that before, but you were asked for some evidence of 20-30 million excess empty houses and apparently you're too scared to talk about it. Why?

16. lostand confused Follow Befriend (9) 165 threads 1,549 comments Premium

    16   12:04pm Sun 21 Oct 2012   Share   Quote   Permalink   Like   Dislike   Protected   ptiemann says I read last week that in the SF Bay Area, there are still millions defaulting every month, should be a million of additional inventory per month. So by the end of 2013, we should have 50 million empty houses, it's better to rent another year, I predict massive craters in those forced REO sales. If you think buying is cheaper than renting today, you will be ecstatic to see prices slashed another 50% or more.. thanks to even lower rates, principal and interest on a 15 year amortizing loan will cost less than the property tax OR insurance. Read the interview that Warren B. gave last week, he spells it all out there! Again, this prediction is not for Phoenix or Oklahoma, but the exuberantly overpriced San Francisco Bay Area. Rest assured, the patient renters will be rewarded, only 1 more year to wait! And what does a small rent increase matter when you can save so much more 12-14 months from now! Aaah sarcasm!!

17. REpro Follow Befriend (1) 22 threads 469 comments San Jose, CA

    17   12:38pm Sun 21 Oct 2012   Share   Quote   Permalink   Like (1)   Dislike   US population: 314,621,923 http://www.census.gov/main/www/popclock.html Household size: 2.6 http://www.msnbc.msn.com/id/14942047/ns/technology_and_science-science/t/census-us-household-size-shrinking/ We need about 121M housing units Population growth: 0.9% per year. http://www.indexmundi.com/g/g.aspx?v=24&c=us&l=en To fill-up needs we need about 1M new housing units per year plus... some to been demolished.

18. pkennedy Follow Befriend (8) 28 threads 1,342 comments Redwood City, CA

    18   12:51pm Sun 21 Oct 2012   Share   Quote   Permalink   Like (1)   Dislike   @REpro The number warren buffet uses for replacement homes is 600K. 1.6M homes needed per year total. 1M for new families/immigration, 600K for replacements.

19. Raw Follow Befriend 10 threads 694 comments

    19   12:55pm Sun 21 Oct 2012   Share   Quote   Permalink   Like   Dislike   REpro says To fill-up needs we need about 1M new housing units per year plus... some to been demolished. 1 million+ just to keep up with population increase. Another 1.5 million or so to replace old homes. Add to that homes that get destroyed in fires etc, and places like Detroit that simply get abandoned - you will have close to 3 million new housing units that need to be built. In the last 5 years the number of new homes built has been pathetic. No wonder building stocks are going through the roof.

20. Raw Follow Befriend 10 threads 694 comments

    20   12:58pm Sun 21 Oct 2012   Share   Quote   Permalink   Like   Dislike   War says Why are any houses needed when there are 20-30 MILLION excess empty housing units in the US? Those mutual funds that have been buying up building stocks think otherwise. They should know better.

21. REpro Follow Befriend (1) 22 threads 469 comments San Jose, CA

    21   1:01pm Sun 21 Oct 2012   Share   Quote   Permalink   Like   Dislike   pkennedy says The number warren buffet uses for replacement homes is 600K. 1.6M homes needed per year total. 1M for new families/immigration, 600K for replacements. Assuming we have ONLY 16M+ units in excess inventory, developers should close doors and stop building for 10 straight years. Obviously it won’t happen, so expect more Detroit-like places in the future.

22. iwog Follow Befriend (48) 274 threads 12,572 comments 47 male Lafayette, CA Premium

    22   1:45pm Sun 21 Oct 2012   Share   Quote   Permalink   Like (4)   Dislike (1)   Protected   War says How many times do you need to be directed to the Census Bureau to see the data? You're lying. The Census bureau doesn't say there are 20-30 million excess empty homes. You just made it up. Now you can either post the link and make me look stupid, or continue to be too scared to actually link the data.

23. iwog Follow Befriend (48) 274 threads 12,572 comments 47 male Lafayette, CA Premium

    23   3:32pm Sun 21 Oct 2012   Share   Quote   Permalink   Like (3)   Dislike   Protected   War says Get off your ass and go LOOK at the census bureau data. I have plenty of times, that is why I know you're making up crap and not telling the truth. Again......it's easy for you to prove me wrong. Just link the data.

24. E-man Follow Befriend (31) 34 threads 2,552 comments San Jose, CA Premium

    24   3:59pm Sun 21 Oct 2012   Share   Quote   Permalink   Like   Dislike   Protected   pkennedy says @REpro The number warren buffet uses for replacement homes is 600K. 1.6M homes needed per year total. 1M for new families/immigration, 600K for replacements. IIRC, it's about 1.2M new single family homes and 400 new units of apartment are required annually to keep up with the population growth & replacements.

25. E-man Follow Befriend (31) 34 threads 2,552 comments San Jose, CA Premium

    25   4:06pm Sun 21 Oct 2012   Share   Quote   Permalink   Like   Dislike   Protected   REpro says pkennedy says The number warren buffet uses for replacement homes is 600K. 1.6M homes needed per year total. 1M for new families/immigration, 600K for replacements. Assuming we have ONLY 16M+ units in excess inventory, developers should close doors and stop building for 10 straight years. Obviously it won’t happen, so expect more Detroit-like places in the future. We will always have about 5M-6M vacant units for recreational, seasonal and occasional use; and about 2M units vacant due to being for sale. The true vacant units for rent are always lower than reported. Typically, we are at full capacity when vacancy is at 5%-6%. I believe a healthy market should have 8%-9% vacancy.

26. E-man Follow Befriend (31) 34 threads 2,552 comments San Jose, CA Premium

    26   4:26pm Sun 21 Oct 2012   Share   Quote   Permalink   Like   Dislike   Protected   Let's do the math for fun. 10% vacancy = 13M vacant units, not 20M-30M. Thanks for proving my point. The full capacity is at 5% vacancy. Looks like the RE market always makes a nice run up and over-build every time we get down to 5% vacancy. This happened in the mid 50's, early 70's and early 80's. The market made a nice run-up and over-built again after we got down to 7% vacancy in the mid 90's. Is 7% vacancy the new norm for full capacity? It's interesting that the rental market got hot even when we're at close to 10% vacancy rate. Could it be that the vacancy units are in a middle of nowhere? Could it be explained that the vacancy in the big cities are lower than the national average figure? :)

27. REpro Follow Befriend (1) 22 threads 469 comments San Jose, CA

    27   6:28pm Sun 21 Oct 2012   Share   Quote   Permalink   Like   Dislike   E-man says Could it be explained that the vacancy in the big cities are lower than the national average figure? :) This is correct. When I am checking multifamily, in Middle of US vacancy in buildings over 30 y. old can go easy to 20-30% because tenants have ability to move to newer developments. In big cities where is job and building restrictions, vacancy rate is often below 5%.

28. E-man Follow Befriend (31) 34 threads 2,552 comments San Jose, CA Premium

    28   6:39pm Sun 21 Oct 2012   Share   Quote   Permalink   Like   Dislike   Protected   REpro says This is correct. In big cities where is job and building restrictions, vacancy rate is often below 5%. Wow. This explains the recent spike in rent. It's interesting that the homebuilders & developers keep making the same mistake over and over again. We wait until the supply dries up, then we start to build, then over-build, then we crash, and the cycle starts all over again. Thx for the info though.

29. lostand confused Follow Befriend (9) 165 threads 1,549 comments Premium

    29   6:56pm Sun 21 Oct 2012   Share   Quote   Permalink   Like   Dislike   Protected   E-man says It's interesting that the homebuilders & developers keep making the same mistake over and over again. We wait until the supply dries up, then we start to build, then over-build, then we crash, and the cycle starts all over again. That is just human nature in any business. Someone makes a ton of money in something and then everybody thinks it is a sure thing and jumps in . This mini "boom" we just have to wait and see if the early ones are the pioneers or just the first lemmings.

30. E-man Follow Befriend (31) 34 threads 2,552 comments San Jose, CA Premium

    30   7:38pm Sun 21 Oct 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   033, I just ran some numbers for the City of San Jose. Last quarter, 2,220 - total SFH & condo sales 1,498 - regular sales including flip properties 176 - REO/Bank Owned sales 546 - Short sales The last 3 months, 379 properties were foreclosed. Out of this number, 197 properties were bought by investors. 182 properties wer taken back by the bank. There are currently 1,496 properties that are in foreclosure process. Note: Some of these properties will be lost to short sale. Some will get a loan mod. Some will be bought by investors at the steps, and some will be taken back by the bank. A tiny fraction will reinstate their loan. There are currently 934 properties that have received their NOD. Some properties will be absorbed by short sale. Some will get a loan mod. Some will make it to the courthouse steps. A very small percentage will reinstate their loan. Combine the above two numbers, we have 2,430 properties, which represent over 3 months worth of inventory for San Jose. Given the market can only absorb about 1/3 of distress properties at a time without a collapse in home prices, that represent about 10 months worth of distress housing inventory. :)

31. New Renter Follow Befriend (3) 13 threads 2,220 comments San Jose, CA Premium

    31   8:35pm Sun 21 Oct 2012   Share   Quote   Permalink   Like   Dislike   Protected   War says Just take a drive around and look. Empty houses everywhere. YMMV

32. Goran_K Follow Befriend (4) 25 threads 1,520 comments Laguna Beach, CA Premium

    32   8:42pm Sun 21 Oct 2012   Share   Quote   Permalink   Like   Dislike   Protected   E-man, do you have figures for SoCal?

33. E-man Follow Befriend (31) 34 threads 2,552 comments San Jose, CA Premium

    33   11:15pm Sun 21 Oct 2012   Share   Quote   Permalink   Like   Dislike   Protected   Goran_K says E-man, do you have figures for SoCal? Wow, Irvine home prices are expensive. It seems like you guys have more condos & townhomes than us here in San Jose. Last quarter, 630 = total sales for SFH & condos/townhomes 470 = regular sales 119 = short sales 41 = bank owned sales The last 3 months, 69 properties were foreclosed. 45 were taken back by the banks. 24 were sold to investors. There are a total 534 properties that are in the process of foreclosure. 319 received their notice of trustee sale. 215 received a notice of default. Your market is up about 10% YoY on the median price and 14% on average price. Your active housing inventory is about 3 months. Your market is hot, but not as hot as the Bay Area. We have just over 1 month of active housing inventory. That's all I got. Nite nite.

34. Goran_K Follow Befriend (4) 25 threads 1,520 comments Laguna Beach, CA Premium

    34   1:01am Mon 22 Oct 2012   Share   Quote   Permalink   Like   Dislike   Protected   E-man says Wow, Irvine home prices are expensive. It seems like you guys have more condos & townhomes than us here in San Jose. Last quarter, 630 = total sales for SFH & condos/townhomes 470 = regular sales 119 = short sales 41 = bank owned sales The last 3 months, 69 properties were foreclosed. 45 were taken back by the banks. 24 were sold to investors. There are a total 534 properties that are in the process of foreclosure. 319 received their notice of trustee sale. 215 received a notice of default. Your market is up about 10% YoY on the median price and 14% on average price. Your active housing inventory is about 3 months. Your market is hot, but not as hot as the Bay Area. We have just over 1 month of active housing inventory. That's all I got. Nite nite. Thanks for the numbers E-man. Even if we don't quite agree on where the market will go, it's good to cross check, and examine all the data that is available. Cheers. Wow, 534 properties in some process of foreclosure. Remember, Redfin only shows 381 active listings (or about 1.5 months of inventory). Very interesting market.

35. bubblesitter Follow Befriend (5) 10 threads 2,329 comments

    35   1:15pm Mon 22 Oct 2012   Share   Quote   Permalink   Like   Dislike   Goran_K says Very interesting market. Indeed. It is very hard to get correct inventory snap shot. I only gauge the market by sale price of the mid to high tier(low end is highly rigged by investors/flippers) - of course by redfin data.

36. Goran_K Follow Befriend (4) 25 threads 1,520 comments Laguna Beach, CA Premium

    36   2:16pm Mon 22 Oct 2012   Share   Quote   Permalink   Like   Dislike   Protected   bubblesitter says Indeed. It is very hard to get correct inventory snap shot. I only gauge the market by sale price of the mid to high tier(low end is highly rigged by investors/flippers) - of course by redfin data. It's very difficult and I live a few blocks from Corelogic. :) But E-man's numbers sort of strengthen my argument that shadow inventory isn't some fantasy, it's a legit threat to true market recovery.

37. Goran_K Follow Befriend (4) 25 threads 1,520 comments Laguna Beach, CA Premium

    37   2:22pm Mon 22 Oct 2012   Share   Quote   Permalink   Like   Dislike   Protected   War says In fact the massive unsold empty inventory lends a boost to a market recovery. Yeah, that's kind of what I meant. I hope they liquidate it soon.

38. bubblesitter Follow Befriend (5) 10 threads 2,329 comments

    38   4:32pm Mon 22 Oct 2012   Share   Quote   Permalink   Like   Dislike   Goran_K says Yeah, that's kind of what I meant. I hope they liquidate it soon. A massive spike in prices in stock market and a 1% to 2% interest rate hike could send this housing market into serious trouble - don't forget the fact that post bubble buyers are surviving by refi'ing their mortgages.