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Forclosures are a mutant 6th finger
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2011 Jan 28, 11:23pm 1,590 views 1 comment
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Done!
2011 Jan 29, 4:15am
The Foreclosures are the bum knee.
Anyone expecting a quick bounce even after we've cleared out the last foreclosure is fooling them selves.
That being said, there's a reality, then there's the "Reality".
The reality is for what is on the Market, houses are going for (X). Just about to make the deal, then out of the corner of my eye, I catch a drop cloth draped over a house that looks far better than the sad stock I've had to choose from.
"Wait! What's this over here?"...
"Oh! Those things, those are just Old foreclosure houses, the banks don't want to sell, and even if they did, no bank wants to loan, so they are cash only deals"...
"Yeah, but! It's a hell of a lot better deal than anything I've seen in years, and it looks better than the crappy houses banks will loan me money for now. Every thing being relative, why can't the bank loan me money for those foreclosed houses. Based on the sad state of the available inventory, even if I was pay what I'm willing to pay for a deficient house, the foreclosed house should be worth more, therefore should have enough equity after securing a mortgage to borrow for a kitchen, bath or roof repair. That's if the repairs needed aren't being over stated in the first place..."
Basically people aren't stupid, and buying is highly psychological things. And just as long as all of the Cherry rides are sitting under garages with a tarp over them, reminding everyone what "Buyers remorse" will bestow on them should they pick from the shabby pickings now. Then the Foreclosure glut will keep the majority of those wanting to buy on the sidelines waiting. That's not to say, there's not sporadic deals out there where the house up for sale, can make sense to buy. But I don't think anyone buying now, isn't kidding them selves the market is still going down some.
Had I not found the house I bought in September after looking for 3 years. I still would be waiting. I haven't seen a house yet, that fits my criteria since I bought this house.
I have been noticing the language some people use about forclosures and short-sales lately. It kind of cracks me up. I have seen language to the effect of "once we can move through these forclosures, the market can begin to appreciate again" or "these foreclosures are really slowing down the market". It is like they are saying that there is the market and then there is that other mess. It seems to me that they are trying to argue that the old market exists with it's high prices if these annoying foreclosures and short-sales weren't in the way. My thought it that the foreclosures and short sales are in some ways a more accurate reflection on the value of homes.
While agree the back-up of foreclosures needs to be resolved, I think that doing so will help the market prices correct to a level that makes sense given the amount people actually earn and can responsibly borrow. I think we could get back to slow appreciation if prices correct further. I think they are a part of the market, not a speedbump on the way back to the bubble days.
#housing