patrick.net

"What the economy is left with then, is a market that has, as Shiller said, merely returned to normalcy from extremely depressed levels.

"There is momentum in the housing market," Shiller said. "Momentum suggests increases in the next six to 12 months."

I'm surprised that Shiller said that. Here's the caveat. He's too late to the game. I'm afraid that the current momentum has lost some steam.

The shadow inventory is not just homes the banks have already foreclosed on. It is homes the banks started to foreclose on but chose to stall the final act. I live in Palm Beach County Florida and we have about 5,000 homes in the MLS. The clerk of court has almost 40,000 foreclosure cases that have been stalled for years. It is not uncommon down here for somebody to have had foreclosure brought against them five years ago and they are still in the home....

I have also been seeing some homes coming on the market that got foreclosed on years ago. Sitting empty all of that time. Many seem to be Fannie Mae properties. Fannie lists them for 50% more than comps. Sadly, some desperate homebuyers are actually paying the prices. I guess when you give easy credit, 3.5% down and in FL you can get $7,500 in free money towards your down payment, people don't care what the prices are.

There is a big cartel and manipulation going on and much of it seems to be among government entities like Fannie, Freddie and HUD. The Federal Reserve buys up the bad paper from the "private" banks. They don't need to foreclose when $85b a month of risk taking is magically healed. Instead they flip it over to Fannie and the tax payers. Fannie gets to set the prices, control the flow and do subprime 2.0

is there a website to look up these numbers?

Cheeseus Sonofdog says

The clerk of court has almost 40,000 foreclosure cases that have been stalled for years

Call it Crazy says

Mark D says

Karl Case: There IS A Recovery. Shadow Inventory Does NOT exist.

Yea right, there's no shadow........ I guess all these "Blue" houses will cure and every one of them will get current on their mortgages!!

*

To the color blind they all look the same. Maybe that is why they stay invisible. ;)

Cheeseus Sonofdog says

There is a big cartel and manipulation going on and much of it seems to be among government entities like Fannie, Freddie and HUD. The Federal Reserve buys up the bad paper from the "private" banks. They don't need to foreclose when $85b a month of risk taking is magically healed. Instead they flip it over to Fannie and the tax payers. Fannie gets to set the prices, control the flow and do subprime 2.0

Finally, someone talking about the 85B/mth elephant in the room. Take that away, and lets see what happens. BOOM! Down we go.

You guys still waiting for the shadow inventory huh? If your waiting until there's a sudden flood of inventory at bargain basement prices that nobody's buying except for you. Well, that's not gonna happen.

There is not going to be a flood of shadow inventory on the market, but skeptics are correct the rise in home prices is atleast partially due to all the underwater homeowners unable to or not wanting to sell and take a loss.

This is keeping inventory low and the low interest rates and high rents are creating the bidding wars and rising prices.

Not exactly a normal market... But its a market that has been manufactured and has legs.

robertoaribas says

We are going to have a very slow market in the future, but the bears are STILL going be disappointed as prices are not going to drop.

Cheap money is driving both stocks and housing right now. You may not like it, but if you expect to make money you can't sit out either. Personally, I worry a lot more about a sudden drop in the stock market than I do about a sudden drop in real estate.