What's the Scoop with the Shadow Inventory?

I was asked this morning what I think about what is going on with the “shadow inventory” (the homes that lenders have foreclosed on but have not yet gone on the market). Lenders are continuing to foreclose on homes at almost record rates, yet the number of Bank Owned (REO) listings entering the market does not reflect that.


According to the Wall Street Journal in April this year : "As of March, banks had an inventory of about 1.1 million foreclosed homes, up 20% from a year earlier, according to estimates from LPS Applied Analytics. Another 4.8 million mortgage holders were at least 60 days behind on their payments or in the foreclosure process, meaning their homes were well on their way to the inventory pile. That “shadow inventory” was up 30% from a year earlier."
http://blogs.wsj.com/economics/2010/04/24/number-of-the-week-103-months-to-clear-housing-inventory/


My best guess is that a) Lenders are hanging on to properties so as not to flood the market, lowering the average sales prices and thereby lowering the value of their inventory and/or b) Lenders are simply overwhelmed by the volume and don’t have their systems & staffing up to speed to deal with it. Yet.


In the Denver area recently, REO (Bank Owned) listings that are in fair to good condition go under contract within 30 days (often faster) and sell for asking price or above asking price.


So… we wait and see what happens next.

Lillian Lively http://llively.yourcastle.org/ Lil@TopProducer.com

Denver Real Estate Trends- Tidbits

As an agent at Your Castle Real Estate I get the most amazing and useful information on real estate trends in the Denver area. One of the big reasons I joined Your Castle was because of the detailed attention to current market conditions. I am not disappointed.

In a class and discussion on 9/1/09 the latest tidbits of interest are:

Denver SW and Aurora North: after all time high prices in 2005 & 2006 and then plummeting prices in 2007 & 2008 prices in those 2 areas we are seeing a rebound in prices. They have now been stable for a year. By 2008 both areas had prices drop to half their ‘05& ‘06 highs. Many of the foreclosed properties were purchased by investors who have now rehabilitated them and are reselling them.

Small homes vs large homes: the average sale price is down most for larger homes. Homes 1150 square feet and smaller are seeing price increases. We are clearly past the bottom on smaller homes. The larger homes, 2875 square feet and up are still seeing prices drop; down 14% in May-Aug 2009 from May-Aug 2008.

Bank owned listings low: Current number of bank owned (REO) sales are about half of what they were a year ago, at their peak. Short Sales are increasing as REO’s decline. Foreclosure notices continue to increase.

Inventory: In the past 12 months 25% of all area sales were in the $135,000 or less range. The buyer competition is fierce in this price range, it’s a seller’s market. Only 8% of the currently active listings are in this price range.

Lil Lively - Your Voice in Real Estate
303-746-8827

IT'S TIME TO INVEST IN REAL ESTATE

For any of you who are still sitting on the fence or thinking that the market still hasn't hit bottom, check this out. All the signs are pointing to recovery, meaning this may be your last window to buy at bubble burst prices. Whether you are interested in a first time buyer situation, moving up to a larger home or creating a real estate investment portfolio, it is time to jump off of the fence! If you'd like further information or a real estate consultation please email me: tracy@thrivingartistalliance.com Meanwhile, take a look at the link below. This landed on the cover of yesterday's Wall Street Journal.
http://www.smartmoney.com/investing/stocks/it-is-time-to-invest-in-real-estate/
Best wishes for a safe and satisfying Labor Day Weekend!
Tracy Shaffer
Your Castle Real Estate

The market in Denver has definitely changed in the last 6 months. I am working with several first time buyers in the $150K and under price range. Several of them are shopping in the western suburbs of Denver (Lakewood, Wheat Ridge, Arvada).

The few Single Family Residences that are available on the west side are primarily Short Sale and Bank Owned. As I prepare the offers and deliver them to the listing agents I am hearing that there are many offers submitted and often they are higher than asking price. This is causing some frustration for my buyers, as you can well imagine.

Many first time home buyers are in the market right now, trying to get their transaction closed before the end of the $8,000 first time buyer tax credit; so the competition in this price range is fierce.

Watch my managing broker, Charles Roberts, discuss the changing Denver market on ABC’s Nightline http://abcnews.go.com/video/playerIndex?id=8413830

And, Good News! This update on the possible extension of the First Time Home Buyer Tax Credit:

Daily Real Estate News August 24, 2009
First-Time Buyer Tax Credit Extension Possible
Bills to extend the maximum $8,000 tax credit for first-time home buyers, which expires Nov. 30, are pending in both the U.S. House and the Senate.Sen. Christopher J. Dodd, a Connecticut Democrat and chairman of the Senate Banking, Housing, and Urban Affairs Committee, is co-sponsor of a bill with Georgia Republican Sen. Johnny Isakson that would raise the credit amount to a maximum of $15,000.
Senate Majority Leader Harry M. Reid of Nevada favors an extension of the current credit. He was quoted by the Las Vegas Sun saying, "It's something we can get done."
Odds are that the credit will be extended and broadened to cover all buyers next year, but the chances of the amount increasing aren’t as good, observers say.
Source: Washington Post Writers Group, Kenneth R. Harney (08/22/2009)

Lil Lively- Your Voice in Real Estate 303-746-8827

Protecting Your Memories

I had the good fortune of being introduced to Creative Connections last week. Creative Connections is a referral network of creatives and meets every Friday at 9am. www.5280cc.com.

While there I had a chance to talk with Ed Campbell who owns A Page Is Turned (www.apageisturned.com). His company is a photo preservation and restoration company. Imagine for a minute that you come home from work to find you home burnt to the ground. While it is virtually impossible to imagine that happening, it is a reality daily in this country.

Even worse, the percentage of people who lose all of their pictures in that fire or natural disaster is astronomical. In reality, how many of us take the time to put our pictures on a disk and then store that disk in a fireproof safe or safety deposit box?

Anybody???

As elementary as it sounds, take a few hours and gather your pictures and videos together and call Ed about how to make sure that you never experience a loss that cannot be recovered.

All the best,

Matt Hanson
303.204.6800

This too shall pass... the good and bad.

I help people buy and sell houses in the Denver metro area, many of which are a hundred years old or more. As I help my clients prepare to list or to move, we find some interesting things in the attics and basements of these storied homes. My recent discovery was page 11 & 12 of the Sunday Denver Post dated December 27, 1931. It was a time of high unemployment and economic anxiety. Here's a bit of the what's up two days after Christmas nearly 78 years ago:
*Pasco Santana, called the PLATTE RIVER HERMIT took residence in a cardboard house near the Sixteenth Street viaduct. With his "Back to Nature" attitude he chose this location, feeling the city dwellers were the ones missing out. "The river is my best friend, even tho it doesn't say anything and just keeps rolling along" (The neighborhood would be too crowded for Mr. Santana's liking today, even among the cardboard crowd.)
*500 SALESMEN ATTEND MEETING- Sponsored by the market development committee of the Chamber of Commerce in an effort to acquaint Denver wholesale and manufacturing firms of their "Buy-it-in this-Market" program. (Just like mama said, everything comes in style again).
*JONES OPPOSES PLAN FOR JOB RELIEF- Senator Attacks Proposal of Direct Federal Aid to Feed Needy.
*POPE APPEALS FOR UNIFICATION OF CHRISTIANS- Seeks United Front for Fight Against Unbelief and Immorality.
*BATTLE IS OPENED ON SULLIVAN LAW- A bitter attack on the recent amendment to the Sullivan law requiring all persons carrying a revolver to be fingerprinted and photographed. The National Riffle Association went on record as favoring a repeal of the Sullivan law.
*DECLINE REPORTED IN FARM MORTGAGES
*FARM WASTES TOTAL 250 MILLION TONS...and so it goes.

Business meetings, battles over government funding of social programs, religions striving to reconcile, gun control, mortgage declines. A lot has changed in America, but this makes me wonder if we're really just swimming in circles. For the readers of these pages in 1931 times were really, really tough. World War I had shown the atrocities of which modern man is capable, the economy was in the toilet, confidence in our government was shaky at best. But somehow, though those years and all that followed we have prevailed. We've taken small steps forward and "giant leaps for mankind", getting better every day. If you don't retain your sense of reason and a bit of the Pollyanna perspective, it certainly never will.
Today the Stock Market is up and the housing market is showing signs of return. Denver is rated #3 among the nation's best cities to work and Gov. Ritter announced that REpower USA was relocating their headquarters from Oregon reinforcing Denver's growth as an epicenter of renewable energy. Interest rates are low and banks are still lending to qualified buyers, there's an $8000 tax credit for first-time buyers and down payment assistance programs have revamped and restarted. But many of us are still struggling. For those experiencing job loss, soaring medical bills, upside down mortgages of a pending foreclosure, the Pollyanna attitude is surely put to the test. Focus on the good in your life, get yourself back on good footing, call in help if you need it.
Today's headlines are experienced differently by each of us. Whether you're feeling like you're headed for the cardboard box by the river, or you're looking for a home overlooking it, as a real estate consultant I can guide you through these changing times. For however the economic moment is treating you... this too shall pass.

Bank Owned Homes Sell Fast

This is a great time to be a buyer. However, getting a good deal is not like shooting fish in a barrel.
A recent article in CNN Money speaks to what I have been seeing in the Denver market for the last 6 months to a year. Several of my first time home buyers are in the up to $150,000 range. Much of what is available in this price range are short sales, and that means waiting, and waiting some more for an uncertain outcome.
The habitable bank owned homes in this range are seeing multiple offers in the first day on the market, and many of those offers are above asking price.
So, if you are looking for a great deal and you want to buy now be ready to act quickly!
Here’s the whole CNNMoney article http://money.cnn.com/2009/08/05/real_estate/buy_foreclosures_now/index.htm?postversion=2009080512

Lil Lively - Your Voice in Real Estate
Broker Associate - Your Castle Real Estate
Cell: 303-746-8827 LilLively@Gmail.com