If Victoria were over 35 and a U.S. citizen, she’d have my vote for president. It’s too bad that the average politician doesn’t have half her smarts.

http://www.businessweek.com/ap/2012-05/D9UH8HM00.htm

I also saw this little tidbit:

“Lenders initiated foreclosures on 36,400 FHA-backed mortgages, twice the number in April 2011, according to Lender Processing Services. The increase for Fannie Mae and Freddie Mac loans was 13 percent, the Jacksonville, Florida-based mortgage- data company said.”

I have to believe that as foreclosures rise, so will losses.

Another month– another bottom.

I saw that ZeroHedge article earlier today, and was especially struck by this:

“Anti-nuclear physician Dr. Helen Caldicott says that if fuel pool 4 collapses, she will evacuate her family from Boston and move them to the Southern Hemisphere. ”

Granted, there are fewer people on the planet more opposed to nuclear power than Caldicott ( http://en.wikipedia.org/wiki/Helen_Caldicott) but I still can appreciate the sentiment.

On April 18, for example, a total of 103 REOs were on the MLS in Brooklyn with 2.5 million people. Queens had 301 — the most of any borough.

Meanwhile, I have gotten stats from the NYS Division of Banking that as of the end of March, a total of 192,000 pre-foreclosure notices had been sent by mortgage servicers to delinquent owner-occupants in danger of losing their properties. Another roughly 75,000+ investor-owned properties were also delinquent. That’s roughly 260,000 NYC properties that have not yet been foreclosed.

What do you think will happen to home prices when the banks begin to either foreclose on these owners or force a short sale:? I have no idea when the dumb banks will do this, but it’s coming.

Notwithstanding this, prices continue to weaken in the four outer boroughs. Check out Jonathan Miller’s Douglas Elliman Report for either Brooklyn or Queens to see this.

If you want to go ahead and buy in either NYC or Long Island, go right ahead. But don’t blame me when your property’s value plunges. I’m trying to save the rear ends of those open-minded enough to read my writings and understand what I’m suggesting.

“How is this for a specific prediction? In a year, the housing markets in all five boroughs will be crumbling and buyers will be hard to find anywhere. Heed my words.” Keith Jurow May 31, 2011.

Nothing personal here Keith but there is something in your writing style (and others both bearish and bullish) that really irks me. Cocksure, arrogant, and ultimately wrong.

You also said that prices in NYC were going to decline 50% in 2 years. How is that clarion prediction working out for you?

Banks exist to make money. Assuming they wish to continue doing so, then I see two major drivers here:

1) From numerous articles, it seems many people in foreclosure aren’t making any payments at all

2) Kicking people out and reselling foreclosed homes drives prices down

Obviously #1 means the banks have no income from loans. #2 means each completed foreclosure lowers the amount of money the banks can reclaim by selling the property. There has to be a “sweet spot” where you minimize losses. Given banks have vast resources of people to figure out exactly what that point is, it seems safe to assume that we are at that point now.

Thing is.. looking around I’d expect more foreclosures to be completed. Someone not paying for two years on the west coast could add up to $100k easily (plus overhead in sending letters, collection agencies, etc). If putting more homes on the market dropped prices 10% more.. $40k.. the banks still come out ahead over no paymets at all, right?

Maybe I’m just completely wrong, but it feels like the banks are either finding a way to make money by not foreclosing, or there are vastly more homes at risk than I know about.

Your comments and insight are always appreciated. My failure to mention them recently is an oversight on my part, and not because your wisdom isn’t valued.

Thank you so much for stopping by, and thanks for your comments.

My Phoenix Housing Market Report emphasized that analysts were fooled by the apparent upward blip of median sale prices in early 2010 due to the first-time buyer tax credit. That does not appear in the price chart I posted in my report.

The key to Phoenix is the incredible overhang of HELOCs taken out during the bubble years of 2004-2006. Add that to first liens and you get an unbelievable number of underwater owners.

My Phoenix source informed me that short sale listings have plunged from 11,000 to 1,200. I am also puzzled by this drop. Banks are clearly withholding REOs from the market. The percentage of sales that were REOs in March fell to a mere 18%.

I suspect that dumb sellers are holding their homes off the market, hoping for a turnaround. Wrong move. There is no turnaround coming. In Connecticut where I am, I’ve reported on double-digit price declines in town after town.

All over the country, owner-occupant buyers are fast disappearing. In 9-12 months major metro markets will be unraveling. Get your home on the market now.

I don’t pay a lot of attention to pending foreclosures, because it’s so hard to tell when they’ll actually happen. Leasing is way up, and population growth (if you trust the stats, which I don’t) is not growing significantly.

I thought about comparing trends between say sales and listings, but at the end of the day, I was up past midnight as it was, and had to get up at 5:30 to get ready for work. Sure, this post is simple but hey, you get what you pay for. : )

I just do not see any good reason for the lack of foreclosure and other “distressed” inventory. While there have been plenty of past foreclosures and Trustee Sale notices are being issued at around 4K a month in Maricopa County, I would like to provide some newlywed relatives with a reason not to take the FHA loan plunge a few months from now.

My anecdotal observations. A schoolteacher acquaintance and her husband whose exurban residence was purchased in late 2005 and was 60% underwater recently moved to a rental house. I have not asked about their loan status bc it would be inappropriate, but the previous house is vacant, not listed as a short sale or regular sale, and no Trustee Sale notice has been issued.

A relative whose last payment was in September 2011 on a Summer 2005 purchase received a Notice of Trustee Sale recently, with the sale scheduled for June 2012.

I guess that my only advice is that a distorted market is a long way from a healed market, but Notice of Trustee Sales returning to the above 6,000-level would provide me with a more convincing argument. Oh, well.

If however, the current administration is returned, prepare for the continuation of a spluttering economy. Those I work with in the financial industry have zero confidence in this presidency.

I think the non-judicial foreclosure states are just about done in going down in price. It is just the vibe I’m getting. My house is going down in price on Trulia and Zillow but that is because of my purchase as well as someone else in the neighborhood lowballing.