Matrix Blog

Posts Tagged ‘Short Sales’

Bank Forgives $1M+ on Short Sale But Lawn Looks Good

December 14, 2012 | 7:00 am |

[click to read article]

This 16-room house on the far western edge of Naperville sold in November for $1.05 million. That’s 38 percent of what it cost to build. In approving the short sale—where a property is sold for less than the outstanding mortgage amount—the lender, IndyMac, accepted a loss of over $1 million.

Here’s some local feedback from someone I know in the area – remember this is an 11,000 square foot house built in a neighborhood with homes no larger than 5,000 square feet.

I’m paraphrasing here:

This area was the last big subdivision left in land-locked Naperville which has 140,000+ people. It started in 2005, and the real estate recession hit hard in 2006 and there was a high school boundary change that put this neighborhood out of the favorable high school.

In the listing “Peterson Elementary’ is a short walking distance to this home. That school was built mid-decade and the school district never opened it because the subdivision stalled. It still sits empty 6 or so years later.

When I graduated from college my first job was very close to Naperville and in fact my boss lived there. It was called the fastest growing town in America. My boss used to tell me how she would run her lawn sprinklers at night because there were watering restrictions because of the rapid growth. It was still risky because they had full time patrols looking out for illegal lawn waterers.

Those were the days.

Tags: ,

Ignore The False Positives, Foreclosure Sales Are Rising Again Now

December 6, 2012 | 12:16 pm | |

,br> [click to open RealtyTrac Report]

RealtyTrac released their Q3 2012 U.S. Foreclosure & Short Sales Report which shows a pretty clear recent trend:

A timeline that counters the national “recovery” discussion over the past year. Record low mortgage rates and held back distressed activity goosed housing sales and price up using year over year comparisons.

I feel like I have to qualify myself as NOT being a housing bear (a distressed housing apologist) but I still can’t figure out the math: flat to falling incomes, high unemployment, rising taxes and tight credit = housing recovery? What’s missing? (memories of my contrarian sentiment feels the same as 2006, just not nearly so dire).

Distressed sales have been held out of the mix as RealtyTrac’s report shows in my distressed housing timeline:

  • 2008-2010 – Heavy foreclosure volume as a result of the fallout from the tanking economy and housing market
  • 2010 (fall) – Robo-signing scandal combined with huge backlogs in judicial states causes a sharp decline in distressed sales entering the market in 2011.
  • 2012 (1Q) Major servicer agreement with state attorneys general as distressed volume drops to its lowest crisis level.
  • 2012 Calculated Risk and other respected sources call the bottom (and they may be right) but doesn’t factor in the distressed sale phenomenon. “Bottom” does not equal “recovery” but rather it’s a step on the way to recovery.
  • 2012 (2Q) Distressed sales begin to rise again. By adding lower priced distressed sales in the mix, housing prices stabilize or slip next year nationally (I see Manhattan rising with low distressed exposure and limited inventory).

Foreclosure levels need to resume their elevated levels or we simply don’t create a real, sustainable housing market recovery. We won’t see a tsunami like 2010 as short sales continue at their high levels and the courts are still backlogged, but I believe we will see a more distressed activity in the next few years than we did during the 2012 lull and that will offset rising prices .

Call me crazy.

Q3 2012 U.S. Foreclosure & Short Sales Report [RealtyTrac]


Get Weekly Insights and Research

Receive Jonathan Miller's 'Housing Notes' and get regular market insights, the market report series for Douglas Elliman Real Estate as well as interviews, columns, blog posts and other content.

Follow Jonathan on Twitter

#Housing analyst, #realestate, #appraiser, podcaster/blogger, non-economist, Miller Samuel CEO, family man, maker of snow and lobster fisherman (order varies)
NYC CT Hamptons DC Miami LA Aspen
Joined October 2007