1. Fannie & Freddie themselves have 4,000,000 VACANT FORECLOSURES on their books. And that doesn't count the millions of vacant homes currently held by the banks. In March 2013, a news reporter mentions 1,000 vacant bank owned homes in Vallejo: http://bit.ly/188dSvg [article link]
Every area I've been able to quantify [adding up foreclosures from foreclosureradar, and subtracting reo sales on the MLSs] ends up showing approx 30%-50% worth of the area's annual home sales are vacant unlisted foreclosures. 30%-50% of an area's annual housing market is quite enough to manipulate any market any way these banksters choose and it's impossible (as of yet) to accurately predict how and when but we can rest assured it's coming some way some time some how. By the way, they have obviously decided to not list REOs as they are still foreclosing, but not listing.
2. In March 2013, fully 1/3 of all homes sold in the US were purchased with ALL CASH. This is a tremendous influx of cash - from US families and investors, foreign investors, hedge funds and sovereign funds. CASH is notoriously flaky. Since most of these purchases are NOT FOR OWNER OCCUPIED HOMES, then CASH can decide not to buy on a moment's notice. CASH is currently buying because real estate seems like a better opportunity than other options like saving. IF/WHEN that situation changes, for example CASH decides that gold/silver is a lucrative investment again, then "overnight" cash will withdraw from real estate. Losing 1/3 of buyers in any market would, at least temporarily, implode that market.
3. Many new rules/laws are being pushed at the Federal level to 1) remove the federal mortgage tax write-off, 2) impose a "sales tax" on higher priced homes for health care revenues, 3) increase down payment requirements, 4) toughen up lending standards... Each and every one of these type of changes will dampen buyer/ownership enthusiasm or eliminate buyers that won't qualify.
4. Virtually all the homes with loans generated between 2000-2009 are still so far underwater, they would have to sell short even now and for years in the future. Actually, it is highly doubtful prices will rise enough to allow any of these homes to sell "whole" - for a price that actually pays off in full what is owed. So home sale inventory will remain in short supply until the banks/GSEs decide to list vacant foreclosures.
CURRENT RESULTS OF THE ABOVE FACTS: Sales in Sonoma county are 25% less to date this year than 2012, while home price median has jumped $100,000. As prices climb and loans now require proof of ability to repay (unlike the fraudulent toxic loans that fueled the last pricing bubble), homes will sell, but fewer of them. This trend is very likely to continue until something breaks - banks list reos or cash decides not to buy...
FYI: Looming housing meltdown: http://bit.ly/15Wp9kQ
I keep my followers up to date on these issues with my daily livestream, which you are welcome to follow: new.livestream.com/accounts/2292674.
Thanks, cj firstname.lastname@example.org
Terry Bell, Realtor
Sonoma County Real Estate
Creative Property Services
Have you created your bunker and made arrangements for your survival?
Too many buyers chasing too few listings isn't fun for buyers, but sellers have been stressed ever since just about the time you got your house in 2005. It's about time the market has some good news about increasing values. I'd say it's a combination of pent up demand, great interest rates, and the drying up of the REO/foreclosure inventory that are all contributing to what you call an unsustainable market and I call an overdue correction.
Only time will tell which of us is right. I've never been scared of making predictions, though, as the link below will show. That's a call of the housing bottom in early 2009. (I actually think that was the start of a very minor additional downward correction that felt like bumping along the bottom. I think we're in for a sustained recovery that will only slow down when rates begin to rise and enough sideline dwelling sellers jump on the bandwagon to help ease the shortage of inventory.