Craig Schaid, Real Estate Pro in Pike Road, AL

Is there going to be a "Double Dip"?

Asked by Craig Schaid, Pike Road, AL Mon Jun 6, 2011

We have been hearing about this for some time...Let me here the feeling of the Trulia Community!

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Answers

31
Karen nailed it. We haven't even hit bottom on the first dip yet. I've even heard some pundits using the "D" word. Unemployment (9.1% this month and looking to rise even higher) and under employment (17-37% Nationwide) are also a major contributor to this malaise.

However, massive and lingering shadow inventory, banks not lending because they have to maintain their capital reserves and can no longer borrow from one another, uncertainty about the mortgage tax deduction, increasing property taxes and 2 to 3 trillion dollars of private capital sitting on the sidelines looking for the time and place to park are all flies in the ointment as well.

Then finally throw in the prime and jumbo resets looming leading to strategic defaults that no one can or even wants to talk about right now because no one really knows what or how to talk about it and I think you can make a pretty good assumption about our economic state.

That doesn't even hit on other psychological factors i.e. erratic energy costs, rising food costs, inflation, deflation myriad worldwide social and economic unrest just to mention a few. I'm not a doom and gloomer by nature. In fact I'm moving forward aggressively in the distressed property arena because I think that will be the future of RE for years to come in my geographical sphere of influence. I just think our government has a lot of real pressing and eminent issues to deal with before consumer confidence will start to fade.

Just my opinion.
2 votes Thank Flag Link Mon Jun 6, 2011
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1 vote Thank Flag Link Wed Jun 15, 2011
Hello Craig!
I have come to find over the years that people are fairly skeptical about what appears in the press. It's healthy skepticism. However, the constant drone of gloomy news is admittedly upsetting (especially when it doesn't apply to your locale). Upsetting because the story of the overall economy is not the story here. Yes, I believe people would prefer to hear some optimism. Well, if they're reading this, they came to the right place.

Jobs are being generated in the local and regional economy here. If there is a recession, the city of Boulder is not feeling it. Sure, most of the population drives and eats food - some of the best food anywhere. Employment is the main difference. In recent months, there was a huge hiring spurt here.

Generally, reality is much different than the headlines. Prices here in Longmont, CO have held steady through the last decade, rising slightly and then slipping some. If you look at Trulia's chart of the price of a median home, there is no steep rise then fall. The interesting thing is Colorado has been characterized as a boom and bust state in the past. That's not true this time around.

Someone looking for huge bargains here is likely to get frustrated. Inventory is not large. I know of a few situations personally that are not likely to appear on the market anytime soon. Why? The owners are determined to stick it out through this soft spell. One homeowner close to my own home plans to rent out their home until the market improves. They have a five-year perspective and I think that is smart.

And, that is a theme in this recession. Buyers, with the aid of online services, are better informed. They are savvy. (They're even savvier when they consult a local agent.) They shop for a longer period of time.

What about all those foreclosures? They're still happening. That's always the story.

Dip? Not here. (Maybe slight dimple in places.)

I'm going to allow myself a Larry Kudlow moment: No dip!

I am a residential real estate specialist. I work mostly in the 80504, 80503 and 80501 zips. Sellers might have to hold on a bit longer. Buyers will have to keep working hard to find the home of their dreams. That's my read.

Best,
SuZ
PML of Longmont, CO
1 vote Thank Flag Link Sat Jun 11, 2011
There already is... it has been here for a while, the main stream media is just a little late in reporting. Now the most important thing is all areas are not experiencing it, some areas are showing real improvement such as here in Nh where we have the lowest unemployment rate in New England and 5th lowest in the country. Other parts of the country are still in decline and will be affected more by this double dip.
Web Reference: http://www.ScottSellsNH.com
1 vote Thank Flag Link Fri Jun 10, 2011
‘They’ say “changes are good”, I guess that depends what ‘they’ are referring to.
I woke up one morning recently, only to read an article that speaks of the real estate market changing for the worst. Waking up to this headline on the front page of the LA Times upset me because I know that when the general public reads this, they will panic. HOWEVER, if you look at it this way, March 2010 vs. March 2011, our
market, LOS ANGELES prices were only off 1.7%. As we always, always say, real estate is local and you need to know that! Articles like this are really more of a national issue. Most of Southern California is not suffering too much (especially in the desirable areas that we live in). I heard about a listing in Studio City over the Memorial day weekend. It was a small/cute 2 bedroom + 1 bath house. It came on the market at $545,000, the Seller cut the offers off at 16 and it went out at $690,000, so take that LA Times!
Please don't believe everything you read/hear. These people are generalising. Speak to a real estate expert in your neighborhood of interest and they will guide you.

Please let me know if you have any real estate questions or concerns, I am here for you!

Best,

JoAnn Gabruk Schoemann
John Aaroe Group - Beverly Hills
Estate Realtor Westside
http://www.WestsideJo.com
Mobile: +1-310-386-5509


*If you know of anyone who needs a Realtor, I would appreciate the referral.

dre:01813362
1 vote Thank Flag Link Tue Jun 7, 2011
You will not TRULY recognize a double dip until a year or so after it happens. Same thing with how far prices were 'going to go down' from the standpoint of typing at your computer in Nov. 2007. You had to wait until July. 2009 to see just what the extent of the damage was.

Something else we've been hearing about for 'some time' is how much quicker short sales would take because banks are 'streamlining the process'.

When the banks have got short sales Nailed at 45 days or less for ANY bank, my opinion is prices will start to rise again. When the banks cut their YES OR NO on whether a homeowner will actually get a loan modification or not to 45 days or less,,,then we'll start to see prices rise.

Too many owners are stuck playing games with Trial Loan Mods & too many banks take more than 60 days to approve short sales, this is keeping prices down.


EmilyKnell1@yahoo.com
562-430-3053 cell
Realtor Since 1996
1 vote Thank Flag Link Mon Jun 6, 2011
Double Dip is a drip, yes we have gotten sluggish, but it is the calm before the storm so get you gear on and lets sell some homes! As Buzz Realtor says, to Real Estate and Beyond!
1 vote Thank Flag Link Mon Jun 6, 2011
panic begets panic...gives an easy way out for those who don't want to go the extra step.
1 vote Thank Flag Link Mon Jun 6, 2011
Most likely yes. With our representatives, and administration focusing on themselves and getting re-elected instead of what is in the best interest for our country and it's people you can bet on it. They need to get it! It's not about them it's about us. They work for us. They are accountable to us. They all need to work together and move our country forward for the benefit of the people. Until that happens the outlook will continue to look bleak.
0 votes Thank Flag Link Thu Jun 16, 2011
Salvador,

I believe the reasons why we're seeing more short sales in some areas are that foreclosure defense is getting tougher due to the recent court decisions which made it tougher for homeowners to save their homes from foreclosure. One thing for sure, it's tough on the homeowners to put up a good foreclosure defense in California because litigation costs are high unless they file bankruptcy; but homeowners are better educated now in that more and more people now realize Chapter 7 doesn't prevent foreclosure.

There aren't a lot of options. And lenders won't let you do a deed in lieu unless you've attempted short sale in the past 90 days and fail. You're going to see more and more people opting for short sales when the lenders decide to be more aggressive on foreclosures. Lenders were slowed down a little by the "robo-siging" problems and harsh criticism they drew from the attorneys general for shoddy paperwork. But things may change. With the decline in the market, short sales make good sense for the banks. In some cases, the banks actually do better price wise in a short sale than through their REO department.
0 votes Thank Flag Link Tue Jun 14, 2011
I am in the Riverside Area, I know it was hitted a lot on this bubble explosion, I can not generalized that every city is going down drasticly, but there is a few going down up to 20% !. ( Victorville,ca). Another situation arised is the short sale wave this summer, just out of the blue people is willing to let their home go easier that before....any comments??
0 votes Thank Flag Link Tue Jun 14, 2011
News just released today says we could be in for as much as another 20 percent decline in property values in many areas. Unemployment is now at 9.2%. Banks won't close good quality loans. The stock market dipped six weeks straight. We're looking at defaulting on our debt to China. Moody's S&P and now Fitch have or want to lower our once gold plated international credit rating?

That's all the news I was able to garner in the fifteen minutes I tuned into the news today before getting nauseated. I'm no genius. Just a dumb ole contractor, RE broker and developer but I'd say we're still in a world of hurt. However, I say this with the proviso that RE is a geographical and localized business and some markets may be doing quite well. You just need to identify them and know when to pull the proverbial trigger.
0 votes Thank Flag Link Mon Jun 13, 2011
Boy, Kennytanlaw nailed it regarding strategic defaults. You ain't seen notin yet. Wait till the full brunt of the prime and jumbo resets start entering the arena. Wauza! Better fasten your seatbelts.
0 votes Thank Flag Link Mon Jun 13, 2011
I came across this article about the market in Las Vegas. I'm not familiar with the market but I heard there are a lot of strategic defaulters in that area. When the values of the property have become too low, it make sense for people to walk from their properties, especially when it is a second or vacation home. I think we might see more strategic defaults if the prices get lower.

the link to this article: http://www.vegasinc.com/news/2011/jun/17/studies-show-anothe…
0 votes Thank Flag Link Mon Jun 13, 2011
Las Vegas had a UP month for both sales and home prices. Interest rates at 50 year lows is certainly going to put a floor on a really bad downswing.

DAVID COOPER Las Vegas Foreclosure and Bank Owned REO specialist. 35 years experience. For your free list Call +1-7024997037 or check website
0 votes Thank Flag Link Sun Jun 12, 2011
Las Vegas had a UP month for both sales and home prices. Interest rates at 50 year lows is certainly going to put a floor on a really bad downswing.

DAVID COOPER Las Vegas Foreclosure and Bank Owned REO specialist. 35 years experience. For your free list Call +1-7024997037 or check website
0 votes Thank Flag Link Sun Jun 12, 2011
Craig, From the numbers released in May there already is. Attached is a blog post from my website with charts and details. The concern is how much of a dip. Will the trend continue down and if so how much and how long. I usually don't try to guess the market but I have seen lots of activity and buyers in the market in my area.
Dawn Lewis 619-981-3917

http://www.dawnsellssandiego.com/blog/2011/san-diego-real-es…
0 votes Thank Flag Link Sun Jun 12, 2011
I've read that it's already happening in Las Vegas.

I personally believe what we don't see it in California may be the "calm beneath the storm" that we're experiencing.

Look at the huge "shadow inventory." If there's going to be a "double dip", let it be painful but short and not the long drawn-out slow agonizing death.

Banks are holding on to huge inventory for their own reasons. When I say "banks", I mean the "loan servicers". They don't have much to lose compared to the investors and borrowers. These banks have already sold their risks to someone else.
0 votes Thank Flag Link Sun Jun 12, 2011
I think every market is local. Some areas have already seen a reduction in foreclosures and an increase in transactions. Lending money and shorter wait times on short sales could help things as well.
0 votes Thank Flag Link Sat Jun 11, 2011
@ Joann, I agree, I hate it when News Papers and Headline News post these stories about all of the drama thats going on. Don't they realize that allt hey are doing is scaring the general public from doing anything. Especially whent hey talk about the fall of the real estate market. Thats exactly what epeople need to here to get them buying and selling again. Here's and Idea, let's just scare everyone away from real estate transactions so that there is no hope for the real estate market at all! BRILLIANT!
0 votes Thank Flag Link Wed Jun 8, 2011
Yes!!! just the matter of When and How.
0 votes Thank Flag Link Wed Jun 8, 2011
When hyperinflation makes the headline news and the stock market is still a crap shoot, buyers and investors will return to home buying. History will repeat itself


David Cooper Foreclosure and Bank Owned REO Investor in Las Vegas for 35 Years. For your free list
Call +1-7024997037 or check website
0 votes Thank Flag Link Tue Jun 7, 2011
I meant to say lack of consumer confidence will start to fade. Probably could have stated it better but Oh well.
0 votes Thank Flag Link Mon Jun 6, 2011
yep yep...stuck in the GAME!!!
0 votes Thank Flag Link Mon Jun 6, 2011
Until foreclosures stabilize, it's definitely possible that we'll see a "double dip", or at the very least, the threat of one will constantly be hanging over our collective heads. (which is just as bad seeing as economies are driven by thoughts alone)

And there are still so many houses in the queue that this dark cloud will be hanging around for years to come.
0 votes Thank Flag Link Mon Jun 6, 2011
Well Craig...

With the banks postponing all of the foreclosures in efforts to work with the Obama "Making Home Affordable Plan", the banks are making efforts to reach out to any and all home owners that are in default to see if anything can be done, to complete any work out program, loan modification or other HAMP, HARP, et al plan, which many of the home owners are not qualifying for. These properties will eventually end up in foreclosure...which there are hundred of thousands of. Then there are the people whom have contacted attorneys to dispute the ownership of the properties...(see my blog for the LA Times article about this), and that the banks do not have the original Notes and other paperwork to prove ownership...which courts are ruling in favor or the home owners...and then there are the people that have paid companies to keep their homes out of foreclosure...and get scammed...then ultimately...all will be in a foreclosure status in the near future!

Many people that have completed loan modifications wind up in foreclosure within 6 months.

It is just a matter of time. In some areas of Southern California, markets are holding, however, very few sales are closing. In others, the market is still falling.

It is just a matter of time for the foreclosure inventory to hit the market. The banks are controlling it.

It is a very weird market right now. We just have to hang in there...fill up your pipeline with buyers...the market will eventually hit and hit hard!

All the best,

Kat
0 votes Thank Flag Link Mon Jun 6, 2011
I'm not so sure about a double dip, but it looks like we're going to be on the low cycle for a few years to come.
Currently, its all about affordability. We see spikes in sales activity and stabilizing trends with lower value areas (less than 450k) but so far, this seems to be influenced by the traditional summer upswing.
Web Reference: http://WalshStreet.net
0 votes Thank Flag Link Mon Jun 6, 2011
Hi Craig,

I'm just wondering why you posted this in LA since you are in Alabama? Just curious. I'm not sure about dips, I think this is not a recovery yet and the "double dip" might just be in expectations...I missed the "up" part of the first dip? We have high unemployment, high taxes, no incentives for businesses to hire and burdensome health care coming...not optimistic.

K
0 votes Thank Flag Link Mon Jun 6, 2011
The double dip has already happened.
0 votes Thank Flag Link Mon Jun 6, 2011
If we are not already in a "Double-Dip", there will be one or we will have a prolonged housing recovery that will take 5 more years.
0 votes Thank Flag Link Mon Jun 6, 2011
Going to be? Real Estate sales are down. Real Estate prices are down. Stock market is down. Unemployment is up.

This is the double dip.
0 votes Thank Flag Link Mon Jun 6, 2011
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