I'm not sure why there is a suggestion that agents are deliberately misleading buyers, yet I hear this suggestion more often than I would expect on this forum. It is almost as if people view the agent:buyer relationship as adversarial.
Most agents I know are exceptionally ethical. They don't always know what is going to happen in the real estate markets but they interprate what they see as best they can. Our crystal balls are unfortunately no better than anybody elses.
Regarding the banking industry withholding a lot of problem houses, you may be interested to read the following comments and observations ny a mortgage lender of my acquaintance:
"As affordable housing runs rampant again with multiple offers we may ask ourselves why inventory levels are so low in a time of record foreclosures and what is this we hear about "shadow inventory"?
Shadow inventory is a the suggestion that massive supply of unsold homes is waiting in the wings and could easily swamp the recovery before it can gather speed. Included in the category are REOâ€™s, foreclosures in process, new high rise condos and homeowners waiting for a better market.
In California banks have taken back a total of 419,183 from January 2007 through June 2009. We also have an estimate of how many have been sold during that period: 328,645. Subtract the two and you have a total possible shadow inventory of 90,538.
Around 20,000 REOâ€™s have been selling each month and a typical escrow is 30 days, so subtract 20,000 that are currently pending and are likely to close. We are now down to a shadow inventory of just 50,538.
But there is something else implied when people talk about shadow inventor which is the notion that banks are holding properties back, in the shadows, in an attempt to hide something. To see if that might be true, I think it is only fair to remove those properties that likely will be listed as soon as they are available. This process usually takes somewhere around 120 days. During the last 120 days banks took back 56,086 properties, though certainly some of these will be clean and vacant. Letâ€™s be conservative and only deduct half from the shadow inventory, we now have a total possible shadow inventory of 22,495 REOâ€™s. At the current rate of REO resaleâ€™s that means that even if banks are purposefully withholding properties, the truth is that it canâ€™t be very many, may be a monthâ€™s worth at most."
Interesting reading, yes?
Bernard Gibbons, Realtor, e-PRO Certified Internet Specialist, DRE License # 01331583
J. Rockcliff Realtors, 15 Railroad Avenue, Danville, CA 94526
Phone (925) 997-1585
See all homes for sale in Contra Costa and Alameda Counties