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Distressed Inventory Report 8-21-10

The same trend continues as last week. It appears that both foreclosures and Notice of Trustee Sales have peaked. Again as I mentioned last week I am not sure if this is due to the seasonal work load of the loan servicers going on vacation but we will know by the third week in September.

The one trend that is interesting is that a lot of the reduction in inventory was for the Notice of Trustee Sale, it appears some of these homes are selling and some of these short sales actually closing. The last few months has seen this number steadly rise. Again it appears to be falling. A fall in this number was a sign the market was picking up like what happened last spring but I am not sensing that on a day to day basis yet. Let’s see what happens.

The spreadsheet is here: Bellevue Foreclosure Report 8-21-10

Tags: bank owned homes, Bellevue Homes, foreclosed homes, notice of trustee sale
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Weekly Scorecard 8-17-10

It appears inventories are peaking and we are seeing closed sales come more in line with in MLS Area 530 (East Bellevue). The other two areas that still have a big spread between closed sales and pending sales. the disturbing faactor is that while inventories have peaked, if you look at pending sales they are by half. The result is that either inventories will need to be reduced or you may see another round of price cuts. Nothing like the spring of 2009 but if the inventories remain where they are and sales do not pick up then this fall and winter could see a slow sagging market.

The spreadsheet is here: Weekly scorecard 8-17-10

Tags: Belleve3 Homes, East Bellevue, pending sales, sold homes, South Bellevue Homes, West Bellevue Homes
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Distressed Inventory Report 8-12-10

The news this week is that distressed inventory appears to be peaking or else the lenders are on vacation and not processing the new defaults. We will know more by the end of September when they return from vacation. This is not a joke as the case loads are so high that work cycles are as important as market cycles.  However looking at the big picture unemployment has stabilized so theoretically at some point in time the foreclosure cycle needs to stabilize but as has been discussed earlier there are two factors. The first is how long some owners can keep going on their reserves and what happens with the new wave of ARM resets that appear to be coming in 2011. Usually we have a quicker upturn and those folks living on reserves manage to hang on long enough so that as the economy comes out of the recession they begin earning enough again to cover their expenses. This may be the self employed or small business owners who are particularly sensitive to market cycles and also have had the added burden of their banks not providing interim funding and are forced to drain reserves to pay down debt. The other class is the unemployed who mange to find new jobs as the economy cycles back up. With an effective 1% growth rate the market is not helping these people out and they are slowly draining what resources they have.

Like a nuclear blast you can say the lucky ones were the ones who were incinerated in the initial blast. These would have been the sub prime borrowers who have been foreclosed in 2007 and 2008 and have written off their debt and are renting and building their resources. The unlucky ones are those who lived and are slowly dying from radiation poisoning and are struggling to hang on and hope they can last long enough until the effects of the blast are behind them.  

Part of the good news regarding the dissipating the effects of the blast are that in the spreadsheet you will see the Notice of Trustee Sales is falling. The reason are potentially two fold. The first is that the house goes to foreclosure and is now a bank owned home. The other is that it has been sold in a short sale. Keep and eye for an increase of the bank owned homes as this will be an indicator if the market is absorbing the NTS homes through either a short sale or foreclosure.

The spreadsheet is here: Bellevue Foreclosure Report 8-14-10

Tags: Bellevue Homes, Distressed Inventory, Foreclosures, notice of trustee sale, Short Sale
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Weekly Scorecard 8-9-10

Things appear to be settling down. Inventories are peaking and the sales are lower after the expiration of the tax credit. Basically over the last few months inventory have risen and the sales volume has fallen. If you take a look at the monthly statistics this trend is very noticeable on the graphs.  In looking at the spreadsheet attached you will see that the pending sales and closed sales are starting to come in line more with closed sales and pending sales roughly beginning to correspond. In my opinion this is an indication of the underlying market after the tax credit. In general lower volumes as the market seeks to be replenished with new buyers.

The pricing appears stable with no real clear trend either up or down.  The indication here is if you are a seller you know where the price needs to be to sell and overall there are fewer buyers as indicated by the closed and pending sales. In addition in looking at the sales it is very evident the homes that are in condition or if older remodeled with new appliances and baths are the onesselling quickly. Some of the FNMA bank homes have had to take steep discounts to under $300,000. That has not been seen for a long time.

The spreqadsheet is here: Weekly scorecard 8-9-10

Tags: Bellevue Homes, closed sales, East Bellevue, pending sales, South Bellevue, West Bellevue
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Distressed Inventory Report 8-7-10

The numbers gradually keep creeping up, mainly the notices of trustee sale (NTS). On the surface for zipcoded 98007 there appears to be a large drop in the (NTS) but this is due to a condo project in the Crossroads area changing its status so that decrease is not a good indicator of the overall general trend. Basically the same trend is continuing with the rate of increase slowing each week which is a sign the distressed inventory may be peaking. The coming month will probably see if this prediction is correct. The other trend which maybe happening is that the servicers who are process the foreclosures may be on their summer vacactions; will wait to see.

The listed inventory remains short sale and bank inventory remains very stagnant with not much movement. Also the quality of the inventory seems to be declining with most of the newer homes gone, except a couple in East Bellevue. There is more homes suffering maintenance and upkeep issues. A lot of older homes in poor repair. The buyers in this market severly discount these homes because they may not want to do the work and they have to use out of pocket money mainly to get it done and not many buyers have the money after the purchase. That is why you see reasonably priced homes in good condition which have had the kitchen and baths update go very quickly while others just sit. Eventually the prices on these homes will keep coming down until there is some incentice to fix the home up. Thee are not many flippers anymore and they need to get the homes really cheap in order to justify a flip. However the flippers are the ones who mainly update the inventory. Recently FNMA has found the discounts to be so severe thay are actually contracting with local contractors to repair the homes so they are marketable. This the first wise use of tax payer money I have seen.

The spreadsheet is here: Bellevue Foreclosure Report 8-7-10

Tags: bank owned, Bellevue Homes, foreclossure, notice of trustee sale, Short Sale
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Weekly Scorecard 8-2-10

While the same trend continues with closed sales at pretty high numbers and pending sales running half of the closed sales the big news which can be inferred by the numbers but which does not show directly is that the upper end inventory is moving. In West Bellevue alone of the 7 sales 4 were over a million and one was a waterfront lot on Hunt’s Point which sold for almost six million and was on the market for only a few days. Also a home in excess of three million closed in Clyde Hill. South Bellevue saw some healty numbers also with a couple of sales over a million. That is why you see the jump in the per sq. ft. averages. It appears that the buyer is responding to the lowered expectations by the sellers on these luxury homes and are moving in.

In the spreadsheet for West Bellevue in the pending sales you see the N/A comment instead of a number. This is sometimes done when the data is minimal and conflicting. In this situation the two pending sales had a huge spread in price and put the per sq. ft. number at an excessively high price. However you can finally see the per sq. ft. prices are starting to move up. Both South Bellevue and East Bellevue had significant jumps in per sq. ft. prices. It will be interesting to see if this is a continuing trend but if the upper end inventory continues to move it will start pulling all prices up.

The spreadsheet is here: Weekly scorecard 8-2-10

Tags: Bellevue Homes, East Bellevue Homes, inventory, pending sales, sold homes, South Bellevue Homes, West Bellevue Homes
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