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Weekly Scorecard 1-17-11

The inventory is staying flat and falling while the sales are remaining at a fair volume. Usually this time of year you start seeing inventories rise and then sale begin to rise any where from two weeks to a month later.  This year the inventory does nopt seem to be coming on. My guess is that two factors have occurred that are influencing each other. The first is that the last two years has wrung a lot of distressed inventory out of the system. There is still more to come but it appears we are getting on the backside of it. The second issue is that prices have not moved up yet and as a result the “discretionary” sellers, those who sell based on opportunity and a forced distressed sale, do not see enough opportunity to participate in the market. The lack of new distressed inventory and low overall pricing appears discouraging “discretionary” sellers appears to be keeping a lid on inventory for now.

The spreadsheet is here: Weekly scorecard 1-17-11

Tags: Bellevue Homes, foreclosed homes, pending sales, sold homes
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Distressed Inventory Report 1-15-11

There was hardly any change from the numbers for the previous week. I suspect though that in the next couple of weeks you will see the numbers rise but the question is where they will peak. On the street level I am seeing less distressed sellers in the Bellevue area but antidotally talking to other agents in the more affordable areas such as Kent and Pierce County there are two issues developing. The first is that all the attempts at loan modifications appear not to be working. Doesn’t work if you can find a job. The other one is that some of the artificially stimulated sales due to the home buyer tax credit are starting to show signs of distress. By trying to stimulate a market using the same misguided practices of no down payment (this time the government gave them the downpayment) and lax underwriting standards (again this time the government bought these loans) is looking to come back and bite us. Some of those buyers who purchased homes in 2009 are starting to default.

 At some point in time we need to stop these “patches” in a very weak dam (our economy) and focus on strengthening the damn. I will divert a some what and go political here. As a country the most constructive thing we could do economically is lower the corporate tax rate to 15%. Forget the personal income tax as far as I am concerned let it go to over 50%. This would do two things. The first is that we would suck capital from around the world to invest in our economy. We would have the largest most secure economy in the world with the best protections for workers, investors and intellectual property. Also by keeping the corporate rte low both small businesses and large corporations would have incentives to leave money in their companies since it is only taxed at 15% where as if a small business owner or corporate executive wants to take money out of the company they will pay a personal income tax rate at least double. This leaves a big incentive to leave money in the company that can be used to pay down debt, increase salaries, hire more workers and expand their present businesses.  The political criticism will be that people should receive the break not corporations. Corporations are not sentient beings. They are individuals organized under a charter and the laws of the nation. They have no personality, they have no feelings, they have no will and they have no malice. However the individuals who own and manage the corporations will have a much greater incentive to make the corporations improve and less incentive towards individual self-enrichment. Now the game being played is that the wealthy are using lower corporate tax rates in other countries to keep business activity and capital there but also looking to have it both ways with our low individual income tax rates and rule of law. Lowering corporate tax rates would be the one best and quickest fix for our economy.

 The other provision I would put in place would be to tax bonuses over 30% of an employee’s income for a company which benefits from an explicit government guarantee. Any bonus income which is received over and above the 20% salary base would be taxed at 75%. As an example if you earned a $100,000 any bonus in excess of $30,000. This would only be for companies that receive explicit federal government guarantees such as banks with their FDIC insurance deposits and the ability to borrow at artificially low rates because of Federal Government Monetary Policy. If you worked for Boeing, Microsoft, Google or your own business the bonus would be taxed at ordinary income and not subject to the “government guarantee” surcharge. This would force institutions such as banks that benefit from these guarantees to evaluate the long term worth of their management and adjust their salary accordingly with a modest performance bonus. Management now has an incentive to build a sustainable business model rather than pay a low salary and have a high bonus based on a quarterly profit that can be manipulated or is obtained at very high risk.

 As a country between government and personal debt we have over thirty trillion. This debt load is crushing. The only way to get rid of it is to have everybody working and our national businesses healthy and productive so that money is earned and value is created. That way the debt could be reduced without the looming specter of deflation or currency devaluation.

 Sorry for the digression.

 The spreadsheet is here:  Bellevue Foreclosure Report 1-15-11

Tags: bankowned, Bellevue Homes, Foreclosures, notice of trustee sale, Short Sale
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Weekly Scorecard 1-10-11

The sales numbers remained strong but the pending sales took a dip this week all except in South Bellevue where both sold and pending sales seem to keep posting pretty good numbers. The inventories remained steady, I would have expected them to start rising again. Still looking for some market direction after the new year. specifically if the trend towards overall higher sales and reduced inventories will continue.

The spreadsheet is here: Weekly scorecard 1-10-11

Tags: Bellevue Homes, inventory, pending sales, sold homes, South Bellevue
Discussion: 1 Comment

Distressed Inventory Report 1-8-11

The numbers have started back up. West bellevue had a very large unexplained spike of foreclosed homes withe a jump from 15 to 28 in one week. In addition there was not new offsetting inventory to account for the spike. usually when a spike like this occurs there is a new construction project which has had some condominium units taken back by the bank. Also in Bellevue two new bank owned waterfront homes have come on the market. On eis over $5,000,000 located on Evergreen Point Rd. Will be interesting to see how quick it sells.

The amount of foreclosed inventory usually starts increasing on a seasonal basis this time of year. The big issue in the next month will be how much and how quick. There is a lot of speculation the numbers were down as the banks clean up their foreclosure practices and that now that issue is behind them and there is a pipeline of back up homes to foreclose on and bring to market. The next month will tell.

The spreadsheet is here: Bellevue Foreclosure Report 1-8-11

Tags: bank owned homes, Bellevue Homes, foreclosed homes, notice of trustee sale, short sales, Waterfront Homes
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weekly Scorecard 1-3-11

A short report this week but taking a look at the closing this week the last week of the year saw a flurry of closings. MLS Area 500 (south Bellevue) had over 16 closings and West Bellevue had 14. These are the highest nu,mbers of the year. Also the inventories are the lowest they have been in years. As an example south Bellevue started the year with 309 homes. The inventory peaked at 419 homes in the last week of June and the year was closed out at only 288 homes. East Bellevue is another good example. Th eyear started with an inventory of 210 homes and peaked at 298 homes in the second week of July and closed the year out at only 187 homes. usually inventories do peak early summer no matter what market conditions. However there appears to be a trend of overall declining inventory and increasing sales volume. Let’s see how thuis trend plays out in the next couple of months.

Th espreadsheet is here: Weekly scorecard 1-3-11

Tags: Bellevue Homes, East belevue, inventory, pending sales, sold homes, South Bellevue Homes, West Bellevue
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Distressed Inventory Report 1-1-11

Happy New Year. The report is attached below but a gradual decrese in inventory but not much to read into that. Really will not have a trend established until at least the end of January. However there is now a full year’s worth of data. The year started out in week one of 2010 with a total of 217 homes which were either foreclsoed or had a Notice of Trustee Sale (NTS). During the year that number swelled to  a high 422 homes in August 7, 2010 report and then declined to 254 homes at close of 2010. The interest thing about the peak is that the graph would show the 422 homes as clear peak with a pretty constant slopu up and down. There was not the ususal topping where you have a peak number that hangs high and varies.

As I discussed previously 2010 was to be the year of the “hanger’s on”. These are people who thought the market might pick up and bail them out or that potentially there job or business prospects would improve as has happened in more robust recoveries. These prople drained their resoruces and threw in the towel in 2010 and I think we are pretty much through that cycle. This trend produced a lot of higher end homes in good condition to select from. At the street level I am seeing this inventory depleted substantially and I think this cycle has run its course.

2011 will be the year we see the all of those failed loan modifications not working out and those homes will be headed to foreclosure. Also later in the year the next source of foreclosures will be the lower end homes where “tax credit” buyers got in over their head. This will be the story the press will pick up on is home purchased in 2009 with the artificial stimulus will come back to bite us without a substantially improved domestic economy. However most of this activity will be at the lower end. The bottom line is for Bellevue is that overall you will see much less distressed invtory over $1,000,000 and the bulk of it will be $500,000 and under. If you are looking for a cheap condo in Bellevue in a converted building you will have a lot of inventory to select from.

The spreadsheet is here: Bellevue Foreclosure Report 1-1-11

Tags: bank owned, Bellevue Homes, foreclosed homes, notice of trustee sale, Short Sale
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