Bellevue Real Estate » Short Sale

Distressed Inventory Report 4-2-11

George Thurtle — Sat, 09 Apr 2011 22:07:24 +0000

Well the trend of the amount of distressed inventory appearing to be peaking was broken this weak. This week the amount of distressed inventory jumped 15 homes from 311 to 326. However the most notable feature is that there were not many new foreclosed homes but a ton of homes that went Notice of Trustee Sale (NTS). If there was not the present higher sales volumes these numbers would be a lot higher. As an example in zip code 98004 there were 8 new NTS homes but the overall inventory went from 42 to 43. This means a lot of these homes are selling having or having their loans modified and I don’t see much of that happening. The other alternative for the NTS homes to be taken off of the list is foreclosure but those numbers do not appear to be spiking like the NTS numbers although it can take up to two weeks to record the Trustee’s Deed after a foreclosure. The other alternative is that more of these homes are being picked up at foreclosure. The Altos graphs show a small bump in median prices and I suspect we will see that bump level out or cycle on a bottom if the amount of the distressed inventory continues.

The spreadsheedt is here: Bellevue Foreclosure Report 4-2-11

Distressed Inventory Report 3-19-11

George Thurtle — Wed, 23 Mar 2011 19:28:44 +0000

The numbers finally ticked up a bit this week and there is more listed bank owned and short sale inventory coming to the market in the MLS. Other than West Bellevue the quality of the inventory is degrading and needs a lot work. Don’t expect to get that new bank home that was avaialble last year. In fact there are only two new bank owned homes available. One is in the Beaux Arts area in Bellevue and the otehr is in the Gelndale area and is listed by yours truly. The interesting thing when looking at the numbers in the amount of churning in the homes with Notice of Trustee Sale (NTS) is you will see four or five new homes in the NTS category but the increase in the over numbers in nil or only up one or two homes. At this point in time it looks like the market is consuming the distressed inventory at about the same rate it is being created.

The spreadsheet is here: Bellevue Foreclosure Report 3-19-11

Distressed Inventory Report 3-12-11

George Thurtle — Tue, 15 Mar 2011 14:23:25 +0000

Another downturn this week in the overall amount of distressed inventory. Generally it should be going up but it looks like a lot of things have worked through the system. Overall the amount of distressed inventory (Bank Owned Homes and Notice of Trustee Sales) is at 307. Down from its near term peak of 317 two weeks ago and down from the long term peak of 422 homes in August of 2010. However while it does appear to be leveling off the amount of the drop is not convincing and the overall numbers could be “basing”. It looks like this could be a case of the “muddles” as looks like they could be a new range of of between 300 to 350 homes but lets see.

The listed inventory is also down for both bank owned and short sale. There does not appear to be new listed inventory coming to the market all except for West Bellevue. In that area there were two new homes. The interesting thing about West Bellevue is that the least expensive bank owned home is $1,549,000 and they top out at almost $5,000,000. This is a switch where before the bank owned inventory was at the lower end. Also in South Bellevue a waterfront came on the market at almost $3,000,000 in Kennydale.

The spreadsheet is here: Bellevue Foreclosure Report 3-12-11

Distressed Inventory Report 3-5-11

George Thurtle — Sat, 05 Mar 2011 19:44:59 +0000

An unexpected surprise this week. The overall inventory of distressed homes dropped from 317 to 307. I was expecting a mild increase. In addition like last week there was a lot of turn over in the distressed inventory. As an example in MLS Area 530 there were four new Notices of Trustee Sale (NTS) but the overall inventory for the NTS homes in that area declined from 80 to 74 homes. That is also including seven new NTS homes being added from the week before. As a result in two weeks 11 new NTS homes were added in the East Bellevue Area but there was a net reduction of 6 homes overall from 80 to 74. This means somehow 17 homes were absorbed either through a short sale, foreclosure or loan modification. Given the fact the foreclosure numbers are flat and not rising and I am not seeing inventory crossing over from NTS to bank owned then it appears that short sales and loan modifications must be removing this inventory.

If the distressed inventory keeps being reduced along with the overall inventory then there will be a floor forming under this market in the next couple of weeks. However it usually takes three weeks to establish this trend. That is why I was surpsed this week is that we had 8 weeks of continuing increases in inventory and in addition I felt there was some inventory held back as banks cleaned up their foreclosure practices that this trend would continue at a somewhat slower rate or maybe level off but a drop was not expected.

The spreadsheet is here: Bellevue Foreclosure Report 3-5-11

Distressed Inventory Report 2-16-11

George Thurtle — Fri, 04 Mar 2011 16:41:50 +0000

Interesting numnbers this week. On the surface it looks like we were treading water with an overall increase of distressed inventory rising only one home from 316 to 317 but if you check the spreadsheet there was some action going. the 98005 zipcode saw a drop of bank owned homes of five homes with the week before having 22 bank owned homes of record in that zipcode now this week it has dropped five homes to 17 homes. If you check the ALTOS Stats you can see that pricintg appears to be stabilizing in the 98005 zipcode. However in the 98004 zipcode there were seven new notices of trustee sale posted (NTS). There is a lot of turning over of inventory going on. What you can’t see on the spreadsheet is there is a constant and much more rapid turn over of inventory than I have seen in the last couple of years where I would see the same houses each week. If there wasn’t this turn over then I think you would see this inventory continuing to climb and spiking like the oil prioces are now.

The listed bank owned inventory continues to decline and that is where I also see somewhat less turn over. However overall both of the bank owned and short sale inventory continues to degrade. In the East Bellevue zip codes otehr than a couple of homes most of it is very low end needing a lot of repair. As we have discussed before this inventory is very hard to sell. No one wants a 1970 split in Lake Hills that needs to be gutted and redone. These homes while they have come down in price need to come down much more to give someone an incentive to buy these and fix them up. This is the type of inventory that is dragging the market down now.

The spreadsheet is here: Bellevue Foreclosure Report 2-26-11

Distressed Inventory Report 2-19-11

George Thurtle — Wed, 23 Feb 2011 16:24:32 +0000

The numbers are continuing to move up. The Notice of Trustee Sale (NTS) notices are the ones taking the big jump with with South Belleuve having 8 new notices in one week. Haven’t seen activity like that since last summer. There is some churning going on with the NTS notices. In West Bellevue there were four new NTS notices but the amount of NTS inventory only jumped by one home. The sales appear strong as the bank owned inventory is changing but the sales are no longer keeping up with the new foreclosure activity. Also there appear to be some houses entering the market in these new foreclosures but most of the activity is at the lower end under $500,000. All except one new NTS in West Bellevue was a low end condo in an old converted apartment building. In general it takes about 90 days for a foreclosed home to enter the system. The amount of listed foreclosed and short sale homes do not yet refelct the increase in the overall numbers.

The spreadsheet is here: Bellevue Foreclosure Report 2-19-11

Distressed Inventory Report 1-22-11

George Thurtle — Sat, 22 Jan 2011 17:00:31 +0000

The numbers continue to drop. Usually this time of year you will start seeing a rise in the amount of distressed inventory. some areas are seeing the amount of foreclosres increase for the new foreclosures but it is being offset by sales. In addition the Notice of Trustee Sale (NTS) appears to be declining. Again a lot of churning going on here. While there are more NTS coming on the overall numbers are dropping. This aligns with what I am seeing at the street level with the lenders working with short sellers to avoid foreclosure. Initially when this crisis started the lenders were in shell shick and would not process short sales or were adversarial to them and thought they were getting “screwed” and could better handle the properties. Well they found out that was not the case and locally I know of no home that a lender has sold for more as a foreclosure than the opportunity they had as a short sale. I can give you many examples in most cases there is a difference of between 15% to 20% for what a lender could obtain as a short sale versus a payoff. If you calculate that it cost a lender 10% just to touch the home as a foreclosure it means there losses are even more. These great business minds keep showing how smart they are but they will still get a bonus basically due to the largess of the Federal Governement giving them free money and generous loss share provisions provided to acquiring bancks like Chase and Wells.

The spreadsheet is here: Bellevue Foreclosure Report 1-22-11

Distressed Inventory Report 1-15-11

George Thurtle — Thu, 20 Jan 2011 19:30:02 +0000

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

Distressed Inventory Report 1-1-11

George Thurtle — Sat, 08 Jan 2011 19:14:44 +0000

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

Distressed Inventory Report 12-11-10

George Thurtle — Sat, 11 Dec 2010 17:19:56 +0000

The numbers keep creeping up and more listed bank homes are starting to make their way to the market. The interesting thing about this week’s numbers is that the NTS/Foreclosure ratio is moving higher. This means that the amount of foreclosed homes is decreasing and that there are more homes coming to the market with Notices of Trustee Sale (NTS). At the street level I am seeing this churning of inventory with the bank inventory being reduced and more short sales coming to the market. This market seems to be on a treadmill woth inventory being brought on at a fairly quick clip but opportunistic buyers seem to be picking it up.

The spreadsheet is here: Bellevue Foreclosure Report 12-11-10