A record 269,962 U.S. homes were seized from delinquent owners in the second quarter as lenders set a pace to claim more than 1 million properties by the end of 2010, according to RealtyTrac Inc.



http://www.bloomberg.com/news/2010-07-15...re-backlog.html

Yeah, I read that last night - amazing. Well, let the flood gates open. I am interesting in hearing how the AM companies are going to manage the flood of foreclosures. I guess we will be seeing a huge growth in Q3 and Q4 as the economist have been predicting.

seized eh? Interesting wording.

Huge growth in listing foreclosures, maybe, but I'm not so sure about huge growth in actually SELLING them.

Who is going to buy all these properties?

"seized from delinquent owners"

Seized from delinquents.
Not "lost by well-meaning citizens who got suckered into Wall Street's Mortgage Casino."
No, they're DELINQUENTS!

We are already seeing builder incentives of 8,000 dollars in credits to move properties.

Since the tax credit expired many potential home buyers see rates falling and values decreasing which means only people that have to purchase are buying.

We can't expect purchasing to reach to boom speculative levels as most were buying as an investment and not a place to live.Take out the investment factor and many are fine with renting.

On the commercial side we are going to kick some serious butt.I have been gearing up for it for a year.Right now is the best time to purchase before government reform comes to the commercial side like it did with the residential side after all the defaults.

I THINK IT WILL BE ANOTHER FALL OF HIGH REO ACTIVITY AND THEN AS SOON WE GET THE MACHINE WELL OILED AND THE SUPPORT STAFF WE NEED TO HANDLE THE INCREASED INVENTORY THE GOVT WILL GO AND PULL THE RUG OUT FROM UNDER US AGAIN AND SLAP DOWN ANOTHER MOTORIUM THAT RUNS FROM NOV UNTIL APRIL. IN MARCH THEY WILL HAVE A NEW PLAN (HAMP, HAFE, H???) AND NO ONE WILL HAVE A CLUE ABOUT IT BUT IT WILL SAVE ANOTHER 5 MILLION HOMES FROM FORECLOSURE. I REMEMBER IN 2007-2008 THAT THE HOUSING CRISIS WOULD BE OVER IN 2010-2011.

And in top of that we still losing jobs.

http://www.miamiherald.com/2010/07/16/1733445/unemployment-rises-to-128-in-miami.html

The analysis that I heard on NPR and other sources is that this 3rd foreclosure boom will be driven primarily by unemployment. The first one was due to sub-prime loans, the 2nd due to alt-A/option ARMs, now it's just plain unemployment.

That is a fantastic question. Investors can only buy so many homes. The government can only afford so many buyer incentives. There is already a glut of properties on the market in my area with more coming. It's very hard to take on new debt (i.e. buying a home) while unemployment keeps rising. This is going to get very ugly folks.

The investor frenzie may be yet another round of FCs. I'm seeing investors start to pay just a tad too much for some of these properties. While these are exibiting a positive cash flow NOW, how will the cash flow hold up when these tenants become unemploed. Considering the unemployment figure seem to hit the lower end of the employment scale first, this could become a real issue. That is unless we listen to NAR, in which case the real estate industry is just fine, all bubble gum and ice cream. But then, NAR told us all there was no housing bubble. I guess the bubble gum popped.

It's better to hold the investment money out waiting for the right deal than to than to overpay in a speculative frenzy.

Many investors try to "talk themselves into a deal" out of frustration or to just get going with something.

Seasoned investors buy on conservative numbers. Not optimistic numbers that have a 20 percent chance of happening and being sustainable.

Just like buying an apartment building. If area rents are 450 a month and the building I want is 65 % occupied. I will buy based off of lower rent numbers 425 or 450 and repairs to have the nicest place with rents in the lower bracket.

My buildings will stay full while the others that assumed rents of 475 to 500 a unit tread water or go under. It's all about buying it right.

I work with some investors that follow your same mind set. As much as they'd like a specific property, they'll walk away unless the pricing fits their model. They've been around for years, survived nicely and will be around for years to come. Some of the new comers, infomercial folks are overpaying and bidding against each other. These are the next round of FCs and will probably be bought by that first group....and I'll be the broker they buy through.

IMHO we are about to see what happened in 2008. The MI companies who have to write the checks forced unrealistic pricing on many REOs then the started going to auction because they were unsaleable at the too high price. Some sold but then (because they had too high of a reserve price) we started getting them back for realistic prices and they sold.

Then they came to reality and allowed pricing that would work and the number of REOs that went to auction decreased significantly as they sold at the realistic prices.

Now they are restarting the cycle because they have now started to ignore the new reality with the end of the first time home buyer credit and (in our case) the gulf oil spill.

We just had one yesterday that had been listed too high, went pending FHA and after 80 days did not pass FHA inspection. Got a decent price reduction but the next day the MI company required that the list price be increased. Now it is going to auction.

My best guess is that it will have too high a reserve, not sell and then we will get it back at a saleable price.

A few months of this and then the MI companies should start coming back to reality again and we will get saleable listings again.

We are just now getting the new County assessors values for 2010 which is based on 2009 sale data and EXCLUDES REO and Short Sales in the calculations. We are seeing values drop 10% - 40% from last year. Some properties that were in the $500K range last year have dropped as much as $100K year over year for assessed value.

We are just now starting to see the ALT-Option properties hitting the market. We got our highest list price REO ever the other day at nearly $500K (It was an ALT-Option). So, for us at least we are just starting to see the ALT-Option listings hitting the market.

Yup the ugly is not over by a long shot.

I always get the question "when do you think the prices will start to rebound". Without much thought my answer has been 3-5 years - conservative. I am starting to wonder - is that the right answer anymore? I'm seeing a much darker picture now, wondering if real estate will just go flat and stay there. How do you guys answer that question? I used to get stared at when I said 3-5 - with folks thinking that was way too long. Nope - it could be longer.