Highlights from this month’s Report:
- Foreclosure filings down, but not much once you adjust for the holidays
- Foreclosure outcomes and 3rd parties are up a few percentage points after adjustments to daily averages
- Cancellations a surprise this month!
- Overall, inventories are flat.
Sean,
At first blush, the number of cancellations paint an optimistic picture. But I thought about this a little further. Cancellations do not necessarily mean loans have been permanently modified. A short sale results in a cancellation as well.
At least where I’ve been looking, I’d say 60-70% of the homes that seemingly get sold are either REO or short sales. I’d be interested in your take on this because if the number of short sales is actually increasing then there “could” be continued downward pressure on prices. I say “could” because I perceive downward pressure at the above 800K market, which will continue to drive the median price upward.
Whether its a wave of foreclosures or a wave of cancellations that are short sales the result is downward pressure on prices.
You are right, the jump in cancellations could have been driven by short sales, or even by filing mistakes that force lenders to cancel and re-file the notice of trustee sale as we’ve seen in the past. The reason I’m attributing it to the permanent mods is that there were enough permanent mods nationally to increase CA cancellations by 40 percent, while at the same time I don’t see any evidence that there were measurable month-over-month changes in short sale closings, or filing problems.
I remain optimistic about short sales, and I think they will be an important part of any successful Realtors business in 2010. But I personally find it hard to imagine that short sales become easy enough to turn into a wave that puts downward pressure on the market.
Sean,
I love the new video.
As you and I have discussed, many who are receiving this trial modifcation have no idea that they are being reported as late on their mortgage payments and destroying their credit while they await the NPV results.
We must better prepare the homeowner and I am hopeful that with people like you, we will be able to do so.
Tax issues and soft landing opportunities need to be discussed with more fervor as Treasury, Fannie Mae and now Freddie Mac have all come out with a push in 2010 for short sales.
Chris – I was thinking the same, but did you see the latest from FHA? They now plan to penalize those who pursue short sales as the best way out of a bad situation: http://www.housingwire.com/2009/12/18/hud-limits-fha-mortgages-after-short-sales/. This government run housing market is insane. More on this story in my next post.