Posted by 101livescan on 3/3/13 9:53am
Msg #458997

Shortage of Housing Inventory

http://www.dsnews.com/articles/index/survey-shortage-of-inventory-creates-frustration-for-buyers-2013-03-01

Not enough housing inventory is certainly true here on the central coast. There are ten suitors for every property. I've had buyers tell me they've made countless offers and lost out because they were out bid. People are paying too much just to get a house, which is a dangerous thing to do in this economy.

That's why I'm doing so many out of state transactions. People are frustrated with the process.

Reply by janCA on 3/3/13 10:13am
Msg #459001

Cheryl, I didn't read the article,but this is so true, it's happening here too and it makes me sick. Seems to be "business as usual" with some of the real estate agents around here. They are inflating the prices of these homes and people are taking the bait, while there is a shadow inventory of millions of homes, that I believe, will be released slowly. It's a new profit game run by Wall Street. They are buying foreclosed homes and renting them back to the prior owners. The so called "recovery" is being fueled by Wall Street private equity firms, hedge funds and the government. Look up the Blackstone Group which has spent 2.5 billion purchasing 16,000 homes.

I have the full article, which my real estate agent sent to me. Some of the homes around here have gone up 30% since last year. It's ridiculous! How soon people forget.

Reply by 101livescan on 3/3/13 10:22am
Msg #459003

Like fish in a barrel. Will we never learn!

Reply by janCA on 3/3/13 10:23am
Msg #459004

by the way, hope this is appropriate for this forum and doesn't belong in JPol. If not, I apologize.

Reply by JerryhFL on 3/3/13 10:28am
Msg #459005

I guess I always thought it was the buyers who determine the value of property. When there is plenty of inventory, lower price and when low inventory higher price.

Reply by janCA on 3/4/13 8:48am
Msg #459073

Jerry, that is true in part, but it's the BPO's that seem to be setting the price around here. My observation is that it started about a year ago and the comps were discretionary. Definitely, not from the foreclosed home down the street, or the home around the corner that sold for much less than what this house is listed for. Or the homes that don't even hit the market because there are deals done behind closed doors.

Reply by 101livescan on 3/3/13 10:40am
Msg #459009

Is this the same article.

http://www.nationalmortgagenews.com/dailybriefing/banks-shedding-distressed-loans-higher-prices-faster-pace-1034853-1.html

Reply by Bear900/CA on 3/3/13 12:29pm
Msg #459025

Speculators are creating another housing bubble

I believe this fits here as it impacts the signing business.

Unfortunately, private home buyers are falling for the pitch from realtors that we have finally “hit the bottom” and now is the time to jump back in. They have no awareness that speculators, not real values, are driving the market up. Once again, there is no solid foundation for current values.

Interesting article:

"How the Fed is creating another speculative market for housing: Fed balance sheet now over $3 trillion and low interest rates are causing speculation in non-traditional markets."

http://www.doctorhousingbubble.com/fed-balance-sheet-mbs-creating-real-estate-speculation-wall-street-buying/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+DrHousingBubble-HowILearnedToLoveSocal+%28Dr.+Housing+Bubble+-+How+I+learned+to+Love+SoCal%29

"Household debt moving lower. Although more people are leveraging up with low down payment products like FHA insured loans."

Marginal buyers are clueless that the independent Government Accountability Office (GAO), recently released a report stating the Federal Housing Administration is a “high risk” entity. FHA is broke and is $1.1 trillion in debt. It recently increased its mortgage insurance premiums and is deleting FHA guaranteed programs in the HECM product (fixed lump reverse mortgages).

Will it be around for the next buyer? Owners will once again be stuck and the cycle will repeat.

Reply by 101livescan on 3/3/13 12:54pm
Msg #459026

Re: Speculators are creating another housing bubble

It's pretty irresponsible and scary.

Reply by JanetK_CA on 3/3/13 1:15pm
Msg #459027

Re: Speculators are creating another housing bubble

"Household debt moving lower. Although more people are leveraging up with low down payment products like FHA insured loans."

Haven't read the link yet, but I heard something just yesterday on the radio about credit card debt creeping up again.

I agree with others, though, that the huge amount of inventory owned or controlled by a few can have a significant impact on the housing market and our entire economy. They have to manage that inventory in some way and it's pretty much a given that any decisions they make will have a major ripple effect.

Another thing that's a given is that lenders are going to just shrug their shoulders and stop trying to do loans. I'm already seeing advertisement change to where some lenders are back to promoting ARMs, which have lower interest rates. I'm not sure why anyone would want to get into an ARM when interest rates and property values are likely to be on the way up. I guess if they're not planning to stay in the property a long time and feel they're certain they'll either be able to refi or sell when they want, it will look like a good deal. Anyone experiencing a little deja vu here?

BTW, on the FHA issue, I recently read something about the FHA considering changing the rules so that mortgage insurance will be permanent on their loans, regardless of equity. I guess I should be glad I'm not a young person trying to buy my first home!

Reply by desktopfull on 3/3/13 2:21pm
Msg #459031

FHA has changed the rules, effective 4/1/13

you will pay the MIP the entire length of the loan regardless of equity. The last FHA loan that I had the MIP payment was $298.38 and I've seen loans with higher FHA payments. Looks like they would be better off saving the amount of the premium for a few years and just getting a conventional loan.

Reply by 101livescan on 3/3/13 2:28pm
Msg #459033

Re: FHA has changed the rules, effective 4/1/13

Puts a big damper on loans for first time homebuyers.

Reply by janCA on 3/4/13 8:40am
Msg #459072

Re: FHA has changed the rules, effective 4/1/13

Sorry, I don't have a link, but the article. If you want me to forward to you, please PM me. Thanks.

Reply by ReneeK_MI on 3/4/13 8:52am
Msg #459075

Here is FHA Mtgee Letter - lots of exceptions/conditions

http://portal.hud.gov/hudportal/documents/huddoc?id=13-04ml.pdf