Resale report for Ada County August "09" 519 Sales reported so far, 274 of them are distressed, Check out the report here!

{ Posted on 9:03 PM by JR Erickson }

I just pulled up some preliminary numbers for August, we have a few more days of reporting but I wanted to give you guys a taste of what is coming. Its nice to have a snap shot of the market, that is up to date and not 1 month, or 2 months behind. Please download the excel spreadsheet to see all the data. Its pretty interesting. I think we are doing pretty good, the Distressed properties that sold this month are up a little bit. Last month we were at 36% (% of distressed properties sold) , and this month we are at 53%. We will continue to watch that number, I think the national number is around 31%. The good thing about that is that we get them off the market, and churn through them as quick as possible, it will return us quicker to a normal market if we can clean those up. The only problem that I see is that we had a rush of defaults last week for Ada County, I think we had around 209 (the highest amount that I have seen in 3 months) If we continue to push more distressed properties through the system, it just makes it longer for us to get are pricing to more stable level. We will continue to watch it, and we will let you know what is going on in the coming months. stay tuned for more info.
 
Jeremy
Ada County market Report

Posted via email from Jeremy R Erickson

Commercial Real Estate Lurks as Next Potential Mortgage Crisis - WSJ.com

{ Posted on 9:11 AM by JR Erickson }

Federal Reserve and Treasury officials are scrambling to prevent the commercial-real-estate sector from delivering a roundhouse punch to the U.S. economy just as it struggles to get up off the mat.

Their efforts could be undermined by a surge in foreclosures of commercial property carrying mortgages that were packaged and sold by Wall Street as bonds. Similar mortgage-backed securities created out of home loans played a big role in undoing that sector and triggering the global economic recession. Now the $700 billion of commercial-mortgage-backed securities outstanding are being tested for the first time by a massive downturn, and the outcome so far hasn't been pretty.

The CMBS sector is suffering two kinds of pain, which, according to credit rater Realpoint LLC, sent its delinquency rate to 3.14% in July, more than six times the level a year earlier. One is simply the result of bad underwriting. In the era of looser credit, Wall Street's CMBS machine lent owners money on the assumption that occupancy and rents of their office buildings, hotels, stores or other commercial property would keep rising. In fact, the opposite has happened. The result is that a growing number of properties aren't generating enough cash to make principal and interest payments.

[Outlook]

The other kind of hurt is coming from the inability of property owners to refinance loans bundled into CMBS when these loans mature. By the end of 2012, some $153 billion in loans that make up CMBS are coming due, and close to $100 billion of that will face difficulty getting refinanced, according to Deutsche Bank. Even though the cash flows of these properties are enough to pay interest and principal on the debt, their values have fallen so far that borrowers won't be able to extend existing mortgages or replace them with new debt. That means losses not only to the property owners but also to those who bought CMBS -- including hedge funds, pension funds, mutual funds and other financial institutions -- thus exacerbating the economic downturn.

A typical CMBS is stuffed with mortgages on a diverse group of properties, often fewer than 100, with loans ranging from a couple of million dollars to more than $100 million. A CMBS servicer, usually a big financial institution like Wachovia and Wells Fargo, collects monthly payments from the borrowers and passes the money on to the institutional investors that buy the securities.

CMBS, of course, aren't the only kind of commercial-real-estate debt suffering higher defaults. Banks hold $1.7 trillion of commercial mortgages and construction loans, and delinquencies on this debt already have played a role in the increase in bank failures this year.

But banks' losses from commercial mortgages have the potential to mount sharply, and the high foreclosure rate in the CMBS market could play a role in this. Until now, banks have been able to keep a lid on commercial-real-estate losses by extending debt when it has matured as long as the underlying properties are generating enough cash to pay debt service. Banks have had a strong incentive to refinance because relaxed accounting standards have enabled them to avoid marking the value of the loans down.

"There is no incentive for banks to realize losses" on their commercial-real-estate loans, says Jack Foster, head of real estate at Franklin Templeton Real Estate Advisors.

CMBS are held by scores of investors, and the servicers of CMBS loans have limited flexibility to extend or restructure troubled loans like banks do. Earlier this month, it was no coincidence that CMBS mortgages accounted for the debt on six of the seven Southern California office buildings that Maguire Properties Inc. said it was giving up. "During most of the evolution [of CMBS] no one ever thought all these loans would go into default," says Nelson Rising, Maguire's chief executive.

Indeed, many property developers and investors complain there is no way to identify the investors that hold their debt and that it is difficult to negotiate with CMBS servicers. In light of the complaints, the Treasury is considering guidance that would allow servicers to start talking about ways to avoid defaults and foreclosures sooner, according to people familiar with the matter. But investors in CMBS bonds argue that the servicers are ultimately bound contractually to the bondholders.

So Maguire will soon have a lot of company. In a study for The Wall Street Journal, Realpoint found that 281 CMBS loans valued at $6.3 billion weren't able to refinance when they matured in the past three month, even though 173 such loans worth $5.1 billion were throwing off more than enough cash to service their debt.

Mounting foreclosures in the CMBS sector would likely depress values even further as property is dumped on the market. And this would put pressure on banks to write down loans. "What's going on in the CMBS world is a precursor for what might be seen in banks' books," predicts Frank Innaurato, managing director at Realpoint.

The commercial-real-estate market could yet be salvaged by an improving economy and bailout programs coming out of Washington. In addition, capital markets are starting to ease for publicly traded real-estate investment trusts. Since March, more than two dozen REITs have managed to raise more than $13 billion by selling shares.

Still, most of the $6.7 trillion in commercial real estate is privately owned. Also, it is unlikely commercial real estate will benefit much from an early stage of an economic recovery. What landlords need is occupancy and rents to rise, and that means employers have to start hiring and consumers need to shop more. So far, there are few signs this is happening.

Write to Lingling Wei at lingling.wei@dowjones.com and Peter Grant at peter.grant@wsj.com

Printed in The Wall Street Journal, page A2

Copyright 2009 Dow Jones & Company, Inc. All Rights Reserved

This copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit

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Posted via web from Jeremy R Erickson

Clunker Winners, out of the top 10 cars sold 8 of them are foreign! GM isn't on the list.

{ Posted on 5:06 PM by JR Erickson }

Clunker Winners

The top 10 models purchased under the government's 'cash for clunkers' rebate program:

1. Toyota Corolla

2. Honda Civic

3. Toyota Camry

4. Ford Focus FWD

5. Hyundai Elantra

6. Nissan Versa

7. Toyota Prius

8. Honda Accord

9. Honda Fit

10. Ford Escape FWD


Now the Government is trying to ban Foreign car purchases for government fleets.

Posted via email from Jeremy R Erickson

Improving Home Sales Belie Market Reality - WSJ.com

{ Posted on 10:37 PM by JR Erickson }

The housing market has come out of its tailspin, lifted by falling home prices, low mortgage rates and an $8,000 federal tax credit offered to some first-time home buyers. But stability, to say nothing of strength, still looks a long way off.

[existing home sales]

The National Association of Realtors is expected to report Friday morning that sales of existing homes rose for the fourth consecutive month in July, up 2.2% from June, on a seasonally adjusted basis. Problem is, a lot of the action is in distressed properties.

A survey conducted in June of 1,500 real-estate agents sponsored by the trade publication Inside Mortgage Finance found that 36% of all sales involve "nondistressed" properties.

July Home Sales Reach Two Year High

1:44

In a boost for the economy, sales of homes in July reached levels not seen since 2007. Dow Jones Newswires' Meena Thiruvengadam reports that trend should continue, thanks to falling prices and ongoing sales of foreclosed properties.

Of the nondistressed sales, only 31% were what the survey described as "unforced or optional." The rest were sales by homeowners in some kind of financial or personal crisis.

"Think about that for a minute," John Mauldin of Millennium Wave Advisors wrote this week. "Two-thirds of home sales are either foreclosures or banks taking a loss on the mortgage." And only a third of the remaining one-third -- roughly 10% of overall sales -- comes from "something we could call a normal selling process."

That first-timer credit has sparked sales, and the NAR expects a flurry of sales in the next few months, as the credit expires Nov. 30. At the low end, it is a "feeding frenzy," says Jim Klinge of Klinge Realty in San Diego.

Meanwhile, the Mortgage Bankers Association said Thursday that the number of homeowners behind on their mortgage payments hit a new high during the second quarter, with more than one in eight homeowners delinquent or in the foreclosure process.

So it is likely that sales will stay mired on the low end of the housing barbell.

Last July, sales of existing homes hit a five-month high, leading the NAR to openly hope a sustained upturn was coming.

It wasn't.

Today, home sales are roughly where they were last year. Given the state of the consumer and the rise in foreclosures, they may be at this point again next year.

Don't get to excited about the "Home Market Recovery" read this article for cup of depression for the day. Little bit of a downer, but good to consider some points.

Posted via web from Jeremy R Erickson

NOD's were crazy high this week! NOS's were up too! check the charts out here.

{ Posted on 10:07 PM by JR Erickson }
Wow, can you believe the NOD's? (Notice of defaults) for the week.  Its almost like they saved them up just to dump them on the pile this week.  Trying to clear their desks before school starts.  Not sure what that means, I guess we just continue to watch them and see where it takes us.  It seemed like we were doing so good, then all the sudden someone just dumped a ton a bricks on the cart.  Lets hope that its just an anomaly and not a trend.  If you have an comments or questions, don't hesitate to leave a comment or send me a message directly.   Have a good week!  to see the entire spreadsheet, and the current Homeowners under default click here to navigate through the info.

See and download the full gallery on posterous

Posted via email from Jeremy R Erickson

Existing home sales in Ada County sorted by area. Average price, average cumulative days on market, and Price per Sq Ft

{ Posted on 9:48 AM by JR Erickson }

Foreclosure related transactions in Ada County amount to 36% in resale numbers compared to 31% Nationally

{ Posted on 9:02 AM by JR Erickson }

Nationally the distressed sales are averaging around 31% of all transactions.  But if you focus in on some of the Florida, California, and Las Vegas markets you will see a lot higher numbers.  I put together a Spreadsheet of all the resale numbers in Ada County for July.  You can check it out here at this link.  I have also attached the file in excel format.  

AdaCountyMarketReport.com
Jeremy Erickson
(208) 991-3606 direct
(208) 379-5717 fax

Posted via email from Jeremy R Erickson

Notice of Defaults and Notice of Sale's continue their decline in Ada County! Check out the trends!

{ Posted on 11:11 PM by JR Erickson }
I am loving what I am seeing in the NOD's and NOS's!, the defaults have been on a 5 week drop, we have come from the 140's down to the 40's (Notice of defaults per week)  The NOS's for the week have dropped too, they were pretty high and this week the ended up at their lowest point over the last 3 weeks.  Stay tuned for more market analysis, and information on Ada County Real Estate Market.

See and download the full gallery on posterous

Posted via email from Jeremy R Erickson

Distressed Property Sales Rising Globally

{ Posted on 12:19 AM by JR Erickson }

Sent to you via Google Reader

Distressed Property Sales Rising Globally

The number of countries experiencing an increase in distressed sales of commercial property rose between April and June this year, and the trend looks set to continue into 2010.

Sent from my iBrain

Posted via email from Jeremy R Erickson

Are you using the Trulia & Zillow apps?

{ Posted on 11:37 AM by JR Erickson }
If you have an iPone, and you own real estate or plan on purchasing in the future, you must get these apps!
Trulia and Zillow
They are free in the app store. They are location based services so they require gps capability. Check them out, they are very helpful in your real estate searches and basic value searches.

Posted via email from Jeremy R Erickson

Notice of default and Notice of Sale Lists are updated and ready to view as of 8-12-2009.

{ Posted on 1:07 AM by JR Erickson }

Hi everybody I just got the reports on the NOS and NOD Lists for the week.  I am excited to report  that the Notice of Defaults have been on a decline over the past 4 weeks,  I thought that was pretty exciting!  Not sure if it will continue, but at least we can see some positive progress.  On the other hand, the Notice of sales are on the rise, but I think the system is working out a glut of defaults that we have had over the past 3-9 months.  I have created a Distressed Property Reports page linked from the website.  Just click here to see the reports,  I am still working on it, so if you are having some trouble accessing some of the data just let me know.  When you look at the spread sheets, Make sure you scroll down to see the "chart" tabs on the spreadsheets.  Thanks,  have a great week!

PS  if you browser blocks the embedded link above, just cut and paste the link below into your browser:

Jeremy E
AdaCountyMarketReport.com

Posted via email from Jeremy R Erickson

Why do banks take so long to approve a short sale?

{ Posted on 6:36 PM by JR Erickson }

 

Why do banks take so long to approve a short sale?

 

This question comes up over and over again from Realtors, homeowners and home buyers everywhere I go.

 

A one sentence answer doesn’t exist for this question. If you truly want to know the

answer to the question, “why” continue reading. This means you will have to take a step back from your particular emotional situation enough to really listen to what’s being said because everyone wants their deal approved NOW.

 

Banks are under no obligation to approve your short sale. I know what you’re thinking, reader. You’re thinking, “Well if the G.D. bank would just approve my short sale faster, they wouldn’t be losing so much money!”

 

Let’s start at the beginning. A homeowner is said to be in a short sale situation when he or she owes more than what the home is currently worth, is in default and must sell. Traditionally, homeowners agreed to pay back the difference between what was owed and the sales price. The short sale seller signed a new, unsecured note at closing and promised to pay back the difference in regular monthly installments. The only case where the debt was “forgiven” was for true financial hardship cases where there was absolutely no way the homeowner could ever repay the difference.

 

An example would be the untimely death of one of the breadwinners. But that was then.

In today’s politically charged, loan modifications for all, let’s-dump-everything-into-

FHA environment, homeowners in a short sale situation today are receiving debt forgiveness and even temporary tax exemptions on top of that. Don’t worry, the rest of us tax payers will pick that up for you.

 

The first step in figuring out why your short sale is taking so long to be approved is to inquire about whether the homeowner is asking the bank to forgive the difference or if the homeowner is gainfully employed and able to pay back the difference. This all must be proven and documented to the lender’s satisfaction. If the homeowner is asking for debt forgiveness, the short sale will take longer to approve if the bank does not have all the required documentation.

 

Thought question: Why would any lender approve a short sale, especially one that requires debt forgiveness, unless there is proof that foreclosure is imminent? Answer: They won’t.  Lenders have no motivation to approve a short sale if the homeowner has not yet defaulted on their loan; the bank has little motivation to approve the short sale. Why not wait for a better offer to come along? (Note, homeowners reading this article should always consult with an attorney if you are selling short, in default, or will be in default on your mortgage loan(s).)

 

All loan servicing departments have processes in place for dealing with short sale approvals. They may not have fancy computer systems so that everything is automated but maybe that’s a good thing. Look where automated underwriting got us.

 

Next step: Homeowners must prove that they do not have the money to make up the shortfall. This means sending in copies of all bank statements, tax returns, w-2s, and other supporting documents to verify that the homeowners is financially insolvent.  Short sales are reserved for people with NO MONEY.

 

Gentle reminder: The new sale must be an arms-length transaction. Another common problem that lenders must watch for is when the real estate agent on the transaction happens to be the “assigned” buyer on the purchase and sales agreement. The lender is not going to be thrilled in paying a real estate commission on that kind of transaction. Further, there are plenty of foreclosure rescue scams happening nationwide. Lenders scrutinize short sale offers to look for signs of fraud.

 

Is it the job of the Loss Mitigation Department to care about clearing your local RE market? No. Is it their job to care about keeping your buyer wiggling on the hook long enough to get papers signed? No. Is a short sale supposed to be a painless alternative to foreclosure for anyone involved?

No. There are no painless alternatives. There shouldn’t be. There cannot be.

 

Next, everyone who is patiently waiting for the bank to approve the short sale must now realize that once the bank says “okay” to the short sale, there very may be a long list of investors who own pieces of this mortgage loan. Each and every investor will have to give their approval for the short sale. We enjoyed many years of growth in the real estate industry and the overall economy thanks to the invention of Residential Mortgage Backed Securities. RMBS made millions of dollars for many people. The downside to securitizing mortgage loans and then selling off slices of each mortgage to different investors is that when it comes time to tell the investor “you’re going to have

to take a haircut” that investor gets to have a say in the matter.

 

Calling loan servicing and yelling at them over the phone will get you nowhere.

I would like to be first to predict that the next meltdown will be loan servicing. But perhaps my prediction is so obvious as to not be much of a prediction at all. How much longer can they sustain this level of stress and pressure, with their current staffing levels, while the banks are facing enormous losses? Of course when that meltdown happens, I predict our government will step in and mandate harsher regulations on servicers, which will be passed on to the consumer in the form of higher interest rates.


Loan servicing use to offer what it said: “service.” It was treated as a cost center on a bank’s balance sheet. Over the past 15 years, servicing became a “profit center” and the highest expense, namely labor, was cut to achieve profit goals. This is one more lesson in under-pricing. The cost of “good” loan servicing in which phones are answered and files processed smoothly, would have cost us all, way, way, way more on the retail end, than what we paid. Let’s say we could create instant loss mitigation nirvana today. All phones are answered on the first ring, all short sales are approved with no questions asked, no documentation required, no proof of hardship necessary, no proof of financial insolvency needed, and all Realtors receive their full 6% commission.  The consequences of not performing due diligence at the loss mitigation stage are disaster for all of us. Compare this to the current nirvana we just left behind: A world where anyone could get a mortgage loan with no verification of ability to repay, with massive fraud still being uncovered. We need to do it right this time, and it takes TIME to do proper short sale loss mitigation.

 



Posted via email from Jeremy R Erickson

SplusE.com tracks Ada County's Recorded Notice of Defaults and Notice of Sales. See the Trends!

{ Posted on 11:58 PM by JR Erickson }

Go to SplusE.com for more information and details.

thanks

Jeremy E


Tracking Ada County's  NTS's & NDF's
Notice of Sale: Also known as NTS's  Recorded filing from lenders stating the sale of property that has been in default.  This recoding happens after the Notice of default filing.

Notice of Default: Also known as NDF's. Recorded filing from lenders stating that the borrower is in default of loan terms, and the foreclosure process is starting.

Links to Spreadsheets and Charts:

  • Notice of Default tracking chart
  • Notice of Default spreadsheet
  • Posted via email from Jeremy R Erickson

    Ada County Market Report video for August 2009 episode 4 is finished, check it out here!

    { Posted on 1:07 AM by JR Erickson }

    Enjoy the video, and it you want to subscribe to the Monthly report in Spread sheet format with all the data that I pull from Multiple listing service, just click on this link to subscribe.  If you have any questions about the movie, just leave a comment, or email me at jeremy@adacountymarketreport.com
    Check out the photos below


    Jeremy e

    AdaCounyMarketReport.com

    See and download the full gallery on posterous

    Posted via email from Jeremy R Erickson

    Ada County New Construction Market Report is Finished, Video is still in production. Sales are down from last 2 months. Get the Report!

    { Posted on 5:28 PM by JR Erickson }

    Sales are down, but historicaly they always peak in June, and things begin to tapper off in July due to the vacations, and other factors.  I have pulled the market data for Ada County New Construction for July 2009.  The overall total sales are down from last month  (137 down to 125 for this month), and the month previous.  The inventory is down to 844, from 864 (30 days ago).  Take a look at the report, and let me know what you think.  When you are viewing the online spreadsheet, remember there are tabs (Sheets) on the bottom, you will be able to toggle through the different sheets.  I have sorted the sales in 3-4 different ways.  I also created some Top Community, Top Builder, and Top Area sheets too.  I will have the Video finished pretty soon, and as soon as I have it, I will send it out to everyone (if you are subscribed if not click here).  Just click on the link below to see the report online.  I will also attach the file to this post, you will be able to download it from Scribd in the iPaper format (above).  Let me know if you have any comments, or questions.  Here is that link!   http://www.jrerickson.com/ACMR/Market_Report_Subscription.html

    Thanks

    Jeremy E

    Posted via email from Jeremy R Erickson