Supply and Demand is a Law, not a suggestion

Whether you believe in the law of gravity or not, it impacts you. Similarly, whether you believe in the law of supply and demand it too has an absolute impact.

Let's start by looking at the supply side of the US Housing Market . . .

In the 3rd quarter of 2009 almost a million homes in the US entered the foreclosure process, an increase of over 22% from the same period in 2008. For your convenience we have provided website addresses for you to cut and paste into your browser to review ...
http://www.realtytrac.com/news/press/newsletter-articles.asp?a=b&itemid=7740&accnt=225575


This represents 1 out of every 136 homes in the country entering the foreclosure process during 3Q09, in some areas the number was as low as 1 in 20 homes entering the process during just this 3 month period!

During the same period, 3Q09, mortgage delinquencies across the country hit a new high ...
http://finance.yahoo.com/news/Mortgage-delinquencies-hit-apf-3335040402.html?x=0&sec=topStories&pos=1&asset=&ccode

having increased 58% from the same period in 2008! With unemployment continuing to rise, and maximum mortgage resets still not due for about another 2 years, which direction will this go?

Combined, this brings the total to almost 4 million homeowners who are either in foreclosure or at least 3 months behind ...
http://finance.yahoo.com/news/Foreclosures-hitting-more-apf-24626172.html?x=0&sec=topStories&pos=2&asset=&ccode
at the end of 3Q09.

Barry Sternlicht, CEO of Starwood Capital Group (who just cut a super sweet deal w/ the govt on distressed assets) stated recently that the total number of "Shadow inventory" could be as high as 12-15 million. While no one knows for certain exactly how many properties banks, financial institutions and investors are sitting on, we do know, for certain, that there are literally millions of people who have not made mortgage payments for months and in some cases for up to 3+ years without being foreclosed upon.


Ok, so what about demand?
According to The National Association of Realtors (notorious for misleading the public) the number of sales in 2010 should be approximately 5.3 million. This represents demand.

You do the math

With about 4 million homes 90+ days delinquent or currently in the foreclosure process, plus who knows how much shadow inventory, plus the rate of foreclosure filings and new delinquencies growing rapidly - what will happen to supply? for how long?

Even if we get to NAR's projected 5.3 million sales next year how will that level of demand even make a dent in the supply?

Bottom line:
US Housing Markets are at least another 5 years from a bottom and will return to price levels similar to those seen in 1996-1998.

Want to understand more about where we are and how we got here? visit www.smashedfeet.com

Now that you have been shaken and awakened, what are you going to do to improve your situation?

If you are considering disposing of real estate holdings I strongly encourage you to review www.6weeklistingstrategy.com and find an agent who understands how to use it.

Prices continue falling in 123 out of 153 cities

Read the attached information put out by NAR a few days ago (click on article title above or cut and paste from below) Then please tell me how, with the huge (and ever growing) shadow inventory we could possibly see prices rise next year???

go back and reread: http://smashedfeet.blogspot.com/2009/11/why-isnt-there-class-action-lawsuit.html and let me know how the inconsistencies presented by NAR could ever be accepted by any sane, logical human being.




http://finance.yahoo.com/news/Median-home-prices-fell-apf-2299106760.html?x=0&sec=topStories&pos=2&asset=&ccode=

And the punch line is California . . .

I just came across a study showing how well, or poorly, each of the 50 states is AS COMPARED TO CALIFORNIA, the underlying assumption is things are so bad in CA that by comparing your state to CA you can gauge how bad things are in your state. Incredible. You can click on the title above, or cut and paste: http://downloads.pewcenteronthestates.org/Beyond_California_Appendix.pdf

either way enjoy

Why isn't there a class action lawsuit against NAR

Click on the title above or cut and paste below.
Read the absolute total bullshit now being spouted by NAR
there is no way in hell prices are going to rise in the next year without an insane level of inflation, which would then lead to interest rates so high that no one will be able to purchase anyhow.

Why is it that NAR is allowed to consistently, blatantly lie to the public???

Someone please show me a single statement or projection that they have made over the past few years that was even remotely close to accurate, please.

This sickens me. Is it any wonder that 70% or more of the people who have been foreclosed on never even list their homes for sale? If that doesn't scream that the public doesn't believe in or trust Realtors, most of them bought their properties from one and have such little faith in the industry that they just loose their homes and don't even bother dealing with Realtors. Why? Because of things like the bullshit in the attached article!

It's getting cold here in the midwest, time to hibernate is around the corner, maybe when I wake up in the spring this will all have just been a bad dream.



http://finance.yahoo.com/news/Realtors-home-prices-to-rise-apf-935437126.html?x=0&sec=topStories&pos=2&asset=&ccode=

Foreclosure pace heats up . . .

According to the article below (or click on title to this article from above) 1 out of every 136 homes in the US received a foreclosure notice during 3Q2009 , at that pace 1 out of every 39 homes in the US will receive one in the next year (pace is actually becoming more rapid and isn't likely to peak for another 2+ years!)

As scary as that sounds, it could be even uglier . . . 1 out of every 20 homes in Las Vegas received a notice in the past 3 months. Think about that, that means 1 out of 5 will receive a foreclosure notice within the next year! As we all know, there have already been tons of properties foreclosed on in that market, and it’s getting worse. Nevada, South FL, AZ and Southern CA are the worst in the country. The also tend to be (particularly S FL) the nation’s crystal ball. What happens there foretells what will be coming soon to an area near you.


http://www.realtytrac.com/news/press/newsletter-articles.asp?a=b&itemid=7740&accnt=225575