Los Altos Real Estate Blog

head_left_image

Foreclosure predications from 2010 that never came to be

Foreclosures have been a hot topic for years. Back in 2010 most industry analysts and economists predicted that foreclosures would continue to rise for at least two years. possibly longer. In addition to those predictions they continued to make estimates based on factors with little or no substantiation. Fortunately for the country, those predictions were wrong.

The foreclosure predictions for 2012 complete lie! According to RealtyTrac, who is considered the leader in foreclosure data, actual home repositions as of September 2012 were 572,844, significantly below the 1,147,000 that occurred in 2011.  These gross gaps between predictions and reality were little more than fear mongering. A recent press release by the Mortgage Bankers Association discusses the ongoing trends from the last two years and how foreclosures actually declined significantly in many parts of the country.

One of the major factors impact foreclosures has been overall economy. When I originally addressed this topic back in 2010 I had actually made a prediction that if unemployment improved, foreclosures which slows significantly. This prediction was actually true and in fact can be referenced in the article from the Mortgage Bankers Association.  If you want to see the actual trends just look at the graphics RealtyTrac below.

 

What about shadow inventory?  Back in 2010 there were projections of millions of homes that would be owned by banks. These would come on and flood the market and keep prices low. Well, those predictions were a lie as well.  As it turns out, shadow inventory has been dramatically declining and is expected to continue to decline on track with actual home repossessions. You can read more details in this Wall Street Journal article.

 

Similar article: Foreclose warning - projections are a lie!

If you have enjoyed reading my blog, please subscribe HERE!

 Want to know more about me?  Just Google Me! 

 

 Bryan Robertson, CEO | T: 650.799.9951 | Email: bryan@catarra-re.com | Website: http://www.BryanRobertsonHomes.com |CA BRE# 01191946 | Catarra Real Estate, Inc  | 171 Main St #220 | Los Altos, CA 94022

 

 

View Bryan Robertson's profile on LinkedIn

 

//

 

Comment balloon 11 commentsBryan Robertson • December 27 2012 07:27AM

Comments

Bryan:  Excellent WSJ article and she's right - it is the pace at which the inventory is liquidated that will have any potential impact on prices as opposed to the total shadow inventory, a number that no one really knows.  Thank you very much.  Linda

Posted by Linda Piper (Planatek Financial, Inc.) almost 6 years ago

I hope that jobs are continued to be created so that we can have less foreclosures.

Posted by Sussie Sutton, UTR TEXAS Realtors - Rep for buyers and sellers. (UTR Texas Realtors) almost 6 years ago

Excellent and timely post!!! Based on what they hear and read on media, some are still waiting for those foreclosures to flood the market...total lie!! Let's hope job market continues to improve in 2013. Suggested!

Posted by Beth Atalay, Cam Realty of Clermont FL (Cam Realty and Property Management) almost 6 years ago

Oh, yeah!  The shadow inventory!  One thing I've started to notice is that the relatively few foreclosures in this area are not exactly bargain priced.  And it looks like there was some attempt at market prep.  

Posted by Patricia Kennedy, Home in the Capital (RLAH Real Estate) almost 6 years ago

Bryan, I found you re-blogged on Pat's blog. I'm going to send this link to my principal broker. Glad that the future is brighter. The trend analysts actually had some positive things to say for the next 7 years (heard them on NPR).

Posted by Gayle Rich-Boxman Fishhawk Lake Real Estate, "Your Local Expert!" 503-755-2905 (John L Scott Market Center) almost 6 years ago

I agree Bryon, some agents in my area still think we are going to get a huge flood of the shadow inventory, I disagree with them.

Posted by Kathy Stoltman, Ventura County Real Estate Consultant 805-746-1793 (Rockwood Realty) almost 6 years ago

The banks took such a bath with their foreclosures in 2008 through 2010 due to damage and vandalism, they made the conscious decision to encourage short sales instead.  People living in the homes decreases all that expense to the banks dramatically.  Short sales have increased geometrically ever since, with 2012 setting the record. 

A huge percentage of my home inspections are on short sale properties, and this trend will continue.

Unemployment has NOT improved.  Don't look at the statistic, it's smoke and mirrors.

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) almost 6 years ago

Bryan I am here because of Pat's re-blog. Interesting article, post and conversation. If I may add to these valid points came the Loan Modifications that has eliminated a great portion of the Foreclosure Market as well...I also heard from Bank Sources that they still have not released all their inventory so there was a large part what I call controlled release prior to the election...

Posted by Endre Barath, Jr., Realtor - Los Angeles Home Sales 310.486.1002 (Berkshire Hathaway HomeServices) almost 6 years ago
Great post Bryan. The shadow inventory, if any, will be absorbed (I believe) by a shadow inventory of buyers. What is most interesting to me is the fact that the states with the most foreclosures were the ones that allowed 100% cash out refinancing..
Posted by Gary Frimann, REALTOR and Broker (Eagle Ridge Realty / Signature Homes & Estates) almost 6 years ago

Bryan:  It goes to show that RealtyTrac's crystal ball is broken. Many other predictions by other 'real estate' moguls also have not come to fruition.  I'm actually glad they fell flat on their face!

I am still waiting for that dreaded shadow inventory (like a stalker in the night) to jump onto the market.

Posted by Lyn Sims, Schaumburg IL Real Estate (RE/MAX Suburban) almost 6 years ago

Hey Bryan, I included this post in Last Week's Favorites.  And Happy New Year to you and all of your favorite people.

Posted by Patricia Kennedy, Home in the Capital (RLAH Real Estate) almost 6 years ago

This blog does not allow anonymous comments