Here's a perfect example of the so called "phantom inventory"
7413 Pebblewood Ct in Riverside. This 3000 s/f home was purchased at the peak for $665k. The lender got it back in August of 2008. They tried to get $417k at the trustee sale but there were no takers at that price so they bought it. The bank has owned this home since Aug 6th, 2008. It just hit the market at the beginning of June! The bank has had this house for 10 months, and are just now getting it on the market.
This makes no sense to me. They certainly would have gotten more for this home a year ago than they will get for it now. Plus the holding costs and misc other costs they have accrued will add to the total loss. It's just stupid for these lenders to hold back the homes. Especially now, the inventory is low and there are some buyers out there.
There's also a pretty good article in the Washington Post on the problem of Phantom Inventory.
Or this story about 15,000 foreclosures that got "lost"??huh.....
8 comments:
There is an explanation why the house on Pebblewood has taken so long to come to market. Like many others that seem to be "phantom inventory" it was actually tied up in court because the bank had to file an unlawful detainer (eviction)action in order to remove the foreclosed owner and get possession. Heres the case RIU008423 - U.S. BANK VS BERARIU. If the former owner knows how to use (abuse) the court system these actions can drag on for months. I know of one in Murrieta that has gone on for 16 months. The bank would like nothing more than to get the house back and sell it as they have an interested buyer (me)
Is there a free place to look up court cases like that one? There's a place I like that has been up for trustee sale (and delayed over and over) for almost two years now.
I keep hearing commercials on 590 KTIE (in San Bernardino) for some lawyer that will help you stay in your home "rent free for 6-12 months" while he gets your mortgage modified. When did doing unethical and/or immoral things (and probably flat out illegal) become acceptable behavior in our society?
http://www.zillow.com/homedetails/12329-Tahiti-St-Victorville-CA-92392/64568724_zpid/
this house has been empty since early Nov 2008. I know the owners didn't contest anything and the schedule to foreclose was pushed back a few times. I don't know what you call this, but it was long before November that these owners stopped being current on their house. I know and have seen many other houses that have been empty for around if not more than a year, but have not been put on the market.
I am pretty sure there is phantom inventory in inland empire but it has been trickling into the MLS. right now I think the banks are more focused on avoiding foreclosures all together. There are people sitting in their houses not paying anything. They are not even getting a notice of default. I personally talked to at least 4 different persons who have been not paying for more than a year. Banks aren't doing anything. When they do send out notices, they keep postponing the auction. According to foreclosureradar.com california report, they foreclosed on 16% scheduled sales and postponed 81% while canceling 3% sales. Each month the number of scheduled sales keeps going up. there are 340 sales scheduled in july for area code 92880 up from 230 in may 2009. This is disturbing trend. I don't understand how this thing is going to play out! They are holding back the wave and its becoming a tsunami. The govt. better have a plan to deal with this. If not, then even though prices are pretty close to historic norms, we are gonna see values plummet and the financial infrastructure freeze. Govt. is already stretched to the limit and they can't bailout anyone without jeopardizing economy on whole. I don't see inflation in the near term but deflation and even more job losses in manufacturing as credit dries up. Chinese have to realize one day that they are throwing money into a pit(even though they don't have a choice). All this uncertainty and unorthodox economics makes me not wanna buy a house. I think it is pretty scary when you look into the future. There is some significant phantom inventory in "better" areas as they are still holding up pretty good and sales are way too low for the banks flood the market.
I think the govt. is too arrogant and spend happy to let a tsunami happen. I mean in the middle of all this they are passing a huge, expensive energy reduction bill as we speak? For heaven sakes, we're saving gas from all the unemployed, from all the vacations not being taken. Is this really urgent right now in the midst of all these crises? The Govt. would rather see people milking their free, defaulted home and get prized loan mods at the future taxpayers expense. Everyone get in the moratorium line and get your handout. You don't need no stinking job, you don't need to pay your mortgage. And we will all praise the president, we'll not all of us. You and I are already in future debt of over $60K per household (and counting!) in owed taxes and no one is complaining too loud are they... so why should they stop there if that will solve the problem AND create a very powerful and huge govt? Just spread moratoriums for another 5 years and trickle things out...who's gonna oppose that? Who has the power to? What could stop this from happening? The banks have no say, we have no say. In the future we'll have such big taxes, we'll wish we had it as good as the Europeans. It's the Obama dream come true. You and I are owned now, he's going to milk this recession to get the social structure he wants. And everyone will love him for a little while until we realize the housing bubble just became our new income tax bubble. He just spread the debt around. Oh how sweet, the media just blew another kiss... God bless America... we're gonna really need it.
in san jacinto it seems as if the banks are "in bed". on realtytrac it shows a ton of bank owned homes yet very few are on mls. since the tsunami has already hit San Jacinto, the banks are now trying to stabilize / increase the market by releasing very few homes. As a home sells, it appears as another gets added. It seems as if they are trying to manage the supply. On my street alone, there are 3 bank owned homes and the original owners are still living there? Sales are brisk because people are getting that feeling of "if I don't buy now". This smells rotten to me but I guess no one will listen
Pretty good article.
Boise real estate
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