bostonbubble.com Forum Index bostonbubble.com
Boston Bubble - Boston Real Estate Analysis
 
 FAQFAQ   SearchSearch   MemberlistMemberlist   UsergroupsUsergroups   RegisterRegister 
 ProfileProfile   Log in to check your private messagesLog in to check your private messages   Log inLog in 

 
Go to: Boston real estate bubble fact list with references
More Boston Bubble News...
DISCLAIMER: The information provided on this website and in the associated forums comes with ABSOLUTELY NO WARRANTY, expressed or implied. You assume all risk for your own use of the information provided as the accuracy of the information is in no way guaranteed. As always, cross check information that you would deem useful against multiple, reliable, independent resources. The opinions expressed belong to the individual authors and not necessarily to other parties.

Middlesex County inventory: foreclosures 4.15%, shadow 3.80%

 
Post new topic   Reply to topic    bostonbubble.com Forum Index -> News & Reference Suggestions
View previous topic :: View next topic  
Author Message
admin
Site Admin


Joined: 14 Jul 2005
Posts: 1823
Location: Greater Boston

PostPosted: Fri Mar 18, 2011 1:40 pm GMT    Post subject: Middlesex County inventory: foreclosures 4.15%, shadow 3.80% Reply with quote

The prospect of a large shadow inventory has long added an extra element of doubt to the potential frailty of real estate markets. The specter of lenders foreclosing on homes and then holding them off the market so as to constrain or delay the price declines of other homes is cause for concern for anybody with a stake in the market and anybody considering buying. In an effort to quantify the effect of shadow inventory and foreclosures in general on the Boston real estate market, Boston Bubble has partnered with RealtyStore to produce snapshots of the local market's composition based on the RealtyStore foreclosure listings data. The market composition for Massachusetts' Middlesex County on March 11, 2011 was:

  • Total homes for sale: 8,524 (*)
  • Foreclosures for sale: 354 ; 4.15% (*)
  • REO shadow inventory: 14 ; 3.80% of foreclosures
  • Market median asking: $379,900 (*)
  • Foreclosure median asking: $184,900

It should be noted that what should be classified as "shadow inventory" is quite subjective and RealtyStore uses a very conservative definition. Specifically, for the numbers above, shadow inventory is "REO property which is held free and clear by an institutional owner but is not actively listed for re-sale or marketed to third parties, including the public." There are various stages leading up to this state which might also be legitimately included in a definition of shadow inventory but which are excluded above. On the opposite end of the spectrum, some people would include those homes where a single mortgage payment has been missed, and others would even include homes of owners/borrowers who have not missed a payment and who plan to list their homes if the market improves.

That said, the numbers above do not paint a picture of a market dominated by foreclosures or shadow inventory. It will be interesting to follow the numbers over time. The currently low percentages may be a result of the fact that Massachusetts is already the slowest out of all 50 states for the time it takes to foreclose, at an average time of over a full year. This was true even before the Ibanez ruling, which will undoubtedly prolong the process even further, possibly even bringing it to a halt for an indefinite period of time. S&P recently estimated Boston's shadow inventory at 62 months, suggesting that the relatively low percentage of REO shadow inventory is in large part due to a backlogged pipeline.

This data is also available for:

(*) Note: non-foreclosure market data is obtained from The NAR and updates are not available as frequently as the RealtyStore data.

- admin
Back to top
View user's profile Send private message Send e-mail Visit poster's website
balor123



Joined: 08 Mar 2008
Posts: 1204

PostPosted: Fri Mar 18, 2011 1:50 pm GMT    Post subject: Reply with quote

Just wait until you can no longer get a $500k loan on a $100k income at 5% Smile
Back to top
View user's profile Send private message Send e-mail
admin
Site Admin


Joined: 14 Jul 2005
Posts: 1823
Location: Greater Boston

PostPosted: Fri Mar 18, 2011 2:21 pm GMT    Post subject: Reply with quote

balor123 wrote:
Just wait until you can no longer get a $500k loan on a $100k income at 5% Smile


Yeah, I completely agree. Interest rates are a single point of failure for the housing market. Inflation expectations suggest that rates will remain low for the foreseeable future (not at 5%, but still low), but it wouldn't take much of a deviation from expectations to greatly affect prices. There's also the possibility that the government will start to withdraw its subsidization of mortgages as is the current talk, although I'm certainly not holding my breath. In any case, I don't think I'm going to wait around for higher rates since I don't know if or when that deviation from expectations will occur, but I will probably use the price range that would result from higher rates to set an upper bound on my purchase price based on the loss that I'm willing to take.

- admin
Back to top
View user's profile Send private message Send e-mail Visit poster's website
Display posts from previous:   
Post new topic   Reply to topic    bostonbubble.com Forum Index -> News & Reference Suggestions All times are GMT
Page 1 of 1

 
Jump to:  
You can post new topics in this forum
You can reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum


Forum posts are owned by the original posters.
Forum boards are Copyright 2005 - present, bostonbubble.com.
Privacy policy in effect.
Powered by phpBB © 2001, 2005 phpBB Group