Tuesday, June 26, 2012

Shadow Boxing with Real Estate

Have you ever heard of the term "Shadow Boxing"?  Its what a boxer will do to train to become a quicker, faster and better opponent.  The boxer will stand in front of  a lighted background to see his shadow in front of him which he will use like an opponent to bob and weave through the shadows of strikes he makes himself.
What on earth could this have to do with real estate?  In real estate we have shadow markets to make our real estate market look faster, quicker and better.  Unfortunately the view of real estate is again being built on false foundations.  We have what you would call "Shadow Inventory"  It is inventory the banks have on their books as assets, but are "non performing assets" . They have these homes on their books as inventory, but are frozen out from selling them because of a government moratorium on bank owned properties now.
As of today there are over 7 million homes on that list.  1 million were released to sell across the nation a month ago or so, but NOT MANY have been release to listing agents across America to put up for sale.  Actually you are going to be looking for a while for bank owned properties if you want to buy one now.  They just aren't out there. Just on the west coast alone there are over 650,000 bank owned condominiums.  I have heard rumors we wont see them for up to 18 more months!    Now i am sure that after the election is over we will see some of the bank owned properties being released, but why not release what should be out there for sale right now?
     A new bulletin came across my desk stating that Short Sales have surpassed Bank Owned properties for the first time. Shadow Inventory, what a concept! There is inventory out there, it's just not on the market now.... The election year has had a bigger part to play in it than i had anticipated.  I had anticipated seeing at least some bank owned properties for sale over the year.  But not the extreme void of bank owned homes that we seem to have right now.  Going from one extreme to the other isn't what we need to recover.  We need a balanced market.  We need lenders to loosen  up their guidelines for home owner occupied buyers a LITTLE so that more people could qualify for a new home sooner than later.
     Forcing the market to look good is one thing, but flat out ruining it is another.  I believe that once the banks shadow inventory is released, it will again flood the housing market with too many bank owned listings. Without the needed amount of buyers out there making "owner occupied" offers the housing market is sure to flop again.  Sure there are the investor (wolves) gobbling up the auctioned up houses across America, and offering up anything under 200k, but that will not be what helps Americans recover financially.
     The fact of the matter is that without a future of homeowners buying houses because they feel confident in the housing market and know it will be a good investment, we will not have real recovery across America.
      I am not too sure about trusting the government to protect us against the next Sr. V.P. of "Sally's Bank" to take us for another real estate ride.  I am not sure that they haven't already tried since Chase just lost over 2 billion dollars in another botched investment scheme.  Its this kind of greed and recklessness that has the big guys ignoring all of the red flags out there saying DON'T DO THAT AGAIN,  IT HURT TOO MUCH THE FIRST TIME AROUND FOR TOO MANY AMERICANS!
     I say write to your congressman out there and tell them to get real with real estate.  Let recovery take place now by giving buyers the chance to buy with not so perfect credit, but with a 10 year commitment to live and take care of their new home.  Give the home BUYER a CASH incentive to REHAB the home instead of giving the seller ALL of the incentive money.  Release the bank owned homes in a steady stream throughout the year and replace every closed home with a new bank owned home on the market..  There could be so many more ideas for recovery and if you have one, i would love to hear your ideas of what you think the government should do better to help Americans across the board.  Take care, your helpful Short Sale expert in real estate,
Stacie MacDonald

1 comment:

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