<!--StartFragment-->Everything you ever wanted to know about distressed properties but were afraid to ask.
Below statistics were complied using MLS data. I did not scrub the data or check every single listing, so accuracy is implied but not guaranteed.
Ada County
Currently there are 5209 total Active listings (4156 Single Family)
Currently there are 1087 Active new construction listings (790 single family)
Currently 659 Active Short Sale Listings (Average price of $260,424 – Average DOM = 103)
56 are new construction
20 are less than 1 year old
290 are 1-5 year
Currently 104 Pending Short Sales (38 of the pending short sales were added this month)
7 are new construction
4 are less than 1 year old
48 are 1-5 year
Since Jan 1, 2008 there have been
5384 Sales (4753 single family)
1338 Sales were New Construction (1213 Single Family)
210 were short sales (39 New Construction, 30 single family)
Foreclosures for Ada County current list 11-25-08 (source Realty-Trac)
1169 Properties in pre-foreclosure (on 11/6/08 there were 1,200)
803 Scheduled Auctions (on 11/6/08 there were 379)
534 Bank-Owned Properties (on 11/6/08 there were 526)
Boise Only
521 Properties in pre-foreclosure (on 11/6/08 there were 544)
331 scheduled auctions (on 11/6/08 there were 131)
213 Bank Owned properties (on 11/6/08 there were 205)
My thoughts:
Short Sales represent 12% of the current active listings
Short Sales represent 3.9% of the sales so far this year
Bank Owned represent 10.25% of the active market (this isn’t exactly accurate because not all bank owned properties are listed but I counted them all for this purpose)
New Construction Listings represent 20.8% of the active market
New construction sales represent 24.8% of the sales so far
In all the numbers above I see a slight balance starting to form. Although new construction sales pace is WAY off historical marks, the listings to sales ratio over all is looking healthier. Short sales are not a huge number in these stats, although I assume the numbers will increase over the coming months. There are still at least 6 months ahead of us before Foreclosures peak, but that could be tempered over the coming months as I assume short sales will be more of a dominate factor over the next 90 days of sales. People who do not “need” to sell will remove their properties from the market which will leave the “have to sells” as a majority of active listings. This may also slightly bode well for new construction as there will be less competition.
The above statistics are complied from MLS data and Realty-Trac. Although the data may not be exactly accurate, it shows a decent picture. Not all pre-foreclosures will end up being Bank Owned – some will short-sell before they are foreclosed upon. The Bank Owned market is hard to track as it is not a searchable field in the MLS. Not all bank owned properties get listed so those numbers don’t get into the statistics either – but I would estimate a majority do end up on MLS.
I see the next 3 months as our best opportunity for “purging” of the market. Savvy buyers and investors are out right now. As long as we do not experience a large lay-off event from a major employer, the next 90 days of sales will probably be more heavily oriented to distressed properties. Our spring market should then be more stabilized as the ratio of distressed properties becomes a smaller percentage of the overall market – as long as distressed properties as a whole begin to trend downward.
Wild-cards to look for:
Our government has become drunk on spending. They are now feeling pressure to do something for “main street”. I predict that there will be some sort of Foreclosure relief in the form of the Government taking equity partnership in homes and resetting loans or they may just suspend foreclosures for a time period. We may also see some government sponsored incentives for purchasers – either an interest rate buy-down program or a tax credit (the current tax credit loan did nothing and the government knows this – it will be more like an actual rebate, not a loan). There also looks to be some Massive stimulus package from the Obama camp. Probably an infrastructure rebuilding campaign and possibly some sort of spending stimulus to jump-start the economy.
Whatever they do, the effect on housing will be positive for the short term. People are afraid to commit to large scale purchases right now. The governments actions will probably be massive enough to jump-start consumer sentiment enough that people will begin to buy again. Any incentive through rates or credits will probably be a short-term opportunity which will jump-start buying and reduce inventory levels further. We may also see a supply imbalance by summer 2009 as New Construction starts nation-wide (as well as locally) are considerably down. The US adds approximately 3 Million people per year and we need 1 Million starts per year to keep up with demand. Starts nationally are on track to be under 800K (20% off) so at some point supply vs. demand functions will kick in to get things rolling in a positive direction again.
The news and reporting are probably the biggest wild cards to watch. Once a general “good feeling’ washes over the media we will see that emerge in the general populous as well. I would predict that as the Obama presidency begins, the news will become more upbeat. The “honey-moon” period for this new president will probably be quite long and very positive. I assume the media will be attempting to look on the bright side of things for some time to come – this in turn will be great for our industry. Baring any large-scale calamities, I predict an overall good-feeling will emerge in spring or summer 2009 with appreciable stability coming to the housing sector by the end of 2009. Gains in housing will probably not begin to happen in our area until 2010 unless we get a large-scale employer to relocate to the valley. I see job stability coming spring 2009 as the economy as a whole should be propped up enough by then (they seem to be printing enough money at this point to make that happen!).
Let me know if any of this isn’t clear or if there is more information you would like! <!--EndFragment-->
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