Foreclosures Still Outnumber Home Sales

Submitted by Rich Toscano on February 16, 2009 - 4:15pm

Housing sales volume has been improving of late, as I noted last week. But now that foreclosure activity has bounced back after a temporary lull that resulted from a change to state law, the number of existing homes going into foreclosure each month is once again higher than the number being sold. That was the case in December, anyway, when DataQuick recorded 3,004 existing house and condo sales compared to the 3,315 mortgage default notices recorded by the county. Default notices dropped to 3,055 in January, but while the January DataQuick numbers aren't out yet, other data indicates that sales will also be lower than they were in December.

Here's an update of a chart we've looked at from time to time as the housing bust has progressed. The orange line on the graph divides the number of single family home sales in a given month by the number of mortgage defaults that same month. The idea is to get a rough idea of how demand stacks up against potential "must-sell" supply. (Condos are excluded from the chart simply because I could only get my hands on historical sales data for single family homes, so the trend changes in this ratio are more important than the absolute number.)

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Submitted by Fearful on February 17, 2009 - 9:29am.

Interesting chart - it invites correlating the sales per default with the rising prices.

Submitted by peterb on February 18, 2009 - 11:10am.

I still think it would be very illuminating to see a chart that breaks down the NOD's by loan amount. This data must exist somewhere. I've asked Mr Mortgage, but he does not answer me. Perhaps this is very valuable info and only the illuminati are allowed access? But all the Piggies on this site that are chomping at the bit to see higher priced homes start to come down would probably like to see this as well? I know I would.

Submitted by NotCranky on February 18, 2009 - 12:06pm.

Peter,Months of inventory by price give a similar clue. It goes up as price goes up.Of course, there are variables as to how problematic that is or isn't but it isn't an indicator of strength at this time. Unfortunately I don't know where those charts are.

Here is an article in which a realtor speaks to some the current downside issues on higher priced homes. Most of this get bandied around here, but he has his view nicely organized too. Sorry no mention of the macroeconomic situation.

http://realtytimes.com/rtmcrcond/Califor...

Submitted by peterb on February 18, 2009 - 12:55pm.

Yes, the higher end is stalling, but knowing how much of them are under stress to liguidate is the real question. Although I have to believe that most would not even attempt to sell in this market unless they were in a "forced" position.

But NOD's are of extreme relevance since most now turn into REO's. And thus, the ultimate forced position in the market. Seeing NODs by loan amount will give us a pretty good idea of what's coming to the market in 6 to 9 months. I think. If Mr Drysdale is correct about his inside information, a tsunami is coming.

Submitted by NotCranky on February 18, 2009 - 1:39pm.

I see what you are saying Peter. That was a very interesting post he made.

Submitted by Rich Toscano on February 18, 2009 - 1:49pm.

peterb wrote:
I still think it would be very illuminating to see a chart that breaks down the NOD's by loan amount. This data must exist somewhere. I've asked Mr Mortgage, but he does not answer me. Perhaps this is very valuable info and only the illuminati are allowed access? But all the Piggies on this site that are chomping at the bit to see higher priced homes start to come down would probably like to see this as well? I know I would.

If you can find it i'll gladly chart it...

rich

Submitted by peterb on February 18, 2009 - 3:56pm.

I'm trying to think where this data would be kept. Frannue and Freddie are probably not going to have it as the $ amounts are above their limits. So perhaps these are kept as portfolio loans and parts of other holdings? But odds are good they're serviced by a hand full of service companies that know the data. How available is this data? I think one may need to be a bit of an insider to get it. Anyone out there know this?

Submitted by massey on February 19, 2009 - 7:50pm.

Isn't this exactly the sort of thing you would find on RealtyTrac?

Submitted by massey on February 20, 2009 - 4:46pm.

This related news article...

http://www.bloomberg.com/apps/news?pid=2...

leads to...

http://www.lpsvcs.com/IndustryExpertise/...

...who probably have the data you're after.

Submitted by mikese on June 14, 2009 - 7:12pm.

spam

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