Market Bottom?

The amount of “multiple and best” scenarios is picking up at a very fast pace on the REO side.

Its starting to feel like 2005 again. If I (um well I mean my coaching students/partners) aren’t out to look at a well priced REO within 30 minutes of it being listed, then its too late….

picture 11 Market Bottom? All the same games too, like, missing keys in the lockbox, missing lockbox, sign removed out of the yard.

I was also talking to Ron and Pete, 2 REO realtors and they said that their listings are down 60% since December. 60%?!? How the crap is that possible in Michigan? Where Detroit has a 22.5% unemployment rate? Its the “moratorium” that the banks started doing last fall. The banks are just letting their defaulted mortgages just sit there!

The most extreme example I saw of multiple and best scenario was a deal Kody and I lost out on. Listed for $240k, it sold for $351k after 15 “highest and best” cash offers were submitted over the weekend. I didn’t think anybody else had that kind of cash in Michigan. That dude is going on my buyers list.

I also thought this was happening in the Michigan market only. Then I read Steph’s blog in Florida and am wondering if this is happening more and more around the country.

Either way, it seems like a temporary bottom. My neighbors have made 2 payments in 16 months and the bank hasn’t put out the notice of default yet. Gotta wonder how many more scenarios like that are going on around the country.

picture 12 Market Bottom?

Popularity: 72% [?]

12 Comment(s)

It’s insane here right now. Demand is definitely up, and supply is way, way down.

I went out to look at a property that just hit the market this morning, and there were 10 people already there. I’m not even going to bother offering on it, because I know it will get bid up way over what I’m willing to pay.

I track the lis pendens being filed in my county, and they have been holding steady @ around 2k/month, so I’m not sure what the heck is going on.

My theory is that the banks are realizing that it is cheaper for them to dump their properties as short sales as opposed to foreclosing. The number of short sales on the mls has skyrocketed, while the number of REOs has decreased dramatically.

If it stays like this much longer, I’m going to be out of business.

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tampasteph | Apr 4, 2009 | Reply

What’s really crazy is that just 2-3 months ago, you had the opposite problem and buyers just didn’t want inventory. I have another theory too. All the investors getting in now are getting in at the right time. Most of them are not the guys who got burned. So for them, buying a house at say $50k when it was listed for $40k but sold for $200k 2 years ago…they are happy to pay more.

To make lemons out of lemonade, at least you got a ton of buyers now! When you do get a great deal, you’ll be able to increase your margins much higher I would think….Maybe you are shifting to less volume and higher margins…meaning higher quality of life. By the way, big congrats on your blog’s popularity. Its great to see.

Have you been trying to double dip more and develop REO birddogs? Pocket listings might come in really helpful down the road.

Good luck!

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bobnorton | Apr 5, 2009 | Reply

2000 Lis Pendens a month? That number is staggering to me as I only see about 100 a month in my county here in NJ.

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Scott | Apr 6, 2009 | Reply

Bob-

Yeah, it’s great to have a bunch of buyers, but when you can’t get a deal to save your life it’s very frustrating. I’ve made over 100 offers in the last few weeks, and haven’t gotten one accepted. Last year my ratio was around 1 in 20.

I have started to give away both sides of the commission, but so is every other wholesaler, and many of them are willing to pay more than me even though they will only be able to make a grand or two on the deal. Sigh.

Scott- It’s been a steady 2000 month for awhile now, which is why I’m really baffled as to what the heck is happening to all of these houses. I’m stumped.

Steph

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tampasteph | Apr 6, 2009 | Reply

What about the retail end? How is the market moving at that end? Typically when I see what you are saying, it usually equates to the back end number (retail) being more steady.

Your situation sounds frustrating….time to move to Cape Corral I love that place!