Jim the Realtor video 02.16.2010

One thing I like about Jim the Realtor is he puts out great videos of properties and gives his honest assessments on the price points.



He is in the San Diego county and lots of the houses in his videos are in great neighborhoods. Many of them are bank REOs.

More Bank REOs on the horizon

During the process of searching and bidding on bank REOs, I felt like the banks and real agents were not being truthful. They always tried to build this fake sense of demand. A property that has been listed for 6 months with no offers would all of a sudden get a lot of demand when I inquired about it.

I could understand if it was just one property, but it seemed like the housing market bottomed by the way everyone was talking to me. They all made me feel like I missed the train. At the same time, the news headlines were indicating the housing inventories were rising. What a disconnect, right?

So if you are looking for a bank REO just keep at it. It does require a lot of patience, follow up and dealing with people lying to you all the time. Again, inventories are expected to continue to increase.

Wall Street Journal:

More waves of foreclosures will keep downward pressure on home prices in parts of the U.S. over the next several years, two new studies project.

The studies—by John Burns Real Estate Consulting Inc. and Standard & Poor's Financial Services LLC—both conclude that most efforts to modify loans with easier terms will delay, not prevent, the loss of homes to foreclosure.

The Treasury Department is expected to give its latest update this week on government efforts to avert foreclosures.

The John Burns study estimates that five million houses and condominiums on which mortgages are now delinquent will go through foreclosure or related procedures that put them on the market over the next few years. That would represent the bulk of the estimated 7.7 million households behind on their mortgage payments.

This "shadow inventory" of homes expected to hit the market is enough to last about 10 months, based on the average sales rate over the past decade, the Irvine, Calif., firm says.

The problem is largely concentrated in Arizona, California, Florida and Nevada. The shadow inventory is equivalent to 27 months of sales in Orlando, 24 months in Miami and 18 months in Las Vegas, the study estimates.

Over the past nine months, home prices as measured by the S&P/Case-Shiller index have increased modestly after a three-year plunge. That is largely because efforts to avert foreclosures have slowed the flow of foreclosed homes onto the market, temporarily constricting supply.

John Burns, chief executive of the consulting firm, said investor demand for foreclosed homes remained strong. Thus, he said, prices were likely to be about level over the next few years, despite the looming foreclosure supply, if the economy continued to recover and mortgage interest rates didn't rise sharply. But if the economy slumped anew and interest rates jumped, he said, "that's going to cause prices to fall further."

The S&P study also says that the "overhang" of foreclosed homes expected to go on the market points to lower home prices.

Some borrowers are catching up on payments after having their loan terms modified, but S&P says current trends suggest that 70% of such borrowers eventually will redefault.