That’s California. Let’s check our old standby:
Phoenix Real Estate Market 2012 Review:
[sorry, this is from a realtor, but it's MLS data]
“Overall Home Supply – For the entire Phoenix MLS at the first of November, the total number of active real estate listings was 22,826 while the number of sold listings for October was 7,724. One year ago, total active listings were 25,879 properties. So, the active inventory is lower at the end of this year than last.
…Chandler: 1.5 months inventory
…Mesa: 1.8 months inventory
…Gilbert: 1.6 months inventory”
http://www.thompsongroupaz.com/phoenix-real-estate-market-2012-review/
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Even adjusting for realtor propaganda, that sounds like pretty tight inventory.
Now, foreclosure activity:
Shrinking inventory for big investors
By Catherine Reagor
The Republic
Fri Dec 7, 2012 3:02 PM
As foreclosures continue to fall in metro Phoenix, the dominant buyers and sellers in the region are changing. Fewer sales of lender-owned inexpensive foreclosure homes means a rapidly shrinking pool of houses for investors to purchase.
As a result, more homeowners will be able to sell to buyers for higher prices because they aren’t competing with lenders.
In November, lenders foreclosed on 1,549 houses in Maricopa County. That’s the lowest level since December 2007, right before the foreclosure crisis hit metro Phoenix, according to the Information Market. During 2011, a typical number of foreclosures was 4,000 to 5,000 a month.
Foreclosure starts, the early indicator of foreclosures, fell to 2,094 last month. By comparison, in March 2009, lenders started the process to foreclose on more than 10,000 metro Phoenix houses, a monthly record for the area. These declines in foreclosure activity are key to telling what will happen to the housing market in coming months.
But there’s another piece of foreclosure data that is even more important now: The total number of foreclosures in lenders’ pipelines across metro Phoenix was 10,606 at the end of November. A year ago, there were double that many foreclosures under way in the region. Two years ago, there were more than 40,000.
Homes on which lenders are in the process of foreclosing are the ones investors hope to buy for low prices and turn into rental houses that bring them high returns on their cash.
Big investors including Blackstone, American Residential and Colony Capital have dominated metro Phoenix foreclosure auctions and its lender-owned home sales market this year. Those firms and other want to package their thousands of rental homes and resell them to investors through real-estate investment trusts, or REITs.
http://www.azcentral.com/business/realestate/free/20121205shrinking-inventory-big-investors.html
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So this is the pattern in both Arizona and California:
+ Foreclosure activity at a low (forclosures happened in 2007-2012?)
+ inventory at a low (for both public and investors)
+ big investors snapping up for cash or in bulk (for rental or later sale)
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= Bidding wars for screwed-over regular Joe.
Is it just me, or are the big investors trading the shadow inventory among themselves, in the shadows? The general public can’t buy this inventory. Either they can’t see it, or they can’t work and save wages as fast as banks can borrow from the discount window (at 1% interest rates). Meanwhile, LL’s see the low inventory and high prices and raise rents accordingly.
And if all the foreclosures already happened in ~2007-2010, then where did all the original mortgages go? Is this what the Fed is ultimately buying from Fannie+Freddie at $40 billion/month?
HBB (especially alpha) predicted this years ago: rake in juicy fees on origination, when it goes kablooey shovel the toxic mortgages off on the taxpayer, snap up the actual “distressed” assets for pennies, and then then sell in bulk for rentals.
The rich are fighting over what little blood we have left.
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