Housing "shadow inventory" rises
It was only last week that the real estate industry was celebrating the good news.
The number of home listings within 27 major U.S. metropolitan areas slipped 2.42 percent in November 2009, compared to a month prior, and is down 27.64 percent compared to a year ago, according to a monthly report of homes listed for sale on Multiple Listing Services (MLS) in the markets surveyed by ZipRealty, a national real estate brokerage.
Fewer homes for sale means the supply and demand dynamics have turned up, which means that the housing market is bottoming, right?
Not so fast.
(Bloomberg) -- The number of homes that may be in the pipeline for a sale because of foreclosure and delinquency climbed about 55 percent to 1.7 million at the end of September, according to estimates by First American CoreLogic.
The “shadow inventory” rose from 1.1 million a year earlier. Such properties include those taken over by banks and mortgage companies and those where the loans are at least 90 days delinquent, the Santa Ana, California-based research firm said in a report today.
What is actually going on is that the homes that should be hitting the market in rock-bottom auction sales, are actually being held up in the pipeline because of HAMP, temporary state moratoriums on foreclosures, and already overwhelmed banks reluctant to take on more inventory.
-
- Email this Instapopulist Forum topic
- 0 points
Great catch, midtowng!
Interesting to note the increase in generation of PIK notes (Payment-In-Kind notes) when private equity firms aren't able to make good on their scheduled interest payments to their investors.
An apt descrption from this Bloomberg article:
details how there is an attempt to utilize PIK notes for an LBO.
There is supposed to be somewhere between $33 billion to $34 billion in PIK notes coming due against private equity firms during the summer of 2010 (according to this article at Geoffrey Parnass at Private Equity Law Review site). Along with the ongoing housing difficulties you just mentioned, the CRE market and these PIK notes (and all those other variables), 2010 should be an interesting year.
That is, if "interesting" equates to a "holy crap" situation!
Post new comment