April was a Shocker!
Chuck Ponzi May 13th, 2009
CNN Money today gives us our money shot for the day while interviewing Realty Trac for insight into the April foreclosure numbers:
Foreclosures in April exceeded even March’s blistering pace with a record 342,000 homes receiving notices of default, auction notices or undergoing bank repossessions, according to a regular industry report.
One of every 374 U.S. homes received a filing during the month, the highest monthly rate that RealtyTrac, an online marketer of foreclosed properties, has recorded in four-plus years of record keeping.
“April was a shocker,” said Rick Sharga, a spokesman for RealtyTrac. “I would have bet on a dip because March foreclosures were so high.
Instead, filings inched up 1% from March and rose 32% compared with April 2008.
Indeed, for those who do not keep up with the lingo, you may want to google what a shocker is.
For those wondering, I’ll give a visual:
Shocker!
If this is in bad taste, let me know, but the foreclosure numbers are definitely a surprise. Sometimes, I’m not sure if living in SoCal has warped my sense of humor.
And, for those seeing green shoots in the economy, I doubt you”ll be seeing a corresponding positive report out of housing. We may very well be in a strong dead cat bounce this year (much like California experienced in 1993) as housing prices realign themselves.
There were 63,900 bank repossessions, the last stop in the foreclosure process. More than 1.3 million homes have now been lost to foreclosure since the market meltdown began in August 2007.
The increasing foreclosures will force RealtyTrac to rethink its forecasts, according to Sharga. “We had been predicting 3.4 million filings for the year,” he said, “but we’ll blow those numbers out of the water.”
With so much uncertainty, I can only stand by my predictions for 2009. There will be some up and some down areas. Overall, the direction is down.
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saying “let me know” after the fact doesn’t excuse you from such behavior, you know
i’m more curious about the photo. what sign are they making? what is GW’s significance in this photo?
the reason i’m more curious about the photo is because everyone knows foreclosures are on the rise. you’re just stating the obvious. it’s not at all shocking, sorry to say.
I think he was meeting with American Sign Language supporters. They are technically making the sign of “7″ in ASL, but it sure looks a lot like “The Shocker”.
I believe the shocker was that even the experts of Realty Trac were surprised that April was higher than March. They were expecting some abatement after April was so high after moratoriums expired.
What is not surprising is that California accounted for 28% of all US foreclosure filings last month with just over 96,560 filings out of 342K. There has been a lot of recent optimism that housing had bottomed due to the recently constrained supply and had even erupted into some scattered bidding wars for well priced properties (I actually witnessed one up close and personal). However, that optimism was largely because of the moratoriums which have now gone away.
However, I believe that this year will actually see some strength due to the moratoriums creating a huge backlog of shadow inventory. Late this year, we will be seeing more of that inventory come on the market and prices erode further in most segments and locations.
Chuck Ponzi
Wasn’t the foreclosure surge due to the expiration of moratoriums? We haven’t paid our badly upside down mortgage since August and still haven’t gotten an NOD, same with a neighbor. We’re just now beginning to talk loan mod w/ Cuntrywide, so fingers crossed.
Ask for principle reduction, get near equivalent rent or just walk away. You don’t want to go for a modification that puts you into a recourse loan. Or something that resets in 5yrs. Basically you will have to hit the reset switch on your credit five years later.
Good luck Jo Jo.
Recourse means they can go after your future income.
Where else can you come for a reference to the shocker and dead cat bounce in one article? Thanks Chuck! It’s not offensive, it just gives the site personality.
Just how high do you think that dead cat bounce will be if it hits in 2009?
I see dead cat bounces in low-end homes and locations. The federal stimulus is having its intended effect on stabilizing the low end from dropping 40 to 50% per year.
However, with no savings, the low end buyer has a limited range.
Volume is definitely up for 2009 because of the above.
However, because the mid range and high end remains stuck, I would say that the dead cat bounce will give us lift up to -12% to -9% for the year. This is quite an achievement when you consider that we were coming off of -40% for the prior year.
Unfortunately, once the stimulus is gone, unless there is an even larger stimulus to follow, there will still be a trend reversion. Normally, we could have established a strong footing to see a stable 2010, but I’m forecasting another loss in 2010 due to the meddling.
In addition, California is paying builders to build even more homes through the 10K credit to new home buyers. So, explain how an overbuilt housing market benefits with even more supply?
Chuck Ponzi
Interesting… I’m ready to buy now, but waiting. I’m hoping to get into a low-end place in a high end location. Probably a condo or small/old home near the beach. Just waiting to watch the Alt-A and prime mess start running its course. I need to see who will be moving out of my new place and selling it to me for cheap. If their creative financing doesn’t kick them out, unemployment should help me get those guys to move out of my new place. Indeed it will be SHOCKING!