A broker out of Idaho posted a response to the article I shared on the 8th: Here is my response, followed by his reply to the aforementioned article.
Jim, regarding your comment about Shadow Buyers. I do not claim to know your market sir, but I can tell you that a great number of real estate agents here in South Florida will run the opposite direction of any buyer who needs financing. Cash is still king, so even if these Shadow Buyers have rebuilt their credit, they are still up against the wall as there are an innumerable amount of All Cash Buyers in the market. Combine this with, what is perceived to be a Government induced, artificial rise in asset prices; and the facts that wage growth is at a historic low, jobs are scarce for those looking & tenuous at best for those who have them; there is no hurry for anyone in the middle & lower classes to take on a major purchase like buying a home unless they can do so without the monthly obligation of a mortgage. Of the more than 200 residential buyers I have interviewed in the past year, less than 5% were requiring financing.
Your market is likely to be very different; Miami is a major international destination and has been seeing large sums of capital flowing in from Canada, Colombia, Venezuela, Brazil, Russia, France, the UK, & Germany. Given the more than 50% depreciation in the dollar we have seen over the last 10 years versus the rising strength of the currencies that are flowing in, the average American family’s purchasing power simply does not support a competitive position versus the position Foreign Direct Investors are in.
In Response to:
Shouldn’t Realtor Mag elaborate on the potential errors in this instead of just “forwarding” what I believe to be bad information?
For example, the very first sentence conflicts with the first sentence of the third paragraph. Which is correct “Foreclosures have been falling in recent months” or is “”Not only are current REO inventory levels elevated ..”?
How does 1.7 million borrowers being delinquent compare to this time last year? That would be more telling of trends to me. Is this 1.7 million properties or if a buyer had a first, a second, and a HELOC, is the data reported as “3 borrowers”?
If we are talking about “shadow inventory” – why not balance it with “shadow buyer’s”? Look at how many people lost their homes to short sale or foreclosure that are already past the time frame to “re-qualify” as buyers again!
I know bad news sells better than good news but I say “Bah Humbug”!
Jim Paulson, CRS, GRI, ePRO, SRES
Owner/Broker – Progressive Realty Corporation