REOs: BofA to increase Foreclosures in 2010

http://streeteasy.com/nyc/talk/discussion/19880-bofa-to-increase-foreclosures-significantly

so the commentary is in one place.

the interesting thing about this 2nd REO wave that's beginning to hit is not the quantity but the quality, most of them are going to be prime (versus subprime). that will have to hurt lower prices points too, RE is a ladder after all.

also the REO flippers/bottom fishers were most of the subprime REO buyers. but this time 1st time buyers that had been on the sidelines for years will have a real chance to get a nicer property (not entry level) on the cheap. not good for homebuilders imho.

notadmin, not directly on topic, but it ties in. in a normal year there are around one million households created. from 2005-08 1.2 million households were LOST (and this doesn't count 2009). and to the extent that sideline buyers do pick up property, that won't generally create households, that will just free up a rental.

http://www.msnbc.msn.com/id/36231884/ns/business-eye_on_the_economy/

"The formation of new households isn’t expected to pick up again until at least 2012, according to the MBA study, even as the population continues to increase. Between 2005 and 2008, those 1.2 million households were lost even as the population grew by 3.4 million."

AR, so true, demographics is key! i'm looking forward to your inputs on that given that the new census data should be available soon (do you know when?). hope you are still with your project.

it would be interesting to get to know how much of that loss is coming from:
* several generations living together (i know cases of grandma's recently moving in with kids and doing the childcare/cleaning/cooking in exchange for roof, the very latin way being implemented by some whites)
* delay in marriage of those in their 20s/30s, keep on living with parents after college?
* immigrants coming back to their countries & not coming in droves (or not bringing their wives, several guys keep on living together while working and sending home their savings)

also, the expectation of homebuilders in terms of increasing household formation is not coming from those that made their business prosper during the last 20 years (2+ kids, house in suburbia, many double income). aren't most coming from more poor backgrounds and a lot are single parents? this is key, but i don't know enough about it yet.