National Shadow Inventory

That "new york" reference is apparently not referring to nyc.....

^^^No, it includes NYC as part of the metro area. NYC is about half that area. MANHATTAN might be a lot less, but there is no way you can have a stat about NY-LI-Northern NJ and NOT have almost half = the five boroughs.

ericho ?

marco - don't hold your breath. The OP links to businessinsider.com. the 'ho is a yahoofinance man, so we might not be seeing him on this thread

At least he ain't a aol member. That cracks me up when I get an aol email contact... It's like they bought in the PH or something.

"How Large is the Shadow Inventory of Homes?"

"A new report estimates that the “shadow inventory” of potential foreclosures and other distressed sales will peak this year at 4.7 million units, a roughly 10 month supply of homes.

But that supply could shrink to as low as 4 million units or swell to as high as 5.6 million homes depending on how many delinquent loans actually move through to foreclosure ( )"

"The rising share of distressed sales could send prices down faster because banks are less likely to wait to reduce prices on their inventory of bank owned homes. The Irvine, Calif.-based housing consultancy estimates that prices will fall by 8% to 11% through 2012, though the declines will be worse if the economy deteriorates or interest rates rise significantly."

"A separate report published Friday by analysts at Standard & Poor’s, meanwhile, shows that the shadow inventory backlog is largest in New York City, followed by Miami." Ruh-rho....

http://blogs.wsj.com/developments/2010/09/27/how-large-is-the-shadow-inventory-of-homes

But is there really much relevance to NYC (the topic of this blog)? The only real issue would seem to be the indirect effect nyc re if finance industry is hit by this ....

How dumb r u buyersquared? 2001 to 2007, mortgage securitization was a huge driver of comp. In nyc.

99% of all new mortgages are one offs to Fannie/Freddie. No wall street needed. Flmaoz.

Ive seen at least 50 "new listings" in the last 4 weeks that were old pulled listings.
THat's why absorption figures for the last year are rubbish.

Truthy. I completely get the same. 10w 66 16D is a perfect ex. They swore to me 'in contract!'. Flmaoz.

Getting a huge dumping every nite of rushmore/ new west end ave developments also. They are showing their hand. It ain't pretty for sellers.

The article says: "The "Shadow Inventory" is comprised of all those distressed residential properties (other than MLS listings) which we know will almost certainly be coming onto the market in the not-to-distant future."

I'm saying that I don't think this kind of "shadow" is of much relevance , at least so far, in NYC. Has there been any evidence of this? This is hardly a dumb comment.

I'm interested to hear substantive arguments.

As to the new-dev "shadow" it simply is not huge enough as a percent of the market to cause it to tank (i.e., it is in no way comparable to the famously awful other markets like fla), in my view.

So I'm left wondering what is going to cause the big downturn some predict.

If your trigger reason is a macro-shock (dollar collapse, or whatever) then so be it, but you may or may not be right on that; if your trigger is moderately higher interest rates there is some chance that will ocurr because other economic conditions have improved so it might not necessarily mean lower re prices.

As I read articles about real estate around the country, it seems that the real chaos ocurrs when you have job losses combined with underwater mortgages and too much new inventory or recent buildup, but so far I don't see such a virulent combination in nyc.

Yep, I've been a whiny bitch about "in contracts" for over a year.

"It ain't pretty for sellers." or bulls, that's why they spend all their time on SE now talking politics......or copper.

In sum, it seems like pent up demand in NYC is putting a floor on the market around where we are now, and I'm not sure what will change that . Until I hand over a deposit check , I'm hoping prices will fall to more sane levels, but not clear what would cause that.

3 more shopping days 'til 3rd Q numbers.

If she breaks below $1000 per ft it's gonna be as disheartening as a below 10K Dow Jones.

Manhattan Coop and Condo totals

avg $ per sq ft---and total closings

1stQ '08 $1289---2282
2ndQ '08 $1263---3081
3rdQ '08 $1193---2654
4thQ '08 $1183---2282

1stQ '09 $1259---1195
2ndQ '09 $1056---1532
3rdQ '09 $ 996---2230
4thQ '09 $1051---2473

1stQ '10 $1038---2384
2ndQ '10 $1051---2756

3rdQ '10 $????---????

Expected future 3rd Q link;

http://www.millersamuel.com/reports/pdf-reports/MMO3Q10.pdf

Also, in wmburg some fairly large new buildings rented up quickly these last few months. Not sure what to make of that, but it seems there is no rent collapse (not to get into some argument about rent trends in detai).

buyerbuyer
It will depend on the patience of banks, the game riding between what comes first, a market rebound or bank collection efforts.
I know at least 6 people who haven't paid their mortgage between 12 months and 20 months.....without a single letter from the bank.
________________________________________
As of right now , my humble opinion says sales market(closings) is 15% overvalued to the rental market.
Rental market now at @ $50 per sq ft supports an $883 per sq ft sales average.
Last quarter was $1051. Way too high. In 3 days(Sam/Miller) I have to believe a 5% drop.

"I'm saying that I don't think this kind of "shadow" is of much relevance , at least so far, in NYC. Has there been any evidence of this?"

The inability to quantify it is part of what qualifies it as shadow inventory. There was another thread on here where people listed particular buildings full of shadow inventory. One takeaway of that thread is that most people have little idea of what is out there outside the neighborhoods they live or are looking to live in. Several people appealed to each other to draw up a spreadsheet but understandably nobody jumped.

So it will likely remain an argument over whether or not it will have an impact in New York. But you can only eat the operating costs and hope for a price recovery for so long.

malthus..That thread was about new dev I think. I think that articles was also talking about properties which are not new dev but are in the forced sale, foreclosure pipeline, of which there is little in nyc, apparently.

I'm not sure that distressed = in foreclosure. Certainly some of the buildings on the thread would/should be considered distressed, as in, in trouble.

malthus and buyer: that thread was sort of abandoned because some authority - i forgot who it was, I think it was in the WSJ--came out about then that said that there were 8,000 condos in shadow inventory in nyc. So when you look at urban's numbers, you might just want to tag on another 8,000 in inventory.

Wasn't that your thread? I think it got abandoned because the 146 political threads pushed it deep into the rotation.

But that 8000 number seems pulled out of somewhere dark and smelly. Was there any justification?

yes malthus, i started that thread. i wish i could remember who came up with that number -- there was some discussion of it on another thread. But I remember the number very well and thinking that the source was legit enough that it was not necessary to continue with the shadow inventory thread cause there was a seemingly legit number being touted. Maybe urban remembers the source.

What I took away from that thread was that there were a couple of thousand just in the big, visibly troubled FiDi developments. Hundreds per building across multiple buildings. It's not a neighborhood that I know, so the numbers caught my attention. FiDi provides a good running start on the theorized 8,000. In an area that I do follow, UES, I think it is much sparser on the shadow front, and what is there continues to trickle out of the shadows and into closings. Azure and Miraval would be relatively high volume exceptions to that general observation.

Was the 8,000 all NYC or only Manhattan? bjw had done some Brooklyn work and posted it at one point.

Forget the shadow inventory for a moment. Let's draw a supply graph based on increasing prices. Let say psf goes to $1500? then $2000psf? Me thinks the entire manhattan mkt would be for sale at those prices.....

With prices decreasing, wouldn't classical economics find that supply would dwindle and demand spike, especially if you include a 20 to 30% increase in purchasing power based on Fed's 4% 30yr mortgages?

I wonder how much of a bloodbath there would be w/o 4% mortgages?, no fannie/freddie to buy mortgages, $15k tax credit, and if banks started getting aggressive with foreclosures in manhattan? One can only wonder...

Was the 8,000 all NYC or only Manhattan

I remember it as all of NYC -- but again, since I can't remember the source, that is not a reliable comment. But I'm sure of that number. There was a lively discussion about it.

w:67 In addition to all you have listed --I'm still confounded by the fact that the difficulty of obtaining jumbo mortgages hasn't had more of an affect on Manhattan -even with lower rates. Wonder if a lot of the activity is foreign buying, currency hedging, and the ever present super wealthy all cash buyer.

i would echo my esteemed colleague from the west 60's.

put aside inventory for a moment.

look at the larger factors facing us and consider how we can possibly solve some or any of these issues without the inevitable bloodbath.

Speaking of inventory, urbandigs' data showing inventory hit 9000 again today. And still looking very hockey stick like.

"CoreLogic: Shadow Housing Inventory pushes total unsold inventory to 6.3 million units"

"The total visible and shadow inventory was 6.3 million units in August, up from 6.1 million a year ago. The total months’ supply of unsold homes was 23 months in August, up from 17 months a year ago. Although it can vary and it depends on the market and real estate cycle, typically a reading of six to seven months is considered normal so the current total months’ supply is roughly three times the normal rate. "

"Unlisted new high rise condos. This also includes high rise condos that were converted to rental units with the intention of eventually selling the units. Note: these properties are not included in the new home inventory report and are not included in the CoreLogic report. These is no data for the number of units nationwide, and these have to be counted on a city by city basis ( )"

http://www.calculatedriskblog.com/2010/11/corelogic-shadow-housing-inventory.html

"Soured NY housing may take 10 yrs. to clear"

"Timeframe seen as three times the national average; gap attributed to legal protections that add years to the process of foreclosing on properties in the state."

"According to the report, shadow inventory in Brooklyn will take the longest to unwind at more than 17 years. Bronx was close behind at 16.5 years, and Staten Island recorded 12 years. Manhattan fared the best, coming in at a little more than eight years. "

http://www.crainsnewyork.com/article/20110426/REAL_ESTATE/110429902

>columbiacounty
about 7 months ago
ignore this person
report abuse i would echo my esteemed colleague from the west 60's.

esteemed? the guy's a monkey with excessive gas.

ok but I'll give it to you if you state that he's your collegue.