Green Housing Shoots

Would love to read the article, but not a subscriber.

Maybe you could copy and paste some of it?

List prices rose in 24 of 26 cities tracked by Altos Research in May, with San Francisco, Washington and San Jose, California, showing the biggest gains. New York and Las Vegas were the only two cities in the index where prices declined.

Another green shoot

CoreLogic’s reading includes distressed transactions involving REOs and short sales, which have been blamed for dragging down overall price trends for residential properties. The impact of distress has become more pronounced in recent months as these homes have claimed a larger share of sales activity, particularly in foreclosure hotspots.

To illustrate the divergence in distressed and traditional pricing, CoreLogic provides a separate measurement that excludes distressed transactions.

When you take REOs and short sales out of the equation, the company found that prices declined by just 0.5 percent in April compared to a year earlier, versus the 7.5 percent drop in the distress-included index.

http://www.dsnews.com/articles/corelogic-home-price-index-shows-first-monthly-increase-since-mid-2010-2011-06-01

CoreLogic provides a separate measurement that excludes government backed mortgages and found that the sales volume was down 90%.

Altos Research provides a separate measurement that excludes the 24 cities where list prices declined and found that list prices all went up.

RealtyTrac provides a separate measurement that excludes borrowers who are current on their payments and found that and found that everyone was in default.

The Telegraph said the same thing: "US housing market sees 'green shoots'"

http://www.telegraph.co.uk/finance/economics/5552478/US-housing-market-sees-green-shoots.html

If you follow the urban markets with the highest foreclosure rates, you will notice that many REOs are purchased by hopeful flippers, who might or might do some superficial sprucing up to prepare for sale. The aspirational asking price then falls falls falls until the property sells for more or less what the flipper paid for it.

The green shoots are more correctly referred to as green blooms -- of algae in the swimming pools.

First REO'S are sold at 20% discount typically.
Secondly the banks may not be taking the time to do basic maintenance.
..
So for someonewith time and the ability to carry there may be some upside, but I would think the upside needs to be more than 20% to compensate for the risk.

I have no doubt that some stupid people may be attempting this after being brainwashed by Home and Garden television or some other Bravo real estate show.

If we're talking short sales then there's always the question of Broker fraud, which involves a low-ball appraisal, a bank agreeing to a short sale and a broker arranging a quick flip.

1. Whatever discount REOs sell for, they're selling into falling markets.
2. Banks do virtually no maintenance -- RoundUp at most
3. Banks require short sales to be publicly listed for a certain period of time. So the broker fraud would need to involve the broker rejecting all better offers. They also pay attention to sales comps. In areas where several (tract-housing) properties per block on on the market at any given time, it would require major collusion amongst brokers to push through such a fraudalent sale. So not impossible, but not likely widespread either. I think.