Foreclosures are spiking, but few bloggers are following the foreclosure biz
Posted by Pat Kitano at 11/16/2007 11:37 AM 
Categories: Real Estate Economics, Real Estate Investment
Categories: Real Estate Economics, Real Estate Investment
Foreclosures are big news - Google Trends shows the news reference volume on the word "foreclosures" crescendoed this summer and has continued to be a key economic focus. However, the business of foreclosure - how real estate companies are mobilizing to address the transactional issues surrounding a spiking REO market - is surprisingly not being documented on the internet.
Blogs are the best way to distribute timely information of an evolving niche of the real estate business. At one time in the not too distant past, there was a Carnival of Real Estate Investing. It went on hiatus with its final series in July as the last real estate investor gave up on a bleak housing market, and the bloggers disappeared too.
The foreclosure business is still rather opaque... with such a swelling market, it has to be assumed there are huge opportunities evolving from crisis, but the resources to monitor this business in real time are few. Here's a quick list of foreclosure business resources:
Blogs
Two foreclosure listing sources Foreclosure.com and Realtytrac have blogs:
Foreclosure.com blog - interesting article: Michael Jackson's Neverland Ranch enters pre-foreclosure
Foreclosure Pulse blog
Bigger Pockets - the leading real estate investor blog and resource devotes a lot of space to the foreclosure biz. Buying at a foreclosure auction - beware of occupied homes Foreclosure Pulse blog
Equity Scout - Chris Smith has a smart investor mentality and I hope he will begin to address and monitor this market.
Products that will gain adoption as the REO market grows:
Online applications designed to facilitate house auctions are the most efficient way to move REO properties that essentially are becoming commoditized as their number increase. There may be more, but the two auction applications that come to mind are Bidselect and Realtybid. Bidselect bundles their offering with HomeTracker One, a real estate asset management platform that positions Bidselect for general house auctions beyond the REO business.
One more underperforming resource:
The Five Star Conference is the premiere gathering for the default servicing community and should be a tremendous resource for data, information and networking, yet its site says very little.
Any other resources?
Technorati Tags: REO, foreclosures, real estate investment, housing market, Bigger Pockets, Equity Scout, Bidselect, RealtyBid, Hometracker One
Maybe no one's blogging about it because the perception is that it's still a relatively small problem.
According to this article in the Real Estate Journal, the percentage of loans in the foreclosure process rose to 1.28%, up from 0.98% a year earlier. That's still below the 1.51% recorded in the first quarter of 2002.
http://www.realestatejournal.com/buysell/mortgages/20070618-paletta.html
And according to this 2001 study, nearly 40% of all homeowners own their homes free-and-clear, so that percentage of homeowners aren't affected at all by the issue.
http://originatortimes.com/content/templates/standard.aspx?articleid=1514&zoneid=5
I agree that foreclosures are horrible problems for those who are going through them, but the fact is, it affects a relatively small segment of homeowners, and that could be why the issue isn't gaining a lot of traction with writers.
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Good point Marlow, I've been kind of expecting the Trump/Kiyosakis et al to be pumping this vehicle. It looks like I've fallen for the media's dire reporting of the housing market.
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When the foreclosures are clustered together their impact is far greater. When you spread that 1.28% percentage across the US I can't say we feel the threat. But when it's right down in one community it's a very interesting economic and buyer/seller psychology lesson.
An appraiser in CA wrote a great article about clouded markets that has me thinking about how to spot this trend in an area and then what to do about pricing. I'd welcome some other bloggers on this to help get my thoughts in order!
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I disagree with this comment; foreclosures are a direct problem for lots of communities, and an indirect one for everyone in our economy.
Take a look at more recent numbers. Nationwide foreclosures are up nearly 100% over this time last year.
http://www.realtytrac.com/ContentManagement/pressrelease.aspx?ChannelID=9&ItemID=3567&accnt=64847
I write about foreclosures occasionally (thanks for the mention, Pat) but mostly in relation to their impact on the communities around them - which is some cases is very strong. This is something that investors need to pay a lot of attention to.
In some areas this is the main issue facing city governments. Yesterday's NPR morning edition had an interesting article on the issue:
http://www.npr.org/templates/story/story.php?storyId=16650417
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Foreclosures are a big deal in the twin cities we have too many of them. They are misunderstood by consumers as an opportunity for a "deal" and banks with or without Realtors do not know how to sell them. I work with buyers and sellers on foreclosures, it is not a business that I gravitate toward or that I wish to attract. Like I said some of the hype is generated by people who do not understand foreclosures, how they are priced or the foreclosure process or how hard they really are to buy.
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I have to disagree with some of these comments about foreclosures being a small problem hyped by the media. Tell the stockholders of any bank shares or employees of most investment firms who have been recently sent packing that this is a small problem. Or how about the guy who has never gotten behind on his house payments only to discover the value of his home has declined below what the mortgage value is. This is a very real problem that potentially will lead the nation into a recession unless we work together to find ways to alleviate it. So I encourage you, the experts, to write about it so that the "perception" that this is a small problem disappears.
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That's good for people like me who started a blog focused just on foreclosures in our local market (www.LoudounForeclosures.com). The blog hit the ground running just a few weeks back. In only a few weeks, 3 real estate investors contacted us and working with us because they came across the blog.
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Congrats Danilo... I do track blogs and other websites that elucidate the foreclosure business and the landscape is sparse... your initiative to developing Loudoun Foreclosures should impress investors and other wanting more information for this developing market.
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We think it's an up & coming topic of discussion; that we're only starting to see the tip of the iceberg; and that opportunities for investors will present themselves soon in this market. Watch the coverage at http://blog.MLS-2.com along with other investment categories like International.
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Pat -
I agree that it is a problem that is under-covered. We spend quite a bit of tie focusing on foreclosures because the foreclosure CRISIS - yes it is a CRISIS - is going to continue to impact every part of the national and world economy! Citibank just needed a bailout for billions from the middle east because of this thing. It is scary to watch . . .
Thanks for recognizing the blog and our site!
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