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During the recent REO conference at Ft. Worth, James Lockhart, the former director of Federal Housing Finance Authority, told the audience that Freddie Mac has 35,000 REO 'assets' and Fannie Mae has 68,000 REO 'assets' on their books. He also indicated that number is rising.
Did he give us any answers? Not really. Mr. Lockhart is more concerned with regulating the industry so that public and private sectors are separated. He insists that in the secondary market, the buyers in this market were very highly leveraged, and now we taxpayers are paying for this situation. He concluded by saying: "We need a better understanding of what the private-public sector should be"
What does the shadow inventory mean for the Phoenix area, and Historic Coronado? Since Arizona is the 3rd most heavily affected state in the foreclosure crisis, we should be seeing at 15,000 to 20,000 REOs in our market place. When will they be released? That's up to Fannie and Freddie.
In the Historic Coronado neighborhood, there are 5 active REO listings, priced from $79,900 to $129,000. There are also 10 pending listings with list prices from $27,000 to $155,000. In the 6 months from March 1, 2008 to September 28, 2008, Historic Coronado had 6 sold REOs, ranging in price from $64,900 to $321,000. Our prices are continue to drop, with more REOs on the way.
Coronado is more fortunate than many areas, because our prices have only dropped over the last year and one half, but with more REOs on the way, we will see more downward pressure on our prices. I'll be watching Fannie and Freddie news and checking on the local listings for more trends.
If you're curious about these trends, give me a call or email me.
Diane Brennan
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