In reading the latest media reports of mortgagee sales for March you could be forgiven for thinking that we are heading into some stratospheric rise of mortgagee sales – much akin to the US market.
However without complete and comprehensive information sometimes misleading impressions can be formed – this reminds me of a TV commercial from the 1980′s in the UK for the respected newspaper “The Guardian” – Seeing the whole picture!
Anyway back to mortgagee sales. The sales in March were 201 – clearly a massive jump as compared to 42 sales in March 2008. This is also the highest ever level of sales in a month ever recorded.
One of benefits of the web though is the visibility of what is on-the-market to complement the data of what has been sold. There are two unique aspects of mortgagee properties that provide these statistics with greater weight as a “lead indicator” – all mortgagee properties are sold by real estate agents and mortgagee properties need to be sold, they do not generally sit on the market for long.
Taking these facts, it is therefore possible to correlate the listings on the market to the sales off-the-market – the graph below shows this correlation. The adjustment that has been made to the statistics is that the listings data is shown with a one month delay – that is to say for the month of March 2009 on the graph shows the reported sales of 201 and is matched to the listings in February with 444.
You would judge that there is a clear correlation of these data sets on this adjusted basis over the past 2 years. Looking forward the forthcoming months has already shown a decline with currently just 379 mortgagee property listings on the website.
It is naturally risky to make predictions, but the graph below may assist in assessing longer term trends – this shows the very latest weekly data of listings of mortgagee properties presented as a 12 week moving average – this measure effectively removes any seasonality factor and is more likely to provide a more robust indicator of trends.
Have we seen the peak of mortgagee properties? – as far as inventory goes, we are not seeing the massive rise seen during 2008, as yet it seems to be plateauing, if the level of interest in searching for mortgagee properties as shown in the graph below is any guide then mortgagee properties is no longer quite the hot topic!
I would think that there is a distinct likelihood that interest in mortgagee sales has dropped off because of the appalling quality of the properties that you see on offer. Considering that there is still a lot of stock on the market with asking prices that don’t make much economic sense, I guess people have lost a lot of interest.
It’s interesting to note that in Japan, one can search through literally thousands of mortgagess sales through the local government websites. While there are some real steals out there, you have to sift through a database of garbage to find gold.