A new friend of mine from Equador, whom I met on the outstanding language learning blog LiveMocha.com, told me about the old year (año viejo) celebrations they have in Equador. As I understand it, they build intricate representations of things that happened in the old year, they drink a lot, and blow things up with powerful and dangerous fireworks — sometimes including (so I understand), the representations of the old year themselves.
None of this namby-pamby first night crap. These are serious equatorial Latinos, folks. They have humidty there that would wilt the average Sacramentan, and she tells me today it was about 99 degrees or so. So when it comes to blowing whatever got them mad in the old year, these people are probably a bit grouchy to begin with.
Top 2009 Explosion-Worthy Stuff
If I had to pick my number one thing about 2009 to blow up in effigy, it would have to be the shift from foreclosure sales to short sales. When the 2008 bank bailout demonstrated the extent of congressional contempt for the will of the American people, the market was still dominated by foreclosures, and month after month more foreclosures were being sold.
Was that a good thing? No, of course it wasn’t. The only winners in that scenario were the banks, whose losses were covered by well-bought politicians, and the buyers, who could relatively easily close on a bargain home.
A year later, the market has shifted to one dominated by short sales. In December, for example, we sold 52.2% fewer bank owned (REOs) than in December of 2008 in Sacramento County, but 70.2% more short sales. Is that better? Well, if you think short sales are a lot better from a “save your credit” perspective, nothing I’ve learned has demonstrated the superiority of short sales. Maybe there’s some slight psychological benefit for the seller, but at the end of the day, the seller loses the house, so to my way of thinking it looks like a wash on the seller side, especially considering the recent news that the banks have only executed on some 5% of the government approved loan modifications that they could have made.
From a buyer perspective, however, this year has been pretty awful, with buyers waiting months and months on short sales. I have a friend at work who went through the short sale process (with another company) for months on end, and is now so fed up that he’s looking at an overpriced fix-and-flip listing. I showed him some comps, but he doesn’t want to hear it.
I suppose that on some level there’s good news in that prices are flattening or improving again in many areas. County-wide, prices have risen 2.2% in Sacramento County from December to December, and the number of non-distressed sales has risen 88.5%.
I guess overall I liked it better when the schadenfreude bloggers were hollering at me and it seemed like foreclosures were the biggest deal in town, rather than the systemic collapse of the economy through the failure of dismantling New Deal bank legislation.
Are things getting much better in real estate? On paper, yes they are. What remains to be seen from my perspective is the extent to which we can “recover” economically with neither jobs nor savings nor strong economic policy. I hope I’m wrong and everything’s hunky-dory, but the job numbers don’t support that. I was lucky as heck to land a second job within a week of the bailout, but we all know too many people in the real estate industry and outside it who have not been so fortunate lately.
So my effigy that I’d like to blow up for año viejo looks like George Bush and Barney Frank doing things with Goldman Sachs that I´m not going to talk about on this family web site. If only I had some good Ecuadorean fireworks, I could do it justice.