Zombie foreclosures

Here’s a weird scene from the aftermath of the US housing bubble…

You’ve all heard of underwater mortgages, but have you ever heard of a zombie foreclosure?

There are more than 300,000 properties in the US where the owner has abandoned the property but the bank never completed a foreclosure.

What does this mean?

Reuters revealed the plight of people who walked away from their homes not realizing that their names remained on the deed and that they were financially liable for taxes and other bills related to the abandoned property.

In some cases, homeowners vacated after receiving a notice from the bank of a planned foreclosure sale, only to find out later the bank never followed through.

Zombie properties can be easy to spot as they deteriorate into neighborhood eyesores and havens for criminal activity.

Read the full article here.

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Short'em High

. Thanks very much for the discussion, additional idea, and full discussion link about the price/MOI scatter plot. Finding a good correlation function wasn’t trivial!


CALLING POPE: This should be the lead this week!

Must watch: http://www.youtube.com/watch?feature=player_embedded&v=bNmcf4Y3lGM

Now this guy was a racist!


The scatterplot, in my view, is “good enough”, most of the methods were empirical to get a best fit and use it as a rough gauge for guessing market direction. The averaging produced better linearity; the correlation on linear scale looked well-behaved so translates well into logspace, I haven’t done much in logspace but it perhaps could give a slightly better measure. I graphed the results on semilog to show how linear the relationship is, and for public display I thought using log units would get more blank stares than it was worth. It turns out the relationship between MOI and price changes is roughly coincidental. Teranet reports on closed, not booked, sales so its dataset is delayed by a month or so, plus it has some averaging built into its methodology. MOI with 3 month moving average adds about… Read more »


@frank #42. Yes, ethnic = all of the above. I agree, however, that doesn’t change anything. You don’t appear to be stating anything. @ Vote Down The Facts #48. To me, special interest groups are those that put a singular item at the forefront of their political agenda which benefits themselves, with the potential of harming others. Take for example cyclists: They may all be in favor of more bike lanes. However some cyclists may cycle for health reasons, others for environmental, and yet others because they can’t afford a car. They aren’t necessarily going to allow a desire for bike lanes override other issues that are more aligned to their preferences. Therefore, they aren’t a special interest group necessarily. Now take the the Christian right in the US. They may have a complex political agenda, but the likelihood is… Read more »

Short'em High


Thanks for posting your work. If I understand correctly this says log(EMOI) gives a crisis severity outcome roughly proportional to the number of standard deviations. [EMOI: short for Enhanced MOI] log(EMOI) definitely squeezes down the dispersion and produces a reasonable detector. I’ll keep this in mind. Thanks.

Related topic. I’ve been looking at your MOI scatter plot. Does that use EMOI? And, what is “half over half”? Axis label says data is 3 months delayed. Is the working theory that price impact takes roughly 3 months to “sink in”? Also, why did you choose percentage price change rather than linear or log change? Did you try those other scales? There are quite a few decisions that went into that scatter plot. If you have a discussion of that work somewhere I’d love to read it.


The traditional rule of thumb says current MOI is exerting downward pressure on prices, and we are also at the seasonal nadir for MOI, so it would take some kind of buying-frenzy miracle to reverse the continued downward price trend. There isn’t even a need for any extra negative financial news. The trend is the news.

Short'em High


If 2013 follows dull 2012 exactly from the current level, MOI on March 31 2014 will be 9.0 rather than this year’s 7.0 (see the chart). Rate of price decline is roughly proportional to MOI, so 2008 doesn’t have to happen for prices to fall even faster than 2012 this year and next.

Any bump in the road can bring a financial crisis to Canada’s fragile debt driven economy and there are dozens of important events on the economic calendar between now and 2014 starting with these on this very Friday:

Statscan Friday April 5, 5:30am PDT:
Employment Change
Trade Balance
Unemployment Rate


A bit esoteric but, mostly for Short’em, I took the log of synthetic MOI (inventory/(sales/workingday*21) which is a slightly improved version of MOI) and looked for how far years were from the average, as measured in standard deviations.

Going to a logarithmic measure seems to better highlight the differences. It looks like a “soft landing” will average just under 1 stdev over the average from the last decade. A median US-style landing will average between 1-1.5 stdevs, and an apocalypse will average 1.5+ stdevs on this gauge.


“Underwater” is a good description of the crisis in a country where large parts of the territory are below sea level. Ironically, the Netherlands, once a model economy, now faces the kind of real estate crisis that has only affected the United States and Spain until now. Banks in the Netherlands have also pumped billions upon billions in loans into the private and commercial real estate market since the 1990s, without ensuring that borrowers had sufficient collateral. Private homebuyers, for example, could easily find banks to finance more than 100 percent of a property’s price. “You could readily obtain a loan for five times your annual salary,” says Scheepens, “and all that without a cent of equity.” This was only possible because property owners were able to fully deduct mortgage interest from their taxes. Underwater: The Netherlands Falls Prey to… Read more »

Yellow Helicopter

Excellent article in the local news – the Abbotsford Today to be exact:

Vote Down The Facts

Short Em, don’t get too excited – daily stats don’t always seem to be stable around long weekends. 2013 is unlikely to be anything like 2008. More like 2012 – dull.


“Our citizenship, a coveted global asset”

I admire your patriotism, but really, does anybody in the world give a flying fuck about Canada or the Canadians living in it? I’m afraid you’re a victim of relentless propaganda campaign from governments of all political strips for the last 40 years. Governments love to tell you how lucky you are to be a Canadian so that the tax raping you get for that privilege somehow seams justified.


Thank you PaulB. I know you have much better things to occupy your time right now. Much appreciated.

Short'em High

date new chg sold inv expired Mar28 271 107 139 16635 56 Apr2 382 198 100 16236 681 <– 681 expired listings: Those are 681 listings that will be back real soon if not this very day (382). Expiring the listing doesn’t stop the ongoing financing cost or the neighbouring property’s sale price reduction impact on the price index. Today’s expired speculator listing purchased after early 2012 is a losing trade and bleeding money every day until it is unloaded. 100 sales after a 4 day long weekend: If daily sales average 100 (unlikely) for every working day until end of month, 21 x 100 = 2100 April sales, that will be a 12% decline from March (2395). If tomorrow’s sales are a lot less than 100, it will be even clearer that March is probably the peak sales month… Read more »


@Short’em High:

Thank you for your reply and stats regarding my Victoria-Vancouver price-decline rate comparison question. Much appreciated!


If you check out those bear sites, they are still relishing the real estate down turn. They may not realize that this March already a turnaround point.

I wonder what Roland Leung would say about today’s numbers. Oh yes, i know what he would say:

Market definitely picking up especially on the West side.



Nice. 382 listing day. Is this a long weekend thing, or a post-HST thing?

Total days 21
Days elapsed so far 1
Weekends / holidays 1
Days missing 0
Days remaining 20
7 Day Moving Average: Sales 111
7 Day Moving Average: Listings 298
Sales so far 100
Projection for rest of month (using 7day MA) 2220
Projected month end total 2320
Listings so far 382
Projection for rest of month (using 7day MA) 5960
Projected month end total 6342
Sell-list so far 26.2%
Projected month-end sell-list 36.6%
Inventory as of April 2nd, 2013 16236
MoI at this sales pace 7.00


New Listings 382
Price Changes 198
Sold Listings 100




These feelings of guilt have been drilled into everyone collectively. But they aren’t relevant! The vast majority of the people wronged are no longer alive. The vast majority people doing the “wronging” are also no longer alive.

Bull friggin’ sh*t. I shouldn’t be encouraging the topic, but I’ll point you towards this article instead. It’s just an example. If you think casual, institutional, cultural, or any form of racism is a dusty relic for the history books, you’re deluding yourself. Some kinds of racism aren’t as fashionable as they used to be, but frankly, other kinds (even some that are relevant to this board) are alive, well, and quite popular.

Vote Down The Facts

“Ethnic groups, a collection of self interest groups, demand immigration policies that benefit themselves and not the collective.”

The entire population, regardless of ethnicity, is made of up self-interest groups; people who own cars vs those who use public transport, married people vs single people, those with children vs those who are childless, the wealthy vs the poor, the young vs the old. The cast their votes based on what issues are important to them, and politicians “appeasing” voters is actually them attempting to appeal to the majority. That’s how democracy works.


Ya so I just checked out the REBGV website. The new HPI number for April 2012 is $963,800, compared with $1,064,800 using the old HPI number, a 9.5% difference. That means the REBGV has pre-empted a 9.5% drop for you.



““However, at night you can look up at condo buildings and see only a few units with lights”

People might be outside? Or asleep?”

I notice the more newly completed buildings have fewer lights at night than the ones who are say 5+ years old. I guess the owners in those new buildings go out more and sleep more? Perhaps not.


Benchmark Prices: May 2012 $967,500
The reported Benchmark Price for a detached house was $1,064,800 in April 2012

So if your figures are correct, the benchmark price dropped 10% from April 2012 to May 2012. I guess what has more likely happened is that the REBGV changed their HPI calculation methodology starting May, which caused the May 2012 number to be the peak month according to the new methodology. This is all BS, of course, but if that OP ever got a reply back from REBGV this is probably the explanation he’s going to get.

Not much of a name...

It looks like a bunch of confusion on the part of the REBGV with their “New HPI”. It was supposed to be introduced in Jan 2012, but wasn’t used (at least in press releases) until May 2012. So the first four months of 2012 had numbers released publicly using the old system. The HPI numbers on their website seem to have been corrected to reflect the new methodology and all current press releases are referencing those same updated numbers.