‘Housing Is In Freefall’
Some housing bubble news from Wall Street and Washington. “The dollar’s early afternoon recovery, in the wake of a solid US jobs report for August, came to an abrupt halt on mounting concerns that the US housing market is teetering on the verge of collapse. The National Association of Realtors revealed that pending home sales slumped by 7 pct in July to their lowest level in three years.”
“Paul Ashworth, senior US economist at Capital Economics, said outright falls in house prices would appear to be unavoidable if this trend continues. ‘Housing is in freefall and that is the key to the economic outlook,’ he said.”
“David Lereah, NAR’s chief economist, said psychological factors account for much of the decline in July home sales. ‘Psychological factors are causing some buyers to remain on the sidelines, waiting for prices to stabilize or for more favorable news about the market and the economy. Contributing to this hesitancy is a lot of negative news stories, but in the end we believe that underlying market fundamentals will prevail.’”
“UBS on Thursday downgraded New Century Financial Corp. and Impac Mortgage Holdings Inc. to ‘reduce’ from ‘neutral’ on increasing risk of a credit downturn. The brokerage sees early signs of worsening credit, noting several nonprime mortgage lenders increasing their repurchase reserves mainly due to early payment defaults.”
“H&R Block Inc. on Thursday reported a first-quarter loss of $131.4 million, citing trouble in its mortgage business. Thursday’s report came one week after Block announced it was setting aside $102.1 million to cover possible losses from having to buy back mortgages. CEO Mark Ernst expressed confidence that the expanded reserve is large enough to cover additional, foreseeable losses from forced buybacks of delinquent mortgages.”
“‘We are assuming that any loan that could come back will come back,’ he said. Ernst said..Wall Street firms and other loan buyers in the secondary market ‘have become much more stringent in their enforcement of the requirements to buy back loans.’”
“Construction spending plunged by the largest amount in nearly five years, reflecting spreading weakness in the housing industry. It was the fourth consecutive decline in residential construction and the biggest drop since January 2002, providing dramatic evidence that the nation’s five-year housing boom has come to an end.”
The Baltimore Sun. “Home sellers aren’t the only ones pained by the sharp housing market slowdown: So are people who build houses. U.S. homebuilders and residential specialty trade employers cut 21,200 jobs in May, June and July, usually the peak building months, according to the most recent preliminary numbers from the Labor Department. The statistics, adjusted for seasonal variations, also showed a significant job loss in March.”
“‘Some of the larger builders have laid off as many as 30 percent of their total staff in this area,’ said John Kortecamp, of the Home Builders Association of Maryland. (Builder) Chris Rachuba in Eldersburg has been getting calls from subcontractors hoping that he has more work for them, a turnaround from the days when there weren’t enough subcontractors to go around. Suppliers that used to be too busy to bother with sales cold calls are descending on him, too.”
A Motley Fool. “It turns out that the anecdotal evidence for falling prices may be exactly right, because a large number of housing sale prices may be based on fudged numbers. That’s right, the last leg of Greenspan’s bubble may be collapsing under the weight of farcical accounting.”
“Many economists and commentators have begun to point out that housing prices are inflated to an unknown degree by seller concessions. These expensive sweeteners are now par for the course as desperate sellers try anything to move their houses.”
“I think we’re only at the tip of the iceberg when it comes to seeing other forms of mild and wild financial shenanigans that pumped this bubble to the bursting point. I’ve been saying for some time that I thought the appraisal business was a funky racket, and it appears to be giving some folks big problems when they want to refinance.”
Blah blah blah. I’m all short now. Bids hit on remaining fall & winter puts.
Laresh is ‘amazing’. The good thing is, with the internet, we can collect his running ‘quotes of wisdom’ and hopefully hold him accountable when this thing is over.
These guys have ZERO integrity…but as long as they get rich and help others get rich at the expense of the ‘masses’ then they are fine with it.
IT IS THE MATH STUPID!!! Why buy something for 2-4 times the cost of renting it? The 50k median salary does NOT afford the 400-600k ‘median’ priced homes that are everywhere along the coasts. That ain’t psychology pal!!! Just basic econ 101.
But just like the MBA stock jockeys who told people that internet stocks trading at 180 times future earnings were ‘STRONG BUYS’, these people are DEAD WRONG and that will be proven over the next 36 months.
Stay tuned! I’m about ready to start rocking the blog again as this is getting more and more interesting as these ‘experts’ try to rationalize how the market is behaving. I need to make sure that there is somebody countering their rediculous statements.
SoCalMtgGuy
http://www.housingbubblecasualty.com
should be Lereah….typing too fast and accidentally hit ‘add comment’ when proofreading.
‘Laresh’ doesn’t sound all the bad…i’ve seen other variations on the name here before…can’t be worse from the name butchering credit companies do…;-)
Like David Koresh- leading his fanatical minions to the ‘promised land’ as they unquestioningly and literally ‘drank the Kool-Aid’ for the last time!!
Just remembered that Jim Jones was the freak with the poisoned Kool-Aid in Guyana. Damn, I’m getting my crazed, psychotic, charismatic leaders all mixed together- Koresh, Lereah, Jones- whatever…
And of course what they drank was actually grape FlavorAde, not Kool-Aid.
The typo reminded me of an old TV/movie cowboy, Lash Larue. DL might have been nicknamed “Lash” Lereah, but that I believe ‘ol Lash was a hero, not a villain.
1- psychological factors account for much of the decline
2 -Psycho factors are causing some buyers to remain on the sidelines\
3 - waiting for prices to stabilize or
4 - for more favorable news about the market / economy.
5 - a lot of negative news stories,
6 - but in the end we believe that underlying market fundamentals will prevail.’
This guy is a Complete ‘FENDER-HEAD’ …assh*le.
Lereah attributes too much to psychology. No doubt, because in the past these talking heads took credit for pushing the market up. People aren’t waiting for the market to “stabilize”, as much as waiting for it to become affordable someday.
Funny how according to Liarreah it wasn’t “psychology” on the way up; it was the “market fundamentals.” Now that RE has crested the hill and is rolling down the other side towards the edge of the cliff, it’s all psychology. You can’t have it both ways, asswad.
Ding!
I too believe that underlying market fundamentals will prevail, but they won’t be in the real estate industry’s favor. But of course most of us here can see this statement as the obvious market pumping that it is.
You know, I hate it when people put in comments that add no value. But I just have to, because you guys said exactly what I was thinking. David L. is a total idiot. Or thinks that we are. I bet he is SO short on the housing market right now, we would all be shocked to see his holdings.
Anyway, one of the jewels from above (see, I will try to add something):
Contributing to this hesitancy is a lot of negative news stories, but in the end we believe that underlying market fundamentals will prevail.
Ugh, you better hope not David. The fundamentals have us taking ~30-60% off the values, depending on the area. The fundamentals (rent/purchase & median income/median home price) are not what you want to be pushing right now. Get the Kool Aid out buddy!
“ ….. comments that add no value”.
Correct. Remember back in the good ol’ days when there was a lot of NUMBERS thrown around in the “happy talk”? Don’t see much of that anymore ….. just talking in generalities …… psychological factors, stabilize, hesitancy due to news about the market and the economy, underlying market fundamentals, setting on the sidelines …….
Lereah’s “pronouncements” during the heyday were typically laced with supporting numbers, and a lot of these ‘general talk’ issues were going on then….?
Boy, no numbers anymore …….. (numbers = value)
My point being ….. much more value in yours Fink, than David’s ….. you actually threw in some math and logic…. stop it.
Psychology makes the market defy gravity and also makes prices collapse. I think that it’s fair to say that psychology is very very important. But, IMO the combination of psychology and bad fundamentals is going to make for a “surprisingly” big collapse.
Speaking of Psychology, our fave radio station just played Billy Joel’s “Allentown” and not long before it The Police’s “Spirits in a Material World”
The timeless Police lyrics include:
Our so called leaders speak
With words they try to jail ya
They subjugate the week
But its the rhetoric of failure
Very timely stuff…..but maybe it’s that the djs are smarter the Liareah and his ilk!
week s/b weak….damn husband keeps feeding me whisky sours….damn! : )
Mr. Lereah . Will you be more specific on what “market fundamentals that will prevail” are .Seems to me you are giving yourself a out .
I’m insulted that he thinks that buyers who are standing by the wayside are being psychological . What about lack of affordability ,what about to much inventory ,what about the lousy loans being offered ,what about lack of job stability if we go into recession ?
I remember hearing about how earnings per share didn’t matter any more, and what was “really important” was revenue per share. I shook my head then, and I shake it now.
Screw revenue, it’s “eyeballs” man, “eyeballs”, “pageviews” and “stickiness”
And take a look at Mish’s website today, showing an inflation adjusted six year median household income, 1999-2005. What can justify a price plateau or just falling a little? Did we just not give a crap about housing or housing value before? When RE investing loses it’s luster this time, homes will quickly become the bastard child of wants, returning to that 1999 ‘inflation adjusted’ price tag.
“…that 1999 ‘inflation adjusted’ price tag.”
That’s the number for me — 1999 — and bam, I’m back in, reckless or not.
Yeah, I found another 1999 fan! I’ve been accused of everything from being Anti-American to just a little sh*t for my 1999 stance. Nice to know I have cheerleader next to me…like I don’t have to be the lone geeky Spartan SNL cheerleader.
I’ve been pimpin the 97′ number on an overshoot scenario. That didn’t take too well with a couple of the bloggers here though (perhaps they bought back in 01 and didn’t want to hear the bad news about being underwater shortly?).
in the Netherlands the 1999 price level (about 40-70% down from current prices) would still be many times above the historical trendline; even ‘97 prices would be nothing more than the start of a return to sanity.
Unfortunately, prices are still surging here and politicians are working on even more homeowner subsidies and free protection from downside risk for after the elections. By the time the Dutch bubble tops we probably need a price decline of more than 90% to reach the historical trendline.
Hey I bought in ‘99 for 5k less than the people I bought from paid in ‘95. ‘Round DC anyway ‘99 ended up being pretty close to bottom. The market was definitely shifting to a seller market, with property going under contract pretty fast and fewer concessions available from sellers.
Lereah: Baghdad Bob of the RE world.
At least he is consistent. Too bad he is consistently irresponsible (in his cheerleading to the media)…
I do find it interesting though that this 2006 NAR leadership summit slideset took a harsher/more truthful stance on the current situation.
Methinks, if there is any psychology involved, it is Lereah pumping out placating “sound bites” to calm the masses, while giving his minions a “reality check” warning of impending doom.
Liarreah is talking out both sides of his mouth. One side is for public/mass media consumption, and the other is for the industry/Fed. As someone on this blog much more astute than I pointed out,
“Their objective is to scare the Fed into respiking the punch bowl. But if that fails, Plan B is to blame the Fed for causing the hard landing. Never mind that only a year ago, both Toll and Lereah were trying to convince everyone that “the sky is the limit.””
On what, pray tell? Homebuilders, subprime lenders, big banks?
Buyers are thumbing their noses at sellers right now. The smart ones are not going to take on a toxic mortgage that will put their families in financial jeopardy for the rest of their lives. Sky-high home prices have punished first time home buyers who just want to find a nice home for their families to live in at a reasonable price.
The people who have run up home prices, in this monster of all housing bubbles, should be ashamed of themselves for pricing out hard working families. Home prices will fall hard because they are simply not worth it at the current price levels. Wealth destruction will occur on a massive scale, because there are currently no buyers.
What we have here is a, “Buyers are thumbing their noses at sellers market”,and saying, Let Them Rot.
“Psychological factors are causing some buyers to remain on the sidelines, waiting for prices to stabilize or for more favorable news about the market and the economy. Contributing to this hesitancy is a lot of negative news stories, but in the end we believe that underlying market fundamentals will prevail.”
No, Dave, they’re waiting for prices to plummet back down to levels where the “underlying market fundamentals” prevail (i.e. where a professional with an MBA doesn’t need to pay 45% of their gross on a neg-am ARM for a particle board and stucco POS).
Psychology up, psychology down.
Psychology down + fundamentals prevailing = falling home prices
A simple formula, really.
Word. ’nuff said.
“David Lereah, NAR’s chief economist, said psychological factors account for much of the decline in July home sales
He’s right, psychologically I can’t pay 3 times what a house is worth.
Right: “underlying market fundamentals” would suggest that typical asking prices should be about 8 times the annual rent instead of 25 times the annual rent. Remember the 1950’s, when mortgage rates were no higher than they are now, and when a month’s rent was conventionally said to be about 1% of the property value?
“…a month’s rent was conventionally said to be about 1% of the property value?”
I was taught that exact, simple formula in business school in the late ’60s.
I’m even willing to go as high as a months rents being 2% of value in this day and age ,but that’s pushing it a little .
According to DL, “Psychological factors are causing some buyers to remain on the sidelines.” Moreover, “we believe that underlying market fundamentals will prevail.”
Translation: Today’s buyers are acting irrationally. Don’t they get it? We know what’s best for them.
What an arrogant bastard!
I think I’ll have some more of my ‘98 Freemark Abby merlot . The latest crush of the amontillado is too harsh! Reading about Liareah and his take on the psychology of the market, makes me wonder how many condos he owns.There is no disclosure as I know? Correct me bloggers!
Isn’t it funny how quickly we’ve gone from predictions of a “soft landing” or a “levelling off”, or of sales decline without much price declines, to this?? At this rate, price reductions should be coming this fall. Then again, a 2200 SF house in not such a great part of Sherman Oaks near my old house just sold for 1.2M. Go figure.
there are some new townhomes in dublin. although they didn’t drop the offering price, they did up the “incentive” from $30k 2 months ago, to $50k 1 month ago, to $70k this week. the townhome itself is about $700k so it’s like 10% off. i guess the real question now is when will we see the bottom. i’ll say 2nd or 3rd qrtr of 2007.
More like 4Q 2010.
and in Europe probably somewhere around 2020 …
Price reductions are already here on Long Island. I see houses whose asking prices are less that the then buyer bought it for in 2003. The market is very slow here. It’s curtains, I tell ya!
So, we are at or below 03′ prices in Long Island and it is only Sept without any big catastrophe or stock market crash, etc. Hmmm? Perhaps my 97′ call is too conservative?
…and isn’t it funny how we all ganged up on you and stopped you from making the worst financial decision of your life.
Again, patience.
Ain’t gonna be no real deals until at least next September.
PATIENCE, Lainvestorgirl.
SEE THE HAND AND THE ARM PULL THE BOW.
PICTURE WHAT COMES NEXT.
Wow, the MSM is finally getting it. The news keeps getting worse and worse every day. Looks like the tide has really gone out.
Guess we not only get to see who has been swimming naked, but then get to watch them get hit by the tsunami on the horizon.
The tsunami must really be coming.
but in the end we believe that underlying market fundamentals will prevail.
__________________________________________________________
For once I agree with DL. Fundamentals will prevail and within 2-3 years homes prices will be down 40% from their peak!
“Paul Ashworth, senior US economist at Capital Economics, said outright falls in house prices would appear to be unavoidable if this trend continues. ‘Housing is in freefall and that is the key to the economic outlook,’ he said.”
Which means: BUY MORE STOCKS! The consumer will never fail! He can’t be stopped!
We’ve reached a new paradigm, apparently.
“Paul Ashworth, senior US economist at Capital Economics, said outright falls in house prices would appear to be unavoidable if this trend continues. ‘Housing is in freefall and that is the key to the economic outlook,’ he said.”
Which means: BUY MORE STOCKS! The consumer will never fail! He/She can’t be stopped!
We’ve reached a new paradigm, apparently.
‘but in the end we believe that underlying market fundamentals will prevail”
And what exactly are those ” underlying market fundamentals” ?
This guy is classic. Says everything and nothing at the same time- typical economist. Do you mean the fundamentals showing a 20 year low in affordability, or the highest inventory in 4 years, or the 20-30% above the mean in prices? I’ll stop there . What a tool.
At this point, Lereah’s job is to not spook the masses. Doing so would trigger a complete collapse.
Lereah is the person telling an man who has been in an accident that “everything will be alright” as they bleed to death.
Lereah’s and LAYs jobs are to rah rah the real estate market. If the dumb AP reporters and the rest of the lazy newspapers print and report the puffed and slanted articles as gospel to be read and believed by the sheeple and others then shame. The data should be placed on the editorial pages and not printed as news.
Maybe, but I think he is the guy at the circus who holds up a “skinny mirror” to a morbidly obese guy while his friend drives up driving the ho-ho truck.
At this point, Lereah’s job is to not spook the masses. Doing so would trigger a complete collapse.
Lereah is the person telling a man who has been in an accident that “everything is gonna be alright,” as they bleed to death.
I don’t know about that. Reassuring an accident victim (however hopeless the situation) would be an act of compassion, of which I believe Mr. Liar-realtor to be incapable. He’s more like the vulture who would go through the victim’s pockets as he lay dying in the street, or like the guy who hits on the widow at the funeral.
“Dollar recovery comes to a halt on US housing market collapse fears”
collapse
noun
An abrupt disastrous failure: breakdown, crash, debacle, smash, smashup, wreck. See money.
A disastrous overwhelming defeat or ruin: downfall, fall, waterloo.
Well, that sounds bad.
Actually, if the housing market collapses, the dollar will go up, not down. The elimination of a couple of trillion dollars into thin air will decrease the number of dollars available. Fewer dollars available = increased demand. Hence, deflation. At least for a while.
I remember growing up in the inflationary seventies and eighties and being surprised in the 90’s (after the RE crash) to see the price of food, clothes, heating oil and gasoline go down!
“I remember growing up in the inflationary seventies and eighties and being surprised in the 90’s (after the RE crash) to see the price of food, clothes, heating oil and gasoline go down!”
But that’s when the U.S.’s contribution to the WDP was (trying to remember BW article) ~60%
Now it’s ~25%.
We’re not running the show anymore. And in that context, things will be different. (IMHO)
the dollar can’t collapse because the euro and Yen will collapse at least as fast thanks to the policies of the ECB and BOJ.
Just read the latest stories about how the Japanese Government is manipulating the inflation numbers to keep interest rates down and the Yen low. And the ECB has vowed to keep the euro below 1.30 to the dollar; I’m sure they have no problem keeping it there with their century-low interest rates and M3 growth that is even higher than in the US.
“I just don’t think we have what it takes to prick the bubble… I don’t think prices are going to fall, and I don’t think they’re even going to be flat. ”
- Diane C. Swonk, chief economist at Mesirow Financial in Chicago, New York Times, Trading Places: Real Estate Instead of Dot-Coms, 3/25/05
__________________________________
So does this mean stories like this were not TRUE????
Crispy -
Any time you want to lay this Swonk quote, or others like them (I especially favor the one from the realtor/carnival barker about Florida entering a new economic paradigm/reality) on me - feel free.
I really enjoy these. Swonk still is one of my nominees for this bubble’s “Henry Blodget Award” winner.
And also, anybody know where I can go to sign up to be a “chief economist” somewhere?
LOL. Thanks!!!
I saved a lot of articles in the last year. I need to dig out my folder of quotes. Maybe Ben can setup something similar to the photos to post quotes.
I’ll second this.
So far we have Yale 10, UCLA 5, Harvard 0 …
Totally off-topic, but is it possible to find all houses owned by a particular individual? I know that the courthouse has records for sales history and whatnot for a particular address, but I want to know all properties owned by a particular person.
Is this possible? Thanks!
My real estate agent can search by name in the MLS system.
There are many online searches that for a fee will provide that. Depending on what state or county they reside in, you can do a search by name. It is tedious, but it can be done. A good start is to look up that county’s property appraiser office and do a search.
For Maricopa County (Phoenix area) for example you can do property searches by name-covers the whole county-this is a free search on the county website. Jefferson County (Colorado) has online public records search where you can find all public records on a person, including title deeds, etc. Nationwide, a bit more work…
If you have access to Lexis (or know someone who does) you can find all the properties.
they go back to 1987 and are 2 months late for most counties in Connecticut…would title plants have more accurate and timely information than Lexis?
what — looking to see how many properties that genius Kiyosaki owns?
If you’re interested in dirt on Kiyosaki, see John T. Reed’s page on him.
Here, for your reading pleasure, is another handy page from from John T. Reed’s. It’s the real estate B.S. artist detection checklist:
http://www.johntreed.com/BSchecklist.html
Thanks for the tips, everyone. I found a search page through my county assessor’s website. You can search, but if you want any more than just a very brief synopsis, you have to drop a few bucks.
I was curious how many properties a coworker of mine who likes to label himself as a “real estate investor” owns. I take it having a lot of liens and abstract judgements from the state and county is not a Good Thing?
He just makes the lawyers rich at his own expense. I wonder how many years the stress is shaving off his life??? That’s priceless there.
Check out http://www.visionappraisal.com; lots of info here on property owners and sales prices for lots of various states.
In Pima County, Arizona, you can do this via our county assessor’s website. Go to:
http://www.dot.co.pima.az.us/gis/maps/landbase/parsrch.htm
Happy sleuthing!
Every single 100% financed purchase transaction we have closed at our office, the price was jacked up from the ask price so the seller can pay for buyers closing costs. EVERY SINGLE DEAL.
Appriaser APB: where does this practice play in your valuations?
So the question remains; what does a 100% no down buyer do in a falling market? What do appraisers do?
Good questions.
1. FIle Bk
2. Change your name to Pedro and move to Mexico.
3. get a 2nd or 3rd job
4. Stop eating.
5. Sell the children
6. Drink heavily
7. Pray like hell
8. Claim that the “terms were not disclosed properly”
9. Keep watching shows like “Flip this House” and believe that crap really happens.
10. Buy 10 gallons of gasoline and a box of matches…….
Lol, I needed that .
I hear things are bad in Denver. And actually 4 & 5 can be combined in true Denver fashion.
Just ask the Donner party.
Also ask Al Packer if you’re from the Denver area.
Appraisers must deduct any known sellers concessions from the sales price. If a property sold for $350,000 and there was a seller’s concession of $5,000 for the buyer’s closing costs, that $5,000 is subtracted from the $350,000. If that sale is then analyzed as a comparable sale in another appraisal it sales price would be $345,000 not $350,000. The Realtors are suppose to post any such concessions with the MLS data at the time of sale. The values of any such giveways such as trucks, vacations etc. are also deducted from the sales price.
From a legal standpoint, this is true. However, how many people have actually been following the law –in letter or spirit– for the last 6 years? Based on the number of fraud cases popping up here & other blogs, I’d say darned few.
Wouldn’t that defeat the purpose of the incentives vs. a straight up price cut?
Lereah quote of the day
“Contributing to this hesitancy is a lot of negative news stories, but in the end we believe that underlying market fundamentals will prevail.”
Sure hope he is correct on this one
Should be….”Contributing to this hesitancy ARE a lot of negative news stories…”
Sorry to kick this guy when he’s down, but he should at least get the wording right. Maybe he’s talking in the singular because he doesn’t want to give credence to the truth - which is that there are many, many news stories reporting this debacle.
Lareah is grammatically correct at least. The verb should be “is,” not “are.” Both the gerund, “contributing” and the noun “a lot” are singular.
I stand corrected! But Lereah is still wrong about everything else.
Thanks, NYC Guy. I love that word gerund.
is ass-pounding a gerund?
A gerund is simply a noun turned into a verb by adding “ing.”
“Contributing to this hesitancy is a lot of negative news stories, but in the end we believe that underlying market fundamentals will prevail.”
Absolutely agree with the previous posts on this. Could Lereah be referring to the “fundamentals” of rock bottom interest rates, lax lending standards and herd psychology? I don’t see anything else behind all this craziness.
David Lereah, NAR’s chief economist, said …..”in the end we believe that underlying market fundamentals will prevail.”
Unfortunately for all of us, David’s right - the underlying fundamentals (i.e. an unproductive, credit-based, speculation-driven economy) will prevail!
…but in the end we believe that underlying market fundamentals will prevail.
Funny, that’s what we keep saying.
San Diego Inventory is up 569% year-over-year.
Oh…….only 569%……
No problem here……….though I do think something is about to hit the fan
I have seen that, the 9/1/2005 inventory number is questionable. Probably a data error.
Yep
09/07/2005 9,841
09/01/2005 2,281
08/28/2005 10,026
09/01/2006 15,272
Looks like it is.
That number is an anomaly. Nonetheless, inventory is up about 50%, which is nothing to sneeze at. There will be more shortly, I’m sure. Especially in the spring/summer season of ‘07. You guys are about a year behind us in the crash. (East coast)
Some housing bubble news from Wall Street and Washington. “The dollar’s early afternoon recovery, in the wake of a solid US jobs report for August, came to an abrupt halt on mounting concerns that the US housing market is teetering on the verge of collapse.
and
“David Lereah, NAR’s chief economist, said psychological factors account for much of the decline in July home sales. ‘Psychological factors are causing some buyers to remain on the sidelines, waiting for prices to stabilize or for more favorable news about the market and the economy. Contributing to this hesitancy is a lot of negative news stories, but in the end we believe that underlying market fundamentals will prevail.’”
Same story………two different tunes………if it wasn’t so serious I’d laugh
“David Lereah, NAR’s chief economist, said “Contributing to this hesitancy is a lot of negative news stories…”
—————————————————————————-
Yeah, blame the news! They weren’t complaining about all the rah rah spin last year though.
Man, get out of your Ivory Tower….
“Paul Ashworth, senior US economist at Capital Economics, said outright falls in house prices would appear to be unavoidable —>if this trend continues.
Anyone want to have some fun?
http://dallas.craigslist.org/wri/201798265.html
I’ve not contacted the poster, but I’d bet dollars to donuts he’s offerring pay only as stock options for his “soon to go public company.” I do a lot of writing for magazines and books in the computer market and “pitches” like this were common from small start ups back in the dot com timeframe. I guess if you found a real player, you could score big, but for every Amazon or eBay that came out of the mix, there were hundreds of companies that quietly disappeared before, during, or after the bust.
LOL..a lot of folks on this blog are more than qualified.
“- Excellent Grammer / English”
I hope the misspelling was intentional? when you try to hire writers at least respect their professions..
Blowin on my fingernails, throwing my head back and laughing like a mad scientist…YES!!! I will ghost-write this book!
Just pullin his chain. Jerk.
I just watched the head of HUD make the following statements in a CNBC interview. He expects the housing market may be soft in the East, West, Southeast, Southwest and the Midwest. He then said later in the interview housing will remain strong because we’ve never had a national housing decline, it’s always been regional. WTF!!!!
I love it! Yeah, every region is declining, he named pretty much all of them, but nationally we’re still looking good
Yeah, try telling that to the good folks in the Northeast, (Boston, etc.)
txchicks57-My Lord, never seen anything like that. What is to become of us?
He’s all over craigslist in Dallas offering stock options for every type of service. It’s been going on for months. The thing is a total sham and I don’t believe for a second that they have an underwriter for this nonsense. IF they do, it’s EF Nuttin.
I’m still trying to figure out what a “catburtler” is.
Clearly, this individual is having his/her own problems with grammar, spelling, syntax, etc. Let’s hope he’s not pushing a new line of dictionaries.
loved this comment by Motley Fool:
A Motley Fool. “It turns out that the anecdotal evidence for falling prices may be exactly right, because a large number of housing sale prices may be based on fudged numbers. That’s right, the last leg of Greenspan’s bubble may be collapsing under the weight of farcical accounting.”
Hey!
The “Lamest Newspaper in All of American” (major city category) is now trying to overcome its exalted status.
Read today’s Carol Lloyd (real estate as entertainment writer) column:
“Sellers slow to wake up to the new reality”
http://sfgate.com/cgi-bin/article.cgi?file=/gate/archive/2006/09/01/carollloyd.DTL
The LNAA is aka the San Francisco Chronicle.
Psychological factors? Sure Lereah. That’s what caused all the lemmings to rush to the beach, generously helped by Greenspan’s free ride….. Just wait and see what happens when the majority of lemmings believe there are sharks in the water.
The RE industry used psychological warfare to their advantage to help inflate this beast (appeal to fear: “buy now or be priced out forever”, appeal to greed: “make more ‘owning’ a home than you can on the job”, selfishness:ever bigger and bigger McMansions)
Now, that the psychological warfare is being picked up by the mainstream media in the opposite direction, Lereah calls foul.
Uh oh.
Phoenix (Maricopa County) Notice of Trustee’s Sale:
Jan 05 1297
Feb 05 940
Mar 05 1040
Apr 05 766
May 05 759
Jun 05 767
Jul 05 748
Aug 05 795
Sep 05 669
Oct 05 728
Nov 05 704
Dec 05 749
Jan 06 726
Feb 06 687
Mar 06 790
Apr 06 638
May 06 764
Jun 06 797
Jul 06 851
Aug 06 1019
Correction:
Aug 06 is 1031
I forgot you can only view max of 1000 records per page view. Haven’t had to go to a next page for a while.
Nothing like several hundred houses going to auction to help stabilize prices, eh? Hehehehe. Nice jump, looks like the house of cards is starting to shake pretty hard now.
This guy DL is worse than a dangling hemorroid.
Here’s a few things
http://tinyurl.com/q2raq
Finally, a word about home equity loans from a source not so well known to retail investors. (This stuff is esoteric, so if your eyes glaze over, just skip to my conclusion.) Fitch Ratings rates (among other things) home equity loan asset-backed securities [HELABS]. This is the fourth HELABS deal where the deal was priced in 2005, that I have seen where the bottom-most classes have been downgraded by Fitch, when it got to the first anniversary. This hasn’t happened to all 2005 HELABS deals by any means, but to have four downgraded is interesting. This hasn’t happened with 2004 and prior classes generally, though there have been a few downgrades for deal-specific reasons.
It’s rare to see downgrades this early on asset-backed deals; bad underwriting tends to persist with asset-backed securities. I think it is a harbinger of more losses for those that have lent to fund home equity loans in 2005 and 2006.
Trivia: Odds are the holders of the most junior certificates are some multistrategy CDO, which means some hedge fund holding the CDO equity will feel the pinch.
Upshot: avoid banks that have grown their home equity loan exposures aggressively over the last few years. The underwriting results are likely to be poor, and the likelihood of negative earnings surprises high.
next:
http://tinyurl.com/lz9zp
“Upshot: avoid banks that have grown their home equity loan exposures aggressively over the last few years. ”
Hmm. Avoid the bank stocks or avoid having accounts in them? My assumption is that FDIC insurance will be ok since it costs nothing to print money and during a deflationary collapse the gov will be printing like crazy.
Do you think a bank in which Berkshire Hathaway is a large backer would be safe?
It’s mostly referring to the stocks of the banks. Avoid them or even short them if you’re adventurous
txchick57
Links won’t work for me. Sounds like very interesting info.
Thanks
““David Lereah, NAR’s chief economist, said psychological factors account for much of the decline in July home sales. ‘Psychological factors are causing some buyers to remain on the sidelines, waiting for prices to stabilize or for more favorable news about the market and the economy. Contributing to this hesitancy is a lot of negative news stories, but in the end we believe that underlying market fundamentals will prevail.’””
Well let me add this. Lereah is right, the hype brought housing prices up and FUNDAMENTALS is what will bring them back down.
How can anyone with internet access believe these hypesters? We can all see the MASSIVE increase in inventory by going to ziprealty.com. 53,500 houses on the market compared to 4500 a year ago? Soft landing? And summer is over?? WTF??
YES! FALL, FALL!
She’s a good girl,loves her mamma, loves je -sus, and america
too.She’s a good girl, crazy ‘bout elvis, loves horses,
and her boyfriend too.And it’s a long day, livin’ in
reseda, there’s a freeway, runnin’ thru the yardAnd i’m a
bad boy, ‘cause i don’t even miss her, i’m a bad boy, for
breakingAnd i’m free, free falling.Yeah
i’m free, free falling.And all the vampires
walkin’ through the valley move west down venturaBoulevard.And all the bad boys are standin’ in the
shadows, and the good girlsAre home with broken hearts.I wanna glide down over mulholland i wanna write her
name in the sky.I’m gonna free fall out into
nothin’, gonna leave this world for a while.
Forgot to mention that I watched the Comedy channel ( CNBC) this morning, and they had an economist Mark Zandy(sp?) on. He stated what I had posted about a month ago on this site that the average savings rate for homeowners that have HELOCS is almost a NEGATIVE 20%. You should should have seen the CNBC pretty boy and the other puppet heads almost explode. He also said the average person under the age of 35 had a negative 16% savings rate and as a nation we were about a negative 2%.
The educated responses from the CNBC babe and the others was “wow.” Then they moved right along to why the economy was still strong because it would “add” 125,000 new “jobs.”
BigDaddy63, the economist in question is Mark Zandi. His sister and I were in the same girl scout troop a-way-back-when.
there’s a joke in there somewhere…
“The educated responses from the CNBC babe and the others was “wow.”
LOL! Erin Burnett. Such an airhead.
She was jawing with a guest this week, talking about the 10-year T-Note, how it’s tied to mortgage rates, and down 50-some basis points in the last month. “Gee, that’s GOOD for housing, isn’t it?” CNBC excels at surface-thinking.
Comedian Carlos Mencia calls those new jobs “yobs”. As in any day laborer could do them, oh well, the US had a nice run.
“Contributing to this hesitancy is a lot of negative news stories, but in the end we believe that underlying market fundamentals will prevail.’
This is the quote of the year! The underlying market fundamental of purchasing a home that costs 9-12 times one’s annual income will prevail only in times of “irrational exuberance,” to put it politely. However, if human beings are truly lemmings as Mr Lereah seems to think then I guess this sort of financial suicide IS representative of a market fundamental!
For once I agree with Lereah. I too “believe that underlying market fundamentals will prevail.” However, we have opposing views of the maket fundamentals.
Hi Portland_Girl,
I was up in your fair city this past week, and was duly impressed with the condo construction boom underway. Does it seem like a good time to invest in condos or other Portland housing?
here is a tiny URL for tonights NPR Marketplace:
http://tinyurl.com/z2cyq
Chip said:”That’s the number for me — 1999 — and bam, I’m back in, reckless or not”.
Agree, but I’m hoping prices will fall even back to 1998 levels or lower because of inflation on real prices such as: gas, food, consumer goods, and insurance costs makes 1998 housing numbers reality, especially since most of our well-paying jobs are now overseas and the US companies arent paying the salaries they once were.
Hmm. Avoid the bank stocks or avoid having accounts in them? My assumption is that FDIC insurance will be ok since it costs nothing to print money and during a deflationary collapse the gov will be printing like crazy.
“Printing money Literally” is a given.
Auger Inn said: “So, we are at or below 03′ prices in Long Island and it is only Sept without any big catastrophe or stock market crash, etc. Hmmm? Perhaps my 97′ call is too conservative”?
I’m thinking yes now. Will prices return to possibly 1995 anyone?
AZ lender said:”Right: “underlying market fundamentals” would suggest that typical asking prices should be about 8 times the annual rent instead of 25 times the annual rent. Remember the 1950’s, when mortgage rates were no higher than they are now, and when a month’s rent was conventionally said to be about 1% of the property value”?
Interesting point, definitely something to think about.