Bits Bucket And Craigslist Finds For December 1, 2006
Please post off-topic ideas, links and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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h&r block / hrb desaster reloaded
just a few weeks after the latest warning things have worsened further….
http://immobilienblasen.blogspot.com/
I think the h&r news is more important than some of the other data out there.
Home Alone with no neighbors
http://www.detnews.com/apps/pbcs.dll/article?AID=/20061201/BIZ03/612010399
Home alone with no neighbors.
http://www.detnews.com/apps/pbcs.dll/article?AID=/20061201/BIZ03/612010399
Corporate flipper decides to cut and run from his GM gambit…
http://www.signonsandiego.com/uniontrib/20061201/news_1b1gm.html
The front page right lead article in today’s WSJ is also about Kerkorian’s “move to unload entire GM stake”
It is know that he wants to get MGM casino shares. I think what happened is that he clicked on the wrong button and bought a sh**load of GM shares instead of MGM ones using his Ameritrade account.
Yeah, he probably forgot to type that first M. Then he woke up to the headlines the next day and thought, “Crap, I bought another American car company!?!”
County’s economy continues to droop
By Dean Calbreath
STAFF WRITER
December 1, 2006
San Diego County’s leading economic indicators declined for the seventh month in a row in October, dragged down by the continuing decline in home building and a rise in unemployment filings, according to a report released yesterday by the Burnham-Moores Real Estate Institute of the University of San Diego.
But USD economist Alan Gin, who compiles the monthly index of economic indicators, sees a silver lining in the decline.
The 0.1 percent slippage in the index in October was the smallest decline in seven months. And improvement in local stock prices, consumer confidence and the national economy suggests that the outlook may be bottoming out – although Gin still projects a slowdown through at least the first half of 2007.
The biggest hurdle in the coming year, he said, is the continuing decline in the local real estate market.
http://www.signonsandiego.com/uniontrib/20061201/news_1b1sdecon.html
I heard that one on KPBS last night. Struck me how the hard facts (homebuilding, unemployment filings (there were three things?)) are pointing down, and the “emotional” ones (stock prices, consumer confidence (there were three things here too?))are pointing up.
Where’s the Love?
http://wallstreetexaminer.com/blogs/winter/?p=125
“Are sellers wisely taking properties off the market now? Are brokers flooded with price reductions that may have been bloated in the first place? Is this an infinite regress where buyers can sit back until - Bingo! - they are finally getting value?”
The above is from an article on the Hamptons - ground zero for excess in America and a house of cards housing market that is on its way to massive collapse.
See: http://tinyurl.com/uxjy6
“Massive collapse”…….. but not in your area.
“Are sellers wisely taking properties off the market now?”
Yeah, if they want to give a gift to their competition for Christmas. Come spring the “wise” sellers who want to relist will be in competition with both the “wise” and the “stupid” who didn’t lower their price enough in the fall and winter. Now where will their pricing start in a market flooded with both the “wise” and stupid?
It’ll likely start way too high.
There are very small 1960’s vintage ranches out there in dumpy downsacle neighborhoods like Shinnecock Hills (home of the Shinnecock Reservation/Ghetto) that had asking prices of almost $1 million last summer. These were $150,000 houses of night janitors not long ago. The appraisers involved with these homes should be jailed.
Now where will their pricing start in a market flooded with both the “wise” and stupid?
That’s a really good question. In my area new listings are still coming on the market at prices 10-15% higher than recent comps. I’m going to assume these folks can wait until some GF appears with an offer close to their wishing price. What happens come springtime, when more highly motivated sellers appear on the market? It will be interesting to observe.
from the article
“Is this an infinite regress where buyers can sit back until - Bingo! - they are finally getting value?”
Is this an admission that current asking prices are inflated?
Finally, REaltors self-medicating:
“(One office, they say, had lithium in the coffeepot.)”
About not advertising the large number of listings because it takes away the area’s cache’:
“Buyers want to know they are getting into a special place. Aside for its natural beauty, over the last few decades it’s the Hamptons cache that has brought the buyers in, tripping over each other to belong here.. So why not give that clubby insider feeling by having selective print ads reflect it!”
So we’ve gone from “there’s a housing shortage” to “*pretend* there is a housing shortage” (at least in The Hamptons ™). And these are the types of, ahem, experts that the media will go to for comments on the housing market.
My feeling is that this kind of baloney is going on in San Francisco… “pretending there exists a shortage”, and especially with all the new condos in the SOMA/Mission Bay area.
Home depot being eyed by private equity-
Hey, do any of you guys want to go in on General Electric? I figure that if we pool some credit we can probably swing it. Maybe we could get Microsoft too. We live on a paper planet, folks!
LOL!
Is your credit score above 650?
What is it with the private equity buyouts these days?
Companies are not ATM machines, they need to be run by people who understand their industry, not by IBs with a spreadsheet.
I wrote a piece called “Money, Money Everywhere” several days ago that has my opinion on this whole trend. Basically, money growth worldwide has been off the charts and investors are putting it to work. I think it’s truly as simple as that. Do most of these deals make sense? No. But hey, that’s excess liquidity for you … it invites malinvestment. Hmm — where have we seen that before? In the past couple years? Housing, perhaps? Will the monetary policy powers that be ever get a handle on these rolling bubbles?
If you’re interested …
http://www.moneyandmarkets.com/press.asp?rls_id=575&cat_id=6&
“What is it with the private equity buyouts these days? Companies are not ATM machines”
Niether are houses and home equity, but we saw that people used them as ATMs as well. It’s all of that excess credit sloshing around…it’s been going into commercial real estate, and now into private company buyouts. Around and around she goes, where she stops, nobody knows…
My opinion, working for many of these businesses (hedge funds, funds of hedge funds, private equity/venture capital, and the recently highly popular fund of real estate funds / SICARs)… if someone commits 1B to your fund and you’re paid a management fee or can collect fees if and only if the money is in play, if you can’t find a good investment…. you make any investment… otherwise, you don’t have a fund. The amount of money pouring into especially the hedge fund of real estate funds type structures is scary even though the overvaluation of many of the markets is well known.
We all know it was a wise decision to deleverage ourselves out of the housing market no later than in the first quarter of 2006.
However, is it a wise decision to follow the same path by liquidating your commercial property assets as soon and as rapidly as possible.
Maybe Casey Serin could tee up GE or GM for that matter since Kerkorian couldn’t…
Yeah, that’s Casey’s problem–he didn’t think big enough.
By Janet Morrissey
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)–Skeptics were slightly less cynical toward home builders over the past month as the number of home-building shares being shorted fell 1.5%, according to a new Bank of America report.
However, the study, released Wednesday, shows cynicism and short-selling still remain high on a historical basis.
The study, released Wednesday, shows that short interest, as a percentage of total equity, represented 10.8% of home-building shares outstanding for the month ending Nov. 10, down from 11% the previous month. However, this is still significantly higher than the 2.5% average among New York Stock Exchange stocks.
Also, the number of trading days needed to cover the shorts increased to 5.8 days in November from 5.2 days in October. The rise was due largely to lighter trading volume.
Topping the list of companies having the highest percentage of short interest includes WCI Communities Inc. (WCI), where short interest made up 48.3% of its total float, and Hovnanian Enterprise Inc. (HOV), where shorts represented 29.6% of total float. This was followed by KB Home (KBH) at 13.8%, Lennar Corp. (LEN) at 9.5%, Centex Corp. (CTX) at 9.4%, Pulte Homes (PHM) at 8.9% and D.R.
Horton Inc. (DHI) at 5.2%.
The report concludes that the month-over-month decline in short interest simply reflected a snapshot of the sector as it was beginning an 8% rally.
You probably can’t borrow the shares of these stocks anymore to short them. If they are available they’re probably only for “prime” customers and even then, while paying a premium to borrow them.
I shorted KBH and TOL yesterday afternoon.
So THAT’S the reason Wall Street suddenly likes builders. There’s so much short interest that it will take only a small push upward to start a big short-covering rally.
Ok, so OFHEA (or whoever) says they’re not going to raise limit on mortgage insurance beyond current $417,000, due to present pricing trend. Does this count as credit tightening? To what degree?
Chilidoggg - i don’t think it counts as credit tightening. In fact, in a market with declining prices, if they don’t lower the limit, that could be construed as credit loosening.
It’s the conforming mortgage limit. So it is a sort of credit tightening. A non-conforming (=Jumbo) loan will typically have a rate that’s 0.2% higher. Not much of a tightening though…..
States with high housing prices (HI, CA,….) have higher conforming loan limits.
Lansner blog: Fed sees Western new home sales ‘particularly weak’
http://tinyurl.com/lzgbg
Optimism over housing market rises
By Annette Haddad, LA Times
Data have a growing number of analysts saying the worst may be over for the sector.
http://tinyurl.com/ydchve
A lot of experts were similarly quoted in the LA Times over the period from 1990-1996, but look what the data shows (especially the Appreciation (%) chart):
http://www.housedata.info/CA/LosAngeles.LongBeach.Glendale/
GS, don’t believe all those charts and graphs. You know real estate goes up FOREVER!
Interesting that in the article the main rationale seems to be “declining rates.”
First of all, I have to ask, how much are rates really declining? Is it really enough to reinvigorate Joehowmuchamonth’s desire to purchase a declining asset?
Secondarily, if I recall, mortgage rates declined for years during the early 90’s housing market downturn.
And apparently, that fact didn’t “save” anyone’s housing market then - so why would it now?
The frogs (or lemmings?) are swimming in a pot on the stove. It’s pretty hot by now. The analyst frogs tell the other frogs that the worst may be over.
How long can you keep pushing on a string before it no longer moves?
http://tinyurl.com/fvju7
Likewise:
http://ichart.finance.yahoo.com/b?s=%5ETNX
NNN Realty sells $160 million in stock
NNN Realty Advisors Inc. sold $160 million in stock to large investors as part of its plan to take the company public, the Santa Ana firm said.
NNN Realty Advisors is the parent company of Triple Net Properties and Triple Net Properties Realty Inc. The businesses are known for sponsoring real estate trades covered by Section 1031 of the federal tax code that defer capital gains taxes.
The company will seek to be listed on the New York Stock Exchange by late 2007.
When you can no longer reap outsized profits and dividends as a private firm, it is time to sell to the stock market and get a bigger pool of fools.
LOL. I didn’t think about it like that…
in 3 years they’ll probably take the company private.
ISM 49.5 — holy shit!
ISM — 49.5 (sorry for double post)
NEWS Texas/Southwest
•Appraisers see flaws in system
Below-market values hurt homeowners and school funding, they say
10:48 PM CST on Thursday, November 30, 2006
By TERRENCE STUTZ / The Dallas Morning News
AUSTIN – Texas schools lost $4 billion last year because property appraisers are unable to judge the true market value of property, according to a new study.
The solution, according to the state’s property appraisal officials, is for the Legislature to require disclosure of all real estate sales prices.
The study by officials with the Texas Association of Appraisal Districts found that lack of such information has caused appraisers in urban areas to undervalue commercial property by an average of 40 percent and residential property by 15 percent.
Multifamily property is undervalued by 25 percent.
If those three types of property were listed on the tax rolls at their true value, it would have generated at least $4 billion in additional operating revenue for schools this year based on the current maximum tax rate of $1.33 per $100 of valuation. That figure represents additional revenue of about 12 percent based on what districts spent last year.
Also Online
Appraisal gap (.pdf)
Alternatively, full-market appraisals would allow districts to raise the same amount with a lower tax rate. Cities and counties would have had the same choice, too.
Mike Amezquita, chief appraiser for the Bexar County Appraisal District and immediate past president of the Texas Association of Appraisal Districts, said Thursday that the study offers compelling arguments for ending Texas’ status as one of five states that do not require public disclosure of real estate prices.
“The current system is a public policy travesty,” Mr. Amezquita said. “It is set up to hurt homeowners, and so much money for schools is being left on the table.”
A blue ribbon committee looking at property appraisals in Texas is considering mandatory sales price disclosure as one of its recommendations to the Legislature. But the proposal is drawing strong opposition from real estate agents, business groups and representatives for apartment complex owners.
‘Tremendous disparity’
Mr. Amezquita said their opposition stems from the tremendous tax break that now exists for commercial and multifamily properties because they are so undervalued on tax rolls compared with single-family homes.
“Based on our findings, there is a tremendous disparity in the treatment of different types of property,” he said, citing the numbers showing that commercial property is typically taxed on only 60 percent of its value while residential property is taxed on 85 percent of its value.
That disparity is the result of appraisal districts being able to obtain more information on home sales than on commercial property sales – where transactions are much more closely guarded.
“The Texas Property Tax Code requires appraisal districts to value property at 100 percent of market value, yet does not give the districts the most fundamental tool with which to accomplish this task,” the report said, citing the lack of disclosure on property sales.
“The central appraisal district staff is left to guess at the value of sold property as well as unsold parcels,” it continues. And if appraisals are appealed, the burden of proof falls on appraisers, so they underestimate the value.
Mr. Amezquita also said commercial and multifamily building owners – many of them out-of-state investment trusts – are far more likely to take an appraisal district to court over tax roll values. He noted that of 500 lawsuits he is facing in the San Antonio area, nearly all involve commercial property.
A spokeswoman for the Texas Association of Realtors questioned whether there is a disparity between residential and commercial property, noting that values on those types of property are calculated differently.
“While all property owners certainly have paid too much for too long, the idea that commercial property owners benefit at the expense of homeowners is nothing more than conjecture,” said the group’s Stacey Lawson. “Commercial properties are appraised using a different method than homes because there are fewer comparable properties.”
Because commercial properties have fewer similarities and sell less frequently than homes, she said, those properties are typically appraised by examining the revenue stream for the owner of the building – the so-called income method.
Ms. Lawson also rejected the notion that sales price disclosure will mean more money for schools, citing past studies on the issue.
“Instead of pushing for legislation that tweaks an already bad system, lawmakers should look for alternative, long-term solutions to the problems” in the property appraisal system, she said.
Critics also said the change could represent a big tax increase, especially for businesses.
Debate looms
The issue will be debated next year regardless of what the appraisal reform task force recommends, although that panel’s stamp of approval would boost its chances.
Rep. Mike Villarreal, D-San Antonio, has already filed legislation that would require full disclosure for all real estate sales within 10 days of the date the property deed is recorded with the county.
The appraisal study was based on analysis of property values in four urban counties – Bexar, Harris, Tarrant and Travis. Appraisers examined properties sold after Jan. 1, 2005, and compared their sales prices with the values that were on the tax rolls at the time.
Mr. Amezquita said sales prices were obtained through a variety of sources, including records in lawsuits and property deed transfer documents – which often include sales information. The average percentages on the three major categories of property were then calculated on statewide property values compiled by the state comptroller’s office.
The calculations estimated that more than $301 billion worth of property was left off the tax rolls in 2005 because of undervaluations by appraisal districts – representing just over $4 billion in tax revenues at the statewide school property tax rate of $1.33. At last year’s figure of $1.50, the revenue loss was $4.5 billion.
Total property appraisals in Texas last year came in at just over $1 trillion, according to state officials.
“The sales price of property sold is the very foundation of the data necessary to value property using appropriate market evidence as required by the tax code,” the appraisal report said. “The additional evidence will not only improve the accuracy of appraised values, but it will foster equity among property types contained within the appraisal rolls.”
Then you obviously haven’t seen her in
“SheMax: Hermaphrodite Realtor”
Inventory won’t be the only thing going up.
Housing Construction Drops in October
Friday December 1, 10:09 am ET
By Martin Crutsinger, AP Economics Writer
October Construction Activity Plunges by Largest Amount Since 2001 Recession
WASHINGTON (AP) — Construction activity in October plunged by the largest amount since the recession in 2001 as home building fell for a record seventh consecutive month.
The Commerce Department reported that building activity dropped 1 percent to a seasonally adjusted annual rate of $1.18 trillion in October following a 0.8 percent fall in September. It was the biggest decline since a similar 1 percent drop in September 2001, a month when the country was hit by the terrorist attacks as it was mired in a recession.
http://biz.yahoo.com/ap/061201/housing_construction.html?.v=4
Yeah, this construction spending number is pretty awful, especially when paired with the ISM figures. It’s hard to ignore the drop considering we haven’t seen a worse decline since 9/11. Dollar getting crunched and the Treasury price breakout I mentioned on my blog yesterday is gathering steam. What’s worth noting is that the ISM Prices Paid index actually rose month-over-month. The blip up only put PP at 53.5 vs. 47 in October. But with oil prices up, the dollar dropping even further, and inflation figures not YET dropping, it can’t be seen as real good news.
http://interestrateroundup.blogspot.com/
Wow!
The USD is at 1.3350 EUR! It’s tanking faster than even I thought it would. It’s very close to 2 UK Pounds as well.
The US are in a recession, I think, even though the official data don’t show that yet. With the USD low, oil will become more expensive for Americans, not so much for the rest of the world.
In Germany, everyone is so optimistic, after unemployment is at a four years low, and less than 4 millions in November. But some of Germany’s important trading partners in Europe are in a bubble, too. I hope, the UK central bank and the ECB act wisely…
The US are in a recession, I think, even though the official data don’t show that yet.
If they could get away with it, the official data would never show it. As it is, they’ve fooled almost everyone into denying it’s already underway.
“The US are in a recession, I think, even though the official data don’t show that yet”
The US consumer is still relatively “fat and happy”: Democrats in congress, stock market still relatively high, housing looking like it will make a rebound.
Wait until spring ‘07 for the pain to start…and Christmas ‘07 for the handwriting to be on the wall.
MARKET SNAPSHOT
U.S. stocks fall as manufacturing sector contracts
National ISM survey spurs hard-landing fears; Home Depot provides support
By Nick Godt, MarketWatch
Last Update: 12:34 PM ET Dec 1, 2006
NEW YORK (MarketWatch) — U.S. stocks fell in midday trade Friday, after a report showed the U.S. manufacturing sector contracted in November, fueling fears of a hard landing for the U.S. economy.
In recent action, the Dow Jones Industrial Average ($INDU :
Dow Jones Industrial Average
News , chart, profile, more
Last: 12,169.45-52.48-0.43% 12:40pm 12/01/2006) dropped 45 points to 12,176, after earlier falling to a low of 12,125.
The blue-chip average remained supported by a handful of issues, including Home Depot Inc. (HD :Last: 38.95+0.98+2.58%
12:20pm 12/01/2006) , which gained 2.8% after a report the company may be the target of a leveraged buy-out.
The S&P 500 ($SPX :12:40pm 12/01/2006
$SPX1,395.24, -5.39, -0.4% ) fell 4 points to 1,395, while the Nasdaq Composite (COMP :
Last: 2,409.85-21.92-0.90%
12:40pm 12/01/2006 COMP2,409.85, -21.92, -0.9% ) lost 20 points to 2,411.
The Institute of Supply Management’s index fell to 49.5% in November from 51.2% in October, indicating that the manufacturing sector contracted last month.
The consensus forecast of estimates collected by MarketWatch was for the index to rise to 51.8%.
Investors have so far been hoping that a fast falling housing market and a weak auto industry would not impact the broad economy too much. The market has also been betting that the Federal Reserve will cut interest rates to prevent the economy from falling too hard.
The Fed usually cuts interest rates if the ISM poll goes below the 50 mark.
“We’ve had a strain of disappointing economic data, and that’s fueling expectations that the Fed will cut interest rates,” said Michael Malone, trading analyst at Cowen & Co.
Hopes of a soft landing for the economy can remain alive in the market, he added, if investors consider low unemployment and believe that the housing market can stabilize.
The ISM survey, however, suggests that at least one key sector of the economy, manufacturing, is near recession.
Another report showed construction spending fell 1% in October, which was above economists’ expectations for a drop of 0.3%.
Speeches from Chicago Fed President Michael Moskow and Richmond Fed President Jeffrey Lacker could also move the market.
Investors will also wait for key data on November auto sales, expected to be released at 12 p.m.
“I do think we can still have a December rally,” he said, adding that “any weakness has been bought relatively aggressively so far.”
http://tinyurl.com/vy7hw
“Hopes of a soft landing for the economy can remain alive in the market, he added, if investors consider low unemployment and believe that the housing market can stabilize.”
Bwahahahahahaha, if that’s the only thing holding this market together-look out below!
Maverick your landing gear is stuck and we have no crash nets, it appears all hope of a soft landing are out of the question. Please land using flight plan B approach and we will send a helo to pick you up have a nice swim.
starts are off 29% and construction off 1%
sure
Downtown Tucson condo dream goes poof:
http://www.tucsoncitizen.com/daily/business/34348.php
Wow. The yield curve is just being gutted today… Traders must Bernanke to get off his a$$ and quit “talking tough” and actually DO something.
http://www.bloomberg.com/markets/rates/index.html
They don’t even show the really short term Treasuries. Last data is:
14 day bill: 5.298%
28 day bill: 5.263%
Can’t get much more inverted….
Help me, I’m falling! Help me, I’m falling!
http://www.dollarcollapse.com/default.asp
A little Northern Virginia report here: I live in in the Aurora Highlands section of Arlington, near Crystal City, which is old homes that have resisted price drops because we are within walking distance of the Metrorail.
Anyway, a couple of blocks over there a fairly large, 1920s-era house that is FSBO. It had been rented out as a group house for college students, and it needed a lot of work (most of which was done). However, you can still see big gaps in the stucco work underneath the fresh coat of paint, and I have to wonder what else is going on with it. The owner first put it on the market about two or three months ago at $789,000 with nice little flyers on the FS sign and everything. Now, it’s still on the market at $699,000 listed on a crude ‘hanging’ attachment to the sign. No flyers. As I walked by this morning, I noticed that a window was broken.
Although the houses that sold in my ‘hood over the summer mostly went for about $20,000 of the ‘wishing price’, this is the first hint I’ve noticed of a freefall. I mean, $90k is a pretty big haircut! And it’s a really cool-looking old house, even if it probably needs more work. Not that I would buy it even at $699k.
OK, I am feeling smart for moving my 401K out of the stock market a few days ago (also moved my roths into gold in August) and into a fixed income fund…but what to do now?
With the dollar falling, 5% return will be eaten by loss in purchasing power.
Are international funds (only choices in my 401 K is Fidelity Int and NAPRX) the place to bet my 401K? Or will they be hurt by the US recession and crappy dollar also?
What are others doing with their 401Ks, retirement portfolios?
Same question. I moved out the the stock market in March this year though. Oh boo hoo. Left on 20% in equities the rest is in bonds 20% and have 60% in cash or cash equivalents.
I am starting to believe Seattle may hold out for alot longer than I thought, prices still up and inventory shrinking, although sales are down. Anyone have any thoughts as to what might be happening here. I think this spring will be very interesting with a huge jump in inventory but no price declines till late 2007. We are so overpriced and unaffordable, I can’t figure out why people are still buying houses here.
Like many other places, I’ll bet you that prices are actually falling for the most part, or at least starting to fall, but the statistics might be distorted based on the types of homes that are actually selling. I doubt that sales volume can fall so much and not affect prices. And perhaps the Pac. NW is the last bastion of the equity locusts.
Our SFH inventory (town of San Luis Obispo) has declined pretty rapidly, too (county #s have leveled off, and local condo inventory still high). Nothing is selling, though. I think those who have the option are pulling their houses off the market to try again in the spring. Probably the same in Seattle. Who wants to house hunt in the rain?
I’m in Seattle too, and I still think it’s going down. We’re just a few months behind the rest of the country. I’ve seen some properties in my neighborhood listed at high wishing prices, reduced once or twice, then pulled from the market. I’m guessing they’re waiting til spring to re-list. If as I expect, inventory starts to climb again in the spring, right as the MSM is starting to catch on to the fact that we’re slipping into recession, I think Seattle will finally succomb.
p.s. They’re still buying because “it’s different here”.
On the way to work today there were a lot of for sale signs along Meridian ave. Plus a huge sign for an auction. First one I’ve seen in Seattle. Things are definitly different than what they were just a few years ago. I think we’re in for exactly the same thing that many other urban areas are in for, but proportionally adjusted because we didn’t QUITE go up as far as some(I could be wrong about that though) places, and we seem to have a weird time lag thing going on.
You couldn’t pay me to buy here now. I think this is the worst town on earth to be a single guy on. If I didn’t have a kid and some other family here that need help, I would leave in a second. Most other guys I know in the tech field feel the same way.
Seattle better figure out a way to make a better dating scene if they want us to hang around, let alone consider buying RE.
btw seattlerenter, any chance I can get you to add a couple extra characters to your nick to avoid confusion? Unless you’ve been longer than me. I started in here sometime before June I think. No biggie.
Thought this was very interesting about specifics on appraisal fraud in OC and in general over at another f’d borrower (http://www.housingbubblecasualty.com/).
You have to scroll down a bit to get to this title:
Wednesday, November 15, 2006
Appraisals…an inside look at ‘The OC’
It’s good to see that some appraisers are coming out on the side of honesty.
This was on our local craigslist, with a headline of something like, “Get case for the holidays!” The housing ATM lives on!
Yes! Use the equity in your home now while you still can! We can get up to 90% of you home’s value AND LOWER YOUR PAYMENT.
You can go with a traditional interest only program, or you can also use THE OPTION ARM! Your new mortgage payment would be 270 per every 100k borrowed.
So if you refi for 500k, your new monthly payment will be 1350! And that won’t be due until Feb!
We do NOT need tax receipts or paycheck stubs.
We are a MORTGAGE BANKER and close all our loans in our own name, that’s why we can do it so fast and efficiently. We have out own in house UNDERWRITER, so no mortgage gridlock, waiting for an outside lender approval.
Anyone know what’s happening with housing in Belgium? My brother-in-law just bought a house there.
Try repeating the query as a reply to nhz the next time you see him/her post. nhz is from the Netherlands, next country along, and both countries are the same size as US States.
gotta post this nice Q&A from WashPost today between the housing bear/writer Kirstin Downey and some realtor from Gaithersburg. this was much needed:
Gaithersburg, Md.: What seems puzzling to me is that the Washington area has many affordable homes priced below $300,000, but affordable housing advocates complain about a shortage of affordable housing. My experience as a seller, journalist covering housing issues, and a real estate agent has been that many moderate-income buyers in terms of those earning no more than 100 percent of area median income want to live like the Joneses and aren’t willing to accept the fact that homeownership must start somewhere, often with a smaller home. Then someone can build equity and start trading up. What have you observed?
Kirstin Downey: It’s hard for people to accept lowering their expectations if they work long hours and earn salaries that would normally buy them an upper-middle-class life–somewhere else. It also seems unfair to them that because of market timing–was the market rising or falling when people bought–that it will influence the housing they can afford to buy for decades ahead in their lives. The fluctuations in home price appreciation are confounding ordinary expectations. People who bought homes in 2000 or earlier have tens of thousands of dollars of equity that people who buy now may not see for a very long time, if ever. That’s another one of those very difficult pills to swallow. And now buying a home in an undesirable area just doesn’t carry a guarantee of upward price appreciation any time soon. So you could go live in a house that seems beneath you–and find yourself stuck there. Yuck.
[here's the link to the entire Q&A]
http://www.washingtonpost.com/wp-dyn/content/discussion/2006/11/17/DI2006111701499.html
It’s hard for people to accept lowering their expectations if they work long hours and earn salaries that would normally buy them an upper-middle-class life–somewhere else.
Those salaries bought an upper-middle-class lifestyle here in DC four years ago, and they will do so again in another four years. Oh, and by the way, those pre-2000 owners don’t have as much equity as they think they do.
December 01, 2006
O.C. homes a tough sell through mid-November
Fresh stats from DataQuick say O.C. housing’s remains sluggish through mid-November. Bet that this month will be the 13th straight month that total sales can’t keep pace with the previous year’s pace. But will the median price remain above-year ago levels? Here’s how it looks by the slice, for the 22 business days ended Nov. 15:
Median price Change vs. ‘05 Volume Change vs. ‘05
Resale houses $660,000 -1.5% 1,627 -24.6%
Resale condos $435,000 -3.7% 622 -37.1%
New residences* $754,500 +8.0% 399 -22.2%
All homes $621,000 +1.0% 2,648 -27.7%
* Includes single-family homes, condos and recently converted apartments
O.C. lender Ameriquest for sale?
UPDATED 12/1 NOON!
Option One. Now this! Here’s what National Mortgage News MortgageWire is reporting ….
ACC Capital Holdings, Orange, Calif., is actively entertaining offers for its entire mortgage franchise, which includes Ameriquest Mortgage and its wholesale arm, Argent, investment bankers and other officials have confirmed to MortgageWire. As of MW’s deadline, an ACC spokesman had declined to comment. Matthew Howlett, an analyst with Fox-Pitt Kelton, said he has been hearing reports that Ameriquest, Argent, and the servicing operation are all up for grabs. According to the Quarterly Data Report, Ameriquest services $113 billion in loans, ranking second among all subprime firms. ACC is a privately held company controlled by California businessman Roland Arnall, who is now serving as U.S. ambassador to the Netherlands. Estimates vary, but bankers say the entire mortgage operation could fetch close to $2 billion.
Register reporter Mathew Padilla tells me he learned this morning …
“Bose George, an analyst with Keefe, Bruyette & Woods in New York, said he has heard the same rumors about Ameriquest and Argent being for sale over the past three days. He finds it likely true considering the wave of acquisitions among subprime lenders. He pointed to today’s big announcement of KeyCorp, a large Midwest U.S. bank selling its Champion Mortgage subprime lending unit to Britain’s HSBC Holdings. In terms of pricing ACC, he referred to to National City Corp.’s agreement earlier this year to sell its First Franklin mortgage unit to Merrill Lynch & Co. for $1.3 billion as a good indicator. ACC Capital, greatly reduced by closing of retail branches, now is only 25 percent or so bigger than First Franklin. So, tossing in the servicing of loans, ACC could be worth around $2.5 billion, he says.”
Also, Padilla tells me that an ACC spokesman declined to comment this morning when aksed if the company had anything to say about the “we’re for sale” reports.
As I’ve shared, my family has been in the forestry business (the farming side) for decades and there’s been a lot of talk about “hot” loads of OSB being shipped from mills because of so much demand; especially after Rita and Katrina.
According to everyone I know in the business, OSB has to be cooled and the ends painted to properly complete the manufactoring process. In the current edition of The Forestry Source, a publication of the Society of American Foresters, it is mentioned in the headline story “Housing Market Decline Felt Nationwide”.
Here’s their homepage:
http://www.safnet.org
With OSB being such a critical aspect of construction, what will this practice, if true, have on the houses who were built using “hot” OSB?
If the product is not being cooled, painted, and is shipped uncovered…..what’s the structual consequences?
I don’t know if the question is even being raised by anyone, much less the answer.
I’m not sure. The questions I have for you are what sound does a falling tree make in the forest if nobody hears it fall? Has anybody ever chained themselves to one of your trees? Does that naked lady who reads poetry ever bother you? Is it true that the hardwood growers are better in bed? These are the really important questions.
Are you naturally this stupid or is it the result of excessive drug use?
there was a thread a few weeks back that discussed current building materials and practices, and the consequences that could arise when substandard methods are used.
I wish I would have bookmarked that thread; If land prices drop substantially, building a home is a strong possibility.
Some of the comments on that thread referred specifically to OSB; maybe you could find it by doing a search on this blog.
About a week ago someone posted a link for starter home affordability percentages in California. It wasn’t the one that CAR uses, but rather the one that says Los Angeles affordability is something like 1.9%. If someone has the link to that file and could post it here again, I would appreciate it. Thank you.