Bits Bucket And Craigslist Finds For February 9, 2007
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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Name:Ben Jones
Location:Northern Arizona, United States
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Downside to a Ponzi Based Economy: Rancid Up-Chuck
http://wallstreetexaminer.com/blogs/winter/?p=407
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Russ,
“Historical homes constructed” chart is wrong. Are you sure that you are dividing Units Completed by the Housing Stock for that year and not by the current stock? I get 2.7%+ for 1972-73. Could you please check and correct it.
BTW, the actual demand for housing has fallen greatly compared to peak in 1970s. Yes, in absolute numbers and even more in % terms, which is DOWN 60%!
Thanks.
Jas
Jas, don’t know what to tell you, as not my chart. Was taken from Credit Suisse’s monthly homebuilder report.
I suggest Jas either pass his comments on to Credit Suisse, or just let things stand with Russ’s attribution. You never know whether industry puts out an erroneous chart due to strategic reasons or analyst error.
OK, Russ. Here is data:
Period Units Completed Total Units %
Dec-70 1,418 68,672 2.1%
Dec-71 1,706 71,080 2.4%
Dec-72 2,004 73,561 2.7%
Dec-73 2,101 75,969 2.8%
Dec-74 1,729 77,601 2.2%
Dec-75 1,317 79,087 1.7%
Dec-76 1,377 80,881 1.7%
Dec-77 1,657 82,420 2.0%
Dec-78 1,868 84,618 2.2%
Dec-79 1,871 86,374 2.2%
Dec-80 1,502 88,207 1.7%
Dec-81 1,266 91,561 1.4%
Dec-82 1,006 92,540 1.1%
Dec-83 1,390 93,519 1.5%
Dec-84 1,652 96,725 1.7%
Dec-85 1,703 99,931 1.7%
Dec-86 1,756 101,292 1.7%
Dec-87 1,669 102,652 1.6%
Dec-88 1,530 104,157 1.5%
Dec-89 1,423 105,661 1.3%
Dec-90 1,308 105,127 1.2%
Dec-91 1,091 104,592 1.0%
Dec-92 1,158 105,602 1.1%
Dec-93 1,193 106,611 1.1%
Dec-94 1,347 108,034 1.2%
Dec-95 1,313 109,457 1.2%
Dec-96 1,413 110,907 1.3%
Dec-97 1,401 112,357 1.2%
Dec-98 1,474 113,805 1.3%
Dec-99 1,605 115,253 1.4%
Dec-00 1,574 117,185 1.3%
Dec-01 1,571 119,116 1.3%
Dec-02 1,648 119,947 1.4%
Dec-03 1,679 120,777 1.4%
Dec-04 1,842 122,643 1.5%
Dec-05 1,931 124,509 1.6%
Dec-06 1,978 126,651 1.6%
BTW, the demand is BELOW 1%! Demand in 1972-73 was 2.5%. I will have lot of info in my upcoming editorial on Historical Perspective On Housing.
Jas
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Americana: Yet Another Way to Get Spendable Money From One’s Home
“Rex & Co. (Real estate Equity eXchange) will actually invest in you and your home. They hand you cash in exchange for up to 15% of your equity. This arrangement is not a loan, it’s more akin to an investment in your company. They participate in the upside when property values go up and share in the loss should they go down.”
http://www.altosresearch.com/blog/
“How much are the closing costs? The costs of obtaining a REX Agreement will vary, but include fees for: appraisal, preliminary title report, title insurance, credit report, natural hazard disclosure, tax service, flood certification, notary, wire, messenger, and recording.”
http://www.rex-inc.com/faqs.php
Of course, Rex & Co. will go public and you can indirectly sell a share in your home to the public. After you have signed a second mortgage to Rex & Co. for some money you will be approached by Wrecks & Co., in due course, to offer you some more money for yet another share and you will sign a third mortgage. God forbid, the prices go down, or Rex & Wrecks go bankrupt. Who knows what your rights will be when things go sour. How many Americans will read the fine print when someone is dangling money in their faces? And how many will know the full cost of being Rexed, or Wrecksed?
America – a land of legalized financial scams. Scamsters know that Americans are bred to be suckers, very thoroughly; they just need to scheme a new way to suck the general public and milk it for what it is worth before the scheme is made illegal. Scam Options, without expensing, during 1995-2005, is a case in point. Tech companies sucked more than a trillion dollars via the scam.
Jas
“Americans are bred to be suckers”
This is so offensive. Course, if you thought it true, you’d have been gone long ago.
Grow some skin.
Well if its an investment on Rex & Co’s part, then why aren’t they aeating the costs of due diligence on the “investment” like msot other investors (i.e. title, appraisal, etc.).
And if its not a loan then why do they need it to be recorded. Investments are not recorded.
Yes, I agree. It seems to be a scam.
“America – a land of legalized financial scams.”
True, but when I get a big chunk of cash, and you get a share of a depreciating assets, it’s you that are getting scammed.
Um, if you hold a pile of Fed notes, I think you are getting scammed too.
Good point.
Touche’ Watcher.
This sounds too good to be true. Perhaps a TV station or newspaper
should talk to these guys. Wonder what is the catch?
it says “up to 15% of your EQUITY” I’ll bet if your equity decreases 85%, they don’t lose a penny.
Looking For Mother of All Bubbles? “Homebuilder stocks in India!”
http://www.immobilienblasen.blogspot.com/
It would be very interesting to see how the Indian govt. and Bankrupters & Fraudsters deal with the inevitable depression that follow debt-driven booms. Indian elite take the top prize in badly copying Americans.
Jas
What’s sad about that is how much they’d love to rip up the remaining 70%(?) of India that is still rural and pave it over.
test
the 20.000-40.000% performance from some builders reminds me of cmgi etc.
Hello Jan-Martin,
I know the German notation for numbers. You mean 20,000-40,000%, correct?
Jas
yup
Rural India’s home production economy may be the country’s best grass roots defense against the next serious global economic meltdown. During the 1930s, America’s rural heartland was similarly buffered, as people could grow their own food when the big city economies went into the crapper. But credit bubbles have this unfortunate effect of turning prime farmland into McMansion tract home developments.
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And from where do you propose the money will come from? Bankrupt state and central govts? People committed suicides in 10,000s in one area during femine a couple of years ago because of debt they couldn’t pay. Govt. would give a family money for every suicide! Very sad, indeed.
Do you know the source of money for India’s current boom? The US Housing Bubble!
Jas
When there is farm-level debt involved, that is a different story — more like the Oakies who were forced to move out to California during the 1930s Dust Bowl years. I should have been more specific in my post above, as I was referring to debt-free German communities during the 1930s in the rural heartland (like where my parents lived). Though they did not have much trade with the world outside their small towns, they did not go hungry during the depression.
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Boy, you really need a lesson in cultural Beliefs and Habits. There is a day-and-night difference between German Americans (or Germans, in general) and rural Indians when it comes to Beliefs and Habits of work, planning, etc. Why are African nations so different from Germanic (North-Western European) nations?
Indian bubble is a mega disaster in waiting in terms of human toll and Bankrupters and Fraudsters of New York City and Mumbai have a lot to do with the bubble. Even more responsible is the US Fraudulent Reserve System, whose “emergency rate” monetary policy flooded the world with debt-induced money (Japan had lot less impact on Indian borrowing).
Just wait and see what these evildoers have wrought – a global mayhem in the waiting. Greater Depression for the US, first, and then to the rest of the world
Jas
I love India and I think it’s sad what’s going on over there.
Though they did not have much trade with the world outside their small towns, they did not go hungry during the depression.
This will be true of rural communities in India to the extent the local production can support the population’s food needs.
One difference though is that the consumerim has spread to far corners of India thanks to mass media. There WILL be a lot of consumer debt and a lot of it WILL end up in default. A lot of the investment in India is going to evaporate. Some in corruption, and some in default.
I love India and I think it’s sad what’s going on over there.
Txchick, my wife works full time on some issues related to India (she’s a lawyer too). Email me at rsjkml at gmail if you’re interested in learning about it.
Not just India. Places like Bhutan, Nepal.
Great movie, “Travelers and Magicians” shows a lot of that.
“Just wait and see what these evildoers have wrought – a global mayhem in the waiting. Greater Depression for the US, first, and then to the rest of the world
Jas ”
Ok Jas, just when is this depression going to happen that you obsess over? I love this logic, “I can’t buy a home so therefore there will be a depression because I’m the center of the universe and everyone who has what I want will suffer”. Dude, you’re going to be waiting for this depression your whole life. Stop obsessing over things you can’t control.
Chick,
Do you know how the corporate Bankrupters collect consumer debt in India? Using violence, or threat of violence.
ICICI and Citi use goondas (thugs, who will beat people up) in their employ to collect of consumer debt that is delinquent. Why does CitiGroup have to engage in this practice? Because the business is very lucrative.
Dupes in America don’t know about the evil nature of international bankers even when tens of millions of households in America have been pushed into the Debt Concentration Camps. Many dupes turn around and blame the victims. The victims are misled by propaganda that Bankrupters control. The mortgage fraud started at the very top by willful neglect of what was going on.
Jas
PS: One of my nephew in India committed suicide because he couldn’t pay consumer debt installment (for furniture just after he got married; his wife became a widow within a year).
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“…when is this depression going to happen that you obsess over?”
Let us say 2008-10. This would necessitate that the recession begins in 2007. In case you don’t know, it was Schumpeter’s conclusion that all financial “catastophes” in our system are due to “bakers’ mischief.” The Housing Bubble has been the best proof of what Schumpeter warned about.
Be safe!
Jas
“Schumpeter suggested a model in which the four main cycles, Kondratieff (54 years), Kuznets (18 years), Juglar (9 years) and Kitchin (about 4 years) can be added together to form a composite waveform. A Kondratieff wave could consist of three lower degree Kuznets waves. Each Kuzmets wave could, itself, be made up of two Juglar waves. Similarly two (or three) Kitchin waves could form a higher degree Juglar wave. If each of these were in phase, more importantly if the downward arc of each was simultaneous so that the nadir of each was coincident it would explain disastrous slumps and consequent depressions.”
Ok, so which part of this cycle are we in?
Uh Oh JAS;….
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“Ok, so which part of this cycle are we in? ”
Schumpeter specifically warned against fixed period cycles. We are at the gate of the Longwave winter. It is not a point in time but rather a turning point that can last for few years. I think that we are at the point where the turn will be very sudden because of the intervention during 2002-06 period.
Jas
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“Uh Oh JAS;…. ”
It is better to shut up if you have nothing to say. Since you can’t keep your silliness to yourself… Doo Doah, DAVE!
And this is my last reply to you, but you can continue on with your silliness.
Jas
referring to GS’s remarks about German debt-free farms during the Great Depression: I don’t think he was make a cultural comparison. I think he was referring to the farms in the northern Midwest/Great Lakes (Wisconsin, Michigan, Minnesota, etc. ) that had been settled 60+ years before the GD (and hence paid-for), by mostly German/Scandinavian/Austro-Hungarian immigrants; as opposed to the farms of the Great Plains and states like Arkansas, Oklahoma, etc.
At one time I thought the USA government business strategy was “America first” and that, through economic leverage, would export low wage jobs abroard…and during economic cycles…export the depressions while keeping the USA stable. Unfortunately it seems that the opposite is happening.
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“the USA government business strategy” is crystal clear — what is good for Bankrupters and Fraudsters of New York City (BFNYC) is good for America even if the rest are damned. Whether we like it or not BFNYC do control our govt. as well as people’s money and economic lives. Capitalism = the rule of capitalists!
Jas
back-sheesh, bubba
Buyers market in Dallas? OMG, how it must have pained them to print this in the Morning Snooze. What’s a discerning creative investor in San Diego to do now? Oh, the humanity.
Buyer’s market may loom as housing inventory rises again
12:00 AM CST on Friday, February 9, 2007
By STEVE BROWN / The Dallas Morning News
stevebrown@dallasnews.com
North Texas home sales started 2007 in the red.
Purchases of pre-owned homes fell 4 percent in January – continuing a string of losses started last spring. Pending sales were also down 1 percent.
No surprise then that the inventory of homes for sale has increased.
At the end of January there was almost a nine-month supply of pre-owned homes for sale in the Dallas-Fort Worth area, according to statistics released Thursday by the North Texas Real Estate Information System.
A six-month supply of houses is considered a balanced market. In December, there was just under a 6-month supply of homes listed for sale in the D-FW area.
Much of the increase was seasonal. January sales closings typically reflect homes that went under contract during the holidays when buyer traffic is traditionally low.
“Some may be seasonal, but I also suspect some is due to a real slowdown in the market,” said Jim Gaines, a researcher with Texas A&M University’s Real Estate Center. ‘We need to see what the March, April and May period brings in terms of sales activity.
“If sales volume doesn’t show marked improvement over last year, I suspect we’ll see a very definite shift toward a buyer’s market with longer sales times,” he said.
Almost 43,000 pre-owned homes are on the market – 7 percent more than a year ago.
Median home sales prices in January were down 1 percent from a year ago to $139,950.
Condo sales and prices were also down last month. Sales fell 6 percent from January 2006 and median prices were off 2 percent.
I had an aunt in Big D who “turned over the keys to the bank” of her condo back in the late 80’s, seems that type of behavior is coming soon to a complex near you.
On an aside, I have a cousin in Houston…. Sun Coast Post Tension (mfg of steel in foundations), he tells me they are still churning out 100+ home packages a day. His wife, a commercial underwriter, tells me “credits not tightening. its getting easier”
Texas cracks 14 months after Cali falls. New Mantra, As goes California, so goes the country.
I have a Dallas mortage broker calling me daily. I made the mistake of letting him run us for “prequalification”. They’ve offered everything but their firstborn. I don’t really want to buy anything! Yeah, maybe I’d take one of those $3M unbuilt Arts District condos for $400K in a few years but that’s not happening now.
“I have a Dallas mortage broker calling me daily.”
Sounds as if his pipeline is drying up.
That’s pretty funny.
What in God’s name did you do that for. That’s like voluntarily requesting a rectal probe.
What’s a discerning creative investor in San Diego to do now? Good question, have you checked in with Mr Pine box in a while?
Josh
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http://www.housedata.info
RANKED BY APPRECIATION OVER THE PAST 5 YEARS
Rank Area %
1 Madera, CA 145.8366
2 Bakersfield, CA 141.7822
3 Riverside-San Bernardino-Ontario, CA 140.7418
4 Miami-Miami Beach-Kendall, FL (MSAD) 140.2393
5 Fresno, CA 140.1411
6 Naples-Marco Island, FL 138.956
7 Los Angeles-Long Beach-Glendale, CA (MSAD) 136.5114
8 Fort Lauderdale-Pompano Beach-Deerfield Beach, FL (M 133.7631
9 Port St. Lucie-Fort Pierce, FL 133.2253
10 West Palm Beach-Boca Raton-Boynton Beach, FL (MSAD) 129.9163
11 Cape Coral-Fort Myers, FL 129.7233
12 Merced, CA 125.8169
13 Visalia-Porterville, CA 124.7353
14 Palm Bay-Melbourne-Titusville, FL 122.2725
15 Yuba City, CA 120.5504
16 Santa Ana-Anaheim-Irvine, CA (MSAD) 119.7938
17 Hanford-Corcoran, CA 117.2607
18 Sarasota-Bradenton-Venice, FL 116.6308
19 Redding, CA 116.4134
20 Deltona-Daytona Beach-Ormond Beach, FL 116.3525
21 Oxnard-Thousand Oaks-Ventura, CA 114.9784
22 Punta Gorda, FL 114.7376
23 Fort Walton Beach-Crestview-Destin, FL 112.0391
24 Modesto, CA 111.5426
25 Sebastian-Vero Beach, FL 108.5341
26 Washington-Arlington-Alexandria, DC-VA-MD-WV (MSAD) 107.3621
27 Ocean City, NJ 106.57
28 Carson City, NV 106.0497
29 Honolulu, HI 105.8662
30 Santa Barbara-Santa Maria, CA 105.5857
31 Chico, CA 105.2553
32 Las Vegas-Paradise, NV 104.7839
33 Orlando-Kissimmee, FL 104.0975
34 Flagstaff, AZ-UT 103.8295
35 Atlantic City, NJ 103.3387
36 El Centro, CA 103.2054
37 Bend, OR 102.0189
38 Reno-Sparks, NV 100.0802
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Break down of areas with 100%+ Appreciation:
CA 16 (None in the SF Bay ARea!)
FL 13
NV 3
NJ 2
AZ 1
DC 1
HI 1
OR 1
CA 16 (None in the SF Bay ARea!)
There are 2 reasons for this;
1) Bay area RE started at a higher price point to begin with (it’s harder to double when you’re starting from a higher number)
2) much of SF Bay Area’s run up started PRIOR to 5 years ago. It really ran up around 1996-2000 with the tech boom.
SF Bay area is as distorted (if not more so) than many/most areas on that list.
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I know it and I agree with your comments. Prices doubled in one year in Saratoga at the peak of the tech bubble. There have been huge swings during 1997-2006.
Jas
I remember from 1996-1999 there was a daily section in the paper called something like “guess how much” where it would show some crap-shack in the middle of nowhere (usually in the South Bay somewhere).
The paper would show the listing price, and the trick was to guess the sales price.
Every time it would go like this:
List price: $555,000
# of bids: 87
Sale in: 4 hours
Then the next page it would say:
Sales price: $785,000.
oops: not daily, should have read “sunday” paper. Sorry
Why would anyone want to live in the Bay area when they could buy in Madera (#1) and be set forever with the most prodigious home-ATM?
Same thing happened in Seattle as S.F. - first dramatic doubling of RE happened late 90’s with the tech bubble. Scary! Then it settled and just kept climbing the past 5 years.
Deals fall back to earth in the Hamptons.
http://www.easthamptonstar.com/DNN/Default.aspx?tabid=1260
This article is a puff piece. It’s way, way uglier out there.
Wes,
when they can’t sell, they try to rent. A lot of European/Asian specuvesters headed there. Any news on them?
I expect to see many of those same towns with negative signs in front of their double-digit appreciation rates a couple of years from now.
Not to quibble, but does “MSAD” mean Metropolitan Statistical Area? DC-VA-MD-WV is an enormous and diverse area. Prices are up way more than 100% in some parts of this region and not so much in others. It’s almost like saying that because it’s 22 degrees in Chicago and 88 degrees in Miami, the “average temperature” is 55 degrees. You’d be pretty miserable dressed for 55 in either place.
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Yes, MSA = Metropolitan Statistical Area. D could be for district, but I am not sure.
Jas
Are there really houses in Atlantic City?? I remember not too long ago there wasn’t even a grocery store.
Wisconsin’s home-building business started this year as it ended last year: slow
Municipalities in metro Milwaukee issued 120 one- and two-family permits last month - January’s smallest volume in eight years and 38% below a year earlier
Matt Moroney, executive director of Metropolitan Builders Association, called the January market “an election-year hangover.”
“With all that negativity, people were not as upbeat or willing to buy a home,” Moroney said.
http://www.jsonline.com/story/index.aspx?id=56367
“Election Hangover?” caused “negativity?”. no wonder the guys last name contains ‘MORON’
sorry, link was cutoff incomplete. Here is the correct one:
http://tinyurl.com/288awc
sorry, the link was cutoff. Last 6 digits should be ‘563672′
thanks for that link - i’m adding it to my blog:
http://madisonhousingbubble.blogspot.com/
excellent. And thanks again for the WI blog. See what you can do about killing all those spammers who seem to invade the posting section.
107% I’ll take it—off 12% so far -cheap stuff is selling agian in DC area,where we burn your money
Get in on the pillaging. The first publicly traded hedge fund is now starting to trade. The symbol is FIG. I hope it does really well because those guys work so hard. They deserve the money.
Can I just buy the fund managers a new Lexus instead of joining their fund, I think it would be cheaper for me and I would sleep better at night
Sorry, a Lexus is what they buy for their 14 year old daughters.
When she misbehaves.
LOL.
only 5 partners will split the approximately 7.5billion ipo
the maids will get a lexus in those homes
FIG opened up 85%. It’s 1999 again, and hedgies are the new .coms. Remember how that ended? Talk about signaling a market top.
Yeah, now J6P can invest with the big boys (kinda sorta). Just in time, as there is so much upside, and very little risk. How are those CDS’s treating you, hedgies?
G 7 Ministers address world financial markets’ stability
“…But differences between G7 members such as the low value of the Japanese Yen and concern over the transparency of hedge funds, anticipates that the final communiqué won’t necessarily be very conclusive.
Germany that currently presides G 8 (which includes Russia but is absent of G 7) would like to tackle the hedge funds issue, a market that has ballooned in the last ten years with increasing risks for financial stability.
However even when United States seems to be willing to address the issue and is not contrary to demanding greater transparency for the hedge funds market, Britain does not follow….”
Mercopress
http://tinyurl.com/yw8us5
Hedge funds are toast. 450 closed last year and the smart boys are dumping out at close to the top.
Follow up to the FOX thing from yesterday in MN.
http://www.myfoxtwincities.com/myfox/pages/News/Detail?contentId=2324140&version=2&locale=EN-US&layoutCode=TSTY&pageId=3.1.1
Crooked realtors wouldn’t be able to pull this stuff if there weren’t stupid and greedy people looking for something for nothing. Let them all burn.
couldn’t have said it any better.
‘Can’t cheat an honest man.’
Hey Tulkinghorn are you the lawyer for the Deadlocks?
More like the dreadlocks, in my case.
Note how the self-proclaimed “good” realtors on this board always maintain a conspicuous silence about the rampant wrong-doing within their “profession.” As they say, the fish rots from the head first, and with lying spokesmen like DL and LAY, it’s not surprising that the NAR turns a blind eye to the widespread fraud committed by its members, and refuses to police its own ranks or enforce even a minimal code of ethics. You also don’t see the rank and file NAR members publically demanding reform and accountability in this corrupt, sleazy, and discredited organization, which speaks volumes about their personal and professional integrity.
I agree. Most of them are not very ethical at all. And the fact that they refuse to turn in each other is evidence of that industry’s lack of ethics.
Let’s be honest. There are examples of Realtors defending positive examples of the trade. What you are saying is kind of like blaming grocery stores for overeating because they keep slashing prices on special items and bulk purchases.
Sales people and marketing are basic elements of any Capitalist society. Credit blowouts are something we should have enough experience with by now to tame, but modern changes and globalism and hedge trading are all combining to create new variants of dangerous volitility. The problem is the fraud and the grossly neglegent lack of consideration for history.
“Note how the self-proclaimed “good” realtors on this board always maintain a conspicuous silence about the rampant wrong-doing within their “profession.” As they say, the fish rots from the head first, and with lying spokesmen like DL and LAY, it’s not surprising that the NAR turns a blind eye to the widespread fraud committed by its members, and refuses to police its own ranks or enforce even a minimal code of ethics. You also don’t see the rank and file NAR members publically demanding reform and accountability in this corrupt, sleazy, and discredited organization, which speaks volumes about their personal and professional integrity.”
Corruption is rife as all levels, especially the top. This is a “Me First” orgy now, IMHO, as anyone with some common sense can see that the credit party is winding-down now, so better hurry up and get what’s left of the scraps.
My favorite parts:
But how did a guy with Holliday’s criminal record also get a real estate license?
Great question!
The Commerce Department admits it does not do criminal background checks on every applicant, and they say Holliday lied on his application.
To protect yourself, there’s any easy way to check if an agent has a criminal past, go to the Minnesota Department of Public Safety website.
LOL. Use the web yourself, because the Commerce Dept doesn’t bother before issuing the license. Nice.
I do not understand why an individual with a criminal record cannot be a Realtor? I was of the opinion that if an individual had been punished by the courts and served his/her sentence then the individual could become a practicing lawyer (subject to bar approval), Senator President or even a janitor. If an individual gets great legal representation and is found “Not guilty” ala OJ Simpson, does that mean an individual with a poor representation in court is condemned for the duration of his life barring presidential pardon. Or is the only thing the individual did on his application is fail to say he had a prior conviction?
The amazing thing to me isn’t that this happened, it’s how OFTEN it’s happening. Does anyone honestly think that this is the only “deal” that Wong and Holliday did? Does anyone think they’re original, and the only ones who did this? Please, they probably learned it in criminal school (jail) or something. (we’ve seen other treads where ex-cons were doing the same thing). Then again, they probably also learned these deals straight from the CEOs of these subprime lenders.
I can’t believe Fox 9 “snitched” on Jesse Holliday. (holdover from another thread)
also, it always makes my day when Ben picks MY contribution to be in a thread! Yippee!!!!
Clouseau, I spoke to one of my old buddies in Minnesota last night. He is a great guy and has a ton of common sense. He’s looking to buy in Wayzata. I told him to be careful. He said there was nothing to worry about. If interest rates come down everything will pick up. I spent a few minutes telling him that interest rates had nothing to do with the Minnesota downturn. It’s all about affordability. I don’t think he liked my answer.
Even the most intelligent of our friends and family aren’t getting this. They are lining up to be the next group of cattle walked across the Killing Floor. There is still plenty of red meat out there for these guys.
Well, it’s off to Florida. I hope all of my fellow blog losers have a great weekend. Keep yourself warm there in Minnesota, Clouseau. Stay away from black ice.
NYCityBoy, you are so right. A friend of mine is seeing his cousin make a “killing” in condos, though the alleged investor cousin has yet to actually sell any of these, half of which are still in th construction phase! He’s basing all his profit numbers on what he *says* they are selling for now. (I wonder if he’ll do like the developer is doing now and throw in a $30k parking space and $40k of furniture in when he goes to sell?)
And so this friend of mine is poised to invest. Nooooo! I keep telling him to beware the negative cash flow, but he’s got stars in his eyes and money in the bank just itching to be “invested”. The sad thing is, he usually tries to be analytical about his investments and money and has avoided some nasty boom-busts in the past, but he tosses all that aside now because the feeling that he is “missing out” is just tearing him apart.
A friend of mine is seeing his cousin make a “killing” in condos, though the alleged investor cousin has yet to actually sell any of these, half of which are still in th construction phase! He’s basing all his profit numbers on what he *says* they are selling for now.
Have him go over Jeff’s well-documented experience in RE speculation - the thread over at SDCIA is named “My Favorite Article/Chart”. Currently he’s feeding his multiple alligators with his lines of credit.
Jeff’s investment wisdom after 20 months’ experience with the alligators:
My advice to others. Buy houses for very little money down, sell them when they go up a lot. If they don’t go up a lot then don’t buy them.
Wish me luck!
Tell your friend that rarely those that enter into a boom win the money. It is those that were invested before hand that come out ahead.
Buh bye middle class…it’s all over but the shouting.
“If they don’t go up a lot then don’t buy them.”
By using a time machine?
Yes - that’s bizarre, it’s like he’s putting the cart before the horse, or something.
The Bizarro World of Real Estate Investing: You know when you know, but when you don’t know, it’s better if you time it right by not knowing before you did know.
I have a theory on that,unless you are involved in the financial markets, or had to focus on the real estate market in the past couple of years for some reason, the topical/garbage reports from MSM would have left you thinking nothing unusual was going on, so for people who weren’t flipping or selling, it just isn’t something they focus on, it doesn’t have any impact on them yet, key word being yet.
I dont remember from the article if they specified what other crimes he had been convicted of. But generally, for most licenses, the things that will disqualify you are: fraud and serious felonies (rape, murder, mayhem, etc.). Otherwise, you can pretty much get most licenses with “minor” criminal offenses and misdemeanors like: petty theft, non-felony drunk driving, etc. The lenght between the last crime committed and the date of the license application also plays a factor, the longer time has passed, the less likely a license will be denied.
So if Holliday had been convicted of misdemeanors and not felonies, then the background check would have probably been irrelevant.
Many on this blog had predicted the news that came out Wednesday (HSBS and NEW) but I am totally amazed at how many analysts cannot see what we all see and have seen for months.
“Analyst Richard Eckert of Roth Capital Partners in Newport Beach, Calif., had upgraded New Century to a “buy” in November because its shares looked cheap and Eckert had confidence in management”.
It is very clear that a lot of people have no clue about the upcoming “trainwreck”.
More on this on the front page of today’s WSJ:
Default Jitters Batter Shares Of Home Lenders
By James R. Hagerty and Ruth Simon
Word Count: 1,157 | Companies Featured in This Article: New Century Financial, HSBC Holdings , Wells Fargo, Fannie Mae, Freddie Mac
Default worries are growing at the risky end of the mortgage market.
Those worries sent some home lenders’ shares plunging yesterday and highlighted uncertainties about how many investors in mortgage-backed securities might be vulnerable.
New Century Financial Corp. shares dropped $10.92, or 36%, to $19.24 in 4 p.m. composite trading on the New York Stock Exchange after the big Irvine, Calif., lender disclosed late Wednesday that it expects to report a fourth-quarter loss and will restate results for the previous three quarters to correct accounting errors.
New Century is one of the nation’s biggest specialists in “subprime” mortgage loans, or …
There is a bevy of related articles in today’s WSJ:
p. A1 “Big Dealer to Detroit: Fix How You Make Cars / AutoNation CEO Sees Inventories Rising Fast; The Big-Wheel Problem”
(Blame it on the cars they make, and ignore the sudden dearth of home equity money available to buy Big Wheels.)
p. A2 “HSBC, facing subprime woes, shuffles management”
p. A2 “Orders for new homes plunge at builder Toll Bros”
(At least their stock price is up 50% since last July…)
p. C14 “Burned mortgage lenders may get overly cautious”
(No way, because it is a New Era, and this time is different…)
In the autos-related article they mention a truck that’s been on the lot for 237 days. Too bad they can’t do the MLS trick of resetting these DOM numbers
rotfl
But Toyota is selling.
The domestic auto makers still need to improve quality and also become more adaptive. The example was a pickup with an underpowered engine that just wasn’t selling.
Well… the Honda pickup isn’t selling due to only having a 6 cylinder too.
Although, fewer HELOCs have got to mean fewer Hummers. PLEASE!
Got popcorn?
Neil
Now that some sub-prime lenders (like NEW yesterday) are feeling real pain in the stock market and making news, I’m looking at shorting FED and DSL. I believe both companies’ mortgages are 100% California, and both companies’ mortgages are subprime and/or ARM’s.
Is anyone familiar with these two?
“…how many analysts cannot see what we all see…”
They are blinded by greed and too many conversations with a surrounding crowd of incestuous greedy people.
Analysts don’t get paid to be different (nor to be bearish). They are sometimes useful, but not always in the way you are thinking of them.
Correct. It is better to be wrong in a group than right by yourself. Career protection.
LOL — good one.
The problem that many on this blog (including myself)have is that we fail to remember that the Lereah’s, Eckert’s, CAR, main stream news media, stock brokers etc. make their money by selling. How many stock brokers ever advise selling? ( 1)Elaine Garibaldi Sept 1987 - Goldman Sachs. She has not been right sense. The news media’s pay comes from selling advert space. Realtors from selling houses - you can’t sell a house unless y6ou have buyers. The banks sell “trust” - the economies going great, don’t worry about a thing - How much money do you want?! I could go on and on, it is not worth my time to discuss the perception of a salespersons reality with the reality expressed by the fear in the average person in the US. .
On Wall Street, “research” is calling your buddies and listening in to other people’s conversations in lunchrooms and happy hours. It’s not about checking the fundamentals anymore. The balloon has slipped its moorings and is drifting away… toward the powerlines.
“…I am totally amazed at how many analysts cannot see what we all see and have seen for months.”
“See” and “report” are totally different, especially when it comes to peoples’ money.
Subprime Woes
http://www.investors.com/editorial/IBDArticles.asp?artsec=16&issue=20070208
“Tony Crescenzi of Miller Tabak said subprime fears may be overblown. He cites fewer banks on the FDIC’s list of problem institutions.
Banks and lenders have packaged their mortgages and securities, selling them to pension funds, hedge funds and other big institutions”.
Oh now I feel so much better!!
We can all share the pain.
“Tony Crescenzi of Miller Tabak said subprime fears may be overblown.”
Is he lying or clueless?
Both.
He’s the chief paid shill for a bond dealing chop house.
A few months ago I mentioned the situation with my dad and his wife. They bought a condo (I think he called it a “carriage house”, whatever that is) in Naples back in early 2004. Last summer they decided to sell the family homestead on Lake Winnipesaukee and bought a condo in Laconia, right at the peak.
Well, the house is still on the market, and the condo is now “worth” less than they paid. I bet the carriage house will soon follow. They bought the properties outright, so there are no worries there. While it wouldn’t be polite of me to ask relatives what they were thinking, I am tempted.
Don’t go there Lou…….
risk premiums
could we have stag-flation from the return of risk ?
not much demand or commodity inflation to worry about- how about dollar and interest rate spreads- I bet they’re comming back mcsoon
flatffplan–I do believe that’s the longest and most cogent post ever from you. Well done!
Some big haircuts here in Prince William County, VA (D.C. Exurb)
MLS #: PW6246722
http://www.homesdatabase.com/PW6246722
Current price (foreclosure): $509,900
Last sold price: $683,445 on 10/28/2005
Haircut: $173,545 or 25%
MLS #: PW6308173
http://www.homesdatabase.com/PW6308173
Current price (says “never been lived in): $509,900
Check out the “conveyances”, according to the Prince William County Tax Database. The earliest one is the price from the builder, Ryan Homes (NVR).
$695,000 4/18/2006 KHAN
$560,000 11/14/2005 JAHANGIR
$494,990 5/31/2005 MAFIL
Haircut: $185,100 or 26.6%
Hi,
No. Virginia baffles me. The outer suburbs are dropping but in Fairfax an Arlington County it is still 2005 in prices. Having bought at the top of the last bubble I well remember how long it took for our tiny little place to actually rise enough in value that if we had to move we would break even.
Intellectually I understand what I read here and what everyone is saying makes sense. What bothers me is we feel like we missed the boat to big house land by refusing to consider buying outside what we can afford. The whole area seems rich here — its like everyone got the memo but us.
I still do not think 3X income is valid anymore either. Realistically when you figure out how much it costs to feed, insure, educate, and plan for retirement 3X is tight. Heck 2.5 is is tight. We are at 1 to 1 ratio and it is tight.
Sometimes I wonder if this will turn out like other times and places. It will not matter if you saved or spent. When this ship goes down — everyone drowns.
I agree to a certain extent. It does indeed seem that everyone in NOVA is living extremely well, new cars, big houses, fancy clothes, dining out. As I drive around the Commonwealth (and I do that a lot for the foreclosures) I wonder anew every time: what do all of these people do that is so valuable to society that they get all of this?
Remember a few things, however: 1) NOVA is based almost exclusively on federal spending. The homeland security boom was almost exclusively here, and hundreds of companies are busily sopping up that gravy even as I write this. There is also a huge cadre of military which rotates every two years and a legion of well-paid, secure bureaucrats who will never leave. 2) there is incredible pressure here to keep up with the Joneses. A lot (and I suspect a whole lot) of people are doing it with credit and HELOCs. 3) The system is designed to lock the peasants into a cycle of debt and peonage, the wage slavery which Marx spoke of. I’m no Marxist. Indeed, I’m very much a free-market capitalist, but I can see that hordes of ordinary people have voluntarily taken on crushing levels of debt which will take the rest of their lives to pay. My receptionist, a 20 YO single mom who is paid hourly, thinks she should be entitled to a townhouse in her own name, and thinks that $325,000.00 is a “bargain” and the resulting $1,500.00 per month is just fine for starting out. I cannot fathom this type of thinking nor this degree of expectations from the younger generations.
If the wars on terror ever end, if the unbelievable waste on homeland security is ever curtailed, if government spending drops (say, if incomes shrink or unemployment goes up or they’re forced to stop counterfeiting) or, if (and I know this is extremely remote) the seat of the federal government is moved inland for security, then the spending here stops - just like that. It is conceivable that congress might not pass next year’s budget. Political gridlock has shut down the government before. If that persisted for any length of time, this area would crash in a huge way. There is no source of wealth here other than government spending, which is extracted from the whole rest of the nation. This area is an aberration, relatively immune or the last to feel any serious economic contraction, but it has its own vulnerabilities.
Fairfax county home prices are going to drop.
According to census.gov, the population percent change from April 1, 2000 to July 1, 2005 was 3.8%. 3.8 Freakin percent! That’s it.
http://quickfacts.census.gov/qfd/states/51/51059.html
It doesn’t make sense to me how the population grows less than 1% a year and yet the cost of housing increases 100% in 4 years.
I’m seeing the same thing in Loudoun.
$475,000 7/2004 bought
$391,700 8/2006 repo’d by Wells Fargo
http://www.homesdatabase.com/LO6234288
Here’s another one in Loudoun:
$410,000 2/2005 bought
$339,656 1/2007 repo’d?
http://www.homesdatabase.com/LO6303616
Fed’s Poole says housing is starting to show signs of stabilizing.
Gee, that’s a relief.
This just in: MSM beginning to suspect that there MIGHT be a subprime problem:
http://www.npr.org/templates/story/story.php?storyId=7299415
Okay, HBB-ers, does this qualify as an NPR Driveway Moment?
I can’t recall having an NPR driveway moment since they fired Bob Edwards and basically adopted the Fox anti-news model of reporting. (Step one: Post somebody outside Terry Schiavo’s hospital room. Step two: Ask somebody coming out how they feel. Step three: Ask somebody who disagrees with the first person how they feel. Step four: Start looking for tenured position in east coast journalism school where you can teach kids how empowering it is to bring America’s many voices to the radio.)
I just saw a CALPERS manager on Bloomberg. He said CALPERS has 8% of assets in real estate, and they are looking to internationalize their real estate holdings.
Specifically he mentioned Asia…..It was pretty clear from his comments that he felt there was to much liquidity in the USA chasing to few assets…..
Sounds like a great move. There is so much less liquidity in Asia.
Oh wait…where is that USA liquidity coming from again?
Hehehe…. I recommend India. In particular Bombay.
CALPERS just bought a shopping center and I believe a high rise in No. Virginia. They spent over a 100 million on it.
Federal Reserve Governor Susan Bies, the central bank’s lead official on regulatory issues and the longest-tenured current board member, resigned effective March 30.
http://tinyurl.com/2ocg8a
“Bies oversaw the Fed’s efforts to implement the so-called Basel II accord, which aims to make banks’ capital requirements more sensitive to the risks they take on. Large U.S. banks have been at odds with regulators for months over whether their overseas rivals face less stringent standards.
`Tougher Job’
“Basel was a much tougher job than I think she realized,” said Edward Kane, a finance professor at Boston College. “The Federal Reserve found that it couldn’t deliver on its promises to very large institutions. It ended up being somewhat of an embarrassment to the Fed that they couldn’t implement it as they had expected to.”
Anyone wish to comment/fill us in on the Basel II accord?
“When lots of executives leave a company, it is a signal that turmoil is brewing at the top echelons and that decisions won’t be made with ease…” the street
http://tinyurl.com/yve43j
so still 4 vacancies on the Fed plus
Willing to sell at a 100k reduction in price? At 749k, it must still be unconscionably overpriced.
I don’t know why I’m so surprised by this sort of thing, but I still am.
http://philadelphia.craigslist.org/rfs/275749580.html
It’s down 12% but at $300/sq.ft. it is still a tad steep…
That’s a pretty nice rehab and it’s in a great neighborhood. I’m curious to see if a buyer who has been waiting for a “deal” in Queen Village will jump on this one. Probably dicker it down another 2-3% and think they got it for a song!
Unfortunately I’ve been hearing too many anecdotes of recent buyers being thrilled that they bought a house “on the dip”, believing that the market is going to spring back to life in a few months.
http://www.dailykos.com/storyonly/2007/2/9/102134/0230
Uh-oh Crispy. Why did you post a link to a post by someone named (gasp!) “New Deal Democrat” on the Daily Kos here? This blog is now going to be srewn with blown gaskets…
“strewn with blown gaskets”
They had this story on the front page and me and Russ Winters were mentioned.
I only knew about it because I checked my stats and was wondering why all these links were coming from the Daily Kos.
Well, you can count me as another new deal democrat - no, I’m not the author.
TxChic,
Man, that poor guy who bought 10,000 shares at 21.50 to make a killing on dividends. I hope for his sake the dividends are about $4 per share, or else he’s a loser–only 1 day after he bought. Sucker!
B
Stock now at 17.40. He is now down over $40,000.00 in less than 24 hours.
He is the definition of catching a falling knife.
Try $16.76–now he’s down $47,400. Ouch, that knife is sharp!
It wasn’t just him. Looked like somebody bought about 10 million shares to hold it at $21.50 most of the day. I hope it was shorts covering.
Look at this group of owners and their shares! Combined losses of about $200 million yesterday! Couldn’t happen to a nicer crowd, either…..
HOTCHKIS & WILEY CAPITAL MANAGEMENT, LLC 4,344,700
GOLDMAN SACHS GROUP INC 4,208,507
GREENLIGHT CAPITAL, INC. 3,494,700
MORGAN STANLEY 3,302,296
STATE STREET CORPORATION 3,194,133
Credit Suisse/ 1,946,625
CITIGROUP INC. 1,805,967
Barclays Global Investors UK Holdings Ltd 1,698,139
SHAW D.E. & CO., INC. 1,574,400
NEW YORK STATE TEACHERS RETIREMENT SYSTEM 1,560,150
And note the last bagholder. I wonder how many loans the New York State Teachers Retirement System buys from New Century every month? Marion the Librarian will be working another few years to support her Music Man in retirment.
I guess a market rebound is a possibly, even in the face of a growing foreclosure rate, but only to the degree people believe in it and the media encourages that optimism.
But I remember the dotcom boom and bust quite clearly, and when the situation is that every greedy schmoe sees the same game as the means to untold of wealth, the party is over, and there is no after-party for the cool kids. The economy absorbs the losses, some people lose their shirts, the media does somber post-mortem pieces for a spell until the Next Big Thing in Get Rich Quick schemes emerges.
I’m thinking its emerging markets stocks, myself.
As for QV, it’s nice, sure, but isn’t this home very near the site of a murder over a dice game just a few months back? Isn’t it also within three block of a big, ol’ public housing development? 750k seems unfathomable. 650k, for that matter.
What do you make of Philly’s real estate values? I see a bust in the not so far future, myself. Philadelphia magazine just ran a cover story on how many millionaires are in the metro area, but they only have so much influence, I think.
What do you make of Philly’s real estate values? I see a bust in the not so far future, myself.
Inflated, by about 20%. If a bust means an overall 20% hit to prices, then I see a bust too.
Philadelphia magazine just ran a cover story on how many millionaires are in the metro area, but they only have so much influence, I think.
Haven’t read that article, saw it at the newsstand, though. Think I’ll read up at the library.
I used to live in Queen Village - loved every minute of it. Within 2-3 blocks of some of the best ethnic restaurants in the city: Vietnamese, Thai, Middle Eastern, Italian - real Italian, not that bogus junk they used to serve at Strolli’s or the Victor Cafe. Nightclubs, live music. The Chef’s Market. Being able to walk across the South St. bridge to the live concerts that Penn’s Landing sponsored- free. Taking the ferry from Penn’s Landing across to the Camden riverfront where WRTI hosted jazz artists - free. Leaning back on the lawn, watching the sun set against the city’s new skyline (seen from across the river). Meeting cute guys. Many cute guys.
Yeah it was a real hell-hole.
Seriously, I know the projects to which you refer. These are the kinder, gentler projects. The real projects were torn down to make way for the newer ones. I used to ride my bike through the real projects - (the old high-rises) on my way to the gym. Nobody ever bothered me.
A killing over a dice game? Hey, what’s a little manslaughter among friends - no worries.
I know I shouldn’t make light of violent crime. But 17 years of city living inured me to that reality. I grew “city eyes” - you know, the ones that show up on the back of your head? They’re closed now due to my residency in wonderful suburbia land. When I’m in town, mainly to socialize now, the radar goes back on. Except I can’t parallel park for $hit anymore. Totally lost those skillz.
That said, $300/sq. ft. is way too much for property anywhere in Philadelphia, or the burbs even. Maybe some pimped-out palace in Gladwyne, but that is so far out of my league I won’t even go there.
It’s funny that you mention public housing because after I read the FLA thread and linked to the site that Mike Fink posted - Riviera Beach - I thought: projects of the future. The activity those posters describe is what you’d find somewhere around 5th and Diamond. AFAIK, there are no $750k THs for sale in the Badlands.
Given the recent boom mentality, though, I could be mistaken.
And given my recent experience dealing with suburban soccer mommies backing out their H3’s with no consideration that somebody’s vehicle (mine) might just have the right of way, and is thisclose to being Hummer-killed, I think I’d rather throw in with the boyz from the ‘hood.
OK I started to answer your questions and then went off into a middle-aged babe’s trip down memory lane/ semi-rant. Oh well, it’s Friday afternoon, what can I say?
Enjoyed your “middle-aged babe’s trip down memory lane,” Phillygal.
I sold RE in center city back in the early 80s, both for my cousin’s firm (across the street from Chef’s Market) and for my own firm briefly.
Sold a ton of new construction and rehab stuff in QV in 79-80– boom times followed by b 20-30% haircut. The current boom was bigger, but Philly never gets as crazy as any of the big glamour towns, and certainly nothing like S FL where I’ve lived for the last 19 years. Philly today is actually one of the least out of balance metros in the US, in spite of the fact that Center City is truly one of the best urban lifestyle environments anywhere. Suburbs are really nice too.
Phillufyans tend to be much more realistic and sensible, less likely to be suckers, than other parts of the US. The other side of that coin is that they typically aspire to less. mmmmm…. chee-e-e-e-s-e steak..
Gold’s @ $666, a devil of a buy, still.
Asset inflation usually occurs before price inflation. So yes, gold is a good buy still. What is the price of a good quality men’s suit these days (out here in Phoenix we wear jeans in the winter and khaki’s in the summer)? I cannot keep up with my plan on moving 10% of my assets to gold. I’m at around 5%. Next week I will buy more gold.
Don’t forget silver.
NEW is dropping even more today. I would have guessed it would be up today. WOW
50% in two days.
FED and NDE down, too. I was a fool to sell my April puts. But after getting battered from October through December, I felt compelled to sell at a loss. Oh well =/.
And people are pissed about it:
http://news.moneycentral.msn.com/provider/providerarticle.aspx?Feed=MW&Date=20070209&ID=6465435
Hello All: I’d like to get your thoughts on the following addendum to a sales contract my sister just received. To me it has scam written all over it. She told me the original “buyer”, who is also a title agent, is going to walk with $20,000 and the new buyer wants $30,000 cash as a cushion for the mortgage payment. Even if that were true, it is quite obvious they can’t afford the house. The real kicker here is that they got an appraisal for $350,000. There’s NO way that house legally appraises for $350,000. In the height of the market it was only $320,000. There are better houses available that are priced at $350,000, but not selling. I obviously changed the names, but here’s the addendum:
Please note that the above referenced property is being purchased at $299,900 by Jim and Jane from Mary as per the sales contract dated January 20th 2007. Upon closing there will be a simultaneous transfer from the new owners to Barbara in the amount of $350,000.
By signing below all parties are acknowledging that they are aware of the simultaneous transfer.
It sounds to me like she needs a lawyer and quick. Just because it’s on paper doesn’t make it legal.
She just got word back from her lawyer who researched it more. He said she’s not liable if there’s fraud involved because she is selling it for the price she wanted and is taking nothing extra out of the deal. If the buyer wants to pay the extra 50 grand, then that’s their business. That’s essentially where it is.
It is illegal to double escrow a property if you are an agent, unless the buyer and seller acquiesce. Why does your sister want to throw away $50,000? Let the flipper’s deal fall out and then make your own offer, or find a better property for less somewhere else. Folks, are you not listening. Liquidity is tanking, prices are dropping, $1 trillion in arms are resetting. This market is headed south, probably for 2-3 more years. Don’t make stupid choices. Why do you think the flipping practice is illegal, without the participants acknowledging the structure? Because the sister is getting shafted.
The thing about it is that she has NO chance of selling it for 350K. The only reason the other 50K is in play is for the title agent to walk with 20K for getting the buyer an appraisal for 350K, and for the buyer to pocket 30K at closing. When she had the house up for sale with an agent it was 320K. She didn’t get ONE looker.
Anyone seen news on the Dodd hearing from yesterday? Feel free to post up some links.
OC Market Off
http://blogs.ocregister.com/lansner/
After receiving an offer for a credit card against our home equity last week, I just received a call from the Equity Division of my mortgage holder. You’d never guess but we qualify for a home equity loan (—maybe because we actually have some equity to extract!)
I told him I was on the Ben Jones Housing Bubble Blog every day and so I knew that a home equity loan was the devil.
I then giggled and said, “Now, Go Away” and hung up.
That was fun, Ben. Thanks
Funny you should mention this. I just got a personal call from BofA offering a special 0% credit card. This was a call from a branch location that I use on occasion. I’ve been a BofA customer for many many years and have never received a phone call from them.
Looks like Wall Street is finally taking the money away from the subprimes.
They are all correcting today. Glad that I doubled up on my short positions early this morning.
Woo hoo!
It’s time for us bears to enjoy the new era begining in the housing market.
Congrats guys, this is another major milestone.
Does anyone have any information on North Carolina? Specifically the Charleston and Mecklenberg areas. I have friends that are looking to move there. Wondering if anyone here can advise?
My Thanks,
Stars End
I’d like to sell my house and buy a bigger one. I want to sell my house after I buy another one, but I don’t want to take the price volatility risk in the mean time. If houses were a true investment I should be able to buy a contract that would guarantee a certain price for my current house that I could exercise over the stated period of the contract. Whoever sold me the contract would then assume the risk in exchange for the cost of the contract.
Is this possible, and if not how can housing be a real investment? I can buy options for nearly anything else, why not my house?
Everyone with a mortgage would benefit from being able buy an option to sell at a certain value, just in case. The banks can buy mortgage insurance, why can’t we? Or am I just missing something?
Yes you are missing something important….your home is going down and value, so no one wants it.
A year ago, $1 trillion bets were placed that your house would be worth more in a year. Guess what? They lost. Game over.
Phoenix Haircuts
———————–
3 Short Sale Opportunities… I NEED OUT!
Reply to: hous-271585314@craigslist.org
Date: 2007-02-02, 1:32PM MST
I need someone that is experienced in short-sales to take over my 3 properties and possibly short-sale them. They are not defaulted yet, but I am out of money and my realtor has had zero leads in the door.
1. Owe $410k Comps show Low $300s
2. Owe $350k. Comps show $280-$350
3. Owe $380k. Comps are all over the place $350-$390k. Rented for $1100/mo.
Thank you.
(name)
“…..Comps are all over the place $350-$390k….”.
Welcome to sub prime mortgage fraud. The only way to sell those deals is to commit a felony.
Do ya feel lucky, punk? Do ya?
Neil or anyone else who can help make sure I am reading this correctly. Warning PDF file.
I was just looking at the Washington DC Condo market report. If I am reading correctly it looks like the average price fell $30K this month with a median hair cut of $28K. Am I reading that correctly?
PDF link:
http://www.gcaar.com/statistics/2007-home-sales/dccc0107.pdf
I think that is a year over year drop. About 8% in mediun and average prices.