“Wall Street’s Appetite Has Disappeared”
Some housing bubble news from Wall Street and Washington. “Mortgage lender SouthStar Funding has closed its doors, the latest victim in the battered subprime lending market, a company executive said Tuesday. ‘We really felt like we could weather the storm and that we would outlive some of the competition,’ said Tyler Wood, SouthStar executive VP. ‘Wall Street’s appetite for the Alt-A and subprime market disappeared.’”
The Post and Courier. “SouthStar, which once employed about 800 people nationwide and last year generated $6.3 billion in mortgage loans, closed its entire operation. ‘SouthStar Funding LLC sincerely regrets that it was necessary to cease its mortgage lending operations,’ the mortgage firm said. ‘The recent unprecedented downturn and policy changes in the mortgage industry necessitated this action.’”
The Boston Globe. “New York mortgage broker Vertical Lend Inc. forged borrowers’ signatures, created false loan records, and charged fees that were never disclosed to customers, state regulators said yesterday as they ordered the company to stop selling mortgages in Massachusetts.”
“Also yesterday, Massachusetts ordered SouthStar Funding LLC to halt operations after regulators learned the company is no longer funding some loans it had agreed to make, said David Cotney, the banking division’s chief operating officer.”
“‘The chickens are coming home to roost,’ said James Campen, a former economics professor at the University of Massachusetts at Boston.”
The Boston Herald. “Subprime mortgage lenders are bulking up on ‘loss mitigation’ personnel in a desperate attempt to avoid foreclosing on homes now worth far less than what borrowers paid for them. The moves aren’t done for altruistic reasons: Lenders simply don’t want to foreclose on homes that will end up on their books.”
“Analyst Gerard Cassidy said he eventually sees other lenders, not just subprime lenders, moving toward hiring extra ‘loss mitigation’ personnel if the housing carnage starts spreading to other areas of the financial sector.”
United Press International. “The troubled U.S. housing market has led to nearly the same job-cut number so far this year as in all of 2006, an outplacement consulting firm said Wednesday.”
“Job cuts in the housing-related industries of real estate, construction and mortgage lending surged 346 percent to 21,245 in the first quarter from 4,764 in 2006’s three months, Challenger, Gray & Christmas Inc. said.”
“‘While many have predicted that the housing market has hit bottom, the situation seems only to worsen as home builders continue to report slumping orders,’ says said John Challenger, CEO of Challenger, Gray & Christmas.”
“‘Now we are seeing the impact hit traditional as well as sub-prime mortgage lenders as demand for loans declines and the number of foreclosures skyrockets,’ he says.”
The Associated Press. “Mortgage giant Fannie Mae, remaking itself as it recovers from a multibillion-dollar accounting scandal, is cutting its 6,500-person work force by several hundred employees by year’s end.”
“Fannie Mae also disclosed in February its decision to withhold $44.4 million in bonus money tied to company earnings targets from 46 current and former senior executives after a government-ordered review found they were undeserved on the basis of performance.”
The Chicago Tribune. “Amid rising levels of defaults and foreclosures in the home-lending industry, nearly 900 Chicago-area workers at four mortgage firms will lose their jobs, according to recent filings with Illinois employment officials.”
“ACC Capital Holdings told the Illinois Department of Commerce and Economic Opportunity in three separate filings last month that it is cutting a total of 515 jobs at three locations.”
“Meanwhile, Fremont Investment & Loan told the state that it was laying off 270 workers. H&R Block Mortgage Corp. is cutting 58 workers. In addition, WMC-GEMB Mortgage Corp. told the state that it is letting go 51 workers in Schaumburg as a result of ‘the current climate’ in the subprime mortgage industry, a spokeswoman said.”
From Reuters. “Mortgage applications fell for the third straight week as interest rates rose, reinforcing a growing view that the housing industry will further sour as fewer subprime borrowers get loan approvals.”
“‘We definitely still think we have some ways to go before we reach bottom in terms of housing activity,’ said Andrew Tilton, senior economist at Goldman Sachs. ‘You’re going to have a combination of more supply and less demand going forward as result of happenings in the subprime market adding to a situation that is already one of oversupply,’ Tilton said.”
“On Tuesday, the National Association of Realtors reported a 0.7 percent bounce in pending sales of existing U.S. homes, suggesting stabilization. ‘Even a stabilization in sales will do little to work off quickly the high level of inventories of homes for sale, which in turn means further downward pressure on prices,’ UBS said in a report.”
From Builder Online. “Credit Suisse analyst Ivy L. Zelman says possible lender restrictions involving subprime and Alt-A mortgages, which accounted for an estimated 40 percent of purchase dollar originations in 2006, may result in a shrinking pool of buyers for new homes.”
“‘Some of the investors said, ‘I’m delivering the loan back to you. Give me my money.’ And that’s basically why New Century went belly up,’ Zelman explained. ‘What people think right now is that this is just a subprime problem, and unfortunately, I wish it was. Subprime is not that significant for many (builders) but we all should realize that housing is a food chain, and there is a domino effect.’”
From Bloomberg. “Some collateralized debt obligations that invest in subprime mortgage bonds, related derivatives and other CDOs may be less diversified than they appear, raising investors’ risks, according to Moody’s Investors Service.”
“Moody’s sees ‘increasing’ correlations in performance, which suggests it will require more protection for bondholders when the project is finished.”
“The value of Canadian building permits plunged from record highs to their lowest level in a year in February. Statistics Canada reported on Wednesday a 22.4 percent tumble in permits due to a sharp decline in both residential and nonresidential permits.”
“The biggest decline was in the province of Ontario but western Canadian provinces of Alberta and British Columbia, as well as Quebec in the central region also saw significant setbacks.”
“‘The hefty retreat does support the view that housing activity will moderate in the year ahead,’ said economist Doug Porter.”
From CTV.ca. “‘February’s decline, the fastest in 13 months, occurred due to across-the-board decreases in both residential and non-residential sectors,’ Statistics Canada reported. ‘Inventory of unsold new housing has been on the rise since August 2006.’”
“The vacancy rate for U.S. apartments climbed to 6 percent in the first quarter, the highest in almost two years, as the number of available properties increased, real estate research firm Reis Inc. said.”
“The decline in prices for condominiums, combined with the large number of condos that are available for rent, has made them less attractive to investors, the study said.”
“Net conversions peaked at more than 55,000 units in the third quarter of 2005 and now stand at less than 1,000 units, according to Reis. In Fort Lauderdale, Phoenix, Las Vegas, Atlanta, Austin, and Fort Worth, the slowdown in conversions has turned to net re-conversions, Reis said.”
What is “loss mitigation personnel?”
Ever watch the Sopranos?
So yoose wan cement or granite shoos? Da choise ezz yourse.
I don’t care about the shoes, just let me taste one last stromboli.
Sorry, don’t have cable. I can’t even watch network TV without throwing bricks, it’s so stupid (exception: PBS).
So Loss Mitigation is the new euphmism for Collection/Repo?
Called “Workout Specialists”
Not even American Idol…..?
Are you mad…!
I work for a network. Problem is their programing is geared to gain the highest market share of the 18 - 24 year olds.
It has someting to do with advertising.
That doesn’t make much sense. I would expect them to focus more on the older, moneyed demographic.
Makes little difference to me though. I’m in my late 20’s and I think 99% of it is garbage.
What is “loss mitigation personnel?”
Someone who calls you 4 times a week and asks you to make your loan payment.
Loss mitigation means they hire nice people to cajole you into continually making your loan payment. They may reduce your rate, forgive some fees, and in general keep you on the hook with your upside down asset. It works. C-BASS is the best at it. They have a subsidiary called Litton Servicing.
Quote: “Litton has clearly established itself as the premier residential mortgage servicer in the industry, as it works to cure problem loans and prevent foreclosures by providing delinquent customers with a full range of structured counseling and support services - its primary goal is to enable families to maintain homeownership.”
They started in the mid 80’s in Texas.
So if I stop making payments they’ll cut my rates too ?
Ahem. C-BASS and its associated companies (including Radian, the largest Private Mortgage Insurance Co.) and some subprime issuers, are going to state earnings on April 12. Perhaps the proverbial caca will hit the proverbial fan at that point.
I think that for proper karma, the government should set up a team of telephone hacks who call lender executives four times a day asking if they are planning to pay the government back for any bailout…
How boring, no lead pipes, no violin cases:
http://tinyurl.com/2dnlj6
This is an actual ad for a loss mitigator (thanks to Voice of San Diego).
Well Hospitals have ASSET trackers to make sure you really dont have any money or assets (house) when you apply for Medicaid………Or when you try and stiff them.
Here’s a new one, REO here on LA Westside:
reporteddate: 2007-04-02 10:19:25Back On Market $659,900 2 Beds 1.00 Baths
MLS Number
07-170211
2547 walnut ave,venice, CA 90291
Area: Venice
Bank-owned foreclosure. Great starter traditional home. 2 bedrooms + 1 bath. Front yard has great curb appeal. Good size backyard. Needs some TLC. Bring all offers. All offers must be submitted on CAR form with pre-qualification and copy of earnest money check plus proof of funds.
Property Type: Residential-Single Family
Rooms:Other
Equipment:Other
That place is the next door neighbor to the Costco parking lot, a hellish landscape starting at about 7am on Saturday all through the weekend. You’re breathing in exhaust from idling engines, and hearing the unending din of honking SUV horns as local residents burn through their HELOCs purchasing a palette of toilet paper and ramen.
Fat f’ing chance getting $650k for that house. Those places are $200k tops.
http://maps.google.com/maps?f=q&hl=en&q=2547+walnut+ave+venice+ca+90291&sll=37.0625,-95.677068&sspn=76.725149,112.324219&layer=&ie=UTF8&z=19&ll=33.991901,-118.447836&spn=0.00127,0.002594&t=h&om=1
What a hellish location.
When you look at that from the air that is friggin comical. Some idiot is chomping at the bit for it right now I bet.
You got that right. Let’s watch it and see how fast it sells. I mean, it’s a perfect opportunity for a flip! hehe
Does the view of Costco add to the curb appeal? Or should we say that this house is close to shopping?
“Adjacent to members-only club”
Don’t employees practice turkey bowling in Costco? (frozen turkey = ball, 2 liter soda bottles = pins) It would then be a members-only sports club…
In Minneapolis, you can get a nice $500,000+ penthouse condo over looking Walmart. Click on ‘The Village’ link and look at the map. lol.
http://www.silver-lake-village.com/
Plus a sweet alley in back that abuts Lincoln Commercial Properties, where I’ve seen all sorts of interesting people hanging out…
MB, 200K is even too much. I know that is Venice, but next to Costco. My Gawd! And the nerve of these sellers. Bring a CAR letter. Yeah, that’s a reputable outfit. A copy of the check. Yeach, like I want my account numbers floating around with some dope hoping for wishing prices. No thanks. I’ll pass. Call me when it goes for 125K. What garbage, needs some TLC. That probably means everything is fromthe 70s, which is fine, but if you want to improve the home, you better have another 100K lying around somewhere.
It is a crappy location, but I think it’s significant in that you couldn’t find REOs even in locations like this even last year. There was another one about a month ago down Ocean Park Blvd, just west of Clover Park.
You’ll see more of these. Even the mighty westside is not immune to the bubble.
Not immune? Heresy! I have the facts right here! (reposted… from a local realtors email…)
Might the age old adage hold true? In real estate it’s all about location, location, location. While some parts of the city (Los Angeles) and nation at large have and will continue to experince slumps in sales volume and annual appreciation, the market segment known as the Westside has a robust heart beat. With enormous amounts of wealth created and residing in this micro market, it is much more insulated from fluctuations in the market place in general. When asked “How’s the market doing?”, it’s good to clarify with “Which one?” in that they differ so much and when speaking of the pocket west of Beverly Hills and north of the 10 freeway…we’re rockin’ and a rollin’
Why he felt I, as a potential buyer, would applaud this “news” is beyond me…
Venice? The didn’t have the guts to list it as Marina Del Rey? C’mon its not that far off, just across Washington Blvd a few hundred yards, maye MDR adjacent?
What a joke
OCDan-
The C.A.R. standard forms are the best in the industry. The reason the “bank” is asking for them is to keep from getting deluded with the “Carlton Sheet” tear outs or the Staples fill in here forms.
Here are two nearby price decreases, I have no idea what the original prices were:
reporteddate: 2007-04-02 09:08:46Price Change - Decrease $1,350,000 2 Beds 2.00 Baths
MLS Number
07-159535
23 20th ave,venice, CA 90291
Area: Venice
This home Is Venice Beach. 1/2 blk to the sand. This updated “Turn of the 20th Century” cutie is for the discriminating person who loves charm with their comfort. Totally new kitchen with hardwood floors. Baths are new with white tile & grey & white tiled floors. New FP, very sleek & understated. Living room has high ceilings & windows galore. High fences front & back for privacy. Nice back patio for BBQ.
Property Type: Residential-Single Family
Rooms:Dining Area,Living
Equipment:Dishwasher,Dryer,Garbage Disposal,Washer
Price Change - Decrease $1,360,000 2 Beds 1.25 Baths
MLS Number
07-171167
1721 pier ave,santa monica, CA 90405
Area: Santa Monica
Enter your own tranquil world through a gated front yard. You will fall in love with this exciting home, private, upbeat & pristine. Open floorplan for ease of living and entertaining. Waterworks like bath, cooks kitchen with stainless appliances, antique O’Keefe & Merritt Stove and Bosh dishwasher and center island. French doors leading to a lush large grassy yard, vegetable garden and spacious deck. Perfect for Sunday brunch and barbeques. Garage converted to bonus room.
Property Type: Residential-Single Family
Rooms:Bonus,Dining,Living,Patio Covered
Equipment:Built-Ins,Cable,Ceiling Fan,Dishwasher,Dryer,Garbage Disposal,Hood Fan,Range/Oven,Refrigerator,Washer
http://www.google.com/maps?q=23+20th+Ave,+Venice,+California+90291,+USA&ie=UTF8&z=19&ll=33.985207,-118.471877&spn=0.001268,0.002594&t=h&om=1
For those of you who aren’t from CA, check out that map. The strange blue structure to the northwest of those courts (which aren’t tennis courts: they’re some weird racquetball/paddleball variation!) is Muscle Beach.
What you can’t see on this map is the absolute tacky shops that are just across from the courts and Muscle Beach, tucked into the ground floors of those large buildings. There’s a sausage stand which, while tasty, tends to stink up the neighborhood, and the shops themselves tend to blare a strange mixture of middle eastern techno and traditional Mexican folk music.
It is an absolutely great place to visit on the weekends, but for that much money you’re better off looking in the canal neighborhood, just to the southeast (zoom out a bit).
The canal neighborhood is nice. Way too pricey but nice.
That $1.3 million place on Pier Avenue is almost directly under the west end of the airport runway for Clover Field.
Got Earplugs?
“Illinois Department of Commerce and Economic Opportunity in three separate filings last month that it is cutting a total of 515 jobs at three locations: 174 jobs at 1600 McConnor Pkwy. in Schaumburg, as well as 341 jobs at two addresses on Golf Road in Rolling Meadows.”
People in Chicago are circling the wagons tighter these days. First it was, “I won’t affect the Chicago area.” then, “It’s only an exurban issue.” now it’s, “It’s a suburban problem. Who wants to live there anyway? Everyone is moving to the city.”
Some woman down the street has her crappy little 2 bedroom house for sale for 859K, reduced twice down from 950K. She was standing outside about 2 months ago bragging about how she bought this enormous house in Illinois with an enormous living room, like 19 by 30 feet, she was just waiting to unload her POS here in LA. Well, she’s still there, the realtor’s sign is still full of flyers, there don’t appear to be any takers. That must be fun, making two mortgage payments while the value of both properties falls.
I wonder how many people have sold and totally bailed out of CA? I mean they have no RE left in CA, like this woman apparently wants to do.
People in Chicago are circling the wagons tighter these days. First it was, “I won’t affect the Chicago area.” then, “It’s only an exurban issue.” now it’s, “It’s a suburban problem. Who wants to live there anyway? Everyone is moving to the city.”
Then, “it’s only the outer parts of the city that shot up the most and are being hit now.” Followed by, “Some things are going down here, but not my building” and “Other people in my building are having trouble selling, but I have a high floor/nice view/better unit.” And finally, “Oh crap.”
Prices are definitely falling (and inventory rising) in 60610 and 60611, so don’t give me any crap about things holding up anywhere else.
Yep, I’m hearing, “The bad developements aren’t selling but they shouldn’t.” and “Sure there are foreclosures but they’re almost all in the far south side.”
All the #’s I read on these new developements that are in preconstruction sales phase are “90% SOLD!”. When it comes to crunch time I can’t wait to see how many sales actually close.
Agreed that there is trouble brewing everywhere (and will be worsening), but the vast majority of the foreclosures are still definitely in the lower income areas. Check out foreclosure.com and compare 60611 vs 60621.
May be a totally different story later this year.
That’s my point Steve. This is a very fluid situation and and the bulls keep changing their criteria to keep their outlook appearing rosy.
People are saying the exact same thing here in NYC. Manhattan is starting to feel like the Alamo of the housing bubble.
I am always amazed driving through the South Loop now (used to live there, sold our condo in 03 to move out of state and came back in 05 to rent in Roscoe Village). The number of condos and cranes is amazing. I especially marvel at the Columbian. How many units are in there, 500? That place is huge.
According to this it’s 220.
http://wibiti.com/HomePageView.aspx?v=v&c=0&HpID=%c2%ba%5c%5d%e2%80%a6%c5%bd
I think the South Loop will really get hit hard in the next 3-5 years.
Paper money has two interesting posts up:
1. Analysis of yesterday’s Pending Home Sales number
and
2. An update to the Case-Shiller tool
http://paper-money.blogspot.com/
Wall Street has lost its appetite?
Indegestion maybe? Bubbles and massive over-capacity can do that.
Wall Street is performing a Heimlich maneuver on itself …hoping to clear these loans before it chokes on them.
SouthStar Funding:
“We should survive, unlike most of the competition, since we operate off a totally new and stable lending paradigm. I think we’ll weather the storm”.
Wall Street:
“All we ask is that lenders ever so slightly reduce the most toxic of loans given out to people who don’t have a snowball’s chance in hell of even servicing the loan, much less ever paying back the principle amount borrowed”.
SouthStar Funding:
Welp, we’re done.
WS is gagging on its own toxic chocolate chunk infused Kool-Aid.
I’m still waiting for Wall Street money-grubbers to start jumping from buildings. There’s got to be a word for that. “Suicide” just won;t do.
Securicide!
we can sell puts and calls on the number of jumpers
Nobody jumps anymore. That would imply taking on some sort of personal responsibility, which doesn’t happen anymore.
“That’s why they make sure the windows can’t be opened, even the Wall Street Journal could not cover up a bunch of swan dives to the pavement.”
Agreed, the Loan brokers pass off the loans to the big financial houses, they turn them into bonds, the bonds get sold off, the bond holders buy into hedge funds, its all set up so that no one is actually responsible and the books look great. That is until the person who “bought” the house can’t pay for it and then it all collapses and everyone points a finger at someone else.
It’s interesting, I heard a story the other day how the governor of Ohio how putting togther some plan for bail out of hosed borrowers. I was half listening and I might be off in what I was hearing, but I could have sworn I heard the plan was to come in and take these foreclosing deals off the lenders hands and provide financing at 6.75% for 30 years. If this is true, then allow me to LMAO! Here’s the thing: Most of these FB’s can’t afford a traditional mortgage, even at today’s low rates. Toward the end of last year, because of everything that was going on, we were getting people in droves coming in wanting to get out of the Neg-Am or adjustable that was about to reset. But when we showed them what the payment was going to be on a 30yrfxd they nearly fell out of their chairs, and in most cases did not qualify. Most were barely making it with their Neg-Am payment, or their I/O at yester-years 5%. I’m sorry, giving these folks no-qual loans at 6.75% is not helping them, just prolonging the inevitable.
Ohio homes for everyone!
I wouldn’t be opposed to this type of bail out, because it still lets lenders make a real return and it gives the buyers a chance to make their payments on fair terms. True–most of the FBs won’t be able to make even these payments, but at least we won’t have to listen to them whine about how they weren’t given a fair shake…
I know it’s ex-nnv’s recollection, but the way it’s written, it sounds like the state coming in and lending the money. Lenders would no doubt love that as the state (taxpayer/bondholder) then presumably takes over the default risk and the lender gets the cash. Would be interested to hear more about the exact plan.
Rorschach moment: Silly goldfish blowing bubbles.
It would be so supremely insane if they actually went through with it on any kind of widespread level. Entertaining as hell for us bubble-bloggers in 49 other states - and mortifying for Ohio taxpayers.
Still - I would think that cooler heads will somehow prevail in the buckeye state. Maybe a very limited program for some low income borrowers in bad straits will materialize (and still turn out to be a bad investment for the state) - but I can’t imagine any state government would be reckless enough to get into this in a meaningful fashion.
I think once public officials truly become informed on the nature of the situation, they’ll shut the hell up. Most are talking out their asses and have no real understanding of the magnitude of the monster they propose to take on.
I think that’s what happened to Dodd…the more he found out what was really going on, the less noise he made about a “pure” bail-out.
I’m almost to the point of regretting sending an e-mail to Dodd. All I get in return is Internet pan-handling e-mails from his campaign that our company spam filters can’t filter out.
I know we have hashed this out for the last week, but this all we need in this country. What, everyone FB will buy in Ohio if this thing goes through. Hey, I’ll just buy some half-million dollar PoS with a NINA/NINJA, whatever loan and then refi into something fixed. Hey, maybe the gov’t will go even farther next bubble. This is a bad precendent. What next, bail out Credit Card debtors?
Actually, homes in Ohio are pretty cheap. I was looking at a website that showed REO homes in Ohio and the average home price of an REO home was around $60K.
I wasn’t trying to deride Ohioans. My fear is that equity locusts would invade again and try to drive everything up. Remember all the scammers who claimed to live in NO after Katrina. This would be no different.
Ohio’s plan was/is to sell bonds to raise the bailout money. Would the bonds’ payback be tied to the mortgage payments? Sounds like a CMO/CDO to me. Once they were issued, how quickly would those bonds sink to junk status?
That’s true. My point is that I think the homes in Ohio are different from California since they are so cheap. If people in Ohio are losing homes due to preditory lending (ARMS with high rates, etc.), it would make sense to offer them 30 year fixed rate loans with decent rates.
On another website, someone was financing $30K for 30 years fixed and the payments were under $200 a month. I figure $60K would be double that, or around $400 and I think that’s a pretty reasonable mortgage, even for a couple of Wal-Mart workers.
I’d be okay with a bailout like that. I just don’t want to be buying $500K homes for every idiot who was stupid enough to think they could afford that price home.
It will be interesting to see if it goes through. The reports were that Ohio was going to float $100M of bonds, and that this would provide a bailout for approximately 1,000 FBs. My understanding is that the proceeds of the bonds would be used to buy-out/refi the loans of these FBs at the 6.75% fixed rate 30 yr. mortgage you described.
This is wrong on so many levels. How do they determine which 1,000 folks get the govt loan? As you mentioned, how many could actually pay on a fully amortizing loan? What experience does Ohio have in loaning funds to FBs (getting appraisals, etc.) or servicing those loans? Even if 1,000 folks are helped, what about all of the others, whose homes will fall into foreclosure, thereby driving down prices on all other homes, including those who were the recipients of the govt loans? Why should the lenders be recipients of the bailout (they will get all of their money back on these 1,000 bad loans that they otherwise would have likely taken a loss on)?
This is socializing the risk (of lenders and FBs) while keeping the rewards private, and will only encourage more gambling by these types of folks in the belief that the govt will bail them out again in the future. If the govt subsidizes something (in this case, bad loans), it will only get more of it in the future.
sister-in-law in ohio is going through bk and foreclosure. A cousin is three months behind on motgage.They paid 94,000 6 years ago refied to 180,000 for home improvement and cc. I heard their house is worth 130,000. I don’t think they could afford the payments at 6.75
Their plan is to issue $100million in bonds, and keep 1,000 households afloat. That is squat. The agency that is lending it is itself holding a couple of billion dollars in loans- the $100 million will barely even keeps its own borrowers out of default.
http://www.ohiohome.org/newsreleases/rlsrefinanceprogram.htm
Thanks for pointing out the rental story. I believe that is a critical piece of this housing slowdown. Hundreds of thousands of single-family homes, town houses and condos that were snapped up by speculators hoping to flip them aren’t moving. They’re sitting empty. That “shadow” supply is flooding the rental market, providing real competition to apartment complex owners.
Here is some copy from an early March post at my blog that contains more statistics on vacancies, rents, etc.
You can see the evidence in a multifamily report from the National Association of Home Builders …
* The group’s index that measures apartments available for rent jumped to 54.8 in Q4 2006 from 38.9 in Q3 2006. The higher the number, the “looser” the rental market is. According to this indicator, rental conditions haven’t been this loose in two years.
* A subindex measuring asking rents dropped to a seven-quarter low of 62.2, while a subindex measuring effective rents (net of concessions) has slumped to a five-quarter low. A lower reading means more survey respondents said rents were lower in the current quarter than in the previous quarter.
* Apartments aren’t being filled as quickly, either. The percent of new apartments rented within 90 days dropped to 42.6 in Q4 2006. That’s the worst reading going back to at least Q4 2002 (the earliest I have data for).
* Lastly, 9.5% of the apartments were sitting vacant as of Q4 2006, according to the NAHB. That’s up from 6.3% a year earlier and the worst going back to at least the end of 2002.
These findings come on the heels of a separate survey from the National Multi Housing Council. The group’s quarterly “market tightness” index slumped to 54 in January 2007 from 70 in October 2006. That’s the lowest reading in 12 quarters, or three years. The percentage of respondents who said conditions were looser than three months ago jumped to 21%f rom 14% in the October survey and just 4% in the January 2006 poll.
From Builder Online. “Credit Suisse analyst Ivy L. Zelman says possible lender restrictions involving subprime and Alt-A mortgages, which accounted for an estimated 40 percent of purchase dollar originations in 2006, may result in a shrinking pool of buyers for new homes.
“‘Some of the investors said, ‘I’m delivering the loan back to you. Give me my money.’ And that’s basically why New Century went belly up,’ Zelman explained. ‘What people think right now is that this is just a subprime problem, and unfortunately, I wish it was. Subprime is not that significant for many (builders) but we all should realize that housing is a food chain, and there is a domino effect.’”
Ivy Zelman is the patron saint of the impending housing apocalypse, and Exhibit 42 is its Zapruder film.
http://www.smugmug.com/photos/136440158-O.png
h_a_n aka passthebubbly
Oooh, looks like the reset action really starts to pick up next month. I hope Neil is making a fresh batch of popcorn.
It makes sense, because one must assumes these are 5/1 ARMS and summer 2002 was when the bubble really started to go exponential. And of course it was the infamous Summer Buying Season™.
Yes. Also, at first glance it looks like a false bottom in early 09.
Can you explain? I would think that the false bottom is in ‘08 after prices drop after not selling for a year
The “false bottom” is months 23-28 or so, counting from Jan 2007. So that’s Dec 08-Apr 09.
In addition to all the other ways in which the apocalypse will be fascinating, different groups of FBers get to get screwed at different times. After early 09 it startes to hit the prime FBs, then the year after that the neg-am FBs get nailed to the wall.
in 24 months time, there is a steep drop off in $ volume of resets, only to start rising rapidly again a year later.
Looking across the values, it adds to about 1.5 trillion in resets within 5 years. That’s a whole lot of wealth transfer.
Help me out guys. My husband and I are on track to save 20% to put down on a 400K place, plus 6 months + of payments. I know this question has been asked… but WHEN is it going to be a good time to buy?
In other words, when will the resets peter out enough to make it worthwhile to risk buying?
That chart clearly shows we have reached the bottom.
best comment today
“Fannie Mae also disclosed in February its decision to withhold $44.4 million in bonus money tied to company earnings targets from 46 current and former senior executives — including Chief Executive Daniel Mudd and ousted former CEO Franklin Raines — after a government-ordered review found they were undeserved on the basis of performance. The company also decided to eliminate some perks for its executives.”
Usually, bonuses occur at the start of the following year. For Fannie Mae to withhold bonuses indicates that they have calculated the revised bottom line already for 2006 and are politcally withholding info for 2005 and 2006.
It is difficult for the Federal Reserve to gauge the true health of the housing sector given the recent damage in the subprime mortgage market, said Richard Fisher, the president of the Dallas Fed Bank on Wednesday. He said the housing markets may “feel some short-term pain” because 40% of homebuyers last year were nonprime, either subprime or Alt-A loans. This pain will make it “less clear whether housing construction has bottomed and how long the housing downturn may last,” Fisher said. Fisher said the economy will grow more slowly because of the housing market, but is strong enough “to weather this storm.” A buildup in housing inventory means that responsible buyers will be able to purchase homes at more affordable prices, he said
http://www.marketwatch.com/news/story/feds-fisher-subprime-woes-obscure/story.aspx?guid=%7B7F3F87AD%2D0232%2D4E72%2D8C86%2D8EA93BF0FDEE%7D
Let me intrepet for the idiots in Bakersfield - this means lower prices!
A buildup in housing inventory means that responsible buyers will be able to purchase homes at more affordable prices, he said
And the irresponsible buyers will not be able to buy; they are locked out b/c of the credit crunch. With talk like this, I wonder what’s bewing?
You are scaring me… LOL
It gets even better. Check this out.
http://www.marketwatch.com/news/story/economy—-eyes-cpa/story.aspx?guid=%7B495EC07D%2D99DC%2D489E%2DA20E%2D559DEAEE6565%7D
Ground level observations. Very interesting. This kind of info on mainstream over-stretched consumers is a strong leading econoimic indicator.
Holy $hit! 200K in annual income and they had to sell their home because they’re tapped out!
Who makes Ramen? Is it a publicly held company?
sacRAMENto?
Check out this comment on Greenberg’s blog from the supposed CPA who says that everybody in middle America is doing great and getting wealthier by the minute!
http://blogs.marketwatch.com/greenberg/2007/04/americans_livin.html#comment-65369174
That CPA probably has three pre-construction homes down in FL right now, and is talking out his a$$ with hopes he’ll be able to start sleeping at night. No doubt he’s doubled down on this current house of cards called the economy. I’m so sick of all these Goldilocks cheerleaders. Just because you believe something does not make it so. If the underlying fundamentals are rotten then it will collapse.
Oh wow. This story mirrors much of what I have suspected
for many years with respect to what was going on within
my circle of personal acquaintances.
Of course, I could never prove it, having no access to other
peoples personal financial information.
One thing that I do know for sure: Many folks here in
Irvine (Orange County) Ca. are poster people for living
above their means.
Neil might have to start making extra extra large
batches of popcorn.
He used the word ’storm.’ I’m flawed!
“A buildup in housing inventory means that responsible buyers will be able to purchase homes at more affordable prices, he said”
Isn’t that what we’ve been saying here for years? All that’s left is to wait for those “affordable prices”.
YES!!!!! LOL
I believe that there is a fundamental difference between “more affordable prices” and buying within one’s means.
BTW, ex-nnv, I’ll be in Reno over Easter weekend. I don’t want to spend the entire weekend in the casinos, so is there anything I should do or any development I should check out to get a sense of the bubble there?
You mean like counting for sale signs? That’ll take you a while. Have you ever been mauled before? If not, try this one: walk into a sales office of any local development (especially true if you have Califoirnia plates).
That raises in interesting issue. Tourists in Reno (and Vegas) tend to carry tons of cash. I usually carry a couple orders of magnitude more. We could see a lot more muggings and car breakins as the apocalypse plays out. And in Reno I do tend to drive around a lot between casinos, so I really can’t avoid stuffing cash in my car if I don’t carry it on me.
About 15 years ago, a 1962 Gold Daytona Rolex showed up @ a local auction in el lay, in strictly, a bad part of town…
A great watch~
I had $16k in my socks, as the auctioneer only took cash and I came in 2nd in the bidding, so it was a moot point.
I guessed that the other 5 people bidding on the watch until around $10k, had the money in their socks, as well.
It was really a sketchy neighborhood…
I wasn’t unhappy I was the underbidder, when it was all said and done, that particular day.
Aladinesane, you carry around $16,000?!?! in your socks?!?! Wow. I guess whatever works for you.
I appreciate you’re in the collectibles business, but for a watch? Does it have its own atomic clock or something?
sfv,
It was a Reaaaly skanky neighborhood, looked rotten by day, who knows what at night?
I was happy to not win the watch. There were too many onlookers that were shocked that somebody would pay that
much for a watch, and they knew the house rules: cash & carry.
They knew that the 5 white guys that were bidding that much on a watch, had some do re mi, in their pockets.
Thus the temporary baggy ankle money trick.
Watches are really collectible and the right one can easily be worth hundreds of thousands of Dollars.
Although I read that the wearing of watches by younger kids is pretty much dying out.
Virtually every electronic doohickey has the time, somewhere on it.
Things Change
Can you check out the prices on undeveloped land? If that market has totally collapsed, it is a sign that builders have decided that housing is dead for the long term. Also, if land prices are cratering, that means houses can be profitably built for not much more than their construction cost, implying that house prices are about to fall into the abyss…
That’s one of the bubble features that I believe is under-appreciated. As it deflates, builders can build with lower land costs, lower commodities costs, and lower labor costs, and continue to undercut the prices of existing homes. Which will drive existing home prices lower not only due to the now-lower comps, but also due to the additional excess supply.
“A buildup in housing inventory means that responsible buyers will be able to purchase homes at more affordable prices, he said”
Isn’t that what we’ve been saying here for years? All that’s left is to wait for those “affordable prices”.
Yep and you can count responsible buyers on one hand.
The long term effects of the bubble will be very positive for our country. Overbuilding will result in low housing costs for the next 2 generations, and more disposable income for all. Great for consumers, and strengthens our global competitive position.
Even though so many want to spin it as the end of civilization as we know it.
This is all good news, not bad.
Well, some good news. But lots of the wrong kind of housing was built in the wrong places. And that money could have been better used for something else.
Brad, I beg to differ that it is ALL GOOD NEWS. Sure there will be lots of low cost housing. However, there will be a lot of pissed off, irresponsible foreclosed-on FBs that will not care any less for the house you just bought. If people label us bitter renters, the next wave after this bubble will be bitter foreclosure “victims.” These people will be angry and pissed off. Look, I know this wil brand me racist, but I don’t care about PC when I live in a nation of peak debt. When people in Compton and South Central LA can’t make the 3K/month mortgage what do you think is going to happen? Do you think these people are cheerfully going to go rent somewhere else? BIG FAT NOOOOOOOOOOOOOOOOOOT! Sure, Joe in Beverly Hills who bit off way too much and blew all the commission checks will leave peacefully knowing he had a year or three with the big dogs, but many people will not go so quietly. I have argued before when the so-called “upper” middle class (read posers) can no longer afford the mortgage and/or filet mignon and/or Hometown Buffet three times day look out. These people are not used to eating breakfast in, PB&J for lunch, and a baloney samwich for dinner. Case in point, South OC. When the pain hits, everyone around here will be whining. Why can’t I get the pedicure? Whay can’t we go on the Queen Mary II cruise this year. While they made their decisions, I can feel for some of these people because the spouse, whether husband or wife, is going to hear about the pain and suffering nonstop. Why don’t you get a real job. Sure, 150K jobs are hanging from trees for anyone to pick.
Now, couple all that with corporations that don’t care about its employees, gov’t at all levels at massive amounts of debt, entitlements that will be broke in the next 25 years and you think everything is peachy. Geez, do you even look at this economy and what is running it? It may be a great opportunity for some, but for most the light at the end of the tunnel is an on coming train. Sorry to rant, but I have no time for Pollyannas. This economy is 70% consumer driven. Bad enough, but couple that with the amount of debt used to finance that consumption and the future isn’t all that pretty for tha nation at large!
Spending financed primarily by the bubble:
Housing related, obviously, so home improvements, furniture, lawn and garden care, appliances, etc.
People on this blog have regularly mentioned cars. Just what Ford and Chevy need.
College costs - government loans that the kids can get don’t begin to cover $40K per year of tuition and living expenses. Middle class parents are covering the difference with home equity loans. The spigot is going to turn off. Colleges may actually have to lower tuition. I don’t know how, but they might.
Pet care - Vets doing kidney transplants on cats is a new thing. Fluffy is going to be getting a gentle push over the edge instead of better health care than uninsured people. Buddy’s doggy day care may be history too.
Lasik surgery and plastic surgery demand has got to be going down too. And where the heck did the woman who does check out at the supermarket get the money to go to Mexico for breast implants (nose job was first) if it wasn’t from home equity?
Wrinkle cream at $300 an ounce and luxury vodka may be heading out of favor too.
Private trainers may find clients a little less easy to find.
Any other nominees?
Sure… 10 trillion dollars worth of debt into non-productive deflating assets is great long-term investing strategery.
Marketmaven, I just chuckled to read that comment. Makes my heart sing for this country’s finances. Just what happened to this country?
http://en.wikipedia.org/wiki/Asset_backed_securities
Instead of building, packaging, and shipping widgets, we started slicing, dicing, packaging, and shipping risk.
“This is all good news, not bad.”
Do you work for the White House?
Sure, if you don’t count the thousands of acres of good, productive land and natural habitats that have been slabbed and/or paved over, and the wasted tax dollars used to build massive amounts of unused infrastructure, and the additional stress placed on minicipal water and sewer systems it’s a wonderful thing!!!
Why do you think they’re trying to legalize 30 million illegal immigrants and bring in another 30 million? Instead of steady controlled growth, we will grow through masses of illiterate immigrants coming here
OK, I think I get it. Accidental double-clicks result in double-posts. My bad - got coffee finger.
IOW, all of yesteryear’s and today’s irresponsible buyers are locked-out!
Is this a credit crunch (non-denial) admission? If it is, it’s news.
Heck! It should be market moving breaking news.
Everyone wants a special deal!
CNNMONEY.COM Article: http://money.cnn.com/2007/04/04/news/economy/foreclosures/index.htm?source=yahoo_quote
They can have a foreclosure moratorium as long as I get a rent moratorium, and for the same amount of time.
h_a_n aka passthebubbly
Yeah, put a moratorium on those foreclosures and see how fast all new lending gets shut down. If this goes through, you will not get a house w/o 30-40% down, a year’s worth a reserves, 2-3 indy appraisals, 5 years of tax returns, an 850 FICO, and your firstborn. You think things are going to get bad. If the Ohio plan, any other bailouts occur, and/or this goes through lenders will get real gunshy about mortgages. These proposals will only add fuel to an already burning blaze of this bubble. Loan requirements will set the bar so high that not only will only the best be able to buy anything, but it will truly lockup the housing market. There is nothing good that can come of any of these proposals.
Loan requirements will set the bar so high that not only will only the best be able to buy anything, but it will truly lockup the housing market.
OCDan, if credit is hard to come by, prices will go down even further, and people will have to save loads of cash just to be able to get into a house. That would not be good news for our consumer economy. I agree with you and other posters above. Politicians will posture a lot and save an FB or two to post the story on their website, but then they will let it go.
Cassiopeia, think about the part where you said prices will go further. You nailed another problem right on the head. So many will be upside it won’t even be funny. I am so amazed by the people who think we are doom and gloomers. This country for too long has lived on borrowed money, money it will never have to pay back. We are in for a major shock soon. You can’t keep playing this game forever.
You can’t keep playing this game forever.
True, especially when you are financing the bottomless pit of a war with no end in sight. If it wasn’t for that, they could keep the mirage going a little longer. As it is, the day of reckoning is closer than many imagine, but not close enough for those of us who have been seeing it coming for a while.
sounds like 75% of the NYC RE market and it still boomed
to buy a co-op you need 20% down, 10% in some cases, declare your finances, pass a credit check, get interviewed by the board of directors of the building and I forgot what else
In an few years that will be standard for ANYONE buying property who needs a mortgage.
“They bought the ticket. They knew what they were getting into. I say, LET ‘EM CRASH”
“”The debt is forcing people to take second jobs, sell family possessions, and rent out a second room,” said Wade Henderson, the president of the Leadership Conference on Civil Rights.”"
Since when did this become a bad thing. Make a mistake you pay for it. Times get hard you buckle down put your shoulder to the stone and weather the storm. Americans have gotten way too soft.
All hail the repo man!
http://www.mises.org/story/2241
“”They were initially developed for people having trouble qualifying for a home loan, but unscrupulous lenders have teamed with real estate agents to put people beyond their means, according to Janet Murguia, president of the National Council of La Raza.
“In many cases these loans were never a good fit,” she said. “We have been warning that Latinos were getting bad loans. It should not be a revelation, but it has taken families being taken out of their homes to shed light on this issue.”"
I’m trying to figure out who La Raza was warning?
OT, for those who know Brooklyn hipstervilles Williamsburg and Greenpoint:
North Brooklyn Residents Dying & Waiting for Health Studies
“It is not a stretch to say that the Greenpoint Oil Spill is one of the nation’s greatest known environmental horrors, yet an astounding lack of information surrounds it and–just as seriously–all of its smaller cousins in Greenpoint and Williamsburg. No one knows the exact parameters of the spill, for instance, since it has moved on the water table over the decades and the state hasn’t done any testing to definitively track it. Some residents fear that is has spread far south of its original boundaries, traveling deeper and deeper into residential areas including areas that are now sprouting luxury condos. Nor has anyone analyzed the health problems from which residents are suffering. No comprehensive studies have been done, despite indications of frightening cancer clusters that experts believe are related to industrial pollution. The problem is far wider than the Greenpoint Oil Spill. As of several years ago, more than 160 businesses in Greenpoint alone were engaged in activities that could cause toxic problems. The issue is just as serious in Williamsburg.”
Williamsburg also has the only facility in NY State for processing radioactive waste. You can live right next to Radiac if you want to. Lots of hip cred there.
You are right, glowing in the dark is very hip.
It will be fun watching these thugs fought over the last of the scraps to cover their losses.
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article1607235.ece
“Moody’s sees ‘increasing’ correlations in performance”
YA THINK??!!
Or was it that the performance was always correlated, and you are just now noticing it?
Japan’s 1990s housing bust was deflationary for 16 years even though their central bank lowered the rate to under 1%.
Could happen here. Precious metals would also deflate.
The best investments in deflationary times are in companies that earn steady profits.
How the world is the fed going to lower rates? We have a 9 Trillion dollar debt. Fiat money is just that, worth the paper it is printed on and no more. How much longer do you think people will invest in this country’s debt if the rates drop top 1%? Correct, zilch. Why bother. At that point you might as well spend into oblivion for what the fed is saying is that the money is so weak it is not even worth paying any real interest on.
Also, those companies that pay earn steady profits will be earning it in dollars no one will want at less than 1% interest. Not only that but those dollars will in effect be worthless. Look, many countries are already slowly but surely getting out of dollars. While foreignors may own 40% of our debt, they are also moving to get out of dollars. Don’t be so bullish on the dollar or the economy. A lot of smoke and mirrors here in the good ol’ USofA!
Right on target, inflation = good for government; deflation = bad for government. This government has always chosen inflation.
Government?
I thought The FED is a privately owned corporation?
The Fed is quasi-private. The government appoints the board members.
“those companies that pay earn steady profits will be earning it in dollars no one will want at less than 1% interest. Not only that but those dollars will in effect be worthless.”
—————————————————-
Toyota is worthless? Try telling that to it’s stockholders. How about Sony? and on and on……
Not in a deflationary economy as has been described. In that scenario, a dollar actually buys you MORE local goods. Hence deflation, not inflation. In that scenario cash is king. That is why helicopter Ben says he will drop tons of money on the economy if prices start deflating. He NEEDS to maintain a certain level of inflation, otherwise people will stop spending their money and just hoard it in bank accounts, or pay off debt. I bet the mere thought of reduced consumer debt chills Bernanke and all the other bankers right to the bone!!!!
I am not predicting the fed will lower rates. I am just reminding people that in a deflationary spiral, the fed is powerless.
A moot subject: differences between Japan’s prebust economy and The US current economy; between savings rates in both countries; federal deficits and current account deficits.
It is important to remember that the US asked/forced Japan to inflate the Yen to deflate the dollar. Just as we are asking Chindia to do today. Japan acquiesced and then their problems started.
“A moot subject: differences between Japan’s prebust economy and The US”
—————————————–
of course there are differences, but I am pointing out that assume that the housing bust will be inflationary. Or that lower rates will be inflationary. It is actually a little more complicated than that.
In the final analysis, why would the FED destroy, via uncontrolled inflation, the very instrument they own and control?
I think the Federal Reserve is running scared. They are aware there is nothing they can do to prevent this recession. They will try to ameliorate the effects of the recession and as a result inflation will go out of control. Inflation is good for the government. It is not good for savers or workers.
“Inflation is taxation without legislation”
Milton Friedman
Goldman is New Century’s biggest creditor:
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article1607235.ece
Nice catch.
F*ckers - that explains why they tried to pump up the subprime market two weeks ago by announcing an intent (non-binding, natch) to buy up subprime companies - implying that they were undervalued bargains.
“The chickens are coming home to roost…”
And the vultures are circling.
How did you find me? LOL
And a fox is in the henhouse. Gonna be bloody.
Zillow getting hammered on bandwidth. I can’t get on
In the past week it is happening frequently. Too many people checking the price of their homes , before listing?
or the bears (is it vultures) checking if the price has fallen to their range ?
OT, I had dinner with someone last night that moved here from Detroit. Says there are no jobs, gangs are all over (knew that), Dearborn is full of Muslims, and, bottom line, you can’t even give away a house over there. She says no one was even showing up at the auctions.
I am truly shocked. With a description like that I thought everyone would want to move in.
Sarcasm off. I am such a pissy mood today. Guess, like Bear posted yesterday, I am in one of those moods where I keep wondering how this whole house of cards (pun def. intended) called teh economy keeps chugging along and my posts reflect it. No offense to anyone.
Dan, don’t sweat it, I’ve been in the same frame of mind lately. What a frigging joke this “economy” is. It’s like all traditional investment fundamentals, everything they teach you in business school, has been turned on its head. Homes still selling at prices the average person can only afford on I/O or neg-am terms; corporations buying back tons of their shares while the top dogs cash out their options; negative savings rate; local, state, and federal budget defecits up the wahzoo; the Fed and wall street telling me the mortgage carnage will be contained and not spread beyond sub-prime; commercial properties selling at prices where you’d get a better return on an ING savings account; ad nauseum. When discussing this with others all I hear is “don’t be so negative, the economy is good.” How can an economy built on housing and iPods be even remotely sustainable? I guess most people are comfortable ignoring the elephant in the room, but I am not.
“It’s like all traditional investment fundamentals, everything they teach you in business school, has been turned on its head”
Deja Vu, stock market bubble of the late 90’s.
“How can an economy built on housing and iPods be even remotely sustainable?”
What, you doubt our fearless leaders. Oh, by the way, the iPod isn’t made here, it’s made in Taiwan:
http://www.thinksecret.com/news/0611honhaiphone.html
http://tech.netscape.com/story/2006/08/31/ipod-manufacturer-alters-libel-suit-against-journalists/
BWAHAHAHAHAH!
Let the Fun and Games begin kiddies. How about a little…
“Where in the World is Carmen Sandiego…WITH my frigging MORTGAGE?”
First show to drop - the affordability wall. DONE
Second shoe to drop - Lending standards tighten. IN PROGRESS
Third (?) shoe to drop - Loan reset flood. COMING SOON
Fourth (?) shoe to drop - Consumer spending pullback induced recession. A WAYS OFF.
We’re going to need a lot of popcorn.
I’ve got to hand it to them.
I never imagined that Greenscum’s Fed, Greed, NAR/REIC and their Associated little Friends HAD it in them to build a “Monument to Stupidity” as BIG as this Housing Disater in 7 years.
strike Disater..insert Disaster…and lay off of the coffee
For those who sat on the sidelines watching this bubble expand and expand, I’m not sure that the victory is that sweet. Would we have been able to get off of the merry go round early enough were we to have purchased? If so, then we who sat by the wayside, watching $280,000 go to $4 million out here in So Cal are the losers, even when the market declines by 50%. If it doesn’t drop by 75% or more, then we have “lost” significantly. Meanwhile, the homeowners have enjoyed the fruits of their purchases, while we sat in apartments. Their taxes were lowered; their lives were “padded”. So that I not be bitter, I look forward to a readjustment in pricing to the good ole’ days of 1974 or so. Then, and only then, will I be satisfied that I didn’t miss a thing. The majority of the h/o’s who borrowed to “improve” will die economically and only the few who dutifully worked to pay down their 1st will have been entitled to the benefits of their risk.
As a capitalist, with assets well insulated from the blow-out, recession, hyper-inflation, depression, I think they’re calling my number now. I’ll be there as soon as my sonar tells me the streets are running with blood. It’s still time to wait. That false bottom in ‘09 will cost me even more time. But I’ll live a happy life down the line in a house I will buy for cash, and furnished with all the goodies soon to be tossed onto the secondary market (nice BMW for nearly free, etc.)
Is this pie in the sky thinking?
Of course. If you buy low and sell high you always win. The only thing is, anyone who bought in the bubble areas the past 3 years bought at or near the highs. It will take 15-20 years for them to break even. I’ve seen it before and this is just another round of boom-bust-boom-bust
Wall St. knows little about the mortgage business. The Street is going right back to the lenders and making them buy back any questionable (risky) loans. You will see a lot more mortgage shops going out of business.
In theory, we could have made a lot of money in this bubble, however nobody knew when the madness was going to end, and if you didn’t get out soon enough - boom! - you’re ruined. It’s just not worth gambling with that much money, IMHO.
What if you’re gambling with somebody else’s money and only your 620 credit score as collateral? That’s why there were so many gamblers in this housing casino.
The value of Canadian building permits plunged from record highs to their lowest level in a year in February
Canada’s RE cheerleaders are climbing over each other to assure the public that the carnage in the US will not spread north of the border, but it appears that the builders are not willing to put their money where their mouthpieces are.