Buyers Now Have An Overwhelming Advantage: NAR
Some housing bubble news from Wall Street and Washington. “Ryland Group Inc. said late Tuesday it expects to report a second-quarter loss of $1.25 to $1.35 a share. The Calabasas, Calif.-based homebuilder said that due to ‘continued deterioration in the housing market,’ it expects to incur $145 million to $155 million in pre-tax charges related to inventory impairments and write-offs in the quarter.”
“The impairments are associated with assets in Arizona, California, Florida and Nevada.”
“Preliminary sales for the second quarter were 2,521 units, down 16.6 percent from the second quarter of 2006. Cancellations were approximately 34 percent of gross orders for the quarter. Preliminary closings totaled 2,461 units in the period, compared to 3,803 units in the second quarter of 2006, a decline of 35.3 percent.”
“With headquarters in Southern California, Ryland is one of the nation’s largest homebuilders and a leading mortgage-finance company.’
From MarketWatch. “‘It is becoming clear that there has been a significant uptick in the cancellation rates among home builders during the June quarter as a result of potential buyers’ jitters over the subprime problem and falling home prices,’ said analyst Lili Zhang.”
From CNN Money. “The slump in home sales and prices will be deeper and last longer than previously expected, according to the latest forecast Wednesday by the National Association of Realtors.”
“The trade group is now looking for flat prices for existing homes in the first quarter of 2008 compared to the first quarter of 2007, and a more year-over-year declines for new home.”
“The group now sees second-quarter existing home sales falling below the 6 million annual sales pace to a 5.96 million rate. If it is correct, it would be the first time in four years that quarterly sales were below the 6 million home annual sales pace.”
“A month ago, the group was forecasting the pace of sales would end the second quarter at a 6.03 million annual rate, and stay above that 6 million threshold through the rest of this year and into 2008.”
“‘Buyers now have an overwhelming advantage given the wide selection of homes available in many markets,’ said Lawrence Yun, NAR senior economist, in the group’s forecast statement. ‘Local conditions vary considerably, but with historically low mortgage interest rates this summer and sustained job gains, it could be a good time for first-time buyers with a long-term view to test the housing waters.’”
“Paul Kasriel, chief economist with Northern Trust in Chicago, questioned the Realtors’ assessment that this is a good time to enter the market, saying weak sales and prices suggest that potential buyers are smart to be sitting on the sidelines right now.”
“‘No one is buying into their Kool-Aid; that’s why prices are falling,’ he said. ‘It could be that they’re going to fall a lot more. The Realtors tend to be overly optimistic. Eventually they’ll be right about prices turning around. I don’t know when prices are going to stabilize but I suspect they’ll fall more than they think this year. It may be a much better time to buy six months or a year from now.’”
“The realtor’s press release was headlined ‘Home prices expected to recover in 2008 as inventories decline’ — even though the forecast median price for existing homes in 2008 was unchanged from last month’s at $222,700.”
“The median sales price of an existing home is expected to fall 1.4% this year and rise 1.8% next year. The median sales price of a new home is expected to fall 2.6% this year and rise 2.2% next year.”
The Associated Press. “Hours after Standard & Poor’s warned that it may cut the credit rating of more than $12 billion in bonds backed by risky home loans, another agency downgraded its rating on hundreds of similar securities.”
“S&P and Moody’s Investors Service said they made the moves because borrowers are missing mortgage payments at levels much higher than anticipated.”
“Lower ratings for mortgage-backed bonds could cause a domino effect that might ultimately strangle what until this year was a major propellent of home prices: easy access to money.”
“Moody’s lowered its rating on 399 of the bonds, known as residential mortgage-backed securities and said it may downgrade 32 more. All of the bonds were issued in 2006.”
The New York Post. “Wall Street is bracing for a nearly $2 trillion washout over the collapse of hollow and shaky mortgage bonds, triggering fears of a recession worse than the dot-com bubble bursting.”
“S&P slammed only a chunk of the half-trillion in mortgage bonds it monitors - about 2.1 percent or $12 billion, but said housing prices could crash by 8 percent this year to make matters worse. Moody’s downgraded $5.2 billion of mortgage securities.”
“Some economists are alarmed that shaky mortgage paper - which could be exposed to be worth barely 60 percent of current purported values - are parked throughout the investment world in mutual funds, hedge funds, financial institutions and other investment pools around the world.”
“Analysts say that there could be a wholesale stampede to unload any newly tainted securities, causing a scramble for capital and forcing hedge funds to give back billions to rich investors.”
“Meanwhile, the market for the new securities and their recycled derivatives, called collateralized debt obligations, is quickly collapsing, closing the window for underwriters to earn back their money.”
“But when the credit rating agencies formally downgrade their mortgage securities later this week, it will force many of CDOs in limbo to be reevaluated for realistic prices that could be as much as 40 percent lower than on the books.”
The Street.com. “Bear Stearns is set to offload about $450 million of securities tied to one of its failing hedge funds. The offering consists of securities from a cash collateralized debt obligation tied to a credit from debt backed by subprime mortgages.”
“The CDO debt list is peppered with fixed- and floating-rate junk debt but includes primarily securities that carry higher-credit quality as rated by Standard & Poor’s and Moody’s Investors Service.”
“Observers had expected that Bear might call off the offering, given Tuesday’s firestorm wrought by Moody’s and S&P’s threatening to downgrade of billions of dollars’ worth of bonds backed by subprime mortgages. Despite the worries, Bear appears set to follow through with the sale. A spokesman didn’t return calls Wednesday seeking comment.”
From Reuters. “Housing jitters intensified when Standard & Poor’s said it may downgrade $12 billion worth of bonds backed by subprime loans, signaling the rating agency’s conviction that the future holds more subprime defaults.”
“Defaulters will return housing stock to the market, driving home prices down and pinching builders’ profits still further, said analyst John Tomlinson of Majestic Research in New York.”
“‘How much more inventory is going to be put back into the market, when there’s already too much inventory already?’ Tomlinson said.”
“The wave of defaults has caused lenders to tighten credit standards, which in turn reduces the potential pool of first-time buyers, Tomlinson said.”
“The reduction in those numbers, combined with a surplus of more affordable inventory, could have a negative effect even on more-upscale builders by leaving real bargains available at the market’s lower end and lowering prices generally, said Tim Ghriskey, chief investment officer with Solaris Asset Management.”
“‘You don’t have motivated buyers out there, because pricing was at bubble levels and it’s coming down. So they think, ‘I can wait a little bit longer, and get lower prices,’ Ghriskey said.”
“Housing is soft despite favorable interest and employment rates, Tomlinson pointed out. ‘If any of those pillars were to fall, the housing market could experience further decline especially because inventories on the new and existing side remain way too high,’ he said.”
From Bloomberg. “Corporate bond risk soared in Europe by the most in at least three years as debt rating downgrades on U.S. subprime securities triggered a worldwide selloff, according to traders of credit-default swaps.”
“Europe’s iTraxx Crossover Index jumped as much as 41,500 euros to 308,000 euros, the biggest daily move since the index was created three years ago, according to JPMorgan Chase & Co. The CDX North America Investment-Grade Index of credit-default swaps on 125 companies increased $2,500 to $50,750, the highest in 19 months, Deutsche Bank AG prices show.”
“The Crossover index may rise as high as 400,000 euros because of ’subprimemania,’ as well as concern about falling corporate earnings and rising oil prices, Jochen Felsenheimer, head of credit strategy at Italy’s biggest bank Unicredit Group, said in a note to investors today.”
“‘The Goldilocks scenario for credit markets is definitely over,’ Munich-based Felsenheimer said. ‘These rating actions, the biggest ever in the subprime market, have the potential to trigger an even more substantial move in credit markets.’”
“The credit quality of subprime mortgage bonds fell to a record yesterday in New York. The ABX-HE-BBB- 07-1 index that tracks securities rated BBB- fell 7.4 percent to 51.42, according to the index administrator. The index has declined by almost half since January, reflecting the increased likelihood of default on the underlying securities, which have the lowest investment-grade ratings.”
“‘People are very nervous,’ said Alex Moss, who helps manage $94 billion of fixed-income assets at Insight Investment Management in London. ‘There’s a lot of concern the selloff in subprime will feed through to the wider market. Until the market finds a floor, it’s difficult to see where the buys are going to come from.’”
“The U.S. economy and financial system are in fine shape despite the ongoing troubles in the housing market and subprime lending sector, said Charles Plosser, president of the Federal Reserve Bank of Philadelphia in a speech in London.”
“Plosser said the unwinding of the housing boom has led to a slower economy, but not to the bust many had been forecasting. ‘It seems unlikely that we will see significant spillover effects on aggregate consumption from the housing sector,’ he said. The paper losses that many homeowners have experienced on their home equity ‘are likely to have only a modest effect on their consumption patterns.’”
“Plosser spent much of his speech defending the Fed’s inaction when the housing bubble was inflating. He, like every other Fed official before him, said the Fed has no business trying to identify and deflate asset price bubbles.”
“He worried that any move by the central bank to deflate bubbles would be ineffective or counterproductive. In addition, he said, trying to prick asset bubbles could hurt the central bank’s credibility by creating a ‘ceiling on rates of return on certain assets.’”
“In fact, the Fed may have the opposite problem, with many critics saying the Fed has created a ‘floor on rates of return,’ quickly bailing out investors when markets fall by lowering interest rates, a phenomenon widely known as the ‘Greenspan put.’”
It’s all going down…
ARMaggedon and the roof caving in…
I am switching to gold and silver ASAP.
Agreed, this is what we’ve been waiting for. Now that it’s here, I’m very concerned. Even about gold and silver.
A lot of these hedgies and financial gurus invested in MBS/CDO products, and also speculated on Gold/Silver/Uranium/PMs.
If they start to come under pressure, they will likely liquidate their holdings to make margin calls.
This could also affect Treasurys.
The problem with the downfall of a mania is that there are little areas that are “safe”.
That said, I am also sitting at my computer trying to figure out how to lose the LEAST amount… and it may be gold/silver… or Treasurys… of ProFunds short mutual fund.
I HATE BUBBLES.
In the short term, it will effect everything - from gold to oil to equities. But over time?
“The problem with the downfall of a mania is that there are little areas that are “safe”.”
I agree 100% with this statement. Yes hedgies are long gold, silver, bonds, stocks. Frankly the only thing I know that is short is the Yen. I do not know if that makes the Yen a “safe” investment - perhaps, just a little less risky.
Hedgies are all in paper, not physical. Physical gold is no ones’ liability.
Yup, I think PMs are gonna tank with everything else, once they stabilize then dive in. Until then be in Yen, Euro and short the market.
Forgot Swiss franc too.
So the flight to quality will be to another piece of paper money that costs a Quarter, to print?
Should I be pulling my hard cash out of the banks and keeping it under my mattress?
“So the flight to quality will be to another piece of paper money that costs a Quarter, to print?”
The value of fiat money is not set by printing costs (near zero) but rather by the CB’s reputation for protecting its value. This amounts in part to convincing markets that printing presses will not accelerate in response to the first sign of macroeconomic weakness. So far, between serving a term as Council of Economic Advisors chair under the loyalist-crazed Bush administration, giving speeches on the topics of govt printing presses and helicopters standing in the ready to drop cargo loads of cash, pumping the stock market up, containing l-t T-bond yields, capping the Fed Funds rate at stimulative levels and discontinuing the publishing of M3 figures, Bernanke has not quite managed to establish a reputation as an inflation hawk. By contrast, the Swiss CB has a long-term track record of maintaining a stable currency.
…once they stabilize then dive in.
Yes, the hedgie liquidation will be the last great opportunity to purchase PMs cheap.
Gold is the most manipulated market by far. Second to none, even equites. The evidence is overwhelming. The inflation adjusted price is considerably higher than where it is currently trading. Even though it has rallied the past few years it is lagging far behind just about every other asset class (in inflation adjusted terms). That said, you should own some(physical) to protect yourself against modern day financial shenanigans, but I wouldn’t overdue it. My two cents.
Series I bonds have been great. large company dividend stocks - I will still get the same dividends when the share prices decline.
I guess the chicken littles are saying ALL investments will decline. What a crock! Show me a time when PMs, stocks, corporate bonds, municipal bonds, CDs, Treasury Bonds, Treasury notes, real estate all dropped in value. Anyone?
1929?
I will still get the same dividends when the share prices decline.
Uhhhh … unless they cut their dividend as times get tough. It has happened before, ya know?
“unless they cut their dividend as times get tough. It has happened before, ya know?”
All companies that paid dividends? Some? Which companies? Nothing concrete here. All same old chicken little.
Diemas, In 1929 if you were into Treasury bonds, you would have been sitting pretty the next decade or two. Nice try though.
Well, since you asked so nicely … here ya go.
Stock Focus: Companies With Dividend Cuts
Vivian Woo, 03.19.01, 8:36 AM ET
NEW YORK - Dividend cuts may be hard on shareholders who are dependent on dividends, but they’re often necessary medicine during hard times. Companies typically cut or reduce dividends in order to conserve cash, pay off debt and increase financial flexibility.
Cyclical companies in particular pump up their dividends during good times and slash them during bad times. During the past 20 years, for example, Ford Motor (nyse: F - news - people) raised its dividend 14 times and cut it two times. According to The Daily Dividend Record, a Standard & Poor’s publication, 35 U.S. companies eliminated or reduced their dividends since the start of the year. Last year, 130 companies took such action.
http://www.forbes.com/2001/03/19/0319sf.html
————————-
and, also note that GM cut their dividend in half (!!!!) last year. Here’s the link for that just in case you’re skeptical.
NEW YORK, Feb 7 (Reuters) - U.S. stock futures fell on Tuesday after home builder Toll Brothers Inc. (TOL.N: Quote, Profile, Research) cut its forecast for home sales, but Dow futures pared losses after General Motors Corp. (GM.N: Quote, Profile, Research) cut its dividend in half, boosting the automaker’s shares.
http://today.reuters.com/news/articlebusiness.aspx?type=tnBusinessNews&storyID=nN07213956&imageid=&cap=&from=business
Not sure why my post didn’t go through, but here we go again. Since you asked so nicely, from 2006 …
NEW YORK, Feb 7 (Reuters) - U.S. stock futures fell on Tuesday after home builder Toll Brothers Inc. (TOL.N: Quote, Profile, Research) cut its forecast for home sales, but Dow futures pared losses after General Motors Corp. (GM.N: Quote, Profile, Research) cut its dividend in half, boosting the automaker’s shares.
http://today.reuters.com/news/articlebusiness.aspx?type=tnBusinessNews&storyID=nN07213956&imageid=&cap=&from=business
or, from 2001 …
NEW YORK - Dividend cuts may be hard on shareholders who are dependent on dividends, but they’re often necessary medicine during hard times. Companies typically cut or reduce dividends in order to conserve cash, pay off debt and increase financial flexibility.
Cyclical companies in particular pump up their dividends during good times and slash them during bad times. During the past 20 years, for example, Ford Motor (nyse: F - news - people) raised its dividend 14 times and cut it two times. According to The Daily Dividend Record, a Standard & Poor’s publication, 35 U.S. companies eliminated or reduced their dividends since the start of the year. Last year, 130 companies took such action.
http://www.forbes.com/2001/03/19/0319sf.html
“Gold is the most manipulated market by far.”
I agree. In fact, it often seems the PPT is somehow hammering gold on the same day it is pumping equities. This is a convenient way to suppress the impression of rampaging inflationary pressures that burgeoning gold prices provide. Nobody ever suspects that ever-increasing stock prices in the face of macroeconomic weakness might actually be inflationary, because asset prices don’t inflate — they just always go up.
Stock market UP!
not for long.
I know, starting to falter. Still, I am confounded by the rallies.
I know, starting to falter. Still, I am confounded by the rallies.
Rallies are to be expected as sheople all think it is time to by after a one day sell off. What a CROCK! They are being sucked in as weak buyers and when we do have a fall they will be the first to bail as they have capital staying power.
Down Down Down like a merry go round and where she stops knowbody knows!!
not for long.
Watching the market this morning just felt surreal. I don’t get it
But BX finished -0.75, at $29.18.
“The U.S. economy and financial system are in fine shape despite the ongoing troubles in the housing market and subprime lending sector, said Charles Plosser, president of the Federal Reserve Bank of Philadelphia in a speech in London.”
This man is whistling past the graveyard. What a load of crap. Doesn’t this guy read the quarterly FED reports about credit. Heck, in 2 pages it sumes up the freakin economy!
And this guy says everything is fine. Yeah, “Other than the shooting, how did you enjoy the show, Mrs. Lincoln?”
Mrs. Plosser: “Charles the house is on fire!”
Charles Plosser: “Don’t worry dear it is only the back of the house that is burning. Lets just watch a movie”
Amazing
“‘Buyers now have an overwhelming advantage given the wide selection of homes available in many markets,’ said Lawrence Yun, NAR senior economist, in the group’s forecast statement.
Forget Liereah, now we have “Yuntruths”.
Yeah instead of only a few overpriced houses on the market now we have thousands of overpriced houses. Some advantage……
The DEA needs to raid NAR headquarters as it seems they have an endless supply delusion inducing narcotics.
ROTHFLMAO!
Testify. When prices fall to levels people can afford based on traditional metrics, we’ll be even. When they are lower, buyers will have the advantage.
On my way to town this morning, I heard “Lying Lawrence” say on the news that housing prices will be much better next year. I can’t believe that he is still being taken seriously. He’s nothing but a shill for the NAR.
Lying Lawrence (fun)Yun and Cocaine Lawrence Kudlow……… what a delusional pair of liars.
Lyin’ Lawrence fun(Yun) and Cocaine Larry Kudlow would make a wonderful pair to host the Liars Club skit, “let’s bury J6P”.
Buyers have an overwhelming advantage with reasons to stay out of the market. It’s becoming more and more difficult to talk them into buying right now, because of so many reasons to stay out.
Overwhelming advantage, eh Lawrence?
Let me put this very simply: Are there rivers of FB blood flowing down Main Street USA yet?
That’s the day buyers will have an “overwhelming advantage,” and not until.
– Judge Smales
“You’ll get nothing and like it”
We always had a wide selection of homes… What we really need is a big crash in prices. It will come. We are all patient here.
Did I actually see this in the MSM?
“Paul Kasriel, chief economist with Northern Trust in Chicago, questioned the Realtors’ assessment that this is a good time to enter the market, saying weak sales and prices suggest that potential buyers are smart to be sitting on the sidelines right now.”
“‘No one is buying into their Kool-Aid; that’s why prices are falling,’ he said. ‘It could be that they’re going to fall a lot more. The Realtors tend to be overly optimistic. Eventually they’ll be right about prices turning around. I don’t know when prices are going to stabilize but I suspect they’ll fall more than they think this year. It may be a much better time to buy six months or a year from now.’”
Ouch. That’s a far cry from the usual REIC cheerleading.
OK Paul Kasriel. “Drinking their kool Aid?” What is your housing bubble blog screen name?
Exactly what I was thinking.
Chicago?
“The trade group is now looking for flat prices for existing homes in the first quarter of 2008 compared to the first quarter of 2007, and a more year-over-year declines for new home.”
hahaha. More of the same manipulations and distortions.
why does the media quote this sleeze?
Why are they saying used houses price won’t drop and new houses price will drop ? It’s all about commission.
NAR makes money selling used houses. They don’t make any money in new houses sold by builders.
not true.
in down markets, the homebuilders pay a hefty commission to realtors who bring in a buyer.
my good friend is a top notch realtor in town here. (and a good guy, really… sorta like MrIncomeStream)
there is a development of high end condos ($3Million or so) going up in my neighborhood… having a hard time selling them.
so they’re enlisting 3 of our highest profile realtors to make it happen… and paying them BIG time. (plus, no splitting the commission)
Why are they saying used houses price won’t drop and new houses price will drop ? It’s all about commission.
It is apparent that the NAR is attempting to manipulate the market in the best interst of their members. The NAR appears to be more of a marketing firm for it’s members instead of a not for profit organization. Perhaps the IRS should take a serious look into the NAR and determine if it still falls into the not for profit business.
NAR is a 501(c)(6) organization, a non-profit business league. The organization doesn’t pay tax, but donations (if anyone wanted to give them) are not tax deductible. Different than a tax-exempt charity which is a 501(c)(3).
They quote them because the REIC is a huge, huge advertiser, and whatever scrap there was of ethics in journalism at one time has long since passed. They will not bite the hand that feeds…
“In fact, the Fed may have the opposite problem, with many critics saying the Fed has created a ‘floor on rates of return,’ quickly bailing out investors when markets fall by lowering interest rates, a phenomenon widely known as the ‘Greenspan put.’”
It’s good to know that someone besides housing bubble blog posters recognizes this could potentially be a problem.
‘He worried that any move by the central bank to deflate bubbles would be ineffective or counterproductive. In addition, he said, trying to prick asset bubbles could hurt the central bank’s credibility by creating a “ceiling on rates of return on certain assets.”‘
Please forgive me for pointing this out, but What a moron!
I actually read this Plosser’s comments with complete disgust. The old axiom of the Fed “taking away the punch bowl” has obviously morphed into “SPIKING the punch bowl with vodka”. They truly disgust me!
Judging from the mad hatter statements coming from the mouths of people that oughta know better…
The spiking seems to be of the purple microdot persuasion.
This so very true, Get. Having essentially reduced their activity to raising or lowering the funds rate, the statement by Plosser is a tacit admission of a strong bias to spike.
But where now, Fed? EU rates are killing the dollar, and unless BB has decided the greenback is unsalvagable its current fall must be causing some sleepless nights. With the market still talking up a rate cut, even a hint of an increase in dollar support would be deadly.
…Noting a hedge fund had recently suffered large losses from positions in the subprime market and concerns that it could lead to a spillover to other funds or lenders, Plosser said: “The coming months should provide a better indication of the magnitude of any adverse effects from this sector.”…
I declare this week to be of the Highest Orwellian Order…
Maybe Plosser had better have some of his research assistants explain some of these numbers to him…
http://www.markit.com/information/affiliations/abx
“The credit quality of subprime mortgage bonds fell to a record yesterday in New York. The ABX-HE-BBB- 07-1 index that tracks securities rated BBB- fell 7.4 percent to 51.42, according to the index administrator. The index has declined by almost half since January, reflecting the increased likelihood of default on the underlying securities, which have the lowest investment-grade ratings.”
11-Jul-07 Overview
Index Series Version Coupon RED ID Price High Low
ABX-HE-BBB- 07-1 7 1 389 0A08AOAC1 48.64 97.47 48.64
http://www.twincities.com/ci_6344409
Twin Cities housing slide picks up speed
As building permits tumble, some experts see a bust; others reserve judgment
BY JENNIFER BJORHUS
Pioneer Press
Article Last Updated: 07/10/2007 11:18:08 PM CDT
New numbers out Tuesday confirm suspicions: The Twin Cities housing slump has slid into, well, a bust.
City officials issued just 592 building permits in June, a number nearly 50 percent off the recent monthly permit peak of 1,104 in June 2005, according to the Builders Association of the Twin Cities.
And while homeowners probably pay far more attention to house prices, many economists prefer permits or housing starts, saying they are a more solid yardstick of market activity.
There are no hard definitions here. But steep declines of 30 percent or more off peak activity have “housing recession” written all over them, they say.
“Anything over 20 percent is pretty big,” said Patrick Newport, an economist at the consulting firm Global Insight in Lexington, Mass.
Nationally, in the past three housing cycles, starts declined an average of 63 percent from their peak to trough, said Karl Case, a housing economist at Wellesley College. In the current cycle, which he said peaked in the first quarter of 2006, starts are about 33 percent off that.
“It can and could go further,” Case said.
Home prices offer another, if less reliable, bust-o-meter.
Andrew Leventis, senior economist at the Office of Federal Housing Enterprise Oversight, said a bust can be considered a 15 percent drop in nominal home prices over five years - a rather arbitrary threshold the Federal Deposit Insurance Corp. put forth in 2005.
Whether such prices measures are useful is
“an open question,” Leventis said.
By the FDIC measure, neither the Twin Cities nor the country is in bust territory … yet.
Using the Office of Federal Housing Enterprise Oversight’s home price index, neither Minnesota nor the nation has declined.
The alternative SP/Case Shiller home price index, a favored measure that tracks repeat home sale prices, shows declines, albeit not dramatic. Nationally, the Case Shiller is down about 2 percent. The Twin Cities is at 164.73, down 3.7 percent from its September 2006 peak.
That’s nearly identical to the drop in the median sale price released each month by local Realtor associations. For May, the latest available figures, the 13-county metro area’s median selling price was $227,495, down 3.9 percent from the local price peak in June 2006.
But don’t base anything on median price alone, economists caution.
Newport, at Global Insight, said that’s because large-scale drops in home prices are so unusual, a sustained price drop of any size indicates a housing market is seriously depressed. The drops in both activity as measured by building permits and price in the Twin Cities “are telling you a consistent story,” Newport said. Bust.
Not all busts are equal. The Twin Cities are not as bad off as other metro areas. Prices in the Detroit area, hit hard by auto-related layoffs, are down 11 percent, again using the Case Shiller index.
Prices are “sticky” and highly regional, said Karl Case, co-creator of the index. “In areas where the economy has soured and employment is declining, the likelihood of a price decline is greater,” Case said.
That suggests the Twin Cities will escape the worst. The area’s underlying economy may not be roaring, but it’s growing.
Indeed, some housing experts eschew the term bust altogether. It’s just too alarmist and unfairly connotes wholesale collapse, said George Karvel, a real estate professor at the University of St. Thomas College of Business. Karvel prefers the term “dramatic adjustment,” a process he anticipates could take four years to work itself out.
Jim Solem, former head of the Minnesota Housing Finance Agency, dismisses the entire discussion as too complicated. The state of the local housing market simply depends on whom you talk to.
“If you talk to someone trying to buy a house right now … it ain’t all bad,” Solem said.
Jennifer Bjorhus can be reached at jbjorhus@pioneerpress.com or 651-228-2146.
Will the wealth destruction in the value of the land underneath real estate assets, force the value of mortgage portfolios to be written down? What does this mean for Freddy and Fanny, and mortgage backed securities?
“What does this mean for Freddy and Fanny, and mortgage backed securities?”
It means that it could be a very long while before Fannie comes clean on its balance sheet, imho.
AHHAHAHAHAHAHAHAHAHAHAHAHAHAHAAHAHAHAAHA.
Whew… Fannie mae having a clean balance sheet. You really kill me GS.
First Fannie would have to produce ANY balance sheet.
don’t forget. Fannie doesn’t report their financials for a reason. they are left listed on the stock exchange for a reason.
we always argue about the PPT. What easier way for the Fed to monetize debt and create stealth inflation than through a large respected company with an implicit guarantee from the gov’t that needs produce no financials?
Agreed. Heck, have they even filed, YET! When was the last time this bunch of crooks and shysters filed any report of value? You guys are really cracking me up with this thread.
Everyone knows they have major impairment loses, even though they do not file a balance sheet. Investor confidence in Fanny and Freddy may be misplaced, due to the implicit govt guarantee. By the time the govt must act to bail them out, the dollar will be worth zero. What good does it do the investor then.
Anny idea how much wealth destruction has occurred in their portfolios since their last audit?
“The paper losses that many homeowners have experienced on their home equity ‘are likely to have only a modest effect on their consumption patterns.’”
Er, no more HELOC’s means no more spending for many cash strapped families Mr Clueless ………
yeah.. when paper-gains pay the bills, paper-losses might seem more real.
My wife and I were at the mall two nights ago getting her a new pair of shoes for work (she’s a rad tech and on her feet all day), and it was DEAD. Kind of eerie when the only other people at the mall are employees.
That’s interesting. I noticed that a LOT around where I live. Stores half empty, restaurants half empty when this time of year when they are usually full. I shop at Trader Joe’s and Whole Foods most of the time. They seem to be doing okay (especially Trader Joe’s) but the other markets like Ralphs, Vons, etc, seem pretty short on customers. I’ve also noticed the more expensive produce isn’t getting much attention. Also, I was a little surprised at a comment made by a friend the other day. He makes very good money, has a wife and 2 kids and every year he takes a family vacation such as an Alaskan Cruise (last year) or a trip to the Grand Canyon where the family goes on one of those expensive tours for several days. He’s even taken the whole family on a couple of trips to europe over the past decade. This year, I asked him where he was going and he replied, “I’ve dusted off our pop-up tent trailer. It’s been in storage and I keep meaning to sell it but seeing as we haven’t used it for years I thought we would take the kids camping and stay within a 100 mile radius.” Yeah, there’s no inflation. Economy doing great. Property prices will recover in 2008 (try 2011 or even 2012 IF we don’t hit a recession). The surge in Iraq is working, etc. Is ANYONE telling the truth these days?
Is ANYONE telling the truth these days?
YES, but I plead the 5th.
Or maybe he can’t HELOC a fancy vacation any more.
I got a card from a friend today. In it she said that her husband’s extended family was at Lake Winnepesaukee (NH) for the week. They were feeling very emotional about it since the home was going up for sale in the fall. Her in laws from NYC own the house. Looks like some of the old family money is going conservative.
“Property prices will recover in 2008 (try 2011 or even 2012 IF we don’t hit a recession).”
Property prices will bottom out by 2010-11…they may recover 2005 value by 2014-20 depending on area and quality (and inflation). Some areas may never see 2005 values again even with inflation (unless hyperinflation).
Funny. Was driving home last night and the turn lane into Wal-mart was empty. And it is never empty. The light turned green and nobody turned in. This was at 6PM, too. Thought it funny at the time, and now your comment. Odd.
Was in a new Target this afternoon (pardon my light work schedule). It was slow but still obnoxious. Customers were either young mothers with their loud and unruly broods or teenage/twentysomething females jabbering on their cell phones. Saw one other male, who was also jabbering on a phone and blocking an aisle. Really unpleasant experience no matter what the crowd. At least when there’s a crowd people are forced to pay some attention to why they are there. But I do remember thinking that it would be hard to make money in such a big store with that kind of crowd.
Of course I had also just come from the Post Office where there was a long line and you have to wait interminably while they ask everyone if they want insurance, delivery confirm, plus everyone pays for everything with a credit card - so I was already a little aggravated. Hey, P.O. - would you please lose the 20 questions and let us get on with business????
‘are likely to have only a modest effect on their consumption patterns.’”
- This statement also jumped off the page when I read it. 50% of the economy for the last 5 years has been housing / consumer spending. There is more employment for sure - like Walmart, CVS and Taco Bell.
One more time with this for Mr. Clueless and the rest of his ilk. The economy has been running on debt for the last 15-20 years. Well, well, well. No the piper wants to be paid. The chicks are coming home to roost. People are getting scared. Good. Now is the time for the enema this country’s economy has need since the 80s when Credit Cards began driving all things for sale.
IT IS ABOUT FREAKIN’ TIME!
GOT NO DEBT? (YOU BETTER HAVE)
Yes, bring the pain.
It’s time for a reality check.
I agree with the PAIN stuff!! This generation has everthing it wants and needs except for a good dose of reality about their spending habbits. MAXED OUT on everthing. NEED a good 29 type deflation to clear the books of greed!
Plus the cr cards are probably already maxed out. No cash, no purchasing.
PPT = Printing Press Time
“Analysts say that there could be a wholesale stampede to unload any newly tainted securities, causing a scramble for capital and forcing hedge funds to give back billions to rich investors.”
These hedgie guys can kiss my you know what. Yeah, I am ranting, but I can’t help it. Seems like this thing called Wall Street may finally tank and big time. Oh no, we have to pay back our rich investors. Cry my a freakin’ river. Now you know what it is like to really have to cough up the money. You guys didn’t give one rats rear when you taking the money and commissions in and hading out CCs like crack on MLK Blvd. in South Central on a Friday night, now did you? Well, life’s a beyatch and has a way of coming around and kicking you in the ballz.
How rich. How ironic.
What billions exactly are they going to give back? Last years bonuses? Correct me if my math is wrong but a hedge fund leveraged 5 times will only be able to give money back if it loses less than 16% of its total value, and we might well be there… What with the rest of the investment being the IB’ers and they want to get paid FIRST….
“The group now sees second-quarter existing home sales falling below the 6 million annual sales pace to a 5.96 million rate. If it is correct, it would be the first time in four years that quarterly sales were below the 6 million home annual sales pace.”
Am I the only one who thinks that 120,000 homes in every state (on average) changing hands every year seems like a lot of homes/transactions?
It does seem like a lot.. lemme try some basic numbers:
Figure a population of 300,000,000, divided by 4 (per family) = about 76,000,000 families .. X home ownership at 68.9% = 52,000,000 homes.
Divide that 52mil by sales of 6 million a year.. means people sell a home every 9 years or so.
Selling every 9 years (on an average) is a bit too much.
Figure 2.6 persons per household, which means 1.1-1.2 million new households per year at current population growth rate of about .9%. (Notice that per captia real growth was negative in Q1 2007.) Also puts home ownership raw number much higher. I think moving stats are actually something like once every five years (mean, not median) but of course the minority that rents moves much more often.
“..Figure 2.6 persons per household..”
I’m just going by what stats i see..
“Total fertility rate: 2.09 children born/woman (2007 est.)”
wiki- Demography of the United States
Your not the only one that thinks that transactions were to high to begin with . How can you have that many transactions with a almost 70% home ownership rate in the United States? Flippers selling to flippers and the industry having a hey-day with their unqualified buyers/speculators and cash back fraud .
Does anybody question the fact that big builders also had a conflict of interest in that they had shares in the lending company that didn’t seem to know how to screen for investors and would always hit the market on appraisals, even with incentives and free stuff added ?
To be fair to the 70% rate, once you have been a homeowner you tend to stay a homeowner even if you move to a different state.
“Does anybody question the fact that big builders also had a conflict of interest in that they had shares in the lending company that didn’t seem to know how to screen for investors and would always hit the market on appraisals, even with incentives and free stuff added ?”
It’s one stop shopping. I posted a press release a few months ago, from a builder in Reno which was not only offering the financing, but reduced monthly payments for the first year so that the renters could ‘ease’ into home ownership. They knew good and well that they were slamming people into homes they could ill afford, and would ultimately lose. The builders could care less, because these notes were sold off to investors, and the builder got their fat paycheck.These sleazeballs are pulling out all of the stops in order to unload their inventory. This country is as crooked as they come.
banter, what is sad is that years ago I told my FIL that the only difference between this country and the Philippines is that their corruption was in the open. Well, I can see that has changed a lot in 14 years and sadly, many have to expect it and do nothing about it.
“The group now sees second-quarter existing home sales falling below the 6 million annual sales pace to a 5.96 million rate. If it is correct, it would be the first time in four years that quarterly sales were below the 6 million home annual sales pace.”
In a few years time, the NAR will be praying for these numbers.
USD index looks to collapse under 80!
http://stockcharts.com/h-sc/ui?s=USD&p=D&yr=3&mn=0&dy=0&id=p34213469220
Silver and gold check.
OH. NO. This is the shot that will reverberate around the world.
Nice post. It looks to be at its lower support so may turn north for a few days (one last gasp). But the overall trajectory sucks, doesn’t it?
Opps. Broke through the support. Off the wire and no net.
This is serious business, but again the smoke and mirrors are alive and well. A quick trip to any housing area makes the whole thing very simple, to many vacant homes and to many people wanting the prices to drop even further before they jump in. If you are a investor you have just two options lower the price and take litttle or no profit maybe even a small loss or sit tight till 09 when you will see again little or no profit, in other words you are in deep?
The housing market is collapsing, millions of ARM loans are coming up for reset in the next year, foreclosures are skyrocketing and people are STILL buying overpriced properties. Today’s buyers have been sniffing the NAR jenkem for too long.
Mark Hart from a TX hedge fund ($1M minimum) now on CNBC talking about the subprime meltdown, how there’s a lot more to come and how his fund is up 28% in one month doing some sort of credit swaps. Is there anyone out there in housingbubbleblog land that can explain how to do this??
mirrors and fog?
I saw the interview and it sounded like some pretty complicated tradeing strategies.Sounded like they bet against the subprime market in some way.Can’t really help you out too much.
You can enter into a forward contract with one of the ABX indices as the underlying. You have to be able to find a counterparty to do this, and the trade is pretty crowded right now. (Meaning, it’s difficult to get a short position because it’s difficult to find a counterparty who will take the long position of the contract.)
We should have been all over this 6 months ago
Nerdgirl,
These funds aren’t in the exchange-traded markets. They’re in the credit default swap space, essentially buying and selling default protection on the actual bonds and vehicles (a *much* bigger market than the indices.) I’d expect to also find a whole slew of even more exotic stuff involved (so the parties can lever up without even needing to deliver the underlying defaulted securities.)
Futures contracts are exchange-traded. Forward contracts are not. As I said, you can enter into a forward contract. You just have to find a counterparty.
Nerdgirl,
No objection there, I was pointing out that the ABX indices are not typically used as an underlying in these transactions.
Looking through the news of the financial world it does look pretty bleak. But, the fact is I have thought several times that “this is it”, this is when it starts to unravel. And it is unravelling but not bad or fast enough for the average person to see it. I still have to defend my views if I give them. The overwhelming majority of people (mostly professionals) still think it is better to buy than rent. And nothing wicked this way comes. I am tired of the smoke and mirrors. I want to start addressing these problems and get back to a normal housing market. When is this damned credit bubble going to burst! My definition of a burst credit bubble by the way is when the majority of people know about it and that is sure as hell not now.
I have to agree, I am sick of realtors responding to me like I have three heads when I say I want to pay no more than 200K for a really nice house in Wellington Florida.
I find myself drifting in and out of feeling very hopeful to feeling discouraged at times. Thank God for this board which always renews my confidence that this market is going back to normal again.
It is just not happening fast enough for my liking as I really want to purchase.
When is this damned credit bubble going to burst!
Actually, RP, I’m *glad* it’s taking a long time. Not because it’ll change the outcome, but because it gives me more time to prepare.
There’s simply never enough time to prepare for a depression.
2007 - bad
2008 - worse
2009 - really worse with blood - max foreclosures
2010 - surrender - foreclosures begin to slow but have a ways to go as many no longer can buy a house and many remain upside down and will walk in 2010-12.
“The median sales price of an existing home is expected to fall 1.4% this year and rise 1.8% next year. The median sales price of a new home is expected to fall 2.6% this year and rise 2.2% next year.”
These clowns are outrageous. This year’s half-through, so there’s some idea how 2007 is going to pan out. It’s pretty universally agreed that it’s going to be negative this year. IMHO -1.4% is a little optimistic, but that said, it’s not over yet.
But their constant assessments of “but don’t worry, prices will be up next year” is annoying. How in the heck can they make such a prediction, after being so wrong about last year and this year? They’re just a lying marketing agency. Lie lie lie.
I’d say predictions by many other economists are more realistic, looking for continued declines in prices through 2009 (even the NAHB!). Foreclosures are still climbing at a hefty pace, inventory is still rising, and there are a sh!tload of subprime ARM resets around the corner, through 2008. Interest rates are rising, subprime loan availability had mostly evaporated, and the economy is slowing down. In this context it takes a special kind of ballz to say “but don’t worry, prices and sales will be up next year!”.
The day I trust a Realtor(tm) is the day I tell a used car salesman to hang on to my money for me.
jeeze.. these guys are just trying to make a living..
Step right up folks.. what we have here is the elixer of life itself! A veritable fountain of youth!
And, iffin you don’t believe me, let me now introduce to you my dead friend, Huxley Morthaven, 112 years young!
That’s the misleading thing about median prices though. If some folks are correct and the high end housing market doesn’t crash as fast as the “average” housing market then it becomes a greater percentage of sales and it’s possible for the median to increase even in a crash.
Red, this is like a cancer that is growing slowing and hasn’t yet caused pain, destruction and maybe death. This all coming to a huge conclusion because nobody can sustain these losses or payments every month with no hope of a decent sell.
Many neighborhoods that are new look like things are dandy with fine cut lawns and drapes or blinds hiding what is really happening nobody lives there on elm street it is all a staged event. Real Estate agents know it, lenders know it, the investors are up the creek and the resale market is shot, thus they can’t sell their home to buy the empty new house they would like to purchase. The Gov’t has enough problems with the War and health care , another nail to the coffin is the houising industry and they are hoping for a hail mary pass that can’t happen, their isn’t even a ball to play with let alone trying to complete a pass?
Real Estate agents know it…
I think a lot of people don’t know it. I think a lot of REAs and even a good portion of Loan Officers believe that stubborn buyers are creating a self-fulfilling prophecy - they’re not buying because they falsely believe prices will come down, and lo and behold, prices are coming down because they’re not buying.
I’m fairly certain that a large number of the people in the real estate bidness fervently hope that people will just start buying again so prices can at least stabilize at the current level.
Sallie Mae has crabs!
http://biz.yahoo.com/prnews/070711/new109.html?.v=9
LAY: “it could be a good time for first-time buyers with a long-term view to test the housing waters.’” Translation: Real estate doesn’t always go up. But, if you want to buy, and don’t mind being under water a few YEARS, Today is a Great Time To Buy!
I’d like to ask her to define “long term” and watch her squirm.
So irritating. Let the Realtors put their money where their mouths are - they can back this up by having the NAR or CAR agree to pay any losses in a subsequent resale within the next [x] years (they should have plenty of banked membership dues from the boom time, at least for the first few to actually use this insurance).
Those of you who go open house shopping, I’d love to hear a Realtor’s response to this proposal. You say I can’t lose? Fine, then bet your own money on that…
NAR dues does not pay any kind of insurance. They use all that money just to run ads and send out a monthly magazine. When I was a realtor years back none of us wanted to belong, because we couldn’t see anything that they did for us for the $400+ a year every realtor has to pay. It’s really rigged. If your company belongs, every agent in that company has to belong. Plus there’s a lot of realtors out there that I still know and they think the ads are a bunch of lies.
Oh, I know they don’t… Color that a fantasy on my part…
“Plosser said the unwinding of the housing boom has led to a slower economy, but not to the bust many had been forecasting….”
Our predictions were early but not wrong. Wait.
Our predictions are not wrong, but the PPT has definitely slowed down the correction process.
Concerning an eventual crash, Bill Fleckstein said one day, “I’m frequently wrong, but never in doubt.”
I love these experts who say the investors will bring back the market? When things are right and they see that a profit exist look out they will fuel another boom, i guess they never heard the expression fool me once okay but fool me twice shame on me. Nobody is going to fall for this run up in prices anymore, banks are now really going to check you out and if you want to play the hide and seek game that flippers like tp play jail may be waiting or at least Paris hilton as a cell mate God forbid. These people will say anything to jump start a dead battery. I wish they would go back to being what they were before which was not a phi betta cappa real estate guru, most likely they were lazy bait and switch fast talking con artist who got theirs in the end?
Once this market gets done with them, those investors won’t have any money to bring back.
So, CNBC has ben running stories all day on “attack on wealth”… AKA, raising the tax rate on hedge fund managers.
CNBC Spokes Model Burnett: So why should we tax equity fund managers at a rate lower than other oncome.
Former Treasury secretay John Snow(job), now with Verburus capital: Its risk based income, and in this country we acknowledge that risk based income is different than regular salarie.
Burnnet: but it is a risk to the investors, not the managers that are taking fees for their work in managing those funds. Other professions work on comission fees and pay regular income taxes. Why would their fees be different?
Snowjob: Well, the equity fund managers are performing a valid service, providing a better life for retirees.. my mom is a retired teacher and she had a better retirement… spewing bs.
Burnett: But the fees are already being taken out of the pension, so the pension’s assets would not be effect by the tax rate on the fees withdrawn from the fund.
Snowjob: well, we tax things we want to discourage, like tobacco and alcohol. Why would we want to discourage capital creation…
Burnett: it is an issue of fairness. Why should the school teacher pay more taxes than the hedge fund manager?
Snowjob: blah, blah, blah,
Next interview: Congressman Frank
Frank: What a bunch of shite. Ms. Burnett, you’re paying a higher tax rate on your income, and we’re not trying to discourage you from doing your job. The thought that these equity fund managers would go do somethng else just because we’re taxing them 35% rather than 15% on their multi-million dollar annual incomes is just crazy!
Nailed the “war on wealth” arguemnt to the WALL. Not war on wealth. Closing a loophole that allows the richer to pay less tax!
I have a similar argument (discussion) with a friend. He argues that the reason he won’t vote for a Dem in the coming election is that the Dems will raise taxes. I argue that, yes, relative to right now, your tax bill would be higher. But in reality, your taxes will be brought back in line to where they were so that we can pay for the past 7 years of spending.
I argue that your taxes have already been raised, you just haven’t had to pay for them yet.
(By the way, my argument isn’t made to benefit any Dem, I’m actually in favor of a Ron Paul-like candidate. I just like to do my part to address the fact that “tax-LESS and spend” is not a solution to “tax and spend” economics)
You’re taxed more now. When the Fed gave tax breaks and returned tax money, they also cut programs to the state and local gov. They in turn raised their taxes to make up the difference. Still taxed the same or more, only just collected from a different branch of gov. It always works that way. That way the Fed gets to say they lowered taxes, but what they don’t say is that they lowered spending to the other government entities, and they’re going to raise taxes right back up.
Real inflation running at 10% is the biggest tax of them all. It’s taken from the money you’ve already earned…. every year.
sleepless, that’s exactly the argument that christopher thornberg makes in his now-famous talk on housing back in 2006.
“I keep hearing about these tax cuts. Folks, we have not had tax cuts in the US economy. A tax cut is when you lower taxes and decrease spending. When you lower taxes and increase spending, that’s what’s known as a tax deferral. ”
That one made a few people scratch their heads.
link in case you haven’t seen it… it should be required watching for HBBers.
Thanks ajas! I’ve got it bookmarked for a more appropriate time to view.
Endless pandering to the wealthy for the wealthy isn’t working anymore. Games up. Even wheeling out Cocaine Larry Kudlow doesn’t work. Makes one wonder what kind of outlandish lying campaign they’ll embark on next to further bury the majority who aren’t part of their exclusive club.
I can not listen to him. His screeching makes my teeth ache, seriously.
The outrageous lies that fly out of his mouth daily leaves me numb.
Darrell, don’t even get me started on these paper pushing pimps. They think because they move money around they deserve 15%. Fro cryin out loud, pay your way. Man, this country needs a big time depression. I hate to say it, but it does. We need a return to hard work, ethics, and values. We need a return to building and selling things of value and saving for the rainy day or your retirement. We need a return to people realizing that bi government isn’t the answer to life, but that you are also part of something bigger than “I got mine, too bad if the roads suck next door,” attitude.
Sorry for the rant, but I am so sick of guys complaining about tax brackets when they make 30 mil a year. These guys have taken a page out of the baseball union. It would be like me going to the homeless shelter and complaining about life. Man, 2 billion starve, go homeless and are unemployed daily in this world.
Get a freakin’ grip.
“this country needs a big time depression.”
You are absolutely right but the ramifications of one are frightening. While it could build a brighter future for our kids and their kids, what do you expect will happen in the preceding five years. Some in government jobs (fire, police, teaching, etc)paying high salaries and those on pensions feel safe at this point and say let it happen, but are they safe? I don’t think so. Salaries will have to adjust downward and the debt load carried by some of them will put them in the tank. Are pensions safe? I don’t have a clue! Those people who chose to suppliment their retirement with 401, etc will probably weather the storm better than others but it would be one big black hole until the dust settled.
My parents were depression babies in 1930’s Florida. Nobody had any money. People got along by trading (barter) goods and services. This only worked because we were mostly an agrarian economy. My dad had to milk the cows before going to school. His mother would be paid for piano lessons with live chickens. People were poor, but mostly got along.
Today, I think a full blown depression would cause serious damage. We can’t even handle one major city when it gets hit by a hurricane! Maybe I should start stashing food away?
“Man, this country needs a big time depression. I hate to say it, but it does.”
maybe so, but I think it’ll just be another opportunity for the rich to get richer, and for the moderately well-off to become rich, in relative terms.. while punishing everyone else.
capital creation…
This is done by VC’s when they back startups like google, apple. Not by playing poker.
“Wall Street is bracing for a nearly $2 trillion washout over the collapse of hollow and shaky mortgage bonds, triggering fears of a recession worse than the dot-com bubble bursting.”
Finally, the MSM is printing the writing on the wall.
I read that… looks like about a week or two until the sht hits the fan.
“Observers had expected that Bear might call off the offering, given Tuesday’s firestorm wrought by Moody’s and S&P’s threatening to downgrade of billions of dollars’ worth of bonds backed by subprime mortgages. Despite the worries, Bear appears set to follow through with the sale. A spokesman didn’t return calls Wednesday seeking comment.”
He was too busy running for the exit, just like everyone else. They are running scared now, no more pretense that anything is ‘contained’.
I read that some of the investors in the Extremely Structured No-Risk Fund, or whatever the name was, has offered their holdings at 10 Cents to the Dollar. So far the best counter offers have been 5 Cents.
It was Extremely Enhanced Structured No-Risk Fund.
‘Foreclosure’s Filthy Aftermath’
http://tinyurl.com/2jdapl
Foreclosure activity in Ohio surged in April, up 39% from March and 135% from April 2006, pushing the state’s total to the third-largest in the nation. That’s 11,431 filings, or one filing for every 418 households — 1.9 times the national average of one filing for every 783 households. For the thousands of Ohioans and others struggling to find money for food and shelter, pet care is often the last thing on their minds. “They spiral down, and financially and in their personal life, everything just falls apart for them,” says Anita Barron of Pet Alliance, the rescue group taking care of administrative work for Cincinnati’s “foreclosure cats.”
‘Sometimes, frustrated homeowners get creative. A man in Eagle Creek, Ore., recently put three 200-pound pigs in his repossessed home. They quickly tore up the place, ripping away the foundation and reducing the back porch to rubble. When police found the pigs, the animals were unharmed but a little cranky. ‘
“O-H!!”
“I-O!!”
My home state’s gettin’ hammered….ugh.
And we are called bitter renters. Whose bitter in this scenario?
Not Whose, What’s bitter…. according to what the swine consumed, not much….
Its all good in Oregon….man I cant wait for the foreclosures around here…..gonna be swweeeeetttt…..of course I dont want FC Round 1… Im waitin for Round 3…bout 2012
‘Sometimes, frustrated homeowners get creative. A man in Eagle Creek, Ore., recently put three 200-pound pigs in his repossessed home. They quickly tore up the place, ripping away the foundation and reducing the back porch to rubble. When police found the pigs, the animals were unharmed but a little cranky. ‘
LOL! Oh, man that gave me a good laugh. Glad the pigs are ok.
That reminds me of something that Happened in Florida during the last Boom.
They Built a Big ” Luxury Housing Development ” on some re-zoned farm land about 10 Mi outside of town. Some guy owned some farm land across the street that hadn’t been used in Years. He thought well there’s not a Gas station or convenience store for miles . Right across the street from the entrance to this Community would be a Dandy place to Put in a Gas/ convenience store.
Well the Snobs in this Development would have no part of it, and since Money runs the Commissioners here they said ” No Way will We change Your Zoning. The People here Don’t want their Property cheapened by having a Gas station next door.
So the Vacant Farm owner got PO and Painted the old Farm House in God awful colors and Painted in Bright Pink Letters about 3 feet Tall on the High Pitched Roof……. NOAH’S ARK. The He proceeded to put a Couple Hundred Stinky Pigs along with a few hundred other Misc. farm Animals on His “Agriculture Zoned land” right a the Entrance to this ” Lovely Luxury Homes”.
I got to say I LMAO!
“Paul Kasriel, chief economist with Northern Trust in Chicago, questioned the Realtors’ assessment that this is a good time to enter the market, saying weak sales and prices suggest that potential buyers are smart to be sitting on the sidelines right now.”
We have a winner! Mr. Kasriel should receive a gold medal for his correct assessment “that potential buyers are smart to be sitting on the sidelines right now.” Perhaps the NAR can learn from Mr. Kasriel in order to correct their lack of credibility.
“Lawrence Yun - ‘…with historically low mortgage interest rates this summer and sustained job gains, it could be a good time for first-time buyers with a long-term view to test the housing waters.’”
How much $ did it take to get you to sell your soul to the devil Lawrence?
Why would it be a good time to buy when the wave of foreclosures has only just begun?
so, ah larry how many houses are you buying?
This is a reasonable question. If we are indeed at bottom, you would expect rich people like Lying Larry to be scooping up properties for investment.
Let’s watch cable for any call-in question opportunities.
I thought the NAR and realtors had a fiscal responsiblility to their clients. Does this sound fiscally responsible to you?
grey area.. almost a catch 22. After all, they are nothing more than commissioned salespeople.
i think it’s called fiduciary responsibility..
If you can prove some secret commission payment or bribery.. collusion.. conspiracy.. or lying to a client and profiting from it, then there may be cause for legal action. Otherwise, it’s buyer beware imo.
“Finally, the MSM is printing the writing on the wall.”
Well said. I have found it very stressful the past year being one of the few people reading the writing on the wall. People! Look! See the writing? It is right there! No? *sigh* What?!? No, I don’t want to buy a house!!! #@$%!!!
http://www.reelediting.com/
Have you all seen this video? I thought it was pretty good.
Great video. No one has their house on the market right now unless they HAVE to move. So there’s a lot of desperate people out there. I’m sure with 85 houses for sale most will be in foreclosure before Halloween.
July 12, 2007; The Day the Consumer Died.
So by by miss American pie
Drove my Chevy to the levy but the levy was dry
An good ol boys were drinking whiskey and rye
Singing this will be the day that I die.
Now I get another case of Musicosis.
Last week it was Achy Breaky Heart, this week …
‘Home prices expected to recover in 2008 as inventories decline’
Isn’t it funny how it’s constantly 6-9 months out in the future. A little bit like getting to touch the rainbow, you’re a_l_m_o_s_t there…….
They’re called “Friedman Units” in the context of Iraq, after a reporter at the NYT by the same name who always predicts that things will turn around in (yet) another six months. Maybe here we can call them NAR units or Kudlow units to describe the alleged turnaround in RE that we all know isn’t coming for years.
I would call them Yun-units.
OT, But if this guys is correct, then things will definitely turn in Iraq soon:
http://www.financialsense.com/editorials/duarte/2007/0711.html
“a U.S. plan for a withdrawal from Iraq has been on President Bush’s desk since April 2007″.
According to Debka: “built around the phased pull-back by early 2008 of a little more than half of the 170,000 or so troops there at present. Around 50-70,000 soldiers are to be redeployed to large strategic fortified enclaves in the south and the north as a semi-permanent US presence. They will be backed by four naval and aerial strike groups in the Persian Gulf and Red Sea and a chain of giant air bases, some expanded, others built from scratch, in Oman, Qatar and Jordan.”
Here’s a little Yun-tube, followed by some Lereah-watch:
WASHINGTON, July 11, 2007 -
Home prices are expected to recover in 2008 with existing-home sales picking up late this year and new-home sales rising early next year, according to the latest forecast by the National Association of Realtors®.
Lawrence Yun, NAR senior economist, said a good buyers’ market has evolved. “Buyers now have an overwhelming advantage given the wide selection of homes available in many markets,” he said. “But with profit margins coming under pressure, homebuilders will limit new construction well into 2008. This should help the overall inventory level to move steadily into a more balanced state.”
WASHINGTON, June 06, 2007 -
Home sales are projected to move in a relatively narrow range with a gradual upturn becoming more pronounced by the end of the year, according to the latest forecast by the National Association of Realtors®.
Lawrence Yun, NAR senior economist, said the market is relatively soft. “Overall housing levels are historically strong, but sales remain sluggish compared to the recent boom,” he said. “Home sales will probably fluctuate in a narrow range in the short run, but gradually trend upward with improving activity by the end of the year. It’s important to keep in mind that all real estate is local, and many markets are expected to have higher sales and strengthening prices during the second half of this year.”
WASHINGTON, May 09, 2007 -
Housing activity this year will be somewhat lower than in earlier forecasts, with clearer analysis of the effects of stricter lending standards and a decline in subprime mortgage origination, according to the latest projections by the National Association of Realtors®.
Lawrence Yun, NAR senior economist, said one benefit for the market is the disappearance of speculative behavior, which contributed to abnormal price growth. “Home buyers today are purchasing for the long-term, generally with a realistic expectation of modest gains over time,” Yun said.
WASHINGTON, May 01, 2007 -
Pending home sales, a forward-looking indicator, show sales closed in April are likely to remain soft, with some drag possible in May as well, according to the National Association of Realtors®.
David Lereah, NAR’s chief economist, expected the decline. “Although the weather improved in March, we’re starting to see the effects of a decline in subprime lending and tighter lending standards,” he said. “Home sales will be relatively sluggish in the second quarter, but a modest uptrend should resume during the second half of this year.
“We’re fortunate to have a positive economic backdrop now with job growth and low mortgage interest rates to provide opportunities for buyers who’ve been on the sidelines or were unable to get into the market during the boom, especially with inventories favoring buyers.”
These articles clearly answer the Riddles of the past few years, or “the Conundrums”, as Greenspan called it.