Affordability Problem Inevitably Led To A Contraction
The Massachusetts realtors report on September sales. “The Massachusetts Association of REALTORS reported today that the number of single-family homes and condominiums sold in September were down over 13 percent compared to the same time last year while prices continue to remain steady. Despite the drop in sales in September, the third quarter was still the fourth most active third quarter since 1990.”
“‘Unfortunately, September wasn’t able to continue the year-to-year sales gains experienced in both July and August,’ said MAR President Doug Azarian. ‘It is definitely possible that all the reports about foreclosures, lack of financing, and the like have taken their toll and the result is that buyers are waiting on the sidelines.’”
“On a month-to-month basis, there was a 33.9 percent decrease compared to the 4,700 homes sold this past August. While a double-digit percentage decrease is typical from August to September, this was the biggest drop in over 10 years.”
“The inventory of residential properties…at the current sales pace represents approximately 12.1 months of supply. The average months of supply went up from the 7.6 months of supply seen in August, 2007.”
The Boston Globe from Massachusetts. “The summer mortgage crisis slammed the Massachusetts housing market in September, causing sales to plunge 18.7 percent.”
“Single-family home sales were 3,735 last month, down from 4,593 in September 2006, according to a monthly report from Warren Group. That was the largest decline in 12 months, when sales slid 22 percent below the previous year.”
“Realtors and analysts said prices are not dropping in line with sale totals because there are fewer and fewer homes on the market. Rather than selling for much lower prices, homeowners are simply not listing properties or are waiting out the downturn.”
“‘Inventory’s down because there’s so much doom and gloom being projected in the newspapers it’s causing people to withhold a potential sale,’ said Daniel Meegan, an agent in Salem and Beverly. Homeowners are afraid ‘they won’t be able to get the value they want out of their house,’ he said.”
“Terry Egan, editor in chief of Banker & Tradesman and other Warren publications, called September’s sales drop ’significant.’ ‘That’s reflective of what’s happening in the mortgage market,’ he said, referring to a credit crunch in July and August.”
The Boston Herald. “Experts said a sudden spike in ‘jumbo’ mortgage rates - those on loans larger than $417,000 - hit housing hard in September.”
“John Brodrick, a past president of the Massachusetts Mortgage Association, said jumbo rates ran about 1.5 percentage points higher than non-jumbo ones last month. That’s far above the normal spread of about 0.38 percent.”
“Greater Boston home foreclosures will create some $85 million in economic losses over the next two years through depressed property values, unpaid taxes and other hidden costs, a new study finds.”
“Kevin Cuff of the Massachusetts Mortgage Bankers Association said lenders are open to increased modifications ‘where appropriate…but there are cases where (a borrower’s finances are so bad) that nothing can be done.’”
“With home sales and prices dropping, it may seem like an odd time to be launching a residential real estate company. But Jon Gollinger, a veteran Boston-area real estate executive, believes he has found a sweet spot in a down market. The firm will offer a sales method steadily gaining popularity in the weak market - auctions.”
“The firm’s current focus is on so-called ‘accelerated marketing’ programs, culminating in an auction of a set of condos or homes. It is an area where Gollinger has already made a splash, having orchestrated an auction of dozens of condos last year in downtown Boston at the Folio project.”
“‘In almost every other market in the country anyone who has a new project coming out of the ground has got into a tough situation,’ Gollinger said.”
“In several markets across the country, there are now backlogs of unsold condos and homes, creating financial headaches for developers and banks. Gollinger’s pitch: He will get those units sold, maybe not at the original dream price, but at a number the builders and their financial backers can live with.”
The Enterprise from Massachusetts. “Becky Demling put her Norlen Park home up for sale earlier this month, but despite a few nibbles, she is still waiting for a buyer to bite. ‘People are coming to see it, we just have to be willing to go well below market value,’ says Demling.”
“The four-bedroom, 1.5 bath, Cape-style home…is now listed for $349,900, well below its $368,900 assessed value.”
The New York Post. “A sharp jump in the number of personal bankruptcy filings could signal growing economic uncertainty for the city. Crain’s New York Business reported yesterday that Chapter 7 and Chapter 13 filings in the five boroughs rose 69%, to 10,541, in the past year.”
“‘New York has not been immune to the housing downturn,’ an economist at the Fiscal Policy Institute, James Parrott, said, noting that an inability to pay high-interest loans and mortgages often leads people to declare bankruptcy.”
The Journal News from New York. “The sense that the market is changing is affecting buyer psychology, said Matt Mazzamurro, broker in Ossining. ‘Those with money are waiting for the bottom to fall further,’ he said.”
“Some homeowners have struggled to sell in the current market. Henry and Elizabeth Brauchler put their three-bedroom Yorktown house on the market in the spring of 2006 for $699,000. The house has been off and on the market since then, and is currently listed at $519,900.”
“‘I certainly won’t give it away,’ said Henry Brauchler. He said he thinks the increase in subprime mortgage lending has resulted in more foreclosures in the market.”
“‘There are some homeowners that have gotten money they shouldn’t have gotten, and that hurt us,’ he said.”
“In Putnam, Robert and Brenda Tracy decided last year to refinance their house in Kent so they could afford a larger house in Carmel. They bought the Carmel house in November, expecting they could sell the Kent house in a few months, ‘not knowing the market would take such a downturn,’ she said.”
“The Kent house, listed at $619,000 in the spring, remains unsold at an asking price of $499,900. Part of the problem is the trouble that potential buyers in the county are having in selling their own houses to trade up, Tracy said. High taxes and the reduced ease in obtaining mortgage money also are factors, she added.”
“‘We just take it day by day and hope one good buyer can come along,’ she said.”
From CBS 3 in Pennsylvania. “The real estate bubble has lost some of its air this year, but that doesn’t mean home sellers have to lose all hope. 3 This Old City condo has high ceilings, a chef’s kitchen and a private rooftop deck with a killer view.”
“Two years ago, it would have been snapped up in a day, but as the owner puts it on the market now, what can he expect?”
“‘We’re seeing things sit on the market longer than they have been,’ said real estate agent Chelsea Hardesty.”
“Real estate used to be all about, location, location, location, well maybe, but in a cool housing market, ‘I think the most important thing is price,’ Hardesty said.”
“Setting a realistic price is critical, especially in this buyers market. Not only do you want to attract the most potential buyers, but mortgage companies are not giving away money like they used to. If the house doesn’t appraise for the sale price, you could lose your buyer.”
The Record from New Jersey. “New Jersey builders have put on the brakes, cutting housing starts by 21 percent this year, the National Association of Home Builders said Tuesday. The builders are responding to a drop in demand from buyers.”
“‘The real estate market is in a severe and continuing contraction,’ said Patrick O’Keefe, president of the New Jersey Builders Association.”
“The housing downturn follows a boom that saw New Jersey house prices rise by about 85 percent in the first half of this decade. That far outstripped the rise in household incomes, O’Keefe said, ‘leading to an affordability problem that inevitably led to a contraction.’”
“According to the NAHB State Starts Forecast, about 24,800 housing units will be started this year in New Jersey — down significantly from the 31,400 housing starts of 2006 and the 35,000 of 2005. And builders are expected to keep production low in 2008, with about 24,200 housing starts.”
“‘People still want to buy homes; all you have to do is hit the right price,’ said Doug Fenichel, a spokesman for Red Bank-based Hovnanian Enterprises Inc., the state’s largest home builder.”
Money Magazine on Maryland. “The last time Sabrina Williams sold a home herself, she received a solid offer the first week, got her asking price of $319,000. Snap, just like that.”
“So when Williams and her husband recently decided to sell the three-bedroom townhouse they own in Germantown, Md., she figured she knew just what they had to do to find a suitable buyer.”
“‘We’d fluff up the towels, clean the carpets and buy a new chandelier,’ she says. ‘And in return we’d save thousands.’”
“But while that simple approach worked well when the couple sold their first home in 2004, that was then (then being one of the hottest real estate markets in decades) and this is now (when inventories of unsold homes are at their highest levels in nearly 15 years).”
“In the two months since they put their townhouse on the market, Williams and Cunningham haven’t gotten even one bid from a prospective buyer, and they’re already beginning to consider other options.”
“‘We can always knock down the price,’ Williams says. Or maybe, she muses, they’ll postpone selling until spring: ‘It’s not like we’re in a hurry.’”
The Daily Press from Virginia. “Builders scaled back on new housing permits by 16.9 percent the first eight months of this year compared with the same period of 2006, Old Dominion University economics researchers said.”
“The declines reflect builders’ recognition that inventory is reaching an all-time high — almost 200 percent more than in 2005, said Vinod Agarwal, an ODU economics professor. ODU Researchers released their quarterly forecast of the Hampton Roads regional economy.”
“‘Builders understand the market conditions, and they are reacting the way you would expect them to react,’ Agarwal said. And although sellers of existing homes have been slow to ratchet down prices, Agarwal said next year could see in Hampton Roads home prices fall by five percent or more.”
“‘It’s going to take some time for sellers to realize what’s happening in the marketplace,’ Agarwal said.”
“What’s happening is this: In 2004, through Sept. 30, there were 3,672 homes listed for sale. Through the same period this year, there were 14,426 active listings. The number of days on the market has risen to 66 days from 29 days.”
“‘It’s obvious the market is flooded,’ Agarwal said.”
“‘It is definitely possible that all the reports about foreclosures, lack of financing, and the like have taken their toll and the result is that buyers are waiting on the sidelines.’”
No, Doug. It is not the REPORTS of these problems that are taking their toll-these ARE the cause. Guys like this are still blaming the media….
BAH, psychology has nothing to do with it.
In LA at least, paying $6K a month for a POS was palatable when you thought it was netting you 20% returns a year. Now, you’re just paying $6K a month for a POS. Even if you don’t think it’s going to drop in the next year or more (idiot), that’s easily 2x the cost of renting.
Nothing but significant price drops will loosen the gears.
I spoke to a Realtor friend the other day who pitched the “yeah, well, everyone wants to live here crap” and I asked him “well, why didn’t everyone want to live here 5 years ago when these $1.5M houses were going for $400K?” He changed the subject quickly.
these ARE the cause.
yup.. and to take a step further back, the cause of foreclosures and tight credit is that prices have exceeded affordability.
A step further back reveals easy credit as the cause of tight credit..
imo, one more step back sees huge demand for high returns on MBS caused the easy credit.
And one step back from there shows lowering the rates led to the higher demand for MBSes.
So the solution is…. LOWER RATES? WTF?
after the dotcom and 9-11 problems, rather than chance economic recovery without intervention, the Fed cut rates to bolster investor and consumer confidence .. results were positive although, imo, its questionable if rate cuts played a big part.
rinse and repeat..
i’m pretty sure my 1st post was eaten in a disconnect..
After the dotcom bust and 9-11, the Fed decided to cut rates, bolstering consumer and investor confidence, instead of taking the chance on markets’ recovering without their intervention.
Recovery did happen although, imo, the rate cuts may not have played a large part in it.
the markets are again in trouble, so.. rinse and repeat..
I agree with you—in part. The media has played and will continue to play an important role in the meltdown just as it played a key role in the run-up.
I used to want to scream everytime I heard the words “red-hot” or better still “white-hot real estate market blah blah blah” All media reports came straight from the NAR with nary a countervailing opinion offered.
I’ll never forget the Boston Globe, no less, featuring a story about real estate etiquette for cocktail parties. It offered advice on how to field such delicate questions as “What did you get for your house?” That was a contrarian indicator if I ever heard one.
–
Monetary policy and media are the keys to controlling the economy for the benefit of a few. When you see lots of people making easy money you know how that game will turn out.
Jas
“Monetary policy and media are the keys to controlling the economy for the benefit of a few.”
I suppose someone “controls” the New York Times, the Washington Post, PBS, Fox, ABC, NBC, CBS.
Funny, did someone “control” them in 1995 as the market went up? In 1990, when real estate plunged? In 1974 when stocks plunged? In 1987 when stocks plunged? In 2004 when stocks increased?
Do “they” call one editor? All editors? Simultaneously? Do they bribe them with cash or do they blackmail them or do they just play along because they went to prep school together? And, after all of these years of “control” no one has ever ascended to any major media position who was not controllable?
This “conspiracy” crap is really, really tiresome. If the “few”, presumably “wired” people, really did have such control why on earth do they go to all this trouble? Why haven’t they sewn up EVERYTHING by now? Why don’t they just short the market, have Paulson declare a recession, and just sit back and rake in the money? Certainly, since they are all powerful, they have enough capital to buy a heck of a lot of out of the money puts and, since they control the timing, they certainly can bury any paper trail (assuming they can’t, somehow, control the regulators). Why bother screwing around if power and money is so easily controlled by the “few”?
Please, make sense of why people with such power and with such malign ambition don’t simply just get it over with and seize everything in one fell swoop. What, are they like cartoon characters who like to toy with their “prey” before killing them off?
This endless, universal, conspiracy stuff is really tiresome.
The only conspiracy I buy into, is the double dumbing down of this country…
The only conspiracy I buy into, is the double dumbing down of this country…
There you go again. Acting as if only market forces were responsible for the housing nonsense and as if the distortions occurred without TOP level tinkering.
If anyone is sick of something it is the rest of us fed up with your ongoing persistent denial.
Dunno, but is jag too young to remember not only relative editorial freedom (as opposed to toeing the corporate line of the venue involved) and actual reporting, the kind where large numbers of folk actually travelled to/interviewed participants (as opposed to cutting and pasting news releases and using file film).
What was our “free press” ranking this year? I believe it was 14th….. Oh, the beacon on the hill we are
Our “free” press has failed us, miserably.
MaryLee,
I agree. We once had real journalism in this country…now, Seymour Hersh still upholds the tradition at the New Yorker.
Otherwise, it is corporate ownership that dictates content.
And, under the new rules proposed by the admin., even local content is about to be controlled…no longer will different corporate entities own tv and newspapers in the same market…now one corporate parent, one point of view. The “watchdogs of the republic” are gone.
As for jag, now we know that Dana Perino posts here.
It’s not a conspiracy. News reporters/investigators are just lazy.
Reprinting press releases and doing “man in the street” interviews are a lot easier than actually getting to the bottom of the story, what with all those pesky requirements for getting a second source to confirm the first, tracking down people that may know something, “following the money”, etc.
Cramer says that the Merrill Mortgage meltdown screams inflation and the FED needs to cut rates to stave it off and save the economy.
He didn’t say “Boooya!” though.
So he’s saying cutting rates would stave off inflation?? Isn’t that bass ackwards??
No, Blano. That’s the New Logic(TM).
I read this morning that Australia is considering raising rates.
The Europeans want to raise also, which would strengthen their already-strong currency. The rest of the world doesn’t want to follow us on our self-destructive inflationary path.
Quote:
#####
The Europeans want to raise also, which would strengthen their already-strong currency. The rest of the world doesn’t want to follow us on our self-destructive inflationary path.
#####
Ooooo Weeeee, that will really kick the Americano $ down to the gutter. Yup, a pig gutter. I wonder when the Mexican peso will be a one-to-one exchange rate with the Americano $ ? Perhaps two years from today ? Heeeee, heeeee, heeeee…
This is what you get for voting damn stupid ASS-CLOWN in the office !
Haha. It hurts… because it’s true! I voted for said ass-clown thinking he could make even clearer the hypocrisy of america, and he has far surpassed my expectations. Oh well!
troll alert
Yes that is ass backwards!
But on WS - lowering rates is always the answer. Flood the world with cheap money and everything will be solved.
I meant deflation. DOH!
LOL - see what you started!
But deflation is the CPI and that is rents. We’re not there… yet.
Got popcorn?
Neil
Selected quotes from the original post:
1. Inventory’s down because there’s so much doom and gloom being projected in the newspapers it’s causing people to withhold a potential sale.
2. People are coming to see it, we just have to be willing to go well below market value.
3. I certainly won’t give it away.
Fire up the HBB artillery!
4. And the ever popular Hope for Spring Bounce eternal:
“We can always knock down the price,” Williams says. Or maybe, she muses, they’ll postpone selling until spring: “It’s not like we’re in a hurry.”
dam girl you dense
Not in a hurry? Yet? Well, her $350k+ mortgage rate adjusts from 5% up to 7% on December 1st! Seriously. So maybe she’s not in a hurry this month, but she will be by Christmas!!!
Meanwhile, her neighbor sold a very similar unit for $377k way back in March. When you add up Williams’ first mortgage at roughly $350k and the second mortgage at roughly $30k, there ain’t much room left for a commission!
I bet she’s pushing for way, way over $400k and finding NO TAKERS!
Actually, she might have the one that’s listed there for $395k. That’s about as low as they can go and not bring a big check to the closing table… just a small check.
Ok Slim, I’ll take door number 3 …if you don’t want to give it away,then don’t. Just keep paying on a depreciating asset until you burn thru every nickle. That will teach those ungrateful buyers to mess with you.
Or door number 2…those irritating folks tramping thru your home who are not being willing to fund your retirement and your future vacation plans are just tools of the damn media. Damn straight–the market price is always the price the seller wants…and don’t let anyone tell you any different.
And finally, door number one…it’s true, the media has conspired to prevent you from getting a fortune from your old POS. The bastards just don’t want you to be happy. If they would drop the doom and gloom and just stick to the fact that RE always and only goes up, you could unload your shack on some clueless fool and retire to easy street.
i don’t want any door! i want what’s behind the curtain!
Or how about what’s in this little McBox?
Monty Hall, out.
I would love to see an irrate investor “boooya” Cramer right in the chops. He’s so annoying.
I’d love to “boooya” Cramer wih one of my Joshua trees, but not in the chops. I have another orifice in mind.
One of my stocks (SGR) apparently was touted by Cramer last night. I’m pretty sure that means I need to sell it today.
Six or so weeks ago, Cramer recommended Countrywide as a “buy”. Then, it was around $19 a share, today, it hit a new 52-week low at $14.47.
So much for their latest plan to “help” their borrowers.
give it 3 days or so for his followers to bounce it up, and then sell.
“‘We can always knock down the price,’ Williams says.”
That’s what I would recommend!
They won’t have to knock down the price.. comps will do it for them.
They are OBVIOUSLY not fluffing-up the carpets the right way. Duh!
d’oh! they need a fluffer!
same time last year while prices continue to remain steady.
really, I have a house I’d love to sell you at 06 prices
the moving median seemed to have msnbc confused today too
FSBO-ing is easy
price right and 3rd party the lawyer’s part and bang, it’s sold
Even the lawyer part will get streamlined in the next 10 years.
Most of that is cut-and-paste.
I’m hoping for loser pays and judge inquisitor
How much of it is cut-and-paste probably varies from state-to-state. Also, most of us will spend a large amount of money on a few housing transactions; and won’t know what is normal, cut-and-paste, or something odd.
Spending a couple of thousand dollars to have a competent lawyer review one of the the most important legal documents you’ll sign doesn’t seem like the right place to cut corners.
flatffplan, you keep saying that over and over for months. I wouldn’t say FSBO is easy. It’s manageable, sure, but not easy.
Sure, the paperwork is easy when you just have the lawyer handle it all (we did), but there’s a lot of adverts and showings that can take more time than some people have, especially if the property is priced just a tad higher than most want to pay, meaning lots of showings and sales pitches.
There’s also the problem of emotional attachment to houses. Some people can’t make the process “easy” because they just are in no way sales oriented. They could price the house low enough to sell itself, so to speak, but that’s not necessarily a good thing.
Not that I’m promoting giving the business to the realtor, but it’s not easy like (for example) selling a car.
I hear that alot in my neighborhood
“Well I wont GIVE it away”
Oh please…..
How about instead
“Gee I hope the bank doesn’t TAKE it away”
“Greater Boston home foreclosures will create some $85 million in economic losses over the next two years through depressed property values, unpaid taxes and other hidden costs, a new study finds.”
Here little hungry Alligator…here Boy !!!
“‘We’d fluff up the towels, clean the carpets and buy a new chandelier,’ she says. ‘And in return we’d save thousands.’”
I hated reading things like this: People spending $100 in order to get 100k more for a house. I always wondered about the fact that anyone with a brain would surely realize that the carpet, paint, appliances, ceiling fans and other trinkety crap could be bought for nothing at Wal-Mart. Why would it automatically make the house worth 20% more?
What’s doubly stupid is that do you all recall all those flipper shows? Well believe it or not, quite a few of them are STILL on. They seem to have changed their formula a bit though. I saw a show last night where a couple of cuty-pie women had fixed up what looked like a glamorized shed in California. They paud 385k, slapped on some paint, put up a fence, hardwood floors. Here’s the catch though: At the end of the show, the only thing that happened was that a realtor came in and suggested what it was now worth. The part where they actually sell it and realize their profit is now cut from the show. Hmmm… could it be because these flippers can’t actually sell them for what they think they can get?
yes, I’ve noticed the change too. But I have seen a few episodes that actually ended with the house on the market, no takers. Its the first dose of reality to hit TLC!
Back in the olden days, you couldn’t expect home remodels to bring back much more than you put into them. In fact, you’d only realize a 90% return on what you spent. Which means that you’d still be out 10%. With odds like that, you might as well just go to Vegas and enjoy blowing your money.
People keep forgetting that there are only certain remodels/upgrades that will net a return on the money spent. And with that, it’s not always a 100% return. All they have to do is their homework. The information is easy to find, and then they wouldn’t be so surprised when no one nibbles or is as impressed with the work as they are.
http://www.cnn.com/2007/US/03/14/renovations.investment/
BayQT~
This is where the sweat equity used to come in… i.e. you made money back on your time investment in doing the work yourself, not paying to have professional contractors and/or GC’s do it for you (at a much higher expense).
“The Massachusetts Association of REALTORS reported today that the number of single-family homes and condominiums sold in September were down over 13 percent compared to the same time last year while prices continue to remain steady. Despite the drop in sales in September, the third quarter was still the fourth most active third quarter since 1990.”
Why do they insist on typing REALTORS in all caps? Is it an attempt by attention whore realtors screaming “HEY!!! LOOK AT ME!!!!!!!”
4th most active qtr since 1990. LMFAO!!!!
in 1990 lobster “lobsta” was 3 $ a pound ………
depression in Bahstin
The California realtors sometimes capitalize all of the words.
gotta hand it to them.. they run a very effective campaign.. almost everyone gives them credit for being something more than common salespeople.
“But Jon Gollinger, a veteran Boston-area real estate executive, believes he has found a sweet spot in a down market. The firm will offer a sales method steadily gaining popularity in the weak market - auctions.”
Criminy, like auctions are a new discovery. Yeah, there’s a sweet spot, sweet like the scent of rotting flesh.
“sweet spot”, and now, a Sweet Deal alert!
Hopefully, no one out their gives realtors , financial talking heads, and mortgage brokers any credence to what they spew. They are desperate for suckers. People that think with more than their brain stem realize the whole country has been shystered. Why do you think the GOP in the late 90’s pushed so hard for everything to be deregulated. Then here comes along The Village Idiot, cutting taxes while waging a trillion dollar war that is unwinnable. But hold on to your wallet, because the Wall Streeters and their cronies will be bailed out as soon as the SM bubble burst. We wouldn’t want the filthy rich to suffer…how inhuman. They were all cohorts in this sham.
My heart goes out to those that trusted what the pondscum said. They truly are the losers.
After the near complete dumbing down of this country, the maestros trump out their big word combinations, to easily bamboozle our vast idiotocracy, about how bad things are…
“Affordability Problem Inevitably Led To A Contraction”
“‘We just take it day by day and hope one good buyer can come along,’ she said.”
Being that one good buyer myself I’m having to beat realtors off with the proverbial stick. Be forewarned before telling a realtor(s) that you have 20% down, are employed, solid fico and first and foremost No CONTINGENCIES. The last one practically started salivating.
As I stated a few days ago a realtor said to me that “there are 4 buyers for that property, but they all contingencies”. OOPS!
I have really rubbed that in with some realtors.. I LOVE being so WANTED!!
ring around the rosey,
the housing market is crashing
renter, renter
with 20% down!
HA
As much as I love my wife, sometimes I do wish I were single, with the 20% down and whatnot. heh
Beating realtors off……anybody want to go there???
No way! Realtors are germy. Besides, they don’t have any money anymore.
I’m bringing renting back….
“Experts said a sudden spike in ‘jumbo’ mortgage rates - those on loans larger than $417,000 - hit housing hard in September.”
In the jumbo jangle mourning, nobody’s buying.
Feeling depressed with all this horrifying housing news?
Eyes leaking water into coffee cup?
All bent out of shape?
Chewing nails and spitting tacks?
Ready to go postal?
Now now, I’ve just the thing to make ya feel all warm and fuzzy, my fellow Bostonians!
Smiles,
Leigh
http://tinyurl.com/yoslal
Hub group, Countrywide in deal
“NACA will rewrite loans in much the same way that bankruptcy courts calculate how much debtors can afford to pay each month. The nonprofit will take a borrower’s post-tax income and subtract from it recurring expenses, $200 a month for sundry expenses, and the actual amount the borrower spends on property taxes and homeowner’s insurance. What remains is the money available for a mortgage payment.”
I wonder if the HD cable box is a recurring expense?
In most cases, the loans that Countrywide services are owned by investors. The company has promised to seek permission from those investors to modify the loan terms so borrowers’ monthly payments are no more than the maximum NACA says they can afford.
these naca activists are venturing way beyond their depth.. their idealism won’t appeal to investors.. Nothing will come of their efforts.
Countrywide pays them lip service to keep them quiet for the time being..
Jim Rogers quits dollar after declaring US recession
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/10/24/bcnrog124.xml
“All other things being equal during the next six months, that’s the way I will go…
he’s gonna wait 6 months? If he’s sure of his position I have to wonder why he’s waiting…
Yeah, he also put his NY property up for sale and was moving to Asia, if memory serves. Wish he’d hurry up.
Owns a landmarked townhouse on Riverside at 107th. Place is empty and unsold.
You don’t move positions that size in one trade - unless you really want to throw money away.
True
Except when it is time to panic.
perhaps.. but another question remains.. Why broadcast your intentions on a big trade?
I won’t accept altruism or stupidity as excuses..
Liquidity, Liquidity, Liquidity
“Real estate used to be all about, location, location, location, well maybe, but in a cool housing market, ‘I think the most important thing is price,’ Hardesty said.”
I thought this axiom was more about starting a business than buying a home?
‘Inventory’s down because there’s so much doom and gloom being projected in the newspapers it’s causing people to withhold a potential sale’
Potential sale? I’m amazed out some of the catch phrases that make everything an absolute without making it absolute.
How about a Top 100 of Favorite RE Catch Phrases? Rules: Must be 1 sentence, under 10 words.
I think we did that one time in a weekend topics thread, but here’s my fave: WON’T LAST! A fitting epitaph for the bubble.
This continues to be a setup for the next Administrtion which looks like a Democratic one. I can see it now, the President in this case Sen Clinton takes her oath in Jan and come Feb 1st you know what hits the fan. Inflation could return to the Carter years so hold on to your hat, somebody is going to be left holding the bag and i think it will be a bag of unpaid bills and interest due?
Yeah, just like the “setup” that had the market tank in 2000 and the economy go into recession in 2001….just after Bush got into office.
What I don’t understand was how Clinton managed to “setup” Bush then? I can easily see how Bush is “setting up” Clinton, now (of course).
OT, but, Cripes, what a boring market today. I wanna see some real blood and guts. This controlled crash is like being stoned to death by popcorn.
Eat your popcorn and enjoy it.
Boring? Do you think the PPT acted today? Look at post 2pm….
Direct correlation with Dollar/Yen.
Check out
http://quotes.ino.com/chart/?s=FOREX_USDJPY&v=s&w=1&t=f&a=0
I think you would be better off looking at euroyen vs S&P500. Dollaryen correlation is 0.72 ; euroyen is 0.94.
The dollaryen range has been narrow all day.
“Do you think the PPT acted today?”
Uh, yeah. so, it went from boring to stupid, like it always does.
To me it makes zero sense to even consider another rate cut. As it is right now at the current rate, US goods and services ( or at least US brands) are selling well in countries like China, India, and the Pacific rim.
That’s all I hear these days in economic shows, which is that while companies like GM might have slumping sales in the US, they’re selling cars like gangbusters in China. Think about it- wouldn’t it be GOOD for the US to actually have an economy based on selling goods and services to other countries? Why- we’d actually start making REAL money from other countries versus money from the US middle class in the form of debt.
Rate cutting would send a strong negative message to some of our trading partners. It would also in the long run hurt US consumers. I see no reasoning for protecting an economy that has been making cash from debt. I do see reason to further trade with other countries. Lowering rates is a sure-fire way to halt that progress.
“The housing downturn follows a boom that saw New Jersey house prices rise by about 85 percent in the first half of this decade. That far outstripped the rise in household incomes, O’Keefe said, ‘leading to an affordability problem that inevitably led to a contraction.’”
But first the loose lending standards problem inevitably led to an affordability problem.
“The four-bedroom, 1.5 bath, Cape-style home…is now listed for $349,900, well below its $368,900 assessed value.”
WELL BELOW?!?!? OMG, $19,000 is not *well below*. That’s only five percent!!!
This what i mean, a builder has a home sitting for a year at 500k they reduce it to 425k, in reality the home was markerted two years ago same builder at 350k, the real price should be 275k again fuzzy math, no wonder nothing sells?
“What’s happening is this: In 2004, through Sept. 30, there were 3,672 homes listed for sale. Through the same period this year, there were 14,426 active listings. The number of days on the market has risen to 66 days from 29 days.”
Why don’t I believe that DOM figure? Because it does not account for homes that were listed then withdrawn from the market because they were priced to never sell. And it is further biased by homes taken off the market then relisted as new, resetting the DOM clock.
“‘We’d fluff up the towels, clean the carpets and buy a new chandelier,’ she says. ‘And in return we’d save thousands.’”
She forgot about feeding the squirrels
Here’s the source article, dated June 20, 2005. What a riot.
http://www.realestatejournal.com/buysell/tactics/20050620-efrati.html
Thank you for that wonderful treasure from the past!
she forgot about feeding the squirrels to the buyers
Bloomberg is making a big deal about Jim Rogers selling US dollars and buying yen, yaun and swiss francs. He says the US dollar is “doomed”.
What does this have to do with housing ? If the dollar is indeed doomed, US interest rates are going to skyrocket to support it. That means much higher mortgage rates and that will depress housing even further !
We are NOWHERE near the bottom of this. And it is NOT contained, unless the container is the global economy.
Plenty to do with housing market, though the reason for higher rates may not be as you said.
The trigger for the lower dollar will be lower S/T interest rates where this is the only lever the fed can control.
As we’ve already seen, this will drive a sell off in long term bonds by foreigners whose small interest rate return will be wiped out by the worse ROE to bring $ back to local currency. The yields in long term rates will go up to attract buyers. Many fixed mortgages are coupled to LT interest rates.
ARMs on other hand are linked to LIBOR rate not fed rates but are tainted goods as investment vehicles.
“If the dollar is indeed doomed, US interest rates are going to skyrocket to support it.”
The dollar may not be doomed, but lowering interest rates will show the world that the US doesn’t care about the dollar. Lowering the interest rates may doom the dollar. The only cure in the governments books for defending the dollar is “war”. Contrary to what Mr. Paulson says about “a strong dollar is in the best interest of the US”, the governments position is to weaken the dollar. A weak dollar is in Wall Streets best interest.
Jeezuz, Ben: who opened the gates to Dumbass Ranch?
That would be a good weekend topic!
?????????
I’m a little slow on the uptake today.
Don’t feel bad, I’m not sure what she’s referring to either. But that’s nothing new, only ’cause I’ve just begun climbing a very steep learning curve here.
Nonsense, you post all sorts of smart words. You, sir, are not gargling with your brain. I just like words, and it pains me to see a good word like ‘muse’ being misapplied to this apple-noggin lady.
I
It’s Official: Homebuilding’s Lost It
http://www.fool.com/investing/general/2007/10/24/its-official-homebuildings-lost-it.aspx
Bank of America’s investment in CFC has lost 400m thus far.
Atta boy!
Thanks. I’d forgotten about that “smart” move.
“In Putnam, Robert and Brenda Tracy decided last year to refinance their house in Kent so they could afford a larger house in Carmel. They bought the Carmel house in November, expecting they could sell the Kent house in a few months, ‘not knowing the market would take such a downturn,’ she said.”
“The Kent house, listed at $619,000 in the spring, remains unsold at an asking price of $499,900. Part of the problem is the trouble that potential buyers in the county are having in selling their own houses to trade up, Tracy said. High taxes and the reduced ease in obtaining mortgage money also are factors, she added.”
“‘We just take it day by day and hope one good buyer can come along,’ she said.”
I used to live in Carmel when I first moved here. The taxes alone have to be eating these people alive. I’m just guessing but I’d say $1000 a month in taxes alone, not to mention heating both places (gotta keep heat to 45degrees minimum in the winter or watch it fall apart)…
$1000 a month in taxes alone
Holy cow, and I thought Texas was bad. FB’s indeed.
That area used to have high taxes but reasonable housing prices, no more.
45 degrees is too low. The corners of rooms and the plumbing in the walls and beneath the floors will get below freezing, with disastrous results. One of my neighbors went home to Iowa to visit his family over Christmas vacation a few years ago and lowered his thermostat to 50 degrees. His plumbing froze upstairs, then thawed out, releasing water that cascaded thru the floor, then the ceiling of the first floor, ruining much of his house. Trying to save $50 on heat cost him many thousands and many weeks of repairs.
45 works here on newer structures but all rooms have to be heated. I’ve never had a problem with 45 even in the bitterest stretches of winter in Vermont and New Hampshire. I don’t think I’d try it on old structures with cotton insulation and plaster and lath walls.
Home builders forecast: Not at bottom yet
http://biz.yahoo.com/cnnm/071024/102407_builders_forecast.html?.v=2
“‘There are some homeowners that have gotten money they shouldn’t have gotten, and that hurt us,’ he said.”
This to me is the funniest comment of all. No honey, if banks had not lended money to people who had no business getting a loan in the first place, then the “value” of your house would never have increased as much as it did. So I suppose if you mean, subprime borrowers getting money have led to your delusions of grandeur about some mythical market value of your home, then perhaps you’re right. Because if it weren’t for such lax lending policies, the “value” of your home would not have gotten than high in the first place.
The logic is WARPED beyond imagination. I have to say that phenomena isn’t associated with housing only. Its everywhere. Debt is good, saving is bad, Peace is war, anger is kindness, slavery is freedom, etc. The wacked out mantra sometimes makes me think I fell asleep and awoke in a parallel universe where people continually babbling like idiots.
the “value” of your home would (should) not have gotten than high in the first place.
this is what i could never understand. why do people think they “deserve” to get rich off the false wealth this bubble created? they did nothing but sign a loan document!
“‘We can always knock down the price,’ Williams says. Or maybe, she muses, they’ll postpone selling until spring: ‘It’s not like we’re in a hurry.’”
See, to me the word ‘muses’ implies that there is some contemplation going on inside the mind of the person. Reflection, pondering, weighing of externalities, etc. As if the person has one of those thinky pink brain thingies, and they are using it.
But that’s not what’s happening here. This person is simply gargling with her brain.
This person is simply gargling with her brain.
Hence a decedent of J6P.
People won’t think. That’s why in a year they will panic. Cest la vie.
Got popcorn?
Neil
OK, PB, I’m on board with you about the PPT. I just watched the Dow rise from -100 to even in 10 minutes.
Rumor of anoter 50 bp intermeeting rate cut.
What a crock of crap.
This is ridiculous. Something is not kosher. This always happens at 2pm et.
Not sure what the deal is - PPT or strange that rumors get generated at 2pm.
There’s always the “Chinese bid” too.
It’s enough to put a person in the nut bin.
Its a non event to get weak sisters out of positions. I do like the idea of the Chinese bid.
This says it all. Perfect double bottom
http://finance.yahoo.com/q/bc?s=%5EDJI&t=1d
I was going to ask you about the double bottom. What do it mean? (If I don’t step away from the computer, I’m gonna have a double bottom…)
double bottom: the symmetry IS amazing in that…
“When rumours increase, and when there is an abundance of noise and clamour, believe the second report.”
Alexander Pope
All of the economic news is bad, particularly today. WTF?
Thanks, TX and Hoz. I didn’t understand your short explanations at first. How lovely that a false rumor can move the stock market up 200 points. Sheesh.
“What’s happening is this: In 2004, through Sept. 30, there were 3,672 homes listed for sale. Through the same period this year, there were 14,426 active listings. The number of days on the market has risen to 66 days from 29 days.”
“‘It’s obvious the market is flooded,’ Agarwal said.”
The “Jonestown” Flood of ‘07…
Drinks on the “house”
I noticed that the usual 3:00 rally from bad news started about 30 minutes early today. Can anyone tell me why this seems to happen on an almost regular basis? I don’t know how many times I see the market down 200 at noon only to rally up at the close? Is bad news swept under the carpet that quickly? Is the anticipation of inflation and dollar depreciation that much of a stock market driver? Bad news is good because that means the fed will further lower rates? Merely confused.
Countrywide wins over critics
The company extends foreclosure-preventive assistance for almost all its hybrid ARM borrowers.
http://money.cnn.com/2007/10/24/real_estate/Countrywide_plan_wins_support/index.htm?source=yahoo_quote
From the Countrywide story. Take note of the final graf:
Michael Shea, housing director of the Association of Community Organizations for Reform Now (ACORN), also remained skeptical. “It raises more questions than it answers,” he said. “The devil is in the details.”
Shea pointed out, on the affordability equation, for example, the question is what expenses will Countrywide include when figuring out how many dollars are left in the budget for mortgage payments? Will it take into account car loans? If they don’t, that may be fine for someone living in Boston or New York, but not places like California, where many of their subprime borrowers live.
In addition, Shea wondered if Countrywide can handle the volume of loans involved, especially given the degree of scrutiny the company will have to put borrowers through.
“It’s ironic,” said Shea. “After giving out loans like candy, now they want to know where every last dollar of income came from. When you have millions of delinquent borrowers you don’t have time to do this.”
Add 2.4 trillion for Middle East war adventures to our future debt.
I think that works out to 8000 bucks a person. ie for that money every family in the US could get a new hybrid or diesel car, or solar panels, ect. The price of oil would crash and we would have done far more to reduce terrorism than this. What a travesty.
Amen, Easton, amen.
Amen again. add to that health care for all the millions of kids without it. a travesty indeed.
“The four-bedroom, 1.5 bath, Cape-style home…is now listed for $349,900, well below its $368,900 assessed value.”
who’s hat did you pull out this assessment. Assessments mean jack. I pay what i want or walk. Bye!
“Affordability Problem Inevitably Led To A Contraction”
That’s what Ponzi/pyramid schemes do.
“Some homeowners have struggled to sell in the current market. Henry and Elizabeth Brauchler put their three-bedroom Yorktown house on the market in the spring of 2006 for $699,000. The house has been off and on the market since then, and is currently listed at $519,900.”
“‘I certainly won’t give it away,’ said Henry Brauchler. He said he thinks the increase in subprime mortgage lending has resulted in more foreclosures in the market.”
Give it away. Okay I offer $1. make you happy now! Good luck selling with that attitude, boy!
“‘We just take it day by day and hope one good buyer can come along,’ she said.”
===========
One good buyer = 1 good FOOL!
“‘The real estate market is in a severe and continuing contraction,’ said Patrick O’Keefe, president of the New Jersey Builders Association.”
“The housing downturn follows a boom that saw New Jersey house prices rise by about 85 percent in the first half of this decade. That far outstripped the rise in household incomes, O’Keefe said, ‘leading to an affordability problem that inevitably led to a contraction.’”
Nice observation you dumb parrot. I bet you weren’t saying this 2 years ago.