A Silver Lining, Because This Was Going To Have To Happen
It’s Friday desk clearing time for this blogger. “Residential real estate prices in Juneau have dropped 5.6% since last October. The Southeast Alaska MLS also shows more homes in Alaska’s capital city are on the market, and they are taking almost a month longer to sell.”
“Wolverton Homes likes to have about 20 available homes on the market in Twin Falls County, Idaho, but when that number crept up to 30, the company decided to organize the first-ever ‘72 Hour Choose Your Rebate’ sale in the region. ‘Our sale was successful,’ said Marketing Director Justin Winson. ‘Now that we got some of those homes sold we can pull another 25 building permits and give our subcontractors enough work over winter.’”
“Many homeowners in the Buffalo Niagara region find themselves struggling to keep up, as rising adjustable- rate mortgage payments combine with falling home values to push them over the edge. A Cheektowaga mother of four shocked four lawmakers as she told them of the $1,200 monthly payment that in a year has turned into $3,300 because of fees and escrow, and threatens to soar to $5,000 in January when the rate resets from 9.75 percent to 16.75 percent.”
“‘We didn’t walk into this to lose our home,’ said the woman. ‘I need help. I need help quick. I don’t want to lose our house.’”
“‘This is an issue that affects each and every one of us, because it affects our property values,’ said Senator Jeffrey D. Klein. ‘We have to make sure this doesn’t happen again.’”
“The subprime mortgage crisis on the mainland so far has been muted here, but even in Hawaii it is dampening demand among second-home buyers, real estate industry experts said yesterday.”
“‘Those California buyers who were buying second homes and condominiums in the $400,000s to $500,000s range are susceptible,’ said on Whittington, regional manager of Countrywide Home Loans in Hawaii.”
“Vacant houses, upset speculators and homeowners left with few answers and little money in the bank, that’s the stark reality for foreclosures in Nevada.”
“It’s a twisted cycle. The government blames the lenders. Lenders blame homeowners. Homeowners in turn want help from the government. The government says there is no money and few solutions.”
“State Senator Warren Hardy said, What obligation does the legislature have to step in and protect them? It’s just investors like Wall Street. ‘What we’re talking about here is speculators who have come into the market and gambled and lost. And I just don’t think the legislature has a role in bailing them out or helping them.’”
“Millions of Australians jumped onto the real-estate bandwagon, spurred also by new sources of financing from nonbank lenders. The median price for a house in Australia is now A$423,900, roughly 70 percent more than in the U.S. During the same period, wages have risen only 19 percent.”
“‘We have to get a mortgage of more than half a million dollars for a unit,’ said Ben Ommundson, who rents a two-bedroom apartment with his partner in a suburb of Sydney, where prices have gained 37 percent in five years. ‘It’s almost impossible to get into the market,’ he said, even with an annual household income of A$130,000.”
“Lanka Rating Agency has warned of a possible slump in the property market which has been growing rapidly in recent years and shows signs of a classic ‘bubble.’ ‘Sri Lanka too has seen the property market being driven by the prospects of the cease-fire and the economic dividends that followed,’ said the statement.”
“‘Over the past decade real estate prices have sky rocketed reaching dizzying heights, setting the stage for a classic real-estate bubble,’ LRA said. ‘The real estate bubble implies that real estate prices are at a high level despite worsening fundamentals, and feed on investors’ expectations that the prices of property will continue to rise even though it is already overvalued.’”
“‘At this juncture it would be wise to step back and take a look at the experiences of South East Asia and the 1997-1998 crises which is largely blamed on lending excessively for real estate.’”
“The Shanghai property market is slowing after a new policy was released last month to curb speculation, prompting investors to put the brakes on. Only 2,674 apartments were sold from October 1 to October 7, only a third of the sales in the last week of September, according to Soufun.com.”
“Shen Jianbin, a 30-year-old senior technical manager, said he would wait for housing prices to go down to a more affordable level. ‘The latest government measures to curb soaring housing prices have strengthened my resolve to wait for a more reasonable price,’ said Shen.”
“The nation’s housing stock increased by nearly 2 million units in the past year, but two-thirds of those newly built homes stand vacant, the Census Bureau reported Friday.”
“The trend toward second homes is evident in the government data, accounting for most of the new housing stock. The number of unoccupied seasonal homes rose by 14% to 4.6 million, while the number of vacant year-round homes that are neither for rent nor for sale rose by 8% to 7.4 million.”
“Only about 11% of the extra vacant units were for sale at the end of the quarter. The number of vacant housing units for sale rose by 139,000, or 7%, to 2.1 million. Vacant units for sale spiked by 38% in 2006.”
“The combination of overbuilding by home builders in the middle of the decade and problems in mortgage markets this year that made it more difficult for buyers to get the financing they needed to buy a home has swelled the inventory of vacant homes on the market.”
“Those who bought homes or condos as investments during the real estate and building booms of a couple of years ago have found an exceptionally weak market for their property. That in turn has lifted the number of vacant homes for sale by 57 percent in just the last three years. And some see the situation only getting worse.”
“‘It’s really striking how high that is compared to historic levels,’ said Dean Baker, co-founder of the Center for Economic and Policy Research. ‘It’s a lot of homes sitting there vacant. It’s very hard to see how we’re near a bottom, when you have that much excess supply.’”
“‘It’s very hard to see how this doesn’t get worse,’ Baker said. ‘It’s certainly possible we could see 3 million, maybe 4 million (vacant homes on the market.)’”
“Wednesday the National Association of Realtors reported that the pace of sales of existing single family homes fell to the lowest level since 1998 in September. Its reading for the sales rate for all existing homes, including condos and other multi-family units, was the lowest since it started tracking those sales in 1999.”
“Today’s housing news news may have a silver lining, if only because ‘this was going to have to happen.’ So says Pat McPherron, an economist at Moody’s Economy.com.”
“He tells John Wordock that ‘there’s an excess supply in the market’ and until home prices come down further, people will keep on ‘walking by the window’ and they won’t buy. McPherron suggests home sellers ‘put themselves in the buyer’s perspective’ and drop prices now.”
Another huge week of building a housing bubble consensus! My thanks to those who support this blog. Please check back this weekend for news, your market observations and topics.
What a weak it was…
I assumed you would be hammered by now. With gold over $780 per ounce, I figured there would be an aladinsane sandwich between two strippers with enough silicon to make a server farm.
Yes, Gold and Silver have really been on the move this last week. I am almost tempted to liquidate my metal and take a good profit, but with my luch it would go onto $1500 /oz
As hyperinflation hits, ala Argentina 2002 style (2/3rds loss of value in the greenback)
Mellow Yellow will be worth around $2300.00 per troy ounce, without even going up, elsewhere in the world, pricewise.
http://en.wikipedia.org/wiki/Argentine_economic_crisis_(1999-2002)
Get this one, Ben. I found out today that Monday a guy will be starting in the office next to me that is a recent layoff of Countrywide Mortgage. It felt like Christmas when I was told that one. I’m guessing I might have some stories to share with all of my good HBBers. What would you like for Christmas, Mr. Jones? What is that little treat that you would like to have? It could be a cheese ball, a bottle of Jack Daniels (my personal favorite), an Omaha steak box or even a good book. I’m making my list and checking it twice.
so City boy, I got the Peter Shiff book from a one Carrie Ann, read it, loved it..signed it.. sent it on to a one Richard Carr, Commercial Real Estate somewhere in LA…funny, I had to advertising it on this site, twice…hey rich, ya’ still lurkin?
Here is gem from an LA realtor:
“If you think that this is not a buyer’s market, you would be wrong. The definition is that when supply exceeds demand, it is a buyer’s market. Well, at this time, the supply of houses exceeds demand. It’s not a bad time to buy if you get a good deal. Buyer’s are still out there buying houses. They know that the prices will come down some more and they make their offers accordingly. They also know that the prices will also come back up. This market is bottoming out, we all know that. When all the ARM’s come due and they sell in foreclosure, the inventory will decrease once again. The number of ARM’s is a finite number. The no money down, low money down days are over so now it’s just a matter of time before it cycles through. We will see the last of these forclosures on ARM’s in two years. The buyers who claim to be sitting and waiting are the same buyers whos sat and waited before the first boom and they are likely to sit and wait until the prices have already started to rise again.”
The buyers who claim to be sitting and waiting are the same buyers whos sat and waited before the first boom and they are likely to sit and wait until the prices have already started to rise again.
I keep hearing that BS. Yea, I realize its just part of the anger at their loss of income, but apparently math isn’t the RE’s strong suit. We’ll buy when the stats say its a good time to buy. This must be in some NAR newsletter for this is something that has cropped up everywhere. Its a favorite comment this week of trolls on quite a few RE blogs.
Oh well. This too shall pass.
Got popcorn?
Neil
“This too shall pass.”
Like a javelin through your lower intestines.
He does have a bit of a point. I think those of us on the sidelines have to be smart and not think we are going to time the exact bottom. I am not saying I’d rush out and buy now, but if the house I want gets within 10% of what I want to spend and I think there is value there, then I’d probably pursue it, provided the numbers work for me.
I know I’m just asking for it with that comment, but I would be naive to think I can spot the exact bottom or turning point.
I have no plans to ever buy again. “If I leave here tomorrow, will you still remember me?” I’m as free as a bird and I won’t trade that for any “ownership society” concocted by any financial gangsters any time soon. They can come within 10% of giving me a rim job and I won’t care. That’s just the way it is.
I agree with you, NYCB. I’ve been so turned off by the thought of homeownership that I am beginning to treasure the freedoms of renting - I’m not tied down to a particular state, I don’t have to worry about hurricanes or the Florida state legislature’s comedic attempts at property tax reform. All the homes in my neighborhood seem tainted.
Maybe we should start a “last man club” as they had during the dustbowl.
Do you remember the times in your life when you had ‘the’ moment?
I had one of those in the last two years after selling my house. As a single I thought, why bother owning, ever? Of course if it was dirt cheap, I would.
But not owning does provide freedom. I like it.
Another thought - maybe the potential buyers “sitting on the sidelines” aren’t really potential buyers at all. I have a house. It’s all the house I’ll ever need. I doubt that I’ll ever buy another house again. Even if it was new. They can build ‘em, but I won’t come.
Well I’d rather buy after a 5% increase after a 50% decrease then after just a 20% decrease. Apparently prices will never decrease in southbay LA. LOL
Pen,
I agree. I’m not going to sweat the last $100k. However, we have a long ways to go until $1.2M homes are within $100k of the bottom. There is a time-value bit to owning a home, but not at today’s monthly costs.
Let’s see… homes are overpriced on a monthly cost basis by at least 150% in LA. But wait, that assumes my competition has a down payment. Bwaaa haaa ha! You see, I’ll know my competition by then (you guys) and I’m sure we won’t have any issues.
Got popcorn?
Neil
right..for me, in my area, there is a home that I really like priced now at around $750k.. if that house was suddenly $550k, I wouldn’t wait for it to be $500k..
I’m not saying it’s different here, but as much as I’d like to see it, I don’t see $750k, becoming $400k, unless the $750k is some crack-head hallucination price.
Pen,
At the end of the day it is your money. But another way to say $500K is “Half of a Million Dollars”. I can not ever imagine spending that much money on anything in life.
At least to me, the people who talk about timing the bottom or having a fixed dollar amount before they buy, is almost like someone saying that they always wanted to buy a ticket fora first class cabin on a ship. If it reaches a certain point they would purchase. But at this point this still looks like the Titantic to me, and regardless of where your ticket is, the ship will be going down.
As mentioned by people above, I really enjoy renting, especially the freedom of moving minus moving fees and the penalty for breaking a lease, but that pails in comparison to all the expenses it takes to sell a house.
I think that some people are happier owning than renting. Probably people like us who have jobs with which we are satisfied. We pay $10,000 cash every six years for a cheap car, we don’t like restaurants, and we don’t travel a lot. We like cooking a nice meal at home, reading, watching TV, entertaining family and friends, and enjoying our house and yard. We pay a lot of money in taxes and upkeep, but to us it’s worth it. We waited until we were 40 years old to buy a house to make sure we could afford it, and we like it a lot more than renting.
Yeah, but not everyone on the Titanic died. In fact, there was a strong association between level of accommodation and likelihood of dying, even if you control for “women and children first” (I know, I did this for a class demonstration I gave to students).
The analogy here is that those who buy smartly (or don’t buy smartly) will have a better chance of surviving what is to come. In other words, the counsel is not “buy” or “don’t buy” but, instead, “do whatever you want to do but back the action with solid thinking and an awareness of the tradeoffs and risks.” In other words, what people should’ve always been doing. Then, after that, “win” or “lose,” at least you’ve done the best you felt you could.
IAT
Any sense of urgency to get in at the bottom is just a symptom of the hangover, imo
After the feverish mania burns itself out and prices return to affordability / normality, housing will not turn tail and shoot up in price.
Just as there is no problem affording tulip bulbs today, there will be no problem with houses tomorrow. “Investing” in RE, as happened in tulips, will be a thing of the past.
Good post. And a nice analogy. Last weekend I bought a bag of tulip bulbs at Costco. 60 bulbs for $9.98. I even thought about the Tulip mania as I stood in line to pay.
An easy way to be smart in buying RE: Buy during a recession (-ve GDP growth, at least 6% unemployment). Conversely, sell during good times (at least 2+% GDP growth, less that 5% unemployment).
We did this twice, and not coincidently, sold twice for more than we paid for the homes. But you need a very good crap detector these days to avoid getting fooled into thinking you need to “buy now or get priced out forever,” even at this late stage of the game. The Fed must be working like crazy behind the scenes to come up with an antidote to the deflationary psychology which is casting a pall over the housing market these days.
Totally agree with your line of thinking. Currently, I am renting a 3br 2.5 bath townhouse in Valencia, CA. If a house I like comes into the market and the monthly nut (P&I, taxes, insurance, maintenance, higher utilities) comes close to my monthly rent, I am jumping and buying. That may be 2 years away; however, the way new house prices are dropping in Valencia, it may get here sooner.
My big concern is where are property taxes going to end up after this debacle. No sense even considering a purchase until I can verify that I’m not going to be footing the bill for all the dumbass mistakes/budgets made during the go-go years. I’ll rent and go to the states that are the most fiscally responsible and have low taxes.
That is something that is pretty hard to predict (direction of property taxes).
Auguar-in,
we think alike on this. No sense in buying anywhere until the tax implications become clear. And Pen, that 500k house? Are you sure it won’t be surrounded by future “rooming houses” –stuffed to the gills with illegals??
It’s already happening in other places.
There is a fresh herd of RE shills on the HGTV boards. Two are from LA, the southbay in particular. It was one of them that came up with the Buyer’s market speech. If you’re bored or drunk and feel like giving them somethin’somethin; stop on by the RE section >; )
linky?
But to get drunk I’ll have to have another glass of port… or three…
I’m getting so tired of the propoganda. Long term, its smart to buy when prices are… ok (not today, I’m no RE shill). But them pushing it EVERY DAY is on my nerves!
You know when its smart to buy when it doesn’t matter if you buy today, in three months, or six months. We’re not there yet. I’m beginning to wonder if my 2010 estimation needs to be shifted to 2011 or 2012.
Did the idiot virus break out an infect 98% of the US population?
Got popcorn?
Neil
Well he’s almost right. I bought and sold after my condo doubled in less than 2 years. At that time I thought I had scored big time. Then all these crazy loans started to really take off and you all know the rest. I cant wait to buy again and have my own opinion of when that will be. My prediction is a drop to pre 2002 and then I will buy. If it doesn’t that’s cool to.
ARM’s are a “finite” number? This guy uses fancy words hoping maybe that it will influence FB’s into his sucker spiel. Ok, so foreclosures are happening and this will cause the supply to go down because they have to be sold? Well they have to be sold at a loss. They should mark them to market. If market says it’s worth 50% than what it was at it’s peak then that is what the buyer is willing to pay. Secondly, all that exotic mortgage garbage is going away. So now what? What will they use to finance? Probably go back to money down, and fixed rates. This means house prices have to come down. This guy is a douchebag. I wouldn’t trust him as far as I could throw him.
Please step away from the crack pipe, Mr. Realtor.
“Well, at this time, the supply of houses exceeds demand.”
Eureka!
“Eureka (Greek ‘I have found it’) is an exclamation used as an interjection to celebrate a discovery. It is most famously attributed to Archimedes; he reportedly uttered the word when, while bathing, he suddenly understood that the volume of an irregular object could be calculated by finding the volume of water displaced when the object was submerged in water. After making this discovery, he is said to have leapt out of his bathtub and run through the streets of Syracuse naked.”
“After making this discovery, he is said to have leapt out of his bathtub and run through the streets of Syracuse naked.”
Sounds like my reaction when my divorce came through, my daughter graduated from college & moved out, and when I arrived at DisneyWorld on my 2nd honeymoon. And also my reaction to all of the land contracts I DIDN’T sign for the fine real estate deals around here.
“The nation’s housing stock increased by nearly 2 million units in the past year, but two-thirds of those newly built homes stand vacant, the Census Bureau reported Friday.”
2,000,000 X 2/3 = 1,666,666 2/3 newly built homes remain vacant.
Who owns these?
What do they expect to gain by holding them vacant, while gangs, meth lab proprietors, marijuana growers, squatters and other vermin might move to occupy them?
Wouldn’t it be cheaper to sell them at current prices than to collectively ride 1.7 million falling knives all the way down to the hard ground below?
One more question:
Do the geniuses at the Fed realize that successfully respiking the homebuilding punchbowl will deliver a further surplus of vacant, unwanted homes to the American landscape?
Hey Stucco, isn’t 2/3 of 2 million 1.3333333 million? Those California public schools aren’t what they used to be. Or were you using Fed Math?
BTW, my kids would have got this one right (with their California public school educations) but it was one too many mental calculations for my overeducated brain at the end of fire evacuation week…
Stucco, are you smarter than a 5th grader?
“Stucco, are you smarter than a 5th grader?”
Usually, but maybe not at the moment.
You pose this question, as if there was reason behind Fed actions. There is no reason, there is no humanity, there is no loyalty to the middle class that pays the taxes and makes this country run. There is only slavish attention and servitude to Wall Street raiders and pigmen.
Another 50 bps rate cut is guaranteed next week. Not to spike respike the housing punchbowl, but to stoke the flames of the new tech bubble. Plunging dollar doesn’t even make front page anymore. A new, rampaging tech bubble will conveniently distract the sheeple from runaway inflation and dollar destruction for at least another 18 months. By Christmas, ex-mortgage brokers will be day trading Apple and Microsoft.
The Fed screws without a condom. They know full well what can and will eventually happen. Sometimes you get lucky, but eventually that luck runs out. The greed is so efficient and complete that by the time the American public wakes up to their extreme, crushing poverty and debt, the Wall Street raiders and pigmen will be on an island far, far away and still defiantly holding up the middle finger.
Rate cut, Wednesday 2 PM, 50 bps — monster wall street rally, 18 month mega tech bubble blowing 99/00 out of the water. Bank on it.
I like your anger.
Yes, welcome to the dark side, C.M.
Hi Craven, (s/b Wes Craven),
Anyway, I believe that you are from Boston’s North Shore, if so, any thoughts on the Essex County market?
Thanks.
Pen
“They know full well what can and will eventually happen.”
SIV contagion?
So Dot Com Bubble #2? Does this have to do with the Internet 2.0? Do they coincide? Why don’t I start inventing Internet 3.0?
As a software engineer, I will take what I can get. A Tech Bubble would be useful right now, since like many in my line of work, I have not seen a raise in over 5 years.
Haha, yeah I know what you mean. I dont think companies give software engineers raises anymore, we just have to keep moving to other companies to get higher pay.
They better start by getting the SMH back over the 200 dma.
Yeah, it’s shocking no one is paying attention to the dollar crash. I was lecturing in class yesterday, and to illustrate I point I brought up the dollar crash using the exchange rate with Canada to illustrate the point. You should have seen the students’ faces. I mean, they had absolutely NO IDEA! It was completely new news to them, and they seemed very concerned.
I was kind of sad–they probably didn’t get the point I was making, because they were distracted by fear. Yet, they seemed paralyzed by that fear.
Perhaps we’ll get a chance to talk about it in the weeks to come. I don’t want to toss out such a shocking fact, and then just abandon them–not if they want to become informed.
IAT
You just nailed it!
“Who owns these?”
Banks. Or they will soon.
Suze Orman just fielded a question from a person on her tv show, asking her if he should foreclose on a house he bought in Florida two years ago for $255K (only $10K down payment, $2600/month payments.) She asked him how much he is selling it for, and he answered $302K! She said, “Just cut price to a fire sale and take a loss rather than ruin your credit.!” Hallelujah, like music to my ears!
Buffalo used to be one of the 10 biggest cities in our country…
It couldn’t have played along much in the housing bubble, as it’s a decaying wreck of a city, methinks~
This is troubling news, that people are getting caught up, upside down in Buffalo.
“Many homeowners in the Buffalo Niagara region find themselves struggling to keep up, as rising adjustable- rate mortgage payments combine with falling home values to push them over the edge. A Cheektowaga mother of four shocked four lawmakers as she told them of the $1,200 monthly payment that in a year has turned into $3,300 because of fees and escrow, and threatens to soar to $5,000 in January when the rate resets from 9.75 percent to 16.75 percent.”
How many of us know of neighborhoods where they have beautiful old Victorian mansions that are now in the middle of neighborhoods filled with crack dens and squalor? This should signal to the FBs that all real estate can turn to crap. All it takes is a couple small incidents and the place turns to crap. North Minneapolis used to be the best part of Minneapolis. Now you wouldn’t walk through there at night without a 9mm. Let’s face it. FBs are just plain dumb.
Freeport, LI
Some of the most beautiful victorians. Now all divided up into multi-families
Sad.
From the link, this woman lives in a neighborhood filled with 9-12,000 dollar homes and she has a mortgage of 160,000?
Fraud, fraud, fraud.
The reporter is a fool, the pols who listened to her are morons,and she’s either a dupe or she made out like a bandit.
This is the east side hood, full of crack, gangs and gunshots.
The whole block wouldn’t sell for 160K.
I grew up in the burbs there and I knew as soon as i saw the numbers that this woman’s story is a crock.
From beginning to end, it’s a hustle and a lie.
My first post on this was eaten, but this con artist and her sob story has ruined a very pleasant day watching the world go to hell.
Here’s a page of lovely homes in her nabe. Got pocket change, you can buy a couple.
http://homes.realtor.com/search/searchresults.aspx?zp=14215&typ=1
This story is such a crock!!!!
I just looked up this chick’s zip code, 14215, which is in the full story, and this is the home of 9-12,000 dollar homes. Yes, I am not kidding. Look it up in realtor.com. It is the east side hood, home of guns, gangs and crack. And this woman is crying because she has a mortgage of 160,000??? No freaking way, there is no whole block in that neighborhood that would sell for that. Clearly, mortgage fraud.
And these yahoo politicians are buying her act??
Buffalo has a lot of problems, but crooked and unbelievably stupid pols would be near the top of the list. It costs the city more to bulldoze these places, than you could sell them for.
And she didn’t know the terms of her mortgage….she sucked more money out of that house than I can believe is possible. This is like getting a 5 million dollar mortgage on a concrete box in Compton.
You can be sure she made out like a bandit and the broker is her cousin, or her son, or her sister or her pastor.
Crap. I’ve been enjoying the world going to hell all day, but this really gets me angry.
Cheektowaga is a first ring decaying suburb of buffalo. Parts are a hellhole no doubt.
I have a friend who bought a house on the Buffalo side about 10 years ago(for $33k.) Gunshots, stolen cars and property were the neighborhood features. About 4 years later they sold and moved to another, less hell-ish section of Buffalo and bought a house for $88k.
While there are neighborhoods you couldn’t pay me $9-12k to live in, I’d say the average house in Cheektowaga would be worth $50-60k. Anything more would get you in a nicer area.
$160k in this area will get you into Clarence. I’d put Clarence up against anywhere in the US as far as safe goes and you’re still only 30-40 mins from downtown. Why you’d want to go downtown is a different issue, but I digress..
The Michigan stories are about the only ones that evoke any sympathy:
http://www.dallasnews.com/sharedcontent/dws/bus/stories/102707dnbusforeclosurechronicle.146134d.html
Sorry, Chick, I’ve seen too much white trash in my lifetime to have any sympathy. I have my background to thank for that one. When you grow up in a blue collar town you understand life a heck of a lot better than if you grow up with a silver spoon between your teeth. That’s just the way it is.
My fiance has relatives in Michigan. Driving through MI, I get a feeling of what the next Depression will be like…
Flint, Gary and other areas of Michigan, have been in a depression for more than 30 years already. The demise of the auto industry didn’t just sneak up on us.
yes, but the politicians will soon be bringing those jobs back (you know, for the children)…
I have a great friend in Erie, PA who I visited last year.
Ditto what you say. I’ve been in NYC or DC my entire adult life. I couldn’t believe what I saw there. The lake is beautiful but the town itself seems almost abandoned in a lot of ways.
Not being critical of you specifically, but that is one of the problems we have been dealing with for the past 25 years.
If you live in Cali, DC or the Northeast Corridor,the economy has been great……if you have lived any length of time for anywhere else in the country, it’s been easy to see the slide of the country into Third World status.
Imagine, this woman inherited a paid-for nice house that she could have lived in for the rest of her life. Instead she borrowed against it like a greedy pig. She should be absolutely ashamed of herself, and I don’t feel a bit sorry for her.
Good evening (please insert your own Alfred Hitchcock accent for Halloween),
Anyway, I’d be willing to bet that this had been covered today, but I wasn’t able to read any comments as I was very busy at work.
So, please forgive what I am sure has been asked, answered and ranted about.
What the CountryWide runnup in stock price today, pure speculation, short covering, other?
Thanks.
Pen
“What the CountryWide runnup in stock price today, pure speculation, short covering, other?”
BofA is out of the wholesale lending business (mortgage brokers) and letting Countrywide (BofA has a stake in CFC) keep their Broker Relationships. Very strong business in Jumbo loans, which is still holding up
good point, but then shouldn’t Bank of America (soon to be Bank of Meximericanada) have been up more than 1% or was it already pretty much fully valued?
There were a ton of comments about Countrywide earlier today on previous threads. There seemed to be a lot of frustration and some gnashing of teeth. We have been discussing this stupidity for a long time, now. If idiotic market swings, like today, negatively effect you at all then you haven’t been paying attention. The HBBers should be so well hedged that nothing short of the rapture should worry them. Here is my scoreboard for the day.
- HB puts down
- HB calls up
- Metals up
- 401k up
- Savings account stayed the same
- Non-U.S. invested funds up
Right now I’m drinking beer and getting ready for a great spaghetti dinner that my wife is cooking. We should all be familiar with the games by now.
CFC was a short squeeze. If Mozillo can’t “cook” a profitable quarter next month, then he is screwed. If I had a nickel for everytime I said that : )… Maybe that’s why he’s so orange?
Pretty soon his skin tone will match his jumpsuit.
When I meant next month, I think their quarter ends but they report in January?
not really feeling a sense of urgency, Im getting ready for an Acceleration Event…clinging to the seat, all buckled in, head betwixt legs, landing gear has malfunctioned….
“‘At this juncture it would be wise to step back and take a look at the experiences of South East Asia and the 1997-1998 crises which is largely blamed on lending excessively for real estate.’”
I first heard this explanation for the 1997-98 South East Asia financial crisis here and now.
Those stats out of Australia nearly made me wet myself. That is frightening. I don’t care how many commodities they have. We keep talking about safe currencies but it doesn’t seem any country has been prudent during this stupidity. Maybe I will start minting my own currency.
Hey NYCityBoy,
and you think you Americans have a housing bubble.
Here in Australia we know what a bubble really is.
It is very hard to beggar thy neighbor’s currency unless you yourself happen to represent a sovereign nation.
Hey GS……….wtf does that mean
Relatives from the UK came out for a month’s holiday earlier this year, and told us that they thought our housing prices were low.
A Cheektowaga mother of four shocked four lawmakers as she told them of the $1,200 monthly payment that in a year has turned into $3,300 because of fees and escrow, and threatens to soar to $5,000 in January when the rate resets from 9.75 percent to 16.75 percent.”
WTF?! Did shy buy the house on a credit card? 16.75% is insane.
There’s something odd about that scenario. Sounds fishy. i wish they would have disclosed the lender and her status when she recieved the loan. A loan jumping 7 points in a quarter sounds fishy.
Exactly what I was thinking. And how do fees and escrow add $2100 to the payment?
And why am I supposed to be sorry for someone’s escrow?
She got a teaser loan with an initial rate of 9.75% when mortgage rates were at historic lows. Does this seem like a responsible person who should own a home?
Oh, man, a teaser starting at 9.75%, that’s a real winner. “Oh why do you tease me so?”.
It almost sounds like she actually did buy the place on a credit card, and then dropped the ball one one of her other credit cards. Can you say “universal default”?
“Today’s housing news news may have a silver lining, if only because ‘this was going to have to happen.’ So says Pat McPherron, an economist at Moody’s Economy.com.”
Once person’s bad Moody’s, is another person’s good moody..see below..
Oct. 26 (Bloomberg) — Moody’s Investors Service cut the ratings of collateralized debt obligations tied to $33 billion of subprime mortgage securities it downgraded this month, a decision that may force owners to mark down the value of their holdings.
Securities with ratings as high as AAA from at least 45 CDOs were either cut or put on review for a downgrade, according to individual statements distributed today by the New York-based ratings company. Moody’s didn’t release a summary.
Connecticut Probe
Connecticut Attorney General Richard Blumenthal said today he is investigating Moody’s, S&P and Fitch for breaching antitrust rules as investigations into credit ratings companies widen. The U.S. Securities and Exchange Commission and the states of New York and Ohio are also probing the ratings companies.
the whole article is at bloomberg.com
When he’s done with those marthafockers he should start investigating TicketMaster and all of the other modern day monopolies that roam freely on the American landscape.
Yep, I never understood the need for ticket agents. Why can’t the venues just sell the tickets? Why not? I’ll tell you why..because they are in bed with the ticker agents, lickin’ each other. The sheople really believe that the events sell out in five minutes, which is a crock. Yeah, sure, 50,000 tickets get processed in five minutes.
There are some court cases going on here in Beantown and the ticket agencies are fighting tooth and nail to not have disclose where they source their tickets. Fortunately, they’re starting to lose and the judges have been forcing them to give up buyer/seller customer lists. Hopefully, they’ll all end up out business, along with the REMICs.
This past week I was up at my parents place in the mountains above Boise and was blown away at the number of properties priced as if they were located in Jackson. WY. A look at the MLS data shows that the mountain areas in Idaho are set for a pretty big fall, especially when you consider the harsh months of winter are ahead.
Here is a sampling of MLS data from Idaho mountain areas for September:
Boise County
Listings: 105
Sold: 5
Valley County
Listings: 264
Sold: 5
It is ALL slowly unwinding. There will be no stone left unturned.
People forget that during times of booms buyers behave like drunken sailors and during times of bust they behave like virgin librarians. The beer goggles are off. I’m guessing the mountain homes won’t look so good to the sober eye.
“Almost 480 tranches of CDOs had been downgraded, according to an Oct. 5 report by Morgan Stanley structured credit analysts. That included 69 AAA securities and 106 with AA ratings.”
Sales forced by downgrades can give buyers an opportunity “to pick the diamonds out of the mud” by acquiring bonds that remain unlikely to default, said Jay A. Gladieux, a principal at Chapel Hill, North Carolina-based Smith Breeden Associates Inc., which oversees $33 billion. “But that transfer of wealth for those who are losing it can be very painful.”
Maybe we should all use our cash to buy up these notes…
hahahahahahahahahaha
Now how exactly did Bill Gross’ comment on this CDO’s and bonds go? Oh yea, “They’re being rated as take them home to mom types despite the six inch hooker heals, tight dresses, and tramp stamps.”
AAA to AA? Not worth looking at yet. Those should have been issued as, at best, A rated that will fall to BBB.
Got popcorn?
Neil
Nobody will buy this crap for a while and many hedge funds looking for “deals” are waiting for a further downgrade before these become a nobrainer and they buy them at 50 cents on the dollar or less.
That is exactly why no bailout is necessary to restore liquidity to the market. In fact, hints that a bailout might be in the works are likely one of the major impediments to liquidity, as bagholders will not bother dropping their reservation price on devalued assets to levels where they can move them if they believe a bailout might buoy their market values in the foreseeable future.
Once all hope for a bailout is drummed out of bagholders’ minds, they will lower the list price to levels where hedge funds (in the case of devalued sump-prime financial assets) and where prospective home buyers (in the case of devalued homes for sale) will be happy to snap them up at fire sale prices.
Something to ponder..
Was there a timing thing going on this past week, with all the write-downs, quality downgrades, etc., in order to add some insurance to getting the Fed rate cut? It seems to me that the deluge of negative stuff was timed just right.
Thoughts?
You should be hedged every which way from Sunday when they announce that Fed decision. If you aren’t, then you took your own gamble, knowing full well that the Fed is not the little guy’s best friend. That’s my thought.
‘Our sale was successful,’ said Marketing Director Justin Winson. ‘Now that we got some of those homes sold we can pull another 25 building permits and give our subcontractors enough work over winter.’”
“Some” of these homes sold? Like five, at a discount? So you will now build another 25 to yield a spring inventory of 50 homes that you can’t sell.
These morons are determined to find bankruptcy. I finally understand that builders will build as many houses as lenders are willing to finance, developers will develop as much land as lenders are willing to finance, and lenders are STILL, STILL, STILL lending money for spec homes and new developments.
“Wolverton Homes likes to have about 20 available homes on the market in Twin Falls County, Idaho, but when that number crept up to 30, the company decided to organize the first-ever ‘72 Hour Choose Your Rebate’ sale in the region. ‘Our sale was successful,’ said Marketing Director Justin Winson. ‘Now that we got some of those homes sold we can pull another 25 building permits and give our subcontractors enough work over winter.’”
These Idiot Savant Homebuilders are a dime a dozen…
How did this country get so stupid?
How did this country get so stupid?
Does it ever feel like you’re in the twilight zone and you know everyone else has done something that’s going to result in horrible consequences to them, but you cannot say anything? This nation is oblivious. We don’t want it to happen, but it is.
I’m thinking about buying quite a bit of food. No matter what happens, that is just smart insurance. Cheap. Worst comes to worst, I’ll eventually eat it anyway. Keeps me out of the bread line.
Got popcorn?
Neil
This type of talk makes me sick:
Let’s see…his constituents are having trouble affording houses. So what does he want? To keep houses at these crazy valuations. He should welcome a price reset. I think he doesn’t represent “we the people”, but instead represents the RE insdustry.
Ability to afford to put even mac-n-cheese on the table be damned, as long as we save our property values.
What kind of loan would go up that much in payments that quick ?I’m sure these real estate investors don’t have any down payment in the game ,so they got a really bad loan .Who would design such a bad loan ? I’m telling you these Wall Street loan pushers had no regard for normal life when they designed these toxic loans .How did they think that people were going to afford the increases if they qualified based on the teaser rates ? Apparently they did not include in their loan risk model the lack of income increases with your average employee these days . How could rating agencies even endorse such bad loan design ? The only way one could even endorse a loan that moved up that quick is if the down payment requirement was 30%.
How did they think that people were going to afford the increases…
There’s really only one answer (assuming lenders did not lose their collective mind):
They, along with buyers, were convinced that property prices would continue to rise.
“‘This is an issue that affects each and every one of us, because it affects our property values,’ said Senator Jeffrey D. Klein. ‘We have to make sure this doesn’t happen again.’”
Indeed, Senator! This bubble made property unaffordable for all of us. We have to make sure that prices go where they should be and never go where they are now again.
ok last one.
not once, on this blog today did I read about Mexico Raising the Interest rate…..I saw it this morning, but as the FED came back to the forefront…..the Peso didnt matter.
I mean to say that, though the interest of the mexicans experiencing this blog are important, rather, the authority over Mexicos credit worthyness was not called into question here.
Who has a more powerful unwashed mass?
A little Friday amusement:
http://www.radarmagazine.com/quiz/2007/10/fox_news_anchor_or_porn_star.php
saucy social currency…….
fact or fiction:
nobody should give a shit.
A guy lost 30K shorting CFC and wants to kill himself, very entertaining.
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_C/threadview?m=tm&bn=3223&tid=208006&mid=208006&tof=4&frt=2
Yahoo is always a riot when a stock blows up. You should have seen the Elan board when the drug started killing people and the stock went from 28 to 3 in days.
That has to be a hoax, but very funny nonetheless.
Screw that lying Orange face.
The guy is better off without the wife . A neighbor I had one time lost alot of money in a down market and his wife left him over it .The wife finally found a rich guy to marry ,so apparently money was very important to this women .The neighbor was a nice guy ,but you always got the feeling he was performing like a monkey for the wife .
Sounds as though both your neighbor and his ex-wife came out ahead.
Will this happen here
http://www.bloomberg.com/apps/news?pid=20601109&sid=axTqfaTiLf4I&refer=home
It’s just a matter of degrees right.
I’m surprised Kirchner didn’t announce that Argentina used exactly the same methodology for calculating CPI as the US.
Oh wait …