The Housing Bubble

Anyone else feeling stimulated today. Lets go think up some new scams for America. Life is great.

Hair of the dog housing market cure: More leverage, plus confidence schemes.

Meanwhile, out there in the real world, home prices continue correcting downwards at the fastest pace in recorded history. Eventually some politician will announce a program just before the housing market actually bottoms out. Later they can claim credit for having stopped the market decline.

THE ECONOMY
598,000 workers lose their jobs in January
The number of cuts by employers is the biggest for any single month since 1974, according to the Labor Department. The unemployment rate climbs to 7.6%.
By Maura Reynolds and Walter Hamilton
February 7, 2009
Reporting from Washington and New York
…
To address the housing crisis, the administration is expected to leverage the size and expertise of Fannie Mae and Freddie Mac — the mortgage giants now controlled directly by the federal government — to spur the refinancing of millions of troubled mortgages.

Lee Ohanian, an economist at UCLA, said the recession, which began in December 2007, was relatively mild until the financial crisis worsened in September and businesses lost confidence in the economy. As a result, it is critical that Geithner’s plan restore confidence in the markets, he said. If it does, then Wall Street may be right that recovery is on the way.

The Ownership Society concept was a big part of W’s platform. How’d that work out for him?

The Associated Press
February 3, 2009, 3:19PM ET
Homeownership rate remains at 7-year low
WASHINGTON

The percentage of Americans who own their homes remains at the lowest level in nearly seven years as the number of foreclosures surges.

The Census Bureau said Tuesday that the U.S. homeownership rate fell to 67.5 percent in the fourth quarter of 2008, down from 67.8 percent in the quarter a year ago, though the change was not statistically different. (???)

The last time the rate was this low was in the first quarter of 2001. Homeownership in the U.S. peaked at the end of 2004, at the height of the housing boom. At that time, the homeownership rate was 69.2 percent.

Meanwhile the government report said that 2.9 percent of U.S. homes — excluding rental properties — were vacant and up for sale in the fourth quarter of last year, compared with 2.8 percent in the fourth quarter of 2007, but again the increase was not statistically different.

The Census Bureau says there were 75.5 million non-rental properties in the U.S. as of the fourth quarter of last year, of which 2.2 million were vacant.

That matched a high set in the first quarter of 2008 and was the highest quarterly number in records going back to 1960.

the thing is you may actually see some buyers (I mean fools) come out and start buying homes thinking all is well because of lower rates and stimulus bill. they will be disappointed…a year from now

Woke up at dawn this a.m., flicked among half-dozen local and national news programs, and within half-hour, saw about ten ads for “car title loans.” Ads have normal looking, semi-affluent types, with numerous $50 and $100 bills being counted and placed into their outstretched palms. Boy, oh, boy. Talk about scraping the bottom of the barrel. Who says you can’t squeeze at least one drop of blood out of a turnip?

..”A failure to act, and act now, will turn crisis into a catastrophe and guarantee a longer recession, …

Since it’s 2/3 spending, even if Porkulous passes quickly it will be a popular defeat for BO.
He’s been in office a couple weeks. There is no legitimate reason for him to risk so much political capital on this bill.

I don’t get how the serial bottom callers, who currently claim housing will bottom out by year-end 2009, take into consideration the labor market situation. Was there ever a time in the past when housing reached a bottom during a period when job losses climbed steeply?

High jobless rate predicted to go higher
Unemployment now at 7.6%, report says
By Edmund L. Andrews
NEW YORK TIMES NEWS SERVICE
2:00 a.m. February 7, 2009

WASHINGTON — Although job losses accelerated last month, the U.S. economy has not yet hit bottom.
…
The contraction in jobs is already steeper than in any recession since at least the early 1980s. But economists warn that several more shoes are about to drop.

The first is the growing severity of the global recession, which has started to choke off exports from the United States. Growth in China has slowed to a fraction of its usually brisk pace, leading to brutal downturns in South Korea, Japan and other Asian nations. Much of Europe has slipped into a recession, too.

A second shoe to drop is workers’ incomes in the United States. The one seemingly bright spot in recent job reports, including the one yesterday, has been that hourly wages and weekly earnings have kept inching upward.

But economists say that trend is all but certain to reverse soon and cause further strain on consumers. Consumer spending, which represents a third of economic activity, has slowed drastically as many workers lose their jobs and others worry about their job security.

The third big shoe is the banking system, which is expected ultimately to report $1 trillion to $3 trillion more in losses tied to the housing market.

The upshot, economists say, is that the United States will face rising unemployment for at least the remainder of this year, even if Congress passes a big economic stimulus bill this week.

Hamptons Inventory Rises, Prices Shrink

By Kate Maier

(02/04/2009) A year-end report compiled by the Corcoran Group compares real estate transactions in 2007 with those in 2008 and shows steep declines in unit sales and selling prices in East Hampton Town and nearby.

“Obviously what we are seeing out here is that inventory is starting to increase on the East End, and median sale price is starting to creep down,” Rick Hoffman, the company’s regional senior vice president, said. “I would suggest that sellers become more realistic with prices.”

The report notes that “the East End is not immune to the phenomenon that has swept the nation and most of the developed world,” according to Pamela Liebman, a chief executive officer at Corcoran. “With so few transactions in the pipeline, downward pressure on prices will continue until a sense of urgency is restored for buyers,” she predicted.

Mr. Hoffman said that this area, which is historically insulated, managed to stave off the economic downturn affecting the national market until about 18 months ago, while the rest of the market started seeing price declines three years ago. As a result, “we have had a more drastic adjustment in the past year,” he said.

According to the report, the number of houses sold in East Hampton Town declined almost 50 percent, from 322 to 165, and in the village from 61 to 31. The median price in East Hampton Town was $799,000 in 2008, compared to $893,000 in 2007. In the village, the median price drop was even steeper, from $2.65 million to $1.9 million.

The median sales price in Montauk was the same as 2007, $825,000, but the average price dropped from $1.25 million to $952,000, with 54 units sold. In 2007, 121 sold.

Prices in Amagansett went up slightly, while units and sales volume dropped by 60 percent. In Bridgehampton, the median price came down 30 percent, with the number of units and the sales volume dipping by more than 60 percent.

Southampton was not hit quite as hard as East Hampton. Median prices dropped by 8 percent and the number of units sold dropped 30 percent, from 177 to 123. Total sales volume was down 22 percent.

There were some small anomalies, but over all the numbers were, not surprisingly, indicative of national economic trends. In Wainscott, 23 houses were sold in 2008, up 21 percent from the year before, but the average price took a 50 percent cut. In Water Mill, both the median price and the total dollar sales increased, and only two fewer houses were sold as compared to 2007. Median prices increased slightly in Sag Harbor and on North Haven as well.

But, Mr. Hoffman said, with so few transactions in those specific areas, such glimmers of hope weren’t likely to be market indicators.

The New York Association of Realtors has reported that single-family home sales in New York were down 16.2 percent in 2008, and the median price dropped by 8.5 percent. December’s numbers were rosier than November’s, however, with a sales increase of 5.6 percent and a median selling price increase of more than 7 percent. “We are hopeful that the December numbers mark the start of the housing turnaround,” a recent release said.

According to the association, in Suffolk County the number of homes sold has dropped almost 20 percent since 2007, and the median sales price dropped for the first time in two years, by 7.6 percent.

Mr. Hoffman stressed that while there are still buyers out there, setting a reasonable price is key. “Seriously, it’s about the right price on the product,” he said. “Anything in any price range that is priced correctly” has a good chance of selling, but “if your property isn’t selling and it has been on the market for more than 90 days,” an adjustment is in order.

http://www.easthamptonstar.com/dnn/BusinessRealEstate/NotetoSellers/tabid/7865/Default.aspx

All the media and political maneuvering reminds me of last September. If we don’t pass the stimulus it’s going to Armageddon. I thought I heard Mr. Reid say again he wouldn’t like to see what happens to the markets if the stimulus doesn’t pass.

In addition, CNBC was in non-stop pump mode yesterday from early morning to nightfall. Welch was on squawk; I have no idea what he said. The noon team’s banner asked “Is this the turnaround?” Then last night, on Kudlow, I thought I saw Liesman announce another bank bailout.

Am I experiencing deja vu or is it the percocet? I’ve been stoned to half-way stoned the last couple of days so my perception might be off a bit.

Employers overwhelmed with applicants
by Chad Graham and Ronald J. Hansen - Feb. 7, 2009 12:00 AM
The Arizona Republic

Denise Stefanisin figured that a recent job fair in Phoenix would be crowded.

She didn’t anticipate that a double line of applicants would snake around the building. It took her an hour to get inside, only to find companies mostly offering jobs paying just above minimum wage.

The Senate-passed credit for homebuyers, unlike the existing $7,500 credit, isn’t refundable, which means house purchasers who owe less than $15,000 in federal income tax won’t get the full benefit in a single year.

Instead, the Senate provision would allow homeowners to split the $15,000 into two separate tax credits of $7,500 to be taken in successive years. To pay $7,500 in federal taxes, a family of four would have to earn about $92,125, according to Internal Revenue Service tax tables.

Bloomberg: Senate’s Stimulus Tax Credit Favors Higher-Income Homebuyers

Saw this on craigslist and though it very well written…..creatures!

WANTED: HOME ON ACREAGE
Reply to: hous-1010438113@craigslist.org [?]
Date: 2009-01-27, 7:47PM EST

Hello to those seeking to sell their home on acreage. Looking for 4 to 40 acres with a home in Lee or Clay county Alabama. Will pay up to $250,000 for property.

As real estate agents are no longer in any way professional I will not be working with such creatures.

Let me know of any properties that fit the above description.

Thank you!

* Location: Lee or Clay County Alabama

Remember all those low paying “jobs that American workers wouldn’t do” ?

YOU might be looking for one of them NOW GF and FB !

Dutch bubble update:

Dutch prime minister appeared on TV yesterday to say that we are heading for unprecedented (bad) times. That’s quite a change, until a few months ago they assured everyone that things were looking bright and Netherlands would easily weather the storm while many other EU countries were already battening down the hatches. He now says the country and especially the housing market is in severe trouble (must be a joke, last month registered a new all time high for prices, and home sellers are as confident as ever about winning the lottery).

But it is clear that the economy is going down: job losses are surging, many companies have gotten in severe trouble over the last few weeks and a complete nationalisation of all banks is no longer ruled out. Last month prediction of our Ministry of Truth that the Dutch economy will contract 0.7% in 2009 seems to have put the decimal point at the wrong place.

The announcement suggests that the government is going to take emergency measures over the weekend. Some options are cutting pensions and doing something about the HMD. In Netherlands mortgage payments and all other costs that are somehow associated with buying/owning a home are 100% deductible from income tax; this is one of the causes of our stellar home prices. Any change to HMD will bring down Dutch homeprices (but who knows, maybe they will introduce 120% deductions for home owners?). The HMD plus some other homeowner subsidies cost the government 30 billion every year, around 5000 euros for every home. Plenty of money to be found there …

At the same time my city is finally sounding the alarm regarding new home construction: with thousands of new homes in the pipeline people are no longer buying, but the government is counting on home/land sales to make ends meet. They are now suggesting that the local housing corporations will buy these homes (with government lending the money) and temporarily rent them out. Trouble is, even if they rent out these homes at 1/200 monthly (minimum to break even at current rates) no one is going to rent them; people can rent from the housing corporation for about a third of those prices, although there are long waiting lists for these rental homes.

I am told the city will try to rent out the new homes at 1/300 monthly, and count on at least 2% yoy price appreciation of the homes to make up the operating loss in the long run. Good luck with that, after about 1000% price appreciation in the last 20 years.
I see a city bankruptcy in the not to far future …

The Continuing Saga of the collapsing building construction market:

I haven’t posted about my company for a few months now, but will update today.
Some background: My company which has been in the home construction supply business for about 50 years now is slowly, but assuredly sinking into oblivion. We are still operational, and still treading water, but business is very slow. I will focus on our facility in Florida.

At the height of the construction boom, we were working 2 shifts overtime and shipping about 120,000 -130,000 pounds of material off our docks daily. (steel products). That peaked at about Sept 2006. We had to increase wearhouse space to accommodate the volume. We had the parking lot filled to capacity……….about 75-90 cars crammed in for employees.

In 2007 business had slowed substantially. We still shipped an average of about 50-60,000 pounds a day until late in the year, then down more. Down from 2 to 2.5 Semi-loads to a single full truck load.
This was about where business had been in 2000-2002, before all the madness started.
“Free houses for everyone. Don’t miss the Housing Boom, blah, blah, ……..”

The slope of sales destruction has been a steady downward decline. Begining in 2008 we started seeing volumes in 30-40,000 pound shipping weights, and continued to decline. Since the end of 2008, we have been shipping an average of about 20,000. Some days much less. It is barely enough to cover overhead, and in some cases does not.
We have steadily cut back staff. Our Plant went from about 100 full time employees to 80, 60, 50. Many cuts happened last year and more have just been done. Somehow, I am still employed, though several other managerial staff persons have been cut.
Late last year we began 32 hour work weeks for regular employees. Two weeks ago we cut our work staff to about 20 or less and began a single shift………32 hours per week. That includes production, maintenance and warehouse employees…….a skeleton crew. Monday we cut more production employees.
Yesterday, we cut more office personell and support staff at all locations. I think we now have about 15-20% of the workforce we employed in 2006.

We are still able to make our payroll and keep money coming in from the small amount of sales we are getting, but it felt strange to pull into my office parking lot and see 7 cars where there was once no room to park. (Friday’s is office and warehouse crew, the plant is closed). One of the primary office employees was terminated yesterday.
There are only a few of us left.
I have anticipated being a statistic in the unemployment line for about a year now. Thus far, I am still drawing a paycheck, but if we see sales decline anymore i think i will be able to devote myself to blogging full-time.

Deals popping up along Texas Gulf Coast

Real estate bounces back from history-making storms, attracting buyers with new developments and relatively low prices

http://www.statesman.com/business/content/business/stories/statesmanhomes/02/08/0208gulfcoast.html

Got mud?

Hi. Some progess here in DC. Forclosure Capitol Hill townhouse with English basement apartment. Listed at $435K. 913 North Carolina Ave, SW, 20003. Decent location. Three blocks from Eastern Markt Metro. Very average Cap Hill town house - not a great big one, not teeny tiny. Don’t know whether apartment is legal, my guess is not. Usually ads will say that apartment has certificate of occupancy. But don’t thing too many hoops required to get.
I would say that this about 1998 - 2002 price ?
Maybe it’s priced lowish to try and attrack overbids. A FB 2 blocks west has had his townhouse on the market for over year for $1 million. He’s long gone to Arizona for work. They own another house in Atanta. Bet this $435K price is causing some anxiety among some of the neighbors Two other nearby townhouses much smaller have been on the market for months at $500K and $542K. The $500K one is new construction about 6 years old but TINY. The $542K one is kind of modern 1950s thing (or remodeled in 1950s - has floor to cieling walls of window) in an alley with other similar places. Price here still in the stratasphere, but expect changes quite soon - by the fall.

My landlord had a heart attack in December.

He had HELOCed his home that I am renting from him to the tune of 365,000 ( paid 101,000) in 1998.
He used a lot of that money and built a brand new home up in Northern Florida, sold his business up here and tried to get a new pool cleaning supply company going down there.
Business is not doing good and with the stress, payments etc.. had a major heart attack.

I get a call from my landlords wife, telling me that they need to move back into the home that I am renting from them.
Our lease had expired in November and we agreed to go onto a month to month to save the landlord the realtor fee they would have to pay if we signed another year lease. At the time is sounded great to us as we have been looking to buy a REO property and felt that when the right home came along it would be easy to give the month notice and move. Never did I think that they would want to move back here. If anything I thought that this home would end up back to the bank.

Now my landlords may not be very financially savvy but they are really nice people and we had socialized with them on occasion in the past and during the hurricane scares I had even been invited to stay with them up North.

This call last week blew me out of the water, they want to move back in here but they don’t want to inconvenience us to much. My landlords wife asked us if THEY COULD MOVE IN WITH US.

We currently have an offer on a home and have been now waiting for almost a month for the bank to respond. My realtor has called many times, re faxed documents, been on hold for endless amounts of time trying to get someone to even talk to her and it seems like they are simply dragging their heals on our offer and interest in buying the house.
My realtor even has the listing on this REO home. This is extremely frustrating to say the least.

We are now in a position to either have the landlord, wife and kid, one dog and a cat move into this home to SHARE WITH US or we have to find another rental that will accept our four dogs, one cat and two birds and move again to perhaps move again if and when the bank finally responds and hopefully accepts our offer.

We have looked at other homes and they are ALL either in contract or sitting with other offers waiting for banks to make decisions for short sales or what ever.
We looked at one home last week and five other couples showed up to look at it. I found out the next day that this home was already in contract when we looked at it and my realtor wasn’t told this.

I looked on the MLS and found three other homes to look at and all three were in contract.

What the hell, I have looked for anther rental and I can’t find anything suitable in our price range of 1400.00 per month.

We are screwed what are we going to do?

My husband doesn’t want our landlord to live with us, I am sort of ok with this idea as I like them but he will leave me if they move in.

HELP.

How can it be so difficult to find a FREAKING HOME TO BUY ??

Zip code 33470

Allen Sinai, chief global economist and president of Decision Economics, a New York-based research and forecasting firm, recently ran various types of government actions through his respected macroeconomic model of the U.S. He discovered some surprising things.

First, even a very large stimulus doesn’t help the economy a lot. The negative forces are too strong — centered on the credit collapse and the collapse in consumer spending. Government will lean against this stunning downturn but can’t make up for the massive loss of private demand.

Furthermore, the larger the budget deficit, from tax cuts and spending, the bigger the bounce in expected future inflation and long-term interest rates. That will take the edge off future growth.

Sinai forecasts a stimulus-based gain in gross domestic product of perhaps 2 percentage points in the first year and 1 point in the following year compared with where we’d be otherwise. A turn could come as early as summer. Without a significant stimulus, he’d expect the recession to last into March 2010.

More pessimistic economists expect it to last that long anyway. The ugliest months lie directly ahead.
————————————————————————-
” expected future inflation ” and then the FED will tighten and we will go back to recession just like 1937 or the FED will let inflation run “just to be sure” either way the steady growth of 1980-2000 seems over.

guy at work just bought a house very happy to get 15K tax credit.
he will rent out his paid off Duplex home and live in the new house. He expects furure inflation

me I expect 10 more years of hard living as the FED mico manages the economy. This may include periods of deflation and inflation as the American standard of living stalls out under too much debt.

The other person at work who is going bankrupt and giving his house back is annoyed at person2 who is buying now at the “bottom”

haha anyway bankrupt person said he will post his whole story here I can’t keep it straight anyway.

Boston Properties Suspends $980 Million Skyscraper

Boston Properties Inc., the biggest U.S. office landlord, plans to suspend construction on a $980 million midtown Manhattan skyscraper after a law firm abandoned plans to lease space there.
“Recently the law firm informed the company that it could not proceed on those terms, thereby rendering the project economically infeasible in today’s environment,” the Boston- based company said today in a statement. The 1 million square- foot tower at 250 West 55th St. and Eighth Avenue was scheduled for completion in 2011.

Office building owners are being battered by the U.S. recession, with the 14-member Bloomberg Office REIT Index losing 51 percent in the past year. Manhattan office vacancies rose to 7.6 percent in the fourth quarter, the highest since 2004, broker CB Richard Ellis Group Inc. said last month. Lending has also dried up as financial companies have taken more than $1 trillion of writedowns and credit-market losses.

“It has more to do with the state of financial markets than the merits of individual projects,” said Dan Fasulo, market analysis director at Real Capital Analytics Inc. in New York. “Lenders don’t want additional exposure to commercial real estate at this point. There’s nothing we can do about it but wait this out.”

Valuable Tower

A completed building on that site would have fetched $1,500 a square foot during the peak of the real estate market in 2007, Fasulo said. That would value the tower at $1.5 billion and made it one of the most expensive in the city, he said.

Boston Properties acquired some of the development rights for the West 55th Street site in May 2008 for about $34.2 million, according to company filings. It said it had invested $401.7 million in the project as of Sept. 30, 2008. It estimated its total investment would be $980 million, according to regulatory filings.

Anyone know what happened to nextag real estate section?
It had good info on past sales and comps.The pages have disappeared from the website.
My guess is they couldnt keep up with all the changes.

Cargo volume falls at U.S. ports

http://tinyurl.com/ctmvuo

Clearwater Beach is now completely wrecked with stalled renovations. Still had a nice lunch with the wifers and my lilhomie. Check out the stuffy country-clubbers in the background… probably hedgies.

i117.photobucket.com/albums/o72/muggyFL/IMG_2.jpg

High-profile Coloradans on list of Madoff’s clients

http://tinyurl.com/aqkc2e

‘Some of the names on the list are straight off the Aspen black-tie-party circuit. The former headmaster of Aspen Country Day School. Authors. A sculptor. Realtors. Retired financiers and venture capitalists. A theater producer. The board president of the Aspen Art Museum. A former Miss World USA. Several philanthropists.

Bob Ritchie, a longtime Aspen Realtor who last month said he knew many locals who lost their investments when Madoff tumbled, …”All these people got so confident — with 12 percent returns, up to 18 percent — they leveraged their homes and made all this cash. But those people are bumming, and they really don’t want their names all over,” Ritchie said. “I would expect some of those homes to come onto the market.”

I am really having a hard time not laughing. Oh, wait… I AM laughing.*

*Except for the philanthropists orgs getting skint part. But that’s if they really WERE philanthropist organizations, that is.
Oh, I know–how about if I only laugh a little bit over those ones, just in case.

The Fed’s super-low interest rates may offer tempting gambling opportunities for hedge fund investors who somehow avoided losing all their money thus far.

Hedge funds eye up Fed borrowing
By Aline van Duyn in New York
Published: February 6 2009 02:00 | Last updated: February 6 2009 02:00

Hedge funds are showing interest in potentially borrowing money from the Federal Reserve to buy securities backed by auto loans.

In the next week or two, the Fed is expected to announce the terms under which investors can borrow from its new $200bn Term Asset-backed Lending Facility (Talf), which will determine whether hedge funds will be able to borrow cheaply enough to make investments in the auto loan-backed securities worthwhile.

Bank of America and Barclays Capital are currently marketing a $500m bond called World Omni backed by recently issued auto loans. Once the Talf terms are set, that deal could be eligible to be financed with Talf funds.

“Haircuts and interest rates have yet to be set and will obviously be crucial to investment decisions,” said Chris Flanagan, head of asset-backed research at JP Morgan.

If I see one more key REIC player calling the mortgage meltdown “unprecedented,” I think I am going to heave. Prediction: Next year, when prime heads the same direction as yesterday’s subprime and today’s Alt-A, Moody’s will say that is “unprecedented” as well, even though it will be completely predictable to anyone who has been paying attention.

The question which comes to my mind: Will Uncle Sam be the “senior holder” by the time this fiasco is over?

Finance and economics
Mortgage losses
Move over, subprime
Feb 5th 2009 | NEW YORK
From The Economist print edition
Decay is spreading to the upper floors of America’s mortgage market
…
Even as credit markets, particularly corporate-debt markets, show some signs of improvement, mortgage loans to supposedly better-heeled Americans are souring at a gut-wrenching rate.

Of particular concern are “Alt-A” mortgages, offered to borrowers sandwiched between subprime and prime. This market was trumpeted as a means of extending home ownership to those, such as the self-employed, with a reasonable credit standing but unsteady income. Its practitioners specialised in loans with scant documentation and exotica such as negative-amortisation mortgages, which allow borrowers to pay less than the accrued interest, with the difference added to the loan balance.

That Alt-A has troubles comes as no surprise. Last summer, for instance, it helped to bring down IndyMac, a Californian bank. But the speed with which loans have soured in recent months, and the reaction of rating agencies, have been startling. Delinquencies rocketed in the final months of 2008. They even rose sharply for loans made in 2005, before underwriting turned really sloppy (see chart).

The rating agencies are rushing to catch up with this grim reality. Moody’s, which last summer had issued a sanguine outlook for Alt-A, recently quadrupled its loss projections on bonds backed by such loans. A steady flow of downgrades has turned into a flood in recent weeks, with thousands of Alt-A tranches taking the plunge. The falls have been unusually steep: of the $59 billion of AAA-rated securities that Moody’s cut between January 29th and February 2nd, an astonishing 91% went straight to junk, according to Laurie Goodman of Amherst Securities. In ratings terms, Alt-A is doing worse than subprime.

Moody’s calls this “unprecedented”. That is putting it mildly. It now expects losses for 2006-07 Alt-A securitisations to top 20%, compared with an historical average of well under 1%. In an ugly echo of the fiasco over collateralised-debt obligations, holders lower down the structure can expect total write-offs, while the vast majority of senior holders will not be spared substantial losses.

Another article on Alt-A loans.

https://news.fidelity.com/news/article.jhtml?guid=/FidelityNewsPage/pages/alt-a-mortgage&topic=economy

Times has an article about the FBs of Lehigh Valley

http://www.nytimes.com/2009/02/08/us/08lehigh.html

Obama’s going to visit and promise them all that he’ll get their prices up again and they’ll all get free houses. Or something like that.

Wednesday, February 04, 2009
How To Sell A House

“An anonymous comment to the next-to-last post, made in Spanish, relayed some housing market information interesting to those who would like to know what it takes to move a residential property in Spain at this moment. We translate (hoping that he or she might have an idea how many units were involved):

Officially, house prices in Spain have dropped 5%. In the meantime, the financial institution in which I work (and I imagine the rest of the banks) has been offering real estate, recently taken back from promotors in lieu of loan repayment or foreclosure, out the back door to its employees at discounts of 35% from original prices - with 100% financing. Almost all were sold within a month.

Also, they are offering foreclosed homes from individuals at substantial discounts, rather than selling them by auction, as would normally be the case.

We can only think that employees taking up the offer would be awarded the added extra of an implicit job guarantee.”
from IBEX Salad - The Spanish stock market, economy and the olive oil business.

The joy of trying to conduct business in the PIGS.