Don’t Let That Twitching Zombie Fool You, Housing’s Dead
The housing bubble story of the day has to be how the media initially fumbled the new home numbers. Business Week, “Let me get this straight: Mortgage and interest rates are on the rise. Household finances are also being pinched by record gasoline prices. Yet somehow, Americans have all of a sudden decided to go out and buy a whole slew of new homes?”
“That’s what a new government report released this morning would seem to suggest. But dig a little deeper, and you’ll see what’s really going on.”
“In February, for instance, the government reported that the median price of a new home sold was just under $240,000. At that price, homebuilders found that demand was diminishing. In fact, new-home sales plunged by 10.9 percent that month.”.
“So in March, homebuilders started slashing prices. The median sales price of a newly constructed property sold in March fell 7 percent down to $224,200. And since peaking at $243,900 in October, median sales prices on new houses have tumbled 8 percent.”
“What does this mean? While demand for new homes may be up, this is clearly turning into a buyer’s market. So if you’re in the market to purchase a new home, wait. If you show some patience, chances are home sellers will be putting their properties in the discount bin.”
Inman News wasn’t fooled. “The rate of new single-family home sales in March was about 7.2 percent below the March 2005 estimate, while the supply of for-sale inventory was up about 31 percent, the U.S. Census Bureau announced today.”
From the Federal Reserve. “Most Fed districts reported cooling residential real estate markets. Home price gains, when measured on a year-over-year basis, were lower than in previous periods.”
From Reuters. “U.S. mortgage applications slid to this year’s low as demand for loans to purchase homes fell last week to the lowest level since November 2003 despite a drop in interest rates, the Mortgage Bankers Association said on Wednesday.”
“‘Slumping mortgage demand, continued build-up in inventories and the fact that prices are now beginning to level off; all this adds up to the fact that turnover is going to fall and fall sharply,’ said (economist) Richard Iley. ‘House prices had been rising much faster than the level of mortgage rates. That’s now flipping around,’ Iley said. ‘That’s a big fundamental shift in the housing market and that has to affect people’s expectations and willingness to buy.’”
“The MBA also said refinancing applications declined last week. Its seasonally adjusted index of refinancing applications fell 2.4 percent to 1,489.4, from 1,526.1 the previous week. A year earlier the index was at 2,052.5.”
And then there is this quote. “Analysts suggested that inventories are at multiyear highs, and that’s a sure sign that the market is slowing on the demand side. At this point, the country could sell new and existing homes for five-and-a-half months without adding a single new ‘For Sale’ sign. That’s a level we haven’t seen in more than seven years.”
“‘New home sales sprang back to life like a vampire in a cheap horror flick,’ said economist Bob Brusca. ‘And like that zombie in the movies, housing really is dead. Don’t let all that twitching fool you.’”
Inman had this:
‘LandAmerica Financial Group Tuesday reported adjusted net income for the first quarter of $20 million. Net income for first-quarter 2006 included an asset write-off of $9.7 million, or $6.3 million after taxes, primarily related to the sale of the company’s headquarters building.’
Centex gets hammered Stock down 6.22% after hours.
The latest earnings release from Centex (CTX:NYSE - commentary - research - Cramer’s Take) represented the big wreck that short-sellers have been waiting for among homebuilders.
The builder missed analyst forecasts for its fiscal fourth-quarter earnings and significantly slashed its 2007 guidance late Wednesday. New orders fell 11% on a unit basis. The company also became the first major build to significantly write down the value of certain land-option deposits, land parcels and preacquisition costs — which amounted to a charge of 14 cents a share for the March quarter.
I liked the first sentence of that article so much that I printed it. Tomorrow should be fun. PHM missed as well, though they tried to disguise it by not backing out the proceeds of the sale of their Mexican division. Also, new orders were down 11%.
Are the mortgage cos very far behind?
Tnx for that tidbit about PHM’s earnings trickery.
Pre-market action for a few selected HB’s as near as I can tell:
HOV 40.02 -0.61
KBH 61.88 -1.37
DHI 31.20 -0.13
CTX 57.00 -3.75 burn baby burn
PHM 38.70 -0.34
And they’re off! …by pretty much 4-5% down across the board in early trading…yowsah
Aw Jesus H. Christ, Bernacke has put the PPT team into action in coordination with his speech in Congress. UFB!
Darn … I put in an order for short limit of 61 today. Should have done market.
I mean 62. I put in the order when it was 61.80 and was hoping for a little spike up.
This is the downside to spin. When fundamentals eventually become too obvious to hide, the magnitude of correction needed to get prices into line with perceptions is much larger than if accounting gimmicks were avoided all along. I guess that is why I expect Toll Bros and friends to eventually correct substantially from their already-sold-off levels.
I referenced the CBS Marketwatch story in the previous thread. Anyone notice the ridiculous dichotomy between the headlines and content on these media stories?
CNBC had an analyst on this afternoon stating that the new homes report was great because it meant consumers would be able to continue borrowing against their homes. Go figure.
Question for Bankers or folks with expertise:
But if median prices now are where they were in Jan ‘05, and average prices now are where they were in Sep ‘04, how will folks be able to a) refi if they bot last year and are now underwater, or b) pull cash out via a HELOC? Do bankers go for that kind of stuff? I can’t imagine they do, but am I wrong to think so? Thanks.
Wow, that’s provably stupid just from reading the headline! He’s pretending that he didn’t notice that this was the first month officially that the median was down, and has no clue that prices have been effectively 5% lower than reported for some number of months due to “incentives’ &c.
Definitely. Headlines by the media failed to capture the main points of today’s new home sales data:
http://bubblemeter.blogspot.com/2006/04/media-headlines-misleading-on-new-home.html
David
To paraphrase a now-tedious war-cry — to evolve it into an appropriately contemporary one — “You go, Ben!”
The Twitching housing monster will be devoured
OT:
All you So Cal Bubbleheads.
Nissan is moving their North American HQ from Gardena/Carson to TN.
40% of Nissan’s Socal employees have committed to move to TN.
60% of Nissan’s Socal employees will be unemployed.
http://www.dailybreeze.com/business/articles/2694861.html
Looks like the jobs exodus has started and there will be some more houses on the market, either through foreclosure or sales.
Not many people realize that SoCal has a good number of white collar automotive jobs.
The North American HQ for Hyundai, Kia, Toyota, Honda, Yamaha, Nissan (for a couple more mos), Ford’s Premier Automotive Group, Daimler Chrysler all have employees in SoCal.
As the inventory overhang hits the auto industry many of those jobs will go *poof*.
This is even a perfecter (sic) storm.
ex-Nissan employee condos for everyone!
I work in the auto industry in Socal and I have a few very good friends at Nissan.
One older engineer told me that in his department, the younger guys are moving with Nissan and the older ones staying here.
All the people staying own houses (in that dept.). No condos or renters.
He told me that was the single biggest deciding factor whether people stay or leave.
You do the math…
But Suzanne already did the math.
Actually, my department just hired a guy from Nissan.
The “owners” don’t want to move. What will they do for work?
Can 60% of one auto mfr’s HQ workforce be absorbed into the other auto mfr’s just as the auto sector is hitting a wall (Ford & GM near term bankruptcies)?
Either way job losses just as the home ATM is breaking down isn’t a pretty or bullish picture.
Maybe with $100/barrel oil the loss of automotive jobs will be the excuse for the great RE bust of 2006-2011.
Two families at my kids school will be moving at the end of the school year. Both families have had their houses for sale for months. No offers yet but one Mom did tell me that Nissan was going to buy their house from them. I’m not sure if this is true. Comps in the area are 650k and she listed her house, located at the end of a stop sign, for 809k. Every few days the house drops it’s price. It is now listed at 779k. Why go through all the selling a house crap if it were a sure thing from Nissan? They close escrow on their new houses in TN on May 25. My husband works for Toyota and he keeps telling me how slow it has been. I am getting worried about the economy. I just filled up the car and it costs 53.33. Ouch! We decided a few months ago to hide some extra cash in the matress.
Yep, it is another negative side effect of the bubble is that the remaining quality jobs are chased out of town by high costs.
It would be better for Nissan to stay if we had a rational market.
Is it the crack in the dam for the HQ jobs in the auto industry in So Cal?
Only time will tell.
Are you the same Shannon from OCR’s RE blog?
Because these services that buy houses from relocating employees don’t pay top dollar - effectively they put a floor under what you’re going to get and guarantee you a “sale”. I was in this position once and ended up selling it myself for about 10% more than I would have got otherwise.
“We decided a few months ago to hide some extra cash in the matress. ”
Why? Just in case you run out of toilet paper? If you want to preserve some wealth, stick with gold or silver.
Since I live in SoCal, I’ve got mixed emotions whenever I hear that companies are leaving and thus taking jobs with them. I know many of the mortgage companies are following suit with both Wamu and CW trying to relocate/hire and otherwise move operations and employees to other states like Texas and outside the country to India. While I’m happy to see the tide change to more reasonable housing costs for all, I’m disappointed it will take companies and jobs leaving the state for it to happen.
I’m going out on a limb here but the NAR is about to be called on their seasonally adjusted claim. They talk about the West being down 12% on volume. I can’t find any places reporting local conditions that are only down 12%. Now, I’m sure they’ll caulk it up to accounting problems or some such but it will spell the end of the MSM accepting their figures.
The Seattle area certainly isn’t down very much. The real-estate market remains VERY tight here right now. In fact, ZipRealty keeps showing a DECREASE in listings for my zip code every week I check. So I guess the housing cold hasn’t caught on everywhere yet.
Maybe they’re being re-listed so the DMO is reset? But the realtors wouldn’t stoop that level would they? Naaaa.
Seattle ziprealty reports 20% of the listigs are price reduced. Just a few months behind the leading edge of the ripcurl that’s all.
Portland oregon for some reason still has a strong RE market.
Just realize that different areas will start falling at different times, at different rates, and by different total amounts. Seattle and the SF Bay area might take longer to start down, and when they do, they may fall less…ya never know.
However, if this whole thing plays out as badly as some here are predicting, ALL areas would (eventually) get hit.
Anecdotal evidence, but my aunt in Seattle (in the city) says that she’s about to sell. Some site (Zillow or something?) showed her house value start to tick down.
We sold our house in Arlington, 1 hour north of Seattle in early March and we had buyers in only 3 days, and we had 2 other people ready to make offers at the open house on the 4th day, so I can say the bubble isn’t bursting here yet, but I know it will go eventually.
Mass psychology is still being written by the main stream media. The spin is holding up.
I know. How many stories were there today where the headline was completely misleading and didn’t relate to the actual message in the story? Ridiculous. Is the American public really that stupid?
In a short word, yes.
Pa. Woman With 97 Cents Gets $328K Home
Apr 25 4:10 PM US/Eastern
Email this story
DOYLESTOWN, Pa.
A woman pleaded guilty to fraud and other charges in what a prosecutor said was his first case in which a defendant stole an entire house.
Wendy Jean-Francois, 44, of Morrisville, pleaded guilty Monday in Bucks County Court to multiple counts of fraud, forgery and related charges.
Prosecutors said Jean-Francois sat down Oct. 5 at a settlement table at Rainbow Assurance, a mortgage title firm in Falls, with 97 cents in her bank account.
But she used two checks totaling $63,000 and a letter vouching for them, purportedly from a Wachovia Bank manager, and left with the keys to a $328,000 home, prosecutors said.
The checks turned out to be counterfeit and the letter forged, said David Zellis, first assistant district attorney. “This just boggles the mind,” he said. Bucks County Judge Kenneth Biehn deferred Jean- Francois’ sentencing for a mental health evaluation.
AND THEY BLAME HER
The bankers that agreed to this deal are obviously morons, but fraud is still fraud.
Uhhhmmm Why wouldn’t they blame her.
Because the bank failed due diligence and should be closed down as a risk to the world financial system.
That’s a fallacy. Just because the banks are also idiots doesn’t mean she shouldn’t be blamed for fraud.
I meant blame -just- her. Of all the guilty she is the least dangerous.
Ha! The joke’s on her. The keys were counterfeit too!
and the house wasn’t there
I say the bankers who approved this should go to jail as well. Hell I don’t write checks at Safeway because of the time and tedium it takes for them to run it through their little computer that calls my bank right then and there.
I can’t wait to see the “Donald” do his live selection of the next apprentice before a studio audience. Smack in the middle of “housing is dead” gloomery, he’ll have to go through the motions of showing off his insane overpriced projects and asking the apprentee to choose one of them to manage. That’s gonna be priceless, no pun intended.
What if the show producers (but not the Donald :twisted:) suddenly realised that one or more of the candidates were playing pass the parcel so that they didn’t get selected for exactly that reason?
“At this point, the country could sell new and existing homes for five-and-a-half months without adding a single new ‘For Sale’ sign. That’s a level we haven’t seen in more than seven years.”
I forget what the official months inventory means buyers market. Was it 6 months or 9?
Thanks
Simmsays…
http://www.AmericanInventorSpot.com
6 months is a rough equilibrium, neither buyers’ nor sellers’ market.
Gee I wonder how NAR arrived at 5.5 months inventory?
It kinda fits the story they are trying to tell.
Lie, Damn Lies and Statistics.
and of course that six months is a NAR claim as well!
Centex down 6% after hours
http://finance.yahoo.com/q?s=CTX&d=t
Yahoo! Let the bloodletting begin!!
Can someone tell me if I’m crazy? I’m almost positive that Realty Times used Inman News as their main RE news source. I was curious to see how Realty Times described the news and link to their realistic headline at Inman News, but there was not even a mention of that story on the site. Now, I can’t find the RT ad link on the Inman page…denial? Am I wrong?
“Home price gains, when measured on a year-over-year basis, were lower than in previous periods.”. This is why I think it’s important to look at things on a quarterly basis. Monthly numbers can vary based on any number of factors. It’s like giving a damn about weekly mortgage app data- what the heck does it prove? The sample size is just too small. Quarters on the other hand are a nice balance.
And just to play devil’s advocate, the quarterly price data -was- up over last year. Yes, inventory is ugly. On a monthly basis, sales in the Northeast were actually very significantly over last year, so it cuts both ways.
We posted some quarterly data today. You’ll see what I mean- sales down, inventory up, price mildly up.
-X
BubbleTrack.blogspot.com
Bubble Track - I like the site. I agree that quarterly price data seems to jive better with what I’m seeing in the market: inventory up, sales down, slight price increase.
Thanks. By the way, what does it mean when you’ve got the conditions we are talking about -even with the slight- price increases? It means there is no reason for prices to continue to rise.. Even if they do.. It’s a market with NO fundamentals.. I say buy in at these prices if you like, but be warned of the risks.
-x
BubbleTrack.blogspot.com
bubble-x…….
AS a bond geek, I watch the Mortgage apps and refi apps weekly. Last year the trend was astoundingly DOWN all year while housing and Govt.R.E. industry data was “saying” things were booming. Now for the 2nd year these numbers drift lower month in month out…
SO WHAT? Haven’t we all heard “follow the money?” Well the sample size of the mortgage data is 50% of all paper written. That is more than statisitically significant!…If you graphed the trends from 1998 you would see that we on a verge of making 8-9 year volume LOWS>..
SO WHAT?…Well if you graph logrithmethicaly $ mortgages & the data from the homebuilding community with the NAR / MLS numbers reported by aka -Uncle SAM and these co-conspiritors you would see that a giant JAW pattern….R.E sales path grinding higher while the purchased (leverage) data dropping into the depths of despair.
So WHAT?…well if $ money flows from mortgage apps are on the verge of a breakdown 1994-8 lows when the industry was a fraction its current size today? And R.E. sales data is glowingly grinding higher near historical top levels “Bullishly” ////We have an obvious DATA disconnect!
What do I mean by disconnnect?
When I first got into the bond business 20 yrs.ago ” refi and mortgage appps LAGGED home sales…45-60 days.
TODAY the $ money data leads by 20 months??
Yep the world is flat! our dollar is backed by gold, it’s different this time and I was born yesterday!
2+2 = the government is lying about the housing market data OR a large % of buyers have shifted buying habits for new homes and home resales to CASH!
While conclusion (B) “we are buying with cash” IS NOT supported by other data..such as, ( Net home equity) and (average debt balances versus income) etc.
Inspired,
Are you referring to the number of mortgage applications or the dollar volume of the mortgage applications?
That’s a very technical comment! I agree with you that a) the numbers are a bit difficult to read, and b) that the market is rotting even if things like price go up.
On the other hand, I just can’t give into conspiracy theories. We have seen nothing to say that the Government is lying. In fact, even NAR’s data APPEARS okay, if a LITTLE skewed. At this point, the data is the data, and it’s most of what we have to go on.
-X
BubbleTrack.blogspot.com
Awesome post / info, thanks.
Comment by Inspired
2006-04-26 20:54:04
Yep the world is flat! our dollar is backed by gold, it’s different this time and I was born yesterday!
______________________________________________________
Yup. Welcome to the world of smoke and mirrors, brought to you by George Bush and his den of thieves in congress. Senior Marketing ANALysts Larry Kudlow and Dave LIARah.
Larry sez “Yes people, the economy is booming”. He doesn’t tell us WHO’s economy. The reality is that the majority of wealth continues to concentrate in the hands who have the most(but they don’t work for it).
Bushes lying mouthpiece, John Snow flat out lied on Kudlow and Co yesterday. He stated that the dividend tax cuts (tax cut for the most wealthy) created the highest revenue stream on record. Flat out LIE.
Here we are people. War is peace and peace is war. Debt is saving and saving is really debt. Fox News tells me so.
well, it’s not a lie. Government tax receipts are up a lot since the Bush tax cuts went into place. And since the wealthy pay a hugely disproportionate amount of taxes in the US, it only makes sense that tax cuts be directed toward them.
One more point: the wealthy people in the US are also among the most productive citizens. Generally speaking, wealth is created, not taken or given. Yes, there are exceptions, but many wealthy people in the US generally got that way through brains, hard work, a willingness to take risk and a little luck. Don’t bash the wealthy just because you chose to spend your life screwing around out in the sticks.
“well, it’s not a lie.”
Care to back that up? The truth is that revenues are at 15 year lows. Why would you state otherwise? Could it be that you repeat the same lies that you gullibly embrace? Probably.
“And since the wealthy pay a hugely disproportionate amount of taxes in the US, it only makes sense that tax cuts be directed toward them.”
Why would you excuse the reckless spending in conjunction with tax reduction resulting massive deficits for 4 years running? Is this your idea of fiscal responsibility?
“but many wealthy people in the US generally got that way through brains, hard work, a willingness to take risk and a little luck.”
Would you care to direction your attention to a report issued YESTERDAY that those not born into wealth have but a mere 2% of becoming wealthy? I think you’d rather believe the pumped BS and continue hiding from the truth.
“Don’t bash the wealthy just because you chose to spend your life screwing around out in the sticks.”
You know little about my cashflow but I’d be willing to wager that you’re a 60k/yr wage slave desperately holding on to hopes that someday you’ll be wealthy promised to you by a rightwing carnival barker.
Sorry junior. Wage slaves don’t get rich.
Lingus-
Where do you get your “facts”? From the US Treasury home page (www.treasury.org):
“Tax Revenues are Surging…
Federal revenues for Fiscal Year 2005 totaled $2.15 trillion — the highest level ever.
The Treasury took in more than $61.4 billion in revenue December 15, the due date for corporate estimated tax payments for the fourth quarter of this year. This represents a fourth quarter record and a 33 percent increase over last year’s payments. ”
I make no excuse for reckless spending (I think the government is wasteful and corrupt- and not just just under the current administartion)…. and I wish I were wrong about tax revenues being at all time highs.
As for being a wage-slave, I own my own company.
Try not to let your anger get in the way of reason and the facts.
hmmm… Dividend tax cuts dated 2002 and you quote 2005? Don’t let the facts get in the way of cherry picking bucko.
you said that tax revs are at 15 yr lows; that’s clearly wrong since 2005 was a RECORD…I’m not cherry-picking anything, just showing how completely inaccurate your comment is with just one data point.
I’m merely responding to your lie where you stated “government tax receipts are up a lot since the Bush tax cuts went into place”. The fact is the Bush tax cut was promulgated in 2002 yet revenues for 2002, 2003 and 2004 were 15 year lows.
Republikkkan smoke and mirrors don’t work anymore as they’ve all been exposed for the liars they are. Only the ignorant minorty continue to puke the pablum.
Lingus-
You make things up and then, when confronted with the facts, dismiss them as part of some big conspiracy theory. The question at hand is whether the federal revenue has risen since 2002. The fact is those revenues have risen steadily. (See the link below). Think about what your saying when you say that tax receipts fell to 15 yr lows…The economy is about 80% larger today than it was 15 years ago. Tax rates would have had to plunge to get back to revenue levels from 15 years before.
Admit it: you simply pulled that 15 year low number out of thin air…. and it is completely wrong.
Check out this link which graphs revenue collected by the federal government….
http://www.heritage.org/research/features/budgetchartbook/charts_R/R1.cfm
Sorry but all the smoke and mirrors won’t help you. “government tax receipts are up a lot since the Bush tax cuts went into place”.
Revenues
2000=2.02 trillion
2001=1.99 trillion
2002=1.85 trillion, Bush dividend “tax cut”
2003=1.78 trillion
2004=1.88 trillion
In light of that those hard cold numbers, the Bush tax cut clearly reduced much needed revenues in 2002, 2003 and likely 2004 to offset the exploding spending by borrow and spend republikkkans.
Sorry but all the smoke and mirrors won’t help you. Nobody believes a word of the worn out republican mantra anymore. It’s over.
the dividend tax cut went into effect in June 2003. Thanks for helping me prove you wrong with your figures above….tax revs went up in 2004 and, as we know, 2005 was a record.
Look, I’m not saying that the dividend tax cut had anything to do with the growing tax revenues. I’m just pointing out that since the tax cut went into place, tax revs are up a lot (as your own data show). To make the staement that tax revs were at 15 year lows is irresponsible.
“Look, I’m not saying that the dividend tax cut had anything to do with the growing tax revenues.”
Sure you did…. you said it right here.
“Government tax receipts are up a lot since the Bush tax cuts went into place.”
All the ducking and weaving on the loss of revenue due to the dividend tax cut won’t change the fact that it was a loss of revenue.
You’re so obtuse that trying to reason with you is pointless. THERE WAS NO LOSS OF REVENUE.
By the way, the sky is blue even if you swear that George Bush made it red.
Clearly the $350 billion dividend tax cut cost 350 billion out of the US treasury for the benefit of a wealthy few. Why not spend taxpayer money on something of value?
Lingus-
I think that any reform that puts less money in the government coffers is good policy….yes, a tax cut that was more broad-based would have been better for everyone. And I also think that Bush’s sending programs over the last few years have been altogether reckless. I don’t like the guy or his policies…it’s just a bad idea to cut taxes and increase spending.
OK. That’s my two cents on this topic…my apologies if some of my comments above got a bit obnoxious. I appreciate the fact that you engaged in a good debate.
Have a good night.
Sorry but starving critical services, regardless of method, is not good policy.
“Let me get this straight: Mortgage and interest rates are on the rise. Household finances are also being pinched by record gasoline prices. Yet somehow, Americans have all of a sudden decided to go out and buy a whole slew of new homes?”
And the answer to this is YES. My wife just can home an told me about one of her workers that did just that this week! There are some out there that are just plain stupid, stupid, stupid, stupid, stupid!!!!!!
It isn’t stupid if you got the seller to take a loss. That can still happen. Not all buying is bad.
6 Months from now.. October. Will we still be seeing this kind of spin? Or will people give in to the inevatible?
Wait for the first-ever lower year-over-year Existing Home Median Price report late next month. It’ll be impossible to spin that.
Man I wish I had my camera tonight, just drove through Jamboree and Calvin in Irvine. At two different intersections there were what looked like high scholl girls two on each corner one has a white sign and the a yellow sign.
OK the white sign went like this:
Leverage your good credit, start investing in real estate in Florida (yep thats right Florida).
Then the yellow sign said:
At the Irvine Regency Hyatt tonight 7p.m.
It still goes on, would love to ahve been outside just to see if there are morons actually show up.
Any one else on this blog in Irvine happen to see it.
Also another 2 intersections down a board on the side of the road, 148 Luxury Homes for sale follow the arrows.
Ho Hum
Did it also say B.Y.O.B.? That is about who’s left.
I live in Irvine and saw this also. I have been through the highrise Avenue One on Jamboree and let me tell you they are SMALL . Who would want them. Overprice Hotel Rooms.
I heard an advertisement on the radio about an RE ‘wealth program” advocating buying property in TN because it cash flows (rents vs. costs)…the next place to catch a spark from the RE wildfire?
Or is it some laid off Nissan employee trying to get one last hit of profit off of his former employer and their move to TN.
I’m casually looking for a house in SW MO (Ozarks) after selling my Saratoga, CA home in Oct ‘05. The agent I am using told me today about a house that I might like, and said that even though it is under contract I should at least drive by it. Why bother? Because in the last few months a number of houses under contract have fallen out of contract because the potential buyers could not sell their home (contingency offers are accepted here). And guess where these buyers have been from? California, Florida, and Las Vegas. So even waaayyyy out here in fly-over country the effects of the bubble have been felt and the popping will also be a factor, although how much is hard to say.
from UK some flats below 2003 prices
http://www.rightmove.co.uk/viewdetails-6432817.rsp?pa_n=11&tr_t=buy
well, in the Netherlands yoy prices are still increasing (have been for at least 15 years), current yoy increase is 4-5%. My own area showed a -11% average price decline last month (the first in many years), but that was just a correction after a +20% surge just before that.
There also is a new surge in refinancing in the Netherlands because people fear (inspired by the easy money mob) that mortgage rates may start rising from their 4-century lows, and that the HMD will get a little bit less generous in future. So hurry and get that 1 million euro mortgage at 1% effective rate as long as supply lasts …
so, still no sign of bubble trouble in the Netherlands; they are surely aiming for the world bubble record over here.
“‘New home sales sprang back to life like a vampire in a cheap horror flick,’ said economist Bob Brusca. ‘And like that zombie in the movies, housing really is dead. Don’t let all that twitching fool you.’”
This is truly a classic and should be framed for posterity- Love it!
The bottom line on all of this, “liars can figure but figures don’t lie.”
My greatest fear is……..what happens when the music stops?…….this bubble is global and out of control……..and I feel history is being written as we speak……..how stupid governments of all types have been.
don’t worry, the global bubble is in very healthy condition
Easy money is still everywhere and as long as that doesn’t change the housing/credit bubble will thrive. I’m getting more credit / mortgage SPAM from US companies every day (please sign up for $ 500K, just takes a minute). And I’m not even living in the US …
It certainly appears healthy. But it can change rapidly. The U.S. market sustains many other economies. When it falls those other economies fall with it. Eventually the rings move out to other economies not directly dependant upon the U.S. Our Great Depression of 2007 will rather quickly result in a world wide depression.
I agree. Reports of the demise of the bubble are greatly exaggerated. I think that will be clearer after this summer.
The idiot Wesley Hoaglund, pres of Lennox Financial is still pitching his co loans and the biggest no brainer on the radio. Another fool co still saying reduce your payments by 35%, etc.
I would like a pepperoni/sausage pizza with my $500K I/O neg am, 10 yr deferred payment, with written guarantee that my home will appreciate at least 20%/yr, or you will buy it at that price in 10yrs - loan. Can’t lose, ran the numbers. WOW
OT, sorta. Driving home last night listening to a news story on the radio. Anybody getting new utility rate increase notices in the mail? We’ve all made sweet comments on filling our tank, but it sounds like there are even more nasty increases coming for elec rates. Baltimore area apparently looking at something like 70%, in part because they were getting discounted power before. PG&E in CA is looking at more double digit increases on top of what they’ve already gotten this year.
Sounds like owning that McMansion’s gonna get real expensive.
But don’t worry, everything here in Baltimore RE is fine. We’re getting hit with a 72% elec increase this summer, our gas prices are at least .10 higher than the nat’l avg, DC inventory is exploding, our prices have stagnated the past 6 months, but don’t worry, the MAR tells us it’s all good and since we’re on the East Coast, tucked betweeen PHI and DC, we’re insulated from the rest of the country, it’s different here. I can’t even imagine the cooling bills this summer in those huge new homes…