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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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Potatoes.
Realtards are potatoheads.
Hey, watch it! You just insulted potatoes!
Here’s my suggestion: Are the reports of short supply and bidding wars true in your area? I thought they were somewhat born out in my area, PHX’ but did quite a bit of looking on zillow last night and saw something I hadn’t been expecting, lots of recent price reductions and a pretty decent supply in my range. Not huge reductions mind you, and not down to where they should be in my opinion, but cut by 5 -15 k in most cases.
Is 2013 the year of the belated knife catcher?
The couple who bought the last condo we owned “won” a bidding war, as we had maybe five offers on one weekend.
Too bad they were later struck by the winner’s curse, as the value of the place dropped by 2/3 over the next half-decade.
Was the buyer a DC Dingbat?
I believe they were (former) Marin County dingbats.
This would have been around 2005, pimpboi. So yes, they were dingbats.
LOLZ
Why won’t you tell us what your losses are?
bidding wars true in your area?
Don’t know if you consider this a bidding war: I put in a backup offer (25K over the listing price) on a large piece of ground despite knowing the seller had already accepted an offer. They declined my backup offer because there’s also a third, all cash offer (don’t know the amount). My realtard told me I could up my offer more to stir up the bees nest and I told him every party but me wins in that game so forget it.
“…every party but me wins in that game so forget it.”
Good job at avoiding the Winner’s Curse…
What subjective odds do you place on the sequester happening? (Mine are less than 50:50…)
DOE says sequestration may force furloughs, program cuts
By Ayesha Rascoe
WASHINGTON | Thu Feb 7, 2013 7:01pm EST
(Reuters) - The Energy Department has notified its employees that it may have to place workers on temporary furloughs and slash “vital programs” if across-the-board budget cuts take place as scheduled in March.
President Barack Obama and lawmakers in Congress have been sparring over how to address the deep automatic spending cuts due on March 1, known as “sequestration.”
“Given that less than one month remains until these cuts would take effect … our senior leadership team is engaged in extensive planning efforts to determine how we would deal with sequestration,” Deputy Secretary Daniel Poneman said in an internal letter to department employees obtained by Reuters.
…
We know of a DoE contractor that had their contract terminated.
60+ people getting laid off in March.
I don’t know if the chances of a 100% sequester is 50:50, but I suspect that the chances of a 50% sequester are near 100:0.
It doesn’t have to happen all-or-nothing. And I really don’t think Congress would force the agencies to enact a year’s worth of cuts in six months of time. I predict a piecemeal deal and then a punt until next year.
“It doesn’t have to happen all-or-nothing.”
Your understanding and mine differ, as your ‘50% sequester’ sounds like a budget deal.
My understanding was the sequester was the ‘no deal’ fiscal Armageddon alternative…
Your question didn’t ask whether there was going to be a deal. You asked if there was going to be a sequester.
“You asked if there was going to be a sequester.”
Again, we seem to differ on what this means.
You seem to think a sequester could be negotiated to mean different levels of government funding reductions, but I interpret it to mean an indiscriminate 10% (or whatever the number is) reduction in government agency funding without any cost-benefit analysis.
I predict a boot smacking into a round, metal cylinder.
Feb. 8, 2013, 6:00 a.m. EST
Big deficits needed for next 4 years: CBO
Commentary: The economic deficit will total $1 trillion this year
By Rex Nutting, MarketWatch
WASHINGTON (MarketWatch) — The U.S. economy is still badly crippled by the aftershocks of the Great Recession and needs several more years of high deficit spending to hasten its return to full employment.
That was the core message in this week’s release of the official budget outlook by the Congressional Budget Office. In its quiet, nonpartisan fashion, the CBO has demolished the arguments made by politicians of both stripes who insist on austerity in a time of depression. Read MarketWatch’s coverage of the CBO’s budget outlook.
The economy will suffer $7.2 trillion in lost output during the depression, equal to shutting down the entire economy for half a year.
Instead, the CBO gently hinted that the government should run higher deficits for the next four years to boost economic growth and job creation, and then start reducing the deficit in earnest in 2017 when the economy is fully healed.
Politicians love to quote the CBO when it warns of the long-term dangers of budget deficits, but they are mum when the CBO warns about our economic deficit, which is wide and still growing.
…
Will the Canadian and Chinese all-cash investors disappear as their home-grown housing bubbles pop?
Canada housing starts plunge in January
TORONTO | Fri Feb 8, 2013 8:24am EST
Feb 8 (Reuters) - Canadian housing starts plunged in January as both single and multiple starts fell, particularly in Ontario, Canada Mortgage and Housing Corp said on Friday in a report that showed the housing market was even weaker than expected.
The seasonally adjusted annualized rate of housing starts was 160,577 units in January, down from 197,118 in December. The December figure was revised down from the 197,976 units reported previously.
The number of starts in January was well below the forecasts of analysts in a Reuters poll, who had expected 195,000 starts.
China mulls tighter curbs on property market:report
Updated: 2013-02-06 16:26
(Xinhua)
BEIJING - Stricter controls could be imposed on China’s property market after house prices in some cities went up faster than expected, Shanghai Securities Journal reported Wednesday.
The report cited an anonymous source close to the Beijing Municipal Commission of Housing and Urban-Rural Development as saying that major cities such as Beijing are “basically sure” to announce new measures in the near term, including restraining demand and creating higher purchase barriers.
These new measures will probably be announced before early March, when the country opens the year’s major political meetings, the report said.
After a short-lived cool-off in 2010, the housing market began to recover last year as the Chinese government tuned its policy to more emphasis on economic growth.
In December 2012, 54 of a statistical pool of 70 major Chinese cities, up from 53 in November, recorded higher new home prices than a month earlier, according to the National Bureau of Statistics. This marked a third consecutive month of such increases.
Housing transactions have also increased after demand picked up for fear of further rises, as evidenced by long queues in the transaction halls in Beijing.
The recent development has fuelled speculation that the government may introduce fresh measures to dampen the market and ease public complaints.
“If the government does not escalate controls, prices in some major cities will run out of control,” said Yang Hongxu, vice president with Shanghai-based R&D Institute of E-house China.
…
Here’s my suggestion: Are the reports of short supply and bidding wars true in your area ??
Yes…All too real honestly…You might say ridiculously real….
Local market observation 95050-95051;
We are a town of 110,000 residents…6 or seven square miles I believe…Home to many of the biggest High-Tech companies of the world…We have a grand total of 26 single family residences available in the entire city…So when you put in the mixer, obscenely low interest rates, with high paying jobs, and inventory available near zero guess what happens…A medium size house (1500 sq.ft.) is running in the $550 + square foot range…Smaller homes (1000 sq.ft.) are running in te $600 + range…Bigger homes (2500 sq.ft.) are running in the $450 + range..
A home near me that I was watching in 95008 just sold…It was on what is considered a big city lot and had a 1400 square foot house on it that needed a boat load of work top-to-bottom…It was listed for $600,000. and sold for $654,000. with 34 offers many of which were all cash…
With that said, I can drive 30 miles away and find foreclosures & short sales…I can drive 60 miles and find good houses for $150. per sq.ft….90 miles and it hits $100. per ft…Kind of a disconnect the likes I have never seen before and I have been in the same zip my entire life…
Correction to my zip….Its 95050-95054….
95054
I like the walk along the river when I go up there, pretty nice.
That location is mostly industrial and Industrial property is valued very high and any homes around there will get lifted because of this.
traffic is so bad nobody wants to live very far away from where they work.
I just got around to reading the Big Short, am half way through…I can’t wait until the big crash. But I am wondering, is this trade in CDOs and credit default swaps still roaring along like it was in 2006? I know there are still mortgage bonds - i can see them in some of my holdings, or a lot of them [gulp]. But do investors still buy huge piles of dodgey mortgages with slapdash ratings, while others short them? Or go long and short both?
Let’s talk about how real estate is gonna make people wealthy in 2013 and beyond. It’s what people crave.
Let’s talk about how the lottery is going to make people wealthy in 2013 and beyond. It’s a fantasy that people can’t resist.
I’d rather talk about potatoes.
Uh, that spelled potatos. Geez.
The never-ending search for culprits in the Fall 2008 financial collapse continues, five years down the road.
Updated February 8, 2013, 2:35 p.m. ET
NY attorney general looks at ratings agencies
Associated Press
ALBANY, N.Y. — New York Attorney General Eric Schneiderman has begun examining the nation’s biggest credit rating agencies’ compliance with agreements reached by his predecessor, Gov. Andrew Cuomo, that ended an investigation into mortgage-backed securities.
The mid-2008 agreements, imposing no financial penalties, required Moody’s Investors Service, Standard & Poor’s and Fitch Inc. to publicly disclose due diligence and evaluation criteria. They also required partial upfront payments to prevent banks from simply buying the better ratings for those securities.
With that market already collapsed, the agencies say they weren’t rating new mortgage-backed securities. The 42-month agreements have expired.
An official with knowledge of the investigation, who was not authorized to speak publicly, said a subpoena this week went to S&P and information requests to Moody’s and Fitch. Under the agreement, then-Attorney General Cuomo agreed to “terminate all current investigation” and “not institute any action” against the agencies. They admitted no wrongdoing but agreed to cooperate with the attorney general’s ongoing probe into the mortgage industry and adopt reforms.
The official noted there appeared to be little effort to monitor compliance and they are looking into whether violations would enable the office now to take another look at alleged misconduct in securities ratings that contributed to the collapse of financial markets.
S&P spokesman Edward Sweeney declined to comment Friday.
At an earnings conference call Friday, when asked about the New York probe, Moody’s chief executive Raymond McDaniel said that the company from time to time gets requests for information from parties that include state attorneys general and that they cooperate with them.
Fitch did not immediately respond to a request for comment.
The U.S. Justice Department this week filed civil charges against S&P, accusing the rating agency of refusing to warn investors that the housing market was collapsing in 2006 because it would be bad for business. The department is seeking $5 billion in penalties.
S&P, a unit of New York-based McGraw-Hill Cos., called the lawsuit meritless and said, “Claims that we deliberately kept ratings high when we knew they should be lower are simply not true.”
…
February 8, 2013, 5:01 PM
Why New York’s Attorney General is on the Sidelines
By Jacob Gershman
With U.S. Department of Justice leading the charge, state attorneys general from California to Delaware have filed their own civil fraud lawsuits against Standard & Poor’s. One notable absence was New York Attorney General Eric Schneiderman.
The complication for Mr. Schneiderman is a settlement agreement inked by his office when the attorney general was still a state senator and the “Sheriff of Wall Street” badge was worn by his predecessor Andrew Cuomo, now the governor of New York.
In June 2008, then-Attorney General Cuomo struck a “cooperation agreement” with S&P and the other major rating agencies. The terms were not made public for another two years, but were hailed at the time by all the parties as a groundbreaking reform package that avoided fines or other penalties but set up new fee structures that made the rating firms less reliant on getting a rating assignment from issuers.
The firms agreed to conduct an annual review of their credit rating process, among other promises, but they were under no obligation to update the attorney general’s office about whether they were actually following through with their end of things.
In exchange, the attorney general’s office agreed to “terminate all current investigations of S&P and not to institute any action against S&P related to any current investigation or the subject matters set forth herein.”
…
The never-ending search for culprits in the Fall 2008 financial collapse continues, five years down the road.
Starting to resemble OJ’s search for the real killers.