Weekend Topic Suggestions
Please post topic ideas here!
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
To donate by mail, or to otherwise contact this blogger, please send emails to: thehousingbubble@gmail.com
PayPal is a secure online payment method which accepts ALL major credit cards.
Links
-
November 2024 M T W T F S S « Sep 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Photo Submission: hbbphotos@gmail.com
View the HBB Photo Gallery *updated 4/13/2008
Has the MSM discovered the U.S. housing market is cooling yet?
Hot U.S. housing markets turning cold: James Saft
By James Saft
Thu Dec 12, 2013 3:07pm EST
People walk near new single family homes under construction in San Marcos, California October 25, 2013. REUTERS/Mike Blake
(Reuters) - After rapid gains, some of the hottest housing markets in the United States look like they are starting to roll over.
Whether this is a reaction to the run-up in mortgage interest rates in recent months or represents a waning bid from the all-cash financial investors who have so often been marginal buyers is unclear. Either way, volatility in house prices may now prove to be a feature of the system rather than a bug.
In Phoenix, where house prices have risen more than 40 percent in less than two years, pending sales fell 32 percent in October, while the number of months (at current sales rates) of supply is up 111 percent from May.
In Sacramento, the October figures are equally grim, with year-on-year supply up 93 percent and sales down 20 percent.
Both Sacramento and Phoenix are markets that have seen a large influx of financial buyers, private equity firms and others trying to put together large portfolios of single-family homes to manage and rent.
Volume isn’t slumping just in the classic boom and bust towns. Washington, DC house sales fell 14 percent in November, while sales in Silicon Valley, now in the midst of a technology IPO boom, fell 20.9 percent in November.
…
US Housing Market Outlook 2014: Slowdown In Housing Recovery, Home Prices To Rise By 4% Next Year
By Moran Zhang
on December 12 2013 5:52 AM
A newly built single-family home that is sold is seen in San Marcos, Calif., Jan. 30, 2013. Privately owned homebuilders are seizing on a housing supply crunch to tap the stock market as more Americans, buoyed by an improving economy, seek to buy their first home or move into bigger premises. REUTERS/Mike Blake
U.S. home prices are on track to end 2013 up an impressive 11 percent, economists say, but that’s probably going to be the fastest rate of home price appreciation for years to come. Home price appreciation is expected to slow “sharply” over the next several years, with gains of just 4 percent penciled in for 2014.
The rapid bounce in house prices, which was driven by strong investment buying and tight supply conditions, will soon start to moderate. The next stage of the recovery will be characterized by strengthening activity among owner-occupiers and mortgage- dependent buyers, a rising number of willing sellers and a much more moderate pace of house price inflation.
Since hitting the trough in the fourth quarter of 2011, the housing market has made substantial progress. So far, national home prices have risen 14 percent, reversing about a quarter of the cumulative decline.
This has generated $2.8 trillion of wealth from real estate, which combined with the sharp gain in the stock market has strengthened household balance sheets. However, housing construction has been slower to recover, still trending notably below the historical pace of 1.5 million.
…
A rental will never feel like a real home.
Smart home buyers are taking advantage of record low interest rates and buying the home of their dreams.
Enjoy those record-low rates while they last!
Vince Foster: The Bond Market Can’t Crash if Fed Taper Is Already Discounted
By Vince Foster Dec 09, 2013 1:05 pm
Volatility, negative convexity, and the bond market’s paradigm shift.
In the wake of Friday’s better-than-expected 203,000 non-farm payroll report, the Wall Street Journal’s Jon Hilsenrath reported that with the better economic news that preceded this data, the Fed is likely to begin to scale back on its controversial $85 billion per month bond-buying program. Thus while the headlines focused on the torrid rally in stock prices, in light of this interpretation, the real story of the day was the reaction in the bond market and more specifically the mortgage-backed security (MBS) market.
The initial knee-jerk reaction in bond prices was weakness, pushing the 10-year note yield above 2.90%. That brought in talk of an inevitable test of 3.0%, the previous high met during the spring when the Fed first floated the tapering idea. The weakness was short-lived though, and despite stock prices maintaining their gains, treasuries managed to stage a curve-flattening reversal, rallying to push the 10-year yield back towards the unchanged level near 2.85%.
In light of the tapering talk, the performance of the MBS coupon stack was even more impressive. Across the board, mortgages saw interest with high coupons outperforming, as the “up in coupon” bias ruled the session. While the treasury curve ended the day largely unchanged, MBSs maintained their gains with higher coupons leading the stack, tightening against both treasuries and swaps.
…
Neither will a cell.
As soon as the last nail was pounded into the wall of the new houses on my street in 1991 I noticed my stucco box was starting to feel like a prison. The billboard at the end of the street had the price of the new homes by the same builder. That billboard was up for several years. Each of those years the price of buying a house that was still unoccupied kept going down. I knew from the billboard. Disconcerting because my net worth those days ranged from $5,000 to $50,000 while my house value dropped b $20,000.
A mortgage is worse than wearing trousers with the words “kick me” over the rear end cheeks.
What are the housing policy implications of turnover at the top of the FHFA?
U.S. Senate approves Watt as housing finance regulator
By Margaret Chadbourn
WASHINGTON Tue Dec 10, 2013 6:16pm EST
Representative Mel Watt testifies before the Senate Banking, Housing and Urban Affairs Committee confirmation hearing to be the regulator of mortgage finance firms Fannie Mae and Freddie Mac on Capitol Hill in Washington June 27, 2013. REUTERS/Yuri Gripas
(Reuters) - The U.S. Senate on Tuesday confirmed Representative Mel Watt to lead the agency that regulates taxpayer-owned mortgage financiers Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB), providing greater leeway for the Obama administration’s mortgage aid initiatives.
The vote to approve Watt as regulator of the Federal Housing Finance Agency was 57-41. Only two Republicans - including Richard Burr, who is from Watt’s home state - voted in favor of the North Carolina Democrat.
President Barack Obama nominated Watt in May to head the independent regulator. But Republicans worried he would be too beholden to the White House and blocked a final vote when Democrats brought the nomination up in October.
Last month, however, Democrats changed the rules to allow nominees like Watt to overcome filibusters with a simple majority in the chamber, which they control 55-45.
…
Any thoughts on why the 10-year T-bond yield is diving this morning?
Flight to safety…North Korea is worrisome…So is Iran…If rates continue to go down, better buckle-up…We may be in for a bumpy ride…Taper will be off the table for awhile longer…
You can only delay 15% interest rates for so long……… And 15% rates is precisely what we need.
I need at LEAST that to make up for my depressed return on liquid savings.
Dec. 13, 2013, 8:30 a.m. EST
U.S. producer prices fall again in November
By Greg Robb
WASHINGTON (MarketWatch) — U.S. wholesale prices fell for the third straight month in November, as prices declined for energy, the Labor Department reported Friday. Meanwhile, the core producer-price index, which excludes food and energy, increased a slim 0.1%. The readings were in line with the forecast of economists polled by MarketWatch. In October, the overall PPI fell 0.2%, while the core PPI rose 0.2%. Wholesale energy prices declined 0.4% in November, led down by gasoline prices. Core prices were pushed up by higher prices for light trucks and farm equipment. Over the past 12 months wholesale prices have increased an unadjusted 0.7%, up from 0.3% in October. Core producer prices have gained 1.3% over the past year, compared with 1.4% in the prior month. The report signals that inflation has stabilized at low levels.
How are your bitcoin investments holding up?
European Banking Authority blasts out warning on bitcoins
December 13, 2013, 5:35 AM
More alarm bells are ringing across Europe over bitcoins.
The European Banking Authority warned Friday of “risks deriving from buying, holding, or trading virtual currencies such as bitcoins,” which adds to last week’s warnings from French and Dutch banking authorities as well as the Chinese. Wagging a finger, the EBA says consumers are not protected through regulation when using virtual currencies and could be at risk of losing their money.
The EBA said there is “no guarantee that currency values remain stable,” and that it intends to a deeper look into bitcoin and the like “in order to identify whether virtual currencies can and should be regulated and supervised.”
The agency said European consumers need to understand that there is currently no regulatory protection in the European Union that would protect consumers from financial losses due to the failure of a platform for virtual currencies.
Just this week, Swedish bitcoin exchange Safello launched what it claims is the first bitcoin ATM in Europe, allowing users to change cash for bitcoins. Coindesk spoke to the CEO and co-founder of Safello, Frank Schuil, who said the financial authority in Sweden does see bitcoin as a “high-risk event,” and users of the machine will have to go through extra security steps.
The EBA warned as well about “digital wallets” storing bitcoins on computers, smartphones, etc., again reminding that there’s no legal protection in case of fraud. Last month, a Denmark-based bitcoin payment processor with a free online wallet service lost over $1 million worth of bitcoins after a security attack on its servers. China has so far produced the biggest known bitcoin swindle, in which a Chinese platform gathered up $4.1 million in bitcoins before disappearing.
…
Are banks still too-big-to-fail these days, or just too big, period?
Why not include real estate, too?
Dec. 13, 2013, 8:35 a.m. EST
Not just too big to fail, banks are too big. Period
Opinion: Finance is so big that it’s literally more trouble than it’s worth
Finance has gone from 2.4% of the economy to 7.9%.
WASHINGTON (MarketWatch) — Forget about individual banks being too big to fail.
The whole financial system is simply too big. Period.
No advanced economy can function without it, but finance has gotten much bigger than it needs to be. The economy has become overly financialized.
Finance includes the banking sector, insurance, Wall Street, hedge funds, private equity and wealth management (but not real estate, in my definition
). It has gotten so big that it’s literally more trouble than it’s worth.
…
I would like to see some discussion a on how a lot of firms are not replacing the retiring workers. It seems to me that firms think that this is better than laying off senior workers and replacing them with younger inexperienced workers. The trend is seen not only in engineering companies but in other general employment such as nursing.
In engineering there will be always a lot of senior engineers that the management do not know what they are contributing.
At the young age of 54, I am involved on three projects at work. I love worki g in the lab with computers and jags and RS-232s, Ethernet, USB, etc. I am having as much fn as I did in my 20s working in a computer lab. Retirement? Flying Spaghetti Monster forbid!
Jags = Jtags