Well, that about sums it up. Good luck out there. (BTW - it's an Air Canada plane, but assume it's landing in Phoenix!)
We have repeatedly said that the key indicator for most of the world’s major stock markets is the US housing market. The Philadelphia Housing Market Index has now fallen to its major support level of 225. Any further weakness from here would be a prelude to a shock.
Because of the importance of this indicator, it has been our policy each fortnight to publish the latest news from the US housing market – it is getting worse!
Ten Las Vegas house projects have been halted or put on hold.
Toll Brothers, one of the major luxury house builders in the US, have said that their second quarter orders were down 33%.
Not surprising, bearing in mind the above, the National Association of House Builders say that the industry’s confidence is the lowest it has been since 1995.
According to the Washington Post a greater proportion of mortgage financers tapped their home equity for cash in the first quarter 2006 than any other quarter in 15 years. More than 50% of these applicants borrowed at higher rates.
One of America’s leading mortgage lenders, Ameriquest, is closing 229 branches and laying off 3,500 employees. (A clear indication of sharply lower activity.)
According to the Commerce Department, housing starts in April were down 7.4% at an annual rate of 1.85 million, the third consecutive monthly decline and the slowest since November 2004.
According to the Wall Street Journal, late payments on mortgages are rising. Delinquencies are sharply higher on loans made last year.
According to a recent study, 29% of 2005 purchasers now have no equity in the homes.
America’s new jobs figure for March was 138,000 - economists had estimated 200,000. 138,000 is the lowest since October last year and it followed three months of downward revisions.
The University of Michigan’s Consumer Confidence Index for April was 79, compared to 87.4 in March, the lowest since Hurricane Katrina.
Lombard Street Research said this week that the US economy had peaked and was tipping into an unstoppable bust. The property market is crumbling - “the real US hard landing starts now”.
May 30, 2006
The US hard landing starts now.
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32 comments:
agreed. The recession is coming soon. The current economy is built on a pile of debt.
Are spammers targeting housing bubble blog sites?
3 of my favorite housing bubble blogs have recently been taken over by spammers:
overvalued.blogspot.com
thereisnohousingbubble.blogspot.com (this one seems to change from a housing bubble blog back to a spammer and back to housing bubble. I think he's trying to get his site back from the spammer but somehow the spammer regains control)
crash2006.blogspot.com
AOOGA!!!!!!!!! Dive, Dive!!!!
For those of you that follows my Extreme Flipper series, the latest installment of EF I is now available. There will be no soft landing for Vegas, not with folks like EF I.
That's a classic bipolar post from CL. Sherman 82? Probably was born in 82. A 24 year old guy who followed the cool crowd and is almost desperate to get out of the trap. How soon will he be in panic?
What is up with all this pessimism? The world economy is pretty strong although I am certainly worried about the MBS and the housing market. A telling tale may be what just happened to my friends - bought in 2001 for $133k, put on market last month for $189. Had one offer (insulting) at $170k. They've decided to pull the house off the market and stay there for a couple more years. If enough people feel the same way it will prolong the downward spiral and keep the economy afloat for longer than we may realize.
As the housing market goes, so goes the economy. Down. Down. Down.
the great stock market crash of 2006 is now underway
look out below
Anonymous said...
"Are spammers targeting housing bubble blog sites?
"3 of my favorite housing bubble blogs have recently been taken over by spammers:
"overvalued.blogspot.com
"thereisnohousingbubble.blogspot.com (this one seems to change from a housing bubble blog back to a spammer and back to housing bubble. I think he's trying to get his site back from the spammer but somehow the spammer regains control)
"crash2006.blogspot.com "
I noticed the same thing. The first is the most freakish, since typing in the address now takes one to a site selling Atlanta real estate. Yes, hacks are screwing with something, using re-directs and hiding the URL of the actual sites to which visitors are diverted.
the great stock market crash of 2006 is now underway
look out below
SWEET!!!!!!!!!!
Economy turning on a dime
Does anyone else get the feeling that things are going down hill fast? I predicted a slowing late in 2006 and a recession in 2007, but Emerging markets tankend last week (See Top Headline on Financial Times - ft.com) and now consumer confidence is down in USA, housing bubble has burst, and stock market is tanking. . .also oil is up because June 1st starts hurricane season. . .I feel recession will start by late summer.
How soon do you think it will be before prices really start to come back down? We are in the market to buy, but still holding out.
panic,
Yes my friends were insulted. I felt that $170k is a fair offer for their property but as is the case with too many sellers, their idea of value has become detached from reality. They have decided to pull it off the market and hang out until they get what they want, which IMO will never happen.
My thoughts are that if just 20% of the people feel like my friends, the housing crash may be delayed although prices will still drop slightly due to panic sellers and those who can't afford it.
My initial thoughts about attacks on RE crash blogs: The money behind the attacks is not from the NAR. It is the chicom gov't that bought so much of the housing debt. They are in line to lose big if these defaults keep climbing.
Any other ideas?
How soon do you think it will be before prices really start to come back down? We are in the market to buy, but still holding out.
Hold out for forecloseur city. Keep an eye out in your area. Problem is that the longer you wait, the higher interest rates will go.
"Problem is that the longer you wait, the higher interest rates will go."
Interest rates rise and fall with the state of the economy. They are rising now, but after housing prices crash and the economy goes into recession they may well fall again as investors move their money from equities to bonds to preserve capital. I often hear people rationalizing a decision to buy into a grossly inflated market with "by the time prices come down, interest rates will be sky high." This may be true but you can renegotiate your interest rate once they change and you cannot renegotiate an absurdly inflated purchase price on a home. Don't buy ANYTHING until similar properties obtained with a 15 or 30-year fixed loan and 20% down can be made to cash flow as a rental. This is the only real insurance against the further downward corrections that are now beginning.
Bernanke is getting ready to pump us up in the form of huge injections of "liquidity", aka funny money. This will force interest rates down as long as he can keep up the happy talk about inflation. The other central banks have no choice but to go along as a bust in the U.S. will be reflected in Japan, Korea, and China.
Yes, it's a suicide pact for sure, but what other choice do they have?
You're right autofx, the DOW is NOT going down more than 10% as the Fed and other central banks will pull out all the stops to try and prop this thing up.
The same is true for the housing market. They can't afford to let home prices plunge because the economic consequences are simply too dire. I think they'll drive interest rates down to record low levels and provide even stranger ways for the idiots to refi their mortgages.
Bernanke said that in theory there is no limit to how much money the Fed can put into the banking system. Now watch as his theory is tested before our very eyes.
What about
http://overpriceddc.blogspot.com
That has gone also.
I moved back to Irvine Calif. a couple of months ago, For those of you who don't know, Irvine is right next to Newport Beach in Orange county.
Well, I went house hunting this last weekend, just so see if the market has started to turn here, like it is in Riverside County to the east.
There are some town homes by Woodbridge Lake the I decided to use as my test case to gage the market. All of these town homes have about the same s/f and lot size. Well, from Aug of last year to yesterday the price is down $70,000!!!!!!
All afternoon going from open house to open house, my girlfriend and I saw only one other couple. Every agent, before we left, told us just to make any offer!
In case you need to know. In Aug. these homes were selling for about $818,000. The best looking unit yesterday went for $749,000.
It's HERE !!!!!!!!
walmart disappoints, gm down 5%, home depot falling, lowes falling - yup, the market has figured out the consumer may be in a bit of a spot
man you look at housing and the stock market over the last few weeks, its going to get much worse before it gets better.
Place your bets, which will happen first:
Phoenix listing hitting 50,000
or
DOW hitting 10,000
Phoenix for 50000, Alex.
Later followed by Dow 10000.
it'll be a race, but phoenix 50,000 will be in June for sure
I'm for Phx 50,000 first as well.
Zinger,
Do you have any confirmation about the 2 trillion in new currency rumor....I first heard about it about 6 weeks ago but then any additional info just stopped!
Post here or e-mail directly at:
fishdinner@comcast.net
Thanks~!
Air Canada! LOL, thats YOUR type of jumbo jet...full of left-wing liberal socialists.
That was a great pic. Someone really is good at Photoshop!
Great metaphore - the bottom falls out in the crash! Love it.
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RickJ
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