September 26, 2006

The Great Housing Crash is here: "The speed of the (housing) collapse has been astonishing - prices and volumes have a long way to fall"

HP'ers - What's your local paper's housing meltdown headline today?

I'm not surprised to see some of the headlines - that small "official" drop in YoY prices caught people's attentions.

However, wouldn't the REALLY be surprised if they knew the truth - that prices are likely down 15% or so already, once you take into account the rampant use of incentives and cash-back at closing to move dead housing inventory.

I enjoyed this quote from Ian Shepherdson of High Frequency Economics picked up in a few papers:

The pace of the downturn has surprised several economists, including Ian Shepherdson of High Frequency Economics. "The speed of the collapse has been astonishing," he said. "This time last year, single-family home prices were up 16.4 percent. With inventory still rising, there is no chance of any short-term relief. Prices and volumes have a long way to fall"

I also saw this quote from the corrupt David Lereah. He must have been drinking a bit at the end of a bad day and let one go:

“If we have prices drop for the rest of the year and sales also continue to drop, then we will have a bad situation in housing of balloons popping rather than air coming out,” Lereah says

Here's a brief selection of headlines around the world. Just wait until the real fun starts....

Home prices likely to fall more - USA Today

US house prices take a tumble - The Age (Australia)

Analyst says of new data: 'Pop goes housing bubble' - Houston Chronicle

US house prices could drop another 10% - The Globe and Mail (Canada)

Home prices drop for first time in decade - Pittsburgh Post Gazette

60 comments:

cash buyer said...

You NEED my money, I may want your property.

autofx in Phx said...

Larry Kudlow says the US economy is the greatest story never told, and consumer confidence is up, and gas prices are down, so everything is ok.

Just think what THE MAN wants you to think.

bostongrrl said...

The news will always be a day late and a dollar short.

Remeber in June when CNN did that story about million dollar homes still a strong market?
(Homes: What a million bucks buys
The luxury home market is holding up. See what $1 million buys in 7 areas around the county.
By Les Christie, CNNMoney.com staff writer)
http://tinyurl.com/zfhfe


Well, if any reporter bothered to do a followup they would find that the Boston home still hasn't sold. Oh yes, and they have dropped the house 71k so far.

bostongrrl said...

Oh wait.

Neither has the St. Louis home.
St Louis, MO
Price: $1.19 million

Now it says ***MOTIVATED SELLER***
$949,000.

borkafatty said...

The Massachusetts Association of Realtors yesterday today reported the lowest August home sales volume since 1995, and the largest year-over-year price decline (6.1 percent) for one month since January 1993.

Furthermore, ForeclosuresMass.com is coming out with news tomorrow that 1,812 foreclosures were initiated in Massachusetts last month, up 72 percent from August 2005 and the highest one-month total since the Web site began tracking foreclosure filings in 2003.

When will it end?

Not anytime soon, according to Larissa Duzhansky, an economist at Waltham-based Global Insight.

borkafatty said...

autofx in Phx said...

Larry Kudlow says the US economy is the greatest story never told, and consumer confidence is up, and gas prices are down, so everything is ok.

Just think what THE MAN wants you to think.

-------------------------

Of course it is we have an election in 30 plus days..so everything is down at the moment...wait till the GOP steals this one, and bang prices are going to go thru the roof..but low interest rates is my guess..but with credit scores in the tank..people late on all forms of debt payments..interest rates could be zero, housing is in the toilet no matter what the money will not be givin away like in the past...but we shall see.

Anonymous said...

I hate to say this, but Kudlow is probably right. There is no way in hell the Fed and powers that be are going to allow a financial meltdown. Look at it this way, the central banks around the world have a vested interest in continuing this charade.

Yes it's ugly, yes it's completely bogus and makes Austrian economists go into spasms, but here in the 21st Century, the big boys can do it, and so they will.

The day of reckoning will be postponed. How long can they keep it up? That's anyone's guess, but I suspect it could go on for another decade or so.

skytrekker said...
This comment has been removed by a blog administrator.
autofx in Phx said...

Anonymous said...
I hate to say this, but Kudlow is probably right. There is no way in hell the Fed and powers that be are going to allow a financial meltdown. Look at it this way, the central banks around the world have a vested interest in continuing this charade.
~
I would just say don't make any big bets based on these assumptions. The central banks of the world are NOT omnipotent. The house of cards will not stand indefinitely. The piper will have to be paid, it's just a question of when.

skytrekker said...
This comment has been removed by a blog administrator.
skytrekker said...

They could not stop the meltdown of the dot.com mess a short 6 years ago- I doubt they will be able to stop this either- its far bigger, and involves more people. Plus you have huge demographic changes coming a few years from now. The FED may be able to prop this 10000 pound elephant up on its spindly tooth pic legs awhile longer- but most booms of this magnitude, built on such a flimsy foundation eventually crash- if not next year, 2009 or 2010.

The current scenario reminds me of the 1920's history wise.

autofx in Phx said...

...most booms of this magnitude...
~
You're saying there have been booms of this magnitude before?

I don't think so. This is unprecedented.

Tabasco Jenkins said...

Yes, Larry Kudlow. The story about how the US economy has been in the grips of massive stagflation the last 5 years IS the greatest story never told. Now go sniff some more coke, you soulless hack.

Anonymous said...

the fed has lost control. they will be powerless, just like the japan central bank the past ten years

deflation

Anonymous said...

"They could not stop the meltdown of the dot.com mess a short 6 years ago"

But they did avert a depression. The dotcom bust wiped out $6-$9 trillion in asset values, equal roughly to one year's GDP! In any prior economy, that would have been catastrophic. Greenspan, for all his faults, averted a calamity much bigger, and the guys at the Fed are ready and willing to use his model again and again.

Anonymous said...

Keith,

I can't believe you didn't post your girlfriend's newest article. Note how she's quoting Nate Nathan, AZ's largest land broker who brokered teh $500M Chrysler Proving Grounds deal..

2 auctions of state's trust land canceled

Catherine Reagor
The Arizona Republic
Sept. 26, 2006 12:00 AM


A year ago, builders couldn't buy land fast enough, no matter how much it cost.

Now, Valley land has lost some of its luster with home builders in the rapidly slowing housing industry, even when the property is in one of the northeast Valley's most desirable areas.

The Arizona State Land Department is calling off this week's auctions of two prime pieces of residential land, one in northeast Phoenix's Desert Ridge development and the other in Fountain Hills.
advertisement



The auctions weren't worth the agency's time because no builders or investors are willing to pay the appraised prices of $150 million for a parcel of more than 325 acres in Desert Ridge and $130 million for 1,276 acres in Fountain Hills.

Potential bidders on the Desert Ridge and Fountain Hills sites made it clear they can't pay what the properties are currently appraised for because they would have to charge more for houses than buyers are willing to pay.

The prices are based on appraisals taken early this year before the Valley's housing market stumbled.

In January, a condominium developer paid a record $1 million an acre for a piece of land in Desert Ridge. But shortly after that, the Valley's housing market started a turn and has been steadily slowing.

When the current Desert Ridge site first went on the auction block in August, it didn't draw a single bid.

The state is in the process of having the sites reappraised. It could be next year before either site goes back on the market. To make it more affordable, the Desert Ridge parcel could be broken into pieces.

So far this year, home building in metro Phoenix is down 24 percent from last year's record pace. Housing analyst RL Brown recently said new home permits could fall as low as 38,000 Valley-wide this year, down 40 percent from last year.

Last year's investor-buying frenzy prompted builders to stockpile huge parcels for future growth. But this year, many of those speculators walked away from deals as the housing market slowed. Valley home builders are now offering tens of thousands of dollars in incentives to try to sell those houses as well as others built for people who can't sell their existing homes.

"There's a correction going on in the Valley's housing market now, and I don't think these parcels or many others should be auctioned this year," said Nate Nathan, a land broker with Scottsdale-based Nathan & Associates.

The one state land piece that Nathan and some other market watchers think should go on the auction block is the first parcel of the 176,000-acres Superstition Vistas site on the fringes of the southeast Valley.

On the day the agency decided to cancel the auctions in Desert Ridge and Fountain Hills, it set a Dec. 7 sale for the first 1,000 acres of Superstition Vistas.

An appraisal, based on current market conditions, was recently completed on the Superstition Vistas land, said new State Land Deputy Commissioner Jamie Hogue. The asking price is $45.25 million, but the winning bidder must also plan the development of another 6,700 acres in Superstition Vistas as part of the sale.

If Proposition 106, a reform package for the Land Department, is passed on Nov. 7, the agency will be able do more land planning like it's trying to do on Superstition Vistas instead of just selling to the highest bidder.

skytrekker said...

The 1920's equaled this boom in sheer 'excessiveness'...specualtion, price rises in assets, and liquidity, and lastly dishonesty.

There was a 'pause' in the economy in 1926- the same year as the Florida RE crash. The FED failed to stop the easy money and raise rates, and pumped more liquidity into the markets.

There is an eerie similarity between now and the 1920's- when you also had a very pro business republican administration in power, who gave huge tax cuts to the corporations and wealthy. The increasing lack of safety nets for the vulnerable are equal to now. Plus an incredible amount of debt as now.

Anyone expecting this to go 'forever' is playing a very risky game of 'Russian roulette'.

autofx in Phx said...

Greenspan, for all his faults, averted a calamity much bigger, and the guys at the Fed are ready and willing to use his model again and again.
~
All right, I'll play along.

Which market are they going to inflate to bubble proportions this time?

How is the tapped-out, debt-saturated, house-poor US consumer going to feed into another bubble?

tabasco jenkins said...

autofx, the Fed can try to keep rates low to try to lessen the blow and print more money to add stimulus. The bubble they're going to create will be in reverse as the US $ deflates, which they see as being less hurtful then having nominal GDP deflate, especially for the stocks and bonds that are owned by all the wealthy people the FED is really trying to please.
Inflation helps those who own assets. Deflation helps those who don't. Take a guess as to which the Fed would rather see helped.

borkafatty said...

Americans are being remote-controlled by the two levers that affect us most - our energy supply and our money supply.

And it's NOT OPEC that pulls the levers - it's the BANKERS, also known as.

THE MONEY CHANGERS
http://tinyurl.com/gx87g

THE MONEY MASTERS.
http://tinyurl.com/a4gqs

Anonymous said...

young grasshoppers:

This small drop will be turning around soon.

Wages turning up (less defaults)
10 year yield down (cheaper mort)

Too much liquidity sloshing around the system to have a crash.

Prices will back down a bit but no great slide like Shiller predicts.

borkafatty said...

Wages turning up (less defaults)

( Umm, well I just got my pay increase 3.5% but my health insurance went up $27 dollars a week, so thanks for the extra $3 bucks a week..turning up I should say not)

10 year yield down (cheaper mort)

( Your credit score better be there otherwise 9% to 10% refi's is the rate quote of the day..ya great savings there..not )

Too much liquidity sloshing around the system to have a crash.

( Could someone show me this vast pool of Liquid I am a little dry at the moment..care to share)

You are correct anonymous things are looking up..pop the champagne we made it thru.

autofx in Phx said...

Anonymous said...
young grasshoppers:

This small drop will be turning around soon.

Wages turning up (less defaults)
10 year yield down (cheaper mort)

Too much liquidity sloshing around the system to have a crash.

Prices will back down a bit but no great slide like Shiller predicts.

~
You have to be a retarded realt-whore.

"Young grasshoppers"...that's pretty funny.

history buff said...

"We will not have any more crashes in our time."
- John Maynard Keynes in 1927

"I cannot help but raise a dissenting voice to statements that we are living in a fool's paradise, and that prosperity in this country must necessarily diminish and recede in the near future."
- E. H. H. Simmons, President, New York Stock Exchange, January 12, 1928
"There will be no interruption of our permanent prosperity."
- Myron E. Forbes, President, Pierce Arrow Motor Car Co., January 12, 1928


"No Congress of the United States ever assembled, on surveying the state of the Union, has met with a more pleasing prospect than that which appears at the present time. In the domestic field there is tranquility and contentment...and the highest record of years of prosperity. In the foreign field there is peace, the goodwill which comes from mutual understanding."
- Calvin Coolidge December 4, 1928

"There may be a recession in stock prices, but not anything in the nature of a crash."
- Irving Fisher, leading U.S. economist , New York Times, Sept. 5, 1929

"Stock prices have reached what looks like a permanently high plateau. I do not feel there will be soon if ever a 50 or 60 point break from present levels, such as (bears) have predicted. I expect to see the stock market a good deal higher within a few months."
- Irving Fisher, Ph.D. in economics, Oct. 17, 1929
"This crash is not going to have much effect on business."
- Arthur Reynolds, Chairman of Continental Illinois Bank of Chicago, October 24, 1929

"There will be no repetition of the break of yesterday... I have no fear of another comparable decline."
- Arthur W. Loasby (President of the Equitable Trust Company), quoted in NYT, Friday, October 25, 1929

"We feel that fundamentally Wall Street is sound, and that for people who can afford to pay for them outright, good stocks are cheap at these prices."
- Goodbody and Company market-letter quoted in The New York Times, Friday, October 25, 1929


"This is the time to buy stocks. This is the time to recall the words of the late J. P. Morgan... that any man who is bearish on America will go broke. Within a few days there is likely to be a bear panic rather than a bull panic. Many of the low prices as a result of this hysterical selling are not likely to be reached again in many years."
- R. W. McNeel, market analyst, as quoted in the New York Herald Tribune, October 30, 1929
"Buying of sound, seasoned issues now will not be regretted"
- E. A. Pearce market letter quoted in the New York Herald Tribune, October 30, 1929

"Some pretty intelligent people are now buying stocks... Unless we are to have a panic -- which no one seriously believes, stocks have hit bottom."
- R. W. McNeal, financial analyst in October 1929


"The decline is in paper values, not in tangible goods and services...America is now in the eighth year of prosperity as commercially defined. The former great periods of prosperity in America averaged eleven years. On this basis we now have three more years to go before the tailspin."
- Stuart Chase (American economist and author), NY Herald Tribune, November 1, 1929
"Hysteria has now disappeared from Wall Street."
- The Times of London, November 2, 1929

"The Wall Street crash doesn't mean that there will be any general or serious business depression... For six years American business has been diverting a substantial part of its attention, its energies and its resources on the speculative game... Now that irrelevant, alien and hazardous adventure is over. Business has come home again, back to its job, providentially unscathed, sound in wind and limb, financially stronger than ever before."
- Business Week, November 2, 1929

"...despite its severity, we believe that the slump in stock prices will prove an intermediate movement and not the precursor of a business depression such as would entail prolonged further liquidation..."
- Harvard Economic Society (HES), November 2, 1929


"... a serious depression seems improbable; [we expect] recovery of business next spring, with further improvement in the fall."
- HES, November 10, 1929
"The end of the decline of the Stock Market will probably not be long, only a few more days at most."
- Irving Fisher, Professor of Economics at Yale University, November 14, 1929

"In most of the cities and towns of this country, this Wall Street panic will have no effect."
- Paul Block (President of the Block newspaper chain), editorial, November 15, 1929

"Financial storm definitely passed."
- Bernard Baruch, cablegram to Winston Churchill, November 15, 1929


"I see nothing in the present situation that is either menacing or warrants pessimism... I have every confidence that there will be a revival of activity in the spring, and that during this coming year the country will make steady progress."
- Andrew W. Mellon, U.S. Secretary of the Treasury December 31, 1929
"I am convinced that through these measures we have reestablished confidence."
- Herbert Hoover, December 1929

"[1930 will be] a splendid employment year."
- U.S. Dept. of Labor, New Year's Forecast, December 1929


"For the immediate future, at least, the outlook (stocks) is bright."
- Irving Fisher, Ph.D. in Economics, in early 1930

"...there are indications that the severest phase of the recession is over..."
- Harvard Economic Society (HES) Jan 18, 1930

"There is nothing in the situation to be disturbed about."
- Secretary of the Treasury Andrew Mellon, Feb 1930

"The spring of 1930 marks the end of a period of grave concern...American business is steadily coming back to a normal level of prosperity."
- Julius Barnes, head of Hoover's National Business Survey Conference, Mar 16, 1930
"... the outlook continues favorable..."
- HES Mar 29, 1930


"... the outlook is favorable..."
- HES Apr 19, 1930

"While the crash only took place six months ago, I am convinced we have now passed through the worst -- and with continued unity of effort we shall rapidly recover. There has been no significant bank or industrial failure. That danger, too, is safely behind us."
- Herbert Hoover, President of the United States, May 1, 1930
"...by May or June the spring recovery forecast in our letters of last December and November should clearly be apparent..."
- HES May 17, 1930

"Gentleman, you have come sixty days too late. The depression is over."
- Herbert Hoover, responding to a delegation requesting a public works program to help speed the recovery, June 1930


"... irregular and conflicting movements of business should soon give way to a sustained recovery..."
- HES June 28, 1930

"... the present depression has about spent its force..."
- HES, Aug 30, 1930

"We are now near the end of the declining phase of the depression."
- HES Nov 15, 1930

"Stabilization at [present] levels is clearly possible."
- HES Oct 31, 1931

"All safe deposit boxes in banks or financial institutions have been sealed... and may only be opened in the presence of an agent of the I.R.S."
- President F.D. Roosevelt, 1933

Anonymous said...

I'm with Borkee on that Americans waste too much energy and money with no thought as to were it comes from and what the "really" costs are. Pray there are not alot of jobs lay off from this slow down, because that's the big question.

hebrew house lender said...

History buff, that is a wonderfull compilation of quotes.
Lets hope the brain dead here in America can learn (lol, highly unlikely) from the past, and see these bought and paid for figure heads for what they really are. I just hope we will hold the appropriate parties responsible this time around.

Anonymous said...

on cnn today - the dow is up nearly 100 points and the article says that with housing going through a contraction, investors are putting their money back into wall street to a larger degree. so I guess the herd is turning back toward stocks in a big way.

Anonymous said...

on the same business page it says an internet website company called Dogster.com has received 1 million dollars in financing from a group of angel investors. this company sets up a website community for dog owners - over a quarter of a million people use this website. doesn't say how much it costs but any amount seems too much to pay for the ability to post a picture of fido, his bowl and toys, his bowel movement for the day and then to review the site for pictures of other moron's dogs and their toys and bowel movements.

Anonymous said...

guy across the street, a flipper, id presume wanted what appeared to be a 5 for 1 on a town house in 5 years, if he gets it the property tax, aside from the normal 10% a year rise will go to a number equal to 5 times what it was, and then think that id liked the place and planned to stay, perhaps the flippers deserve what they may get, for helping the local tax collectors revenues, and be bailed out because they can not sell, at 205 OF WHAT THEY OWE, ON WHAT IS VALUE? ID NOT PAY THESE!

Anonymous said...

guy across the street, a flipper, id presume wanted what appeared to be a 5 for 1 on a town house in 5 years, if he gets it the property tax, aside from the normal 10% a year rise will go to a number equal to 5 times what it was, and then think that id liked the place and planned to stay, perhaps the flippers deserve what they may get, for helping the local tax collectors revenues, and be bailed out because they can not sell, at 205 OF WHAT THEY OWE, ON WHAT IS VALUE? ID NOT PAY THESE!

Frocco said...

I live in Rhode island and:

"the Rhode Island Association of Realtors has stopped providing monthly housing data; the third-quarter numbers are not scheduled to be released until Nov. 1."

This was printed in the local newspaper!! Guess they will hide the numbers on the way down but exploit them on the way up!!

autofx in Phx said...

I just hope we will hold the appropriate parties responsible this time around.
~
We won't. Americans have become far too apathetic.

Anonymous said...

How do I know when to start buying housing again?

When asset values are below postitive cash flow including all possible costs - interest, taxes, maintance,..?

Once I hear Taxi drivers talk or there short stint as real estate investors and how they are now bankrupt and back in as Taxi drivers?

Once Trump gets a hair cut indicating that he is quiting the celebrity business and focusing back on real estate?

Anonymous said...

What was the most valuable asset, product or service during the great depression?

We all know there is going to be a great crash and depression. The important question is how do I make money off it?

Do I hoard cases of whiskey?

borkafatty said...

U.S. stocks rally on jump in consumer confidence

didn't the stock market jump durning the depression right before the big crash?

Consumer confidence hahaha cooked billing..everyone I talk to is broke stiff. Sure we have saved a few dollars the past few weeks due to falling gas prices..but for real I do not see people waiting in line to enter the local walmart.

What I do hear is.

My gas bill is to high
my electric bill is to high
my food bill is killing me
my auto insurance is thru the roof
my mortgage is killing me
my taxes are killing me

i can go on, that is reality not the shit Disney-Reuters is spewing.

Oh and by the way dont think the fed is not watching.

Frocco said...

WOW!!! listen to the spin in this report, I didn't know bad news was acually good news for the housing industry..HAHAHAH

http://www.forbes.com/video/?video=fvn/business/ab_homes092606&partner=yahootix

borkafatty said...

And they pay her to do that?? what was she choking on gum?

Anonymous said...

And you think Bernanke has never seen those quotes from the '20s and '30s? The man has studied the great depression for twenty years and he's vowed never to let economic circunstances reach that point where we will face another one.

The world today is quite different in that central banks can coordinate their actions with extreme precision. Their monetary tools are sharper and more numerous, and they can act more quickly. I'm no Pollyanna and think it could never happen again, but to compare the situation then and now requires full realization of the significant differences as well as similarities.

Anonymous said...

RE: That Forbes Video

I think she has a point, but wouldn't you think the mortgage industry is going to sit on its money and wait for the overpriced refi's to come in every year for the next five or so years? This said, doesn't it make more sense to refinance $225 on an ARM than to finance a new buyer at $180 with a 30 year fixed..

Other notes
That Mortgage Owner / Founder is wearing PINK mules...honey, no.

hebrew house lender said...

lmmfao..... Would you really trust anyone with the last name bernanke? About anything having to do with money no less? How about fieth? wolfowitz? perle? bolton? chertoff?????? Tell me your more wise than this anonymous above.

Anonymous said...

Why the debate about the ability to stop the downturn? The powers that be will make money on the downside just like they make money on the upside. The trick is to keep the masses moving. The insiders like Bernard Baruch were out of the market before the crash then they moved in afterward and bought quality for pennies on the dollar. Despicable.

Anonymous said...

"And you think Bernanke has never seen those quotes from the '20s and '30s? The man has studied the great depression for twenty years and he's vowed never to let economic circunstances reach that point where we will face another one."

"The world today is quite different in that central banks can coordinate their actions with extreme precision. Their monetary tools are sharper and more numerous, and they can act more quickly. I'm no Pollyanna and think it could never happen again, but to compare the situation then and now requires full realization of the significant differences as well as similarities."

So you think Helicopter Ben will come charging in on a white horse and heroically save the day? It's different this time, eh?

Sure, we might avoid a deflationary depression (kind of hard to have genuine deflation when the government just prints money). OK, so we'll have a prolonged, severe, stagflationary 'recession' with 15% inflation (reported as 6%) and 15% unemployment (reported as 7%). In about a decade, nominal home prices might be about the same as they are now, except that the dollar amounts will translate into about 20% of the purchasing power that they do now (an 80% collapse). At least not too many people will be able to afford to drive monster PU trucks and SUVs with the $15 gasoline prices we'd have, so that would be a bit of a silver lining. Don't for a second think that wages will keep up with inflation.

Jip said...

No it's not astonishing. It was held off for the past 3 years. They were selling (s#!++y houses) was WAY less than they should hav been.

End of story...

Jip said...

OOPS
I meant they were selling the houses for WAY more than they were worth...

LauraVella said...

Spoke with a friend of mine who lives in Lafayette, CA - they bought a house there in 03', said its really slow...more homes going up for sale, no buyers. Prices are holding steady, for now that is.

The house we sold in Sept 04' with multiple offers and 25K over asking is up for sale again. the Young couple who bought it signed on title with their parents- 20% down and a fixed rate cant seem to make it work.

Timber, watch out below! The panic will soon be setting in...I give it by the end of the year.

Anonymous said...

What happens when more and more of the REIC jobs turn into pumpkins?

Anonymous said...

What happens when more and more of the REIC jobs turn into pumpkins?

I told you so said...

CNN/Money

Wall St. gains from housing slump
Many worry about how the housing slowdown is hitting the economy, but investors pulling out of housing are pumping money into stocks. Housing: Falling mortgage rates can do only so much

LauraVella said...

Anon 12:19 said:"The trick is to keep the masses moving".

Into the next bubble.

Anyone got gold?

Anonymous said...

"Into the next bubble."

"Anyone got gold?"

Exactly. The Fed will ease and print (monetize debt) to keep the housing recession from turning into a depression. Of course, this is highly inflationary, so we'll be in stagflation for a long time. That environment is great for gold and might be decent for stocks. At least a share of stock represents fractional ownership in a company and that's something that has value if it's a good company. A Federal Reserve Note does not represent anything and the dilution is worse than at all but the most corrupt corporations.

borkafatty said...

Massachusetts Foreclosures Soar in August


ForeclosuresMass.com is reporting today that foreclosures in Massachusetts are escalating at levels the company says it hasn’t seen “since the housing crash of the early 1990s.”

The latest Massachusetts Market Analysis Report shows that 1,812 new foreclosures were initiated in August, which is 72 percent more foreclosures than August of last year (1,055), and 266 percent more than in August 2004 (680). It is also the highest one-month total since ForeclosuresMass.com began tracking foreclosure filings in 2003. The July to August increase was 34 percent, making it the largest month-to-month increase in the past three years, according to the report.

“These latest findings have prompted us to extend our forecast; we expect foreclosure rates to continue this historic climb well into next year,” said Jeremy Shapiro, president and co-founder of ForeclosuresMass.com.

When comparing foreclosures during the year ending Aug. 31 (15,309), to the previous year (10,517), foreclosures increased statewide by nearly 46 percent. The counties that had the biggest jump in foreclosures this August over the same month last year were Bristol at 106 percent (166 v. 80), Dukes at 100 percent ( 4 v. 2) and Essex, up 85 percent (224 v. 121).

ForeclosuresMass.com provides online Massachusetts foreclosure data to investors, consumer homebuyers, bankruptcy and real estate counsel, mortgage originators, real estate agents and lenders.


--You are right Anonymous things are looking up!--

whatequity said...

From the Chicago Tribune (registration required):

Home prices finally hit wall

At a pace that some analysts described as "astonishing," the price of existing homes declined nationally for the first time in 11 years in August, signaling that the long-awaited other shoe has finally dropped on the real estate market.

Home sales have been slowing for months but sellers appeared to be holding out to get their price. Now the pressure to sell is intensifying, leading to a drop in house values across the country.

In the Chicago region, prices stayed flat for the month, meaning that the average homeowner missed out on appreciation. But analysts see price declines hitting the area soon as anxious sellers give in to the trend and lower their asking prices.

Anonymous said...

Hey I'm already unemployed.

38, PhD in hard science in San Diego (not biotech/chemistry), no job, diddly squat for 6 months and counting.

I ain't gonna be buying any new house soon. We're worrying about health insurance and groceries. It will sucketh more once unemployment payments turn tits up.

At least I have a fixed 30 year @5.25% (I refi'ed nearly at the bottom, my only good market timing call) with payments less than equivalent rent.

Anonymous said...

The Fed will ease and print (monetize debt) to keep the housing recession from turning into a depression. Of course, this is highly inflationary, so we'll be in stagflation for a long time.

True but the destruction of debt by default is a contraction of the money supply, so overall it may even out, if the Fed is really lucky. Nonetheless it will be a long "malaise" as the USA has to face the fact it doesn't actually make any real value any more; all that is outsourced.

The Chinese central bank has decided it wants no more dollars (T-bills). That may be the reason for the stock market going up---they could be investing in equity instead of (depreciating) US dollar bonds.

They will own the USA; the workers of the USA will be indentured servants and a colony of China.

whop said...

Larry kudlow is typical of the media he represents. Part of the BS they want you hear. He is worthless.

Anonymous said...

Is a 401k safe?

Anonymous said...

"'The Fed will ease and print (monetize debt) to keep the housing recession from turning into a depression. Of course, this is highly inflationary, so we'll be in stagflation for a long time.'"

"True but the destruction of debt by default is a contraction of the money supply, so overall it may even out, if the Fed is really lucky."

I bet they overshoot and end up stoking inflation. The amount of outstanding debt is finite (though HUGE) while the Fed's ability to create more FRNs is infinite. Also, the government is hugely in debt and debtors prefer inflation to deflation, so there is going to be an easy money bias. They'll do their best to manage inflation expectations the usual way: jawboning and manipulated official statistics.

"Nonetheless it will be a long "malaise" as the USA has to face the fact it doesn't actually make any real value any more; all that is outsourced."

Sounds like stagflation to me. Wages and home prices are sticky in the downward direction, so there will end up being enough inflation to cut (real) prices without dropping nominal prices too much. Your average Homer Simpson type really doesn't understand the concept of real prices. As the dollar weakens against other currencies, prices of imported goods and services will increase, further contributing to consumer price inflation.

"The Chinese central bank has decided it wants no more dollars (T-bills). That may be the reason for the stock market going up---they could be investing in equity instead of (depreciating) US dollar bonds."

"They will own the USA; the workers of the USA will be indentured servants and a colony of China."

Unfortunately, that's not too implausible a scenario. Our corrupt and incompetent government has allowed the Chinese to effectively destroy our industrial base without having to drop a single bomb. We've even paid them to do it (but those WalMart prices were low!) and even gave them the technology to make all kinds of stuff, from electronics to missiles.

This is how it must have felt to be a citizen of the Roman Empire in the 5th century.

Anonymous said...

All hail Emperor Bushius II, Caesar of Caesars!!

Anonymous said...

Commodities' downturn could cause real pain

By Gail MarksJarvis | Tribune staff reporter

Sept. 24: Commodities' downturn could cause real pain

Sept. 17: Raiding a 401(k) to pay mortgage isn't wise move



You'd be hard-pressed to find a "hot commodity" lately.

With the U.S. housing market giving investors a scare, China's building boom facing some restraint, Iran apparently less of an immediate threat to oil supplies, and hurricanes failing to howl, commodities have been slipping since early August.

Crude oil futures on the New York Mercantile Exchange have fallen more than 20 percent since reaching a record $78.40 a barrel July 14. Stockpiles are rising. And hedge funds reportedly have been growing more cautious about commodity bets since Amaranth Advisors LLC, a Connecticut hedge fund, made national headlines last week after a bum move in natural gas cost the company billions of dollars.

As the hurricane season passes without destruction, natural gas prices have slipped almost 70 percent from a record high of $15.78 per 1,000 cubic feet in December.

With each day, prognostications about commodities have been turning more negative. While the long-term view held by many analysts, including those at the Goldman Sachs Group Inc., is that this is a lull in a multiyear global growth drama, others are starting to warn investors that the five-year bull market in commodities may have run its course.

LauraVella said...

Anon said: "With each day, prognostications about commodities have been turning more negative. While the long-term view held by many analysts, including those at the Goldman Sachs Group Inc., is that this is a lull in a multiyear global growth drama, others are starting to warn investors that the five-year bull market in commodities may have run its course".

I wouldnt trust anything GS has to say-they are the twin talking head of Cramer who everyone knows said "housing never goes down-its a great investment-7/04"!

When the the media takes about commodities, they are not talking about gold. Gold is an investment hedge during a recession. Gold prices went up during the last housing meltdown, and the one before that, and the one before that...

The masses need to go somewhere where inflation doesnt deflate their investment, the masses don't even have a clue about what gold is for...yet.