Even the NAR is forced into some mind-numbing honesty lately. You can't argue when the numbers start pouring in.. you can just spin...
From the Comstock newsletter (good god this is ugly):
Ø 32.6% of new mortgages and home equity loans in 2005 were interest only, up from 0.6% in 2000
Ø 43% of first-time home buyers in 2005 put no money down.
Ø 15.2% of 2005 home buyers owe at least 10% more than their home is worth.
Ø 10% of all home owners have no equity in their homes
Ø $2.7 trillion in loans will adjust to higher rates in 2006 and 2007.
Ø 70% of borrowers who took out pay-option ARMS in the past year have loan balances larger than their initial loan.
Ø Homeowners face higher payments as mortgages are reset. Generally, monthly payments rise between $200 and $500 depending on the size of the mortgage.
Ø According to Reality Trac, August foreclosures were up 23% over July and 53% over a year ago.
Ø The number of homes for sale is at record highs, and inventories are 59% higher than a year earlier.
Ø New home sales are down 22% and existing home sales down 11%.
Ø The NASB housing market index has recorded an all-time decline.
Ø The housing affordability index is at a 15-year low.
Ø The house price-to-income (rents) ratio is off the charts. According to HSBC, in 18 states accounting for over 40% of national home values, the price-to-income ratio is 3.6 standard deviations above the mean.
Ø The OFHEO index of house prices deflated by the consumption price deflator has soared to a record high of 350 from 250 in 2001. From 1976 to 1996 it never was above 220.
Ø According to the NAR the year-to year prices of existing homes are now flat. A short time ago they were rising at a yearly rate of 16%.
Ø Nationally, home prices have not declined on a year-to-year basis since 1933. Recently, however, prices have been dropping in the North East, West and Mid-West.
Ø Sales incentives are now estimated at 3% to 7% of selling prices.
September 16, 2006
It's the numbers, stupid. Comstock Funds lays it out - a housing disaster of epic proportions is unfolding in America
Subscribe to:
Post Comments (Atom)
13 comments:
Real Estate Agents can always find new jobs.
Homes used in marijuana operation linked to same real estate agent
STOCKTON – One real estate agent negotiated the sales on all seven suburban north Stockton homes retrofitted to be indoor marijuana groves.
Stockton police raided the homes Wednesday and Thursday, seizing thousands of marijuana plants and uncovering a sophisticated indoor growing operation.
The seven homes in the Spanos Park West subdivision and a nearby subdivision all sold within the past six months for an average of $600,000.
Investigators believe the discovery in Stockton is linked to similar operations found in the past few weeks in Sacramento and Elk Grove where 21 homes were raided. In those cases, one agent negotiated 20 of the 21 deals.
In the Stockton case, one agent who was selling homes remembered the buyers’ agent well. Nicole Truszkowski, an agent for Professional Realty in Stockton, said she worked with him on two sales and that he gave the impression San Francisco families would be moving into the homes.
The seven homes raided by police this week were at 10325 Almanor Circle, 5444 Beardsley Lane, 9731 Tomasso Lane, 10816 Arrowood Drive, 5512 Hennessey Drive , 10651 Willow Glen Circle and 5656 Havencrest Circle.
http://www.recordnet.com/apps/
pbcs.dll/article?AID=/20060915/
NEWS01/60915002/1001
The brainy ones driving up house prices?
If the real-estate market made sense, it would work like this:
You'd put money down, take out a mortgage and buy a house for X number of dollars.
Over the long haul, its value would steadily increase depending on variables such as interest rates and sweat equity.
On a psycho-financial level, the homeowner would enjoy control over his/her shelter as well as tax benefits and the pleasant daydream of one day burning loan documents.
In a word, home ownership would be predictable and accessible, a sort of economic democracy.
The reality, at least in these parts, is quite different. Real estate can seem as predictable as a runaway roller coaster.
During periods of bubbly exuberance, prices can shoot up 20 percent or more a year. It's like every homeowner is a lottery winner, drunk on dumb luck. Gimmicky instruments such as interest-only loans allow speculators to feed in a frenzy. Houses get flipped as fast as In-N-Out burgers during lunch hour.
Then, just like that, the mood changes from bubbly to flat. The flippers worry they'll get caught upside down, owing more than their houses are worth. Buyers stand back, worried they'll plunge in as the market heads south.
That appears to be about where we are now. In a leery standoff between buyers and sellers.
Countywide, the volume of August sales was the lowest in nine years. In North County, the median price for a house declined from last year at this time, a cloudy bellwether.
The wary word one hears whispered is “reset,” as in the resetting of payments for variable or interest-only mortgages. In a down market, those who bought homes to make a quick killing may find themselves unable to make ballooning payments, spawning foreclosures and more downward pressure on prices.
Call me callous, but I don't mind seeing the speculators go down in flames. If you treat houses like chips in a casino, and not a long-term investment, then you should be prepared to lose.
Still, beneath the bubble talk, there ought to be some basic economic foundation to inspire faith in the region's property values over the long term.
Evidently, there is, but it takes a lot of brains.
http://www.signonsandiego.com/news/
northcounty/jenkins/
20060916-9999-1mi16jenkins.html
doh!
Why do you call Ben's blog boring when you keep plagiarizing its (plagiarized, pasted-together) stories? When something interesting show ups there, it's only a matter or minutes or hours before you swipe it.
How long til we see the excess's of easy money go up for sale (or best offer)! The BMW's, Hummers, Escalades, etc. Helo's, planes and partnerships, Yacht's, party boats, custom cycle's, Rolex's, vacation homes, time shares (chuckle) Pre-construction contracts, Big screens.....yada yada!
So which banks are most vulnerable to the collapse? WaMu? Wells-Fargo? HSBC? Bank of America?
I keep on hearing some realtors saying; price your house "intelligently" or price it "realistically."
F'ck, how could one do that with no money down and owes more than the value of their house? The evidence (post) speaks for itself.
"How long til we see the excess's of easy money go up for sale (or best offer)! The BMW's, Hummers, Escalades, etc. Helo's, planes and partnerships, Yacht's, party boats, custom cycle's, Rolex's, vacation homes, time shares (chuckle) Pre-construction contracts, Big screens.....yada yada!"
You probably won't see them go up for sale. They're "Paid For". The owner has the title for the vehicles and probably wrote a check for the big screen.
Thing is, it'll take the owner 30 years (and 5x the money) to pay for the new toys. The vehicles will be worn out and sold long before they debt is paid. Idiots.
"Why do you call Ben's blog boring when you keep plagiarizing its (plagiarized, pasted-together) stories? When something interesting show ups there, it's only a matter or minutes or hours before you swipe it."
I don't read paranoid ben's snooze-fest. I get sent articles by readers, then there's this great thing called google news - try it one day
ben doesn't have a patent on bubble stories - and I'd imagine most of the time I post first (luxury of living in UK with GMT)
Keith said . . .
"I don't read paranoid ben's snooze-fest. I get sent articles by readers, then there's this great thing called google news - try it one day"
Really? Then how come your posts contain the exact same mixture of re-quoted passages as his, often in the same order? Are your readers cutting and pasting? There is no way you would come up with the same bits and pieces strung together if you or your readers weren't plagiarizing.
"If the real-estate market made sense, it would work like this:
You'd put money down, take out a mortgage and buy a house for X number of dollars.
Over the long haul, its value would steadily increase depending on variables such as interest rates and sweat equity.
On a psycho-financial level, the homeowner would enjoy control over his/her shelter as well as tax benefits and the pleasant daydream of one day burning loan documents."
Great statement! Thanks to Bush and Greenspan buying a house will be a bad risk for the next 2-3 years at least. If people get smart, the housing market is destroyed for years to come. Government wants us to be left with Tulips to invest in for our retirement. CHAOS.
had luck with tulips, 40$ for 40 from holland 30
they may only be worth the down payment, all else is manipulations and froth in a market that can stay irrational longer than one can remain solvent
Post a Comment