Good god watch this UBS homebuilder conference video on paperdinero's great bubble news network, and then tell me we're not in historic times.
"Death spiral"
Homebuilders building houses on dead land to move the land
50% higher inventory
Speculators jumping ship
Beefing up the marketing and incentives
Get rid of the land
"Popping a house on that land" to move land
Call a bottom - maybe 2008
Too much inventory
Cancellations 40% - people cannot sell existing homes
Oh, man, it's getting REALLY ugly now...
November 11, 2006
Video on CNBC on the homebuilder "death spiral" with "no end in sight"
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I won't believe any of it until Keith Olberman rants about it for ten minutes and blames it all on Dick Cheney. I know right now he's busy working an exclusive about Raum Emmanuel's plan to fix the election, and how Howard Dean hacked voting machines in key races, and that has to take priority over any RE news. But I'm sure he'll get to this story eventually and we'll finally see the truth.
Only a few news outlets deserve our trust these days...
Too bad the MSM isn't reporting this
U.S. cities where median home prices are expected to drop the most in the coming year.
Stockton, CA
Merced, CA
Reno/Sparks, NV
Fresno, CA
Vallejo/Fairfield, CA
Las Vegas, NV
Bakersfield, CA
Sacramento, CA
Washington, D.C.
Tucson, AZ
http://money.cnn.com/
popups/2006/biz2/
newrules_wherenot/6.html
Then read this from craigslist on a builder discount in Fresno,Ca.
Centex discount brand new 3/2 1824 sq ft house from Centex for $280K. Original price was $360K.
http://forums.craigslist.
org/?ID=52350333
Did you see Toll try to intimidate that guy for telling the truth? Bob "I sold at the top" Toll has big brass cajones. Nobody tells the truth around Toll and gets away with it!
Bring on the Greater Depression!
My parent's house is paid for, so we can still go live with them.
I gotta remember to sell all of my junk before the Greater Depression hits. Anyone wanna buy some old tools?
Oh, yeah. Don't forget to buy that Swiss Annuity before the dollar goes down the toilet.
400 Swiss Francs oughta cover rent in Sparks, Nevada during the depression. I can always move the family into an old mine shaft where it's warm in the winter. : D
casey serin has a 3 new u tube videos explaining his missfortune.He looks like he is on meth with dilated pupils.I bet law enforcement is waiting for him to admit his crimes on video that will make proscecution a slam dunk.
For a better analysis of the housing bubble without all the political BS on this site:
http://thehousingbubbleblog.com/
Casey Serin missed his chance to join the Heaven's Gate cult.
Gold stocks are going to the moon!
Doug Casey said so. Doug Casey always says so.
The housingbubbleblog.com is a dead website.
Last entry was June 29, 2005.
Gog was Toll pissed or what. I loved it!
I come to this blog just for the nihilism.
Love it.
Fantastic to see Ara turning on Bob.... knives out baby.
Also...
Did anyone else notice how haphazardly the nails were being shot in, in the construction footage?
Can you say poor qualuty control?
Bang 'em out.
I pity anyone who bought any of their claptrap garbage.
I wish that someon would invent a middle finger emoticon.
:)
It's a new paradigm, and everybody who doesn't buy, now, will be priced out forever. Anybody who does buy will be rewarded with a lifetime of riches, as their property will continue its 30% yearly price increase.
Renters, and anybody born in a future generation, will not be able to afford a $10,000,000 starter home in 15 years. They will live in tent cities, and Hondas.
This asset bubble is different than all of the others - it will never slow down, or pop. The gains are permanent.
-RE.Agent
if it is really ugly now Keith, why are home stocks on fire?
THIS IS OVERKILL, BUT ISN'T THAT WHAT KEITH IS ALL ABOUT?!?!
The cause of bubbles is often disputed although some experts believe that the cause of bubbles can be explained by the "greater fool's theory." The greater fool's theory explains the behavior of a perennially optimistic market participant (the fool) who buys an overvalued asset in anticipation of selling it to another rapacious speculator (the greater fool) at a much higher price. The bubbles continue as long as the fool can find another (greater) fool to pay up for the overvalued asset. The bubbles will end only when the greater fool becomes the greatest fool who pays the top price for the overvalued asset and can no longer find another buyer to pay for it at a higher price.
HEY ANON 5:35: YOU STOLE THAT FROM WIKIPEDIA!!
Here's my own actual theory:
I think the cause of bubbles is excessive monetary liquidity in the financial system. Excessive monetary liquidity (a.k.a. easy credit) potentially occurs while central banks are implementing expansionary monetary policy (ie. lowering of interest rates and flushing the financial system with money supply). When interest rates are going down, investors tend to avoid putting their capital into savings accounts. Instead, investors tend to leverage their capital by borrowing from banks and invest the leveraged capital in financial assets such as equities and real estate. Simply put, economic bubbles often occur when too much money is chasing too few assets, causing both good assets and bad assets to appreciate excessively beyond their fundamentals to an unsustainable level. The bubbles will burst only when the central bank reverses its monetary accommodation policy and soaks up the liquidity in the financial system. The removal of monetary accommodation policy is commonly known as a contractionary monetary policy. When the central bank raises interest rates, investors tend to become risk averse and thus avoid leveraged capital because the costs of borrowing may become too expensive.
Still waiting for the meltdown, not a correction.
Three major recessions and prices came down briefly before rising to new highs.
What is a meltdown? Definition means a lot. If people expel sunnis from an area that is usually called ethnic cleansing but many today would call it genocide but twisting the meaning doesn't make it so. Same with this so called meltdown.
New homes and price reductions mean little since they have more room to lower prices since many of those projects took up to ten years (depending on how regulated the area) to concieve, permit, develope, build so they have lots of room to lower price to dispose of inventory and still break even. That doesn't mean some companies go belly up, but most won't even in a slowdown.
Resales. Again, even in the meltdown in Denver in the late 80s and the RTC making things worse with fire-sales that affected other homeowners and created a mini-whirlpool sucking other buyers into foreclosure because when they "HAD" to sell they couldn't sell for what they owed due to foreclosures selling for less. However, in most cases, the vast majority sat it out and paid their loans and waited for a recovery.
Reverting to a mean isn't a meltdown. If Phoenix should be selling 30,000 houses a year to meet normal demand and sell 60,000, a loss of 30,000 is a correction and a reversion to the means. Selling 20,000 may be seen as a meltdown as it is way below the mean. Even during the 1989-92 slowdown they were still building and selling new homes in every market.
I don't care what the "median" price of a home in any given geographical area is as it doesn't reflect what the average "mortgage owed' is. Not sure that information is available but lets hypothosize that in Phoenix the average mortgage is $140,000 (which may be high) but the average sell price in Sept 2005 was say $230,000 and say new is $280,000. Lets say there are two million houses in Phoenix and in the past five years they built 300,000 (which is high as they didn't build 60,000 each year for the past five years) and then the average new home over those five years still isn't the high of 2005 as the average price was much lower over each of the previous four years with the outrageous appreciation happening in 2005, then the vast majority would owe significantly less than the bubble peak so prices would have to fall to less than the average mortgage owed to really be a meltdown.
Will that happen? I hardly think so without a 1930s style depression. A recession doesn't quite cut it for a meltdown. A recession will produce a correction.
So quit the hype. It is as bad as the hype on Iraq. Oh my god, 2000 dead soldiers in three years, compared to what? Vietnam? Korea? WWI&WWII? And yet people already cry "Vietnam" in Iraq. Drama queens will go to no end to cry "the end of the world."
Death spiral? Hardly. If such a thing did come our way none of us would have to guess if it was really here, we'd all know it and there would be a revolution in the streets.
Still waiting for the meltdown, not a correction.
Three major recessions and prices came down briefly before rising to new highs.
What is a meltdown? Definition means a lot. If people expel sunnis from an area that is usually called ethnic cleansing but many today would call it genocide but twisting the meaning doesn't make it so. Same with this so called meltdown.
New homes and price reductions mean little since they have more room to lower prices since many of those projects took up to ten years (depending on how regulated the area) to concieve, permit, develope, build so they have lots of room to lower price to dispose of inventory and still break even. That doesn't mean some companies go belly up, but most won't even in a slowdown.
Resales. Again, even in the meltdown in Denver in the late 80s and the RTC making things worse with fire-sales that affected other homeowners and created a mini-whirlpool sucking other buyers into foreclosure because when they "HAD" to sell they couldn't sell for what they owed due to foreclosures selling for less. However, in most cases, the vast majority sat it out and paid their loans and waited for a recovery.
Reverting to a mean isn't a meltdown. If Phoenix should be selling 30,000 houses a year to meet normal demand and sell 60,000, a loss of 30,000 is a correction and a reversion to the means. Selling 20,000 may be seen as a meltdown as it is way below the mean. Even during the 1989-92 slowdown they were still building and selling new homes in every market.
I don't care what the "median" price of a home in any given geographical area is as it doesn't reflect what the average "mortgage owed' is. Not sure that information is available but lets hypothosize that in Phoenix the average mortgage is $140,000 (which may be high) but the average sell price in Sept 2005 was say $230,000 and say new is $280,000. Lets say there are two million houses in Phoenix and in the past five years they built 300,000 (which is high as they didn't build 60,000 each year for the past five years) and then the average new home over those five years still isn't the high of 2005 as the average price was much lower over each of the previous four years with the outrageous appreciation happening in 2005, then the vast majority would owe significantly less than the bubble peak so prices would have to fall to less than the average mortgage owed to really be a meltdown.
Will that happen? I hardly think so without a 1930s style depression. A recession doesn't quite cut it for a meltdown. A recession will produce a correction.
So quit the hype. It is as bad as the hype on Iraq. Oh my god, 2000 dead soldiers in three years, compared to what? Vietnam? Korea? WWI&WWII? And yet people already cry "Vietnam" in Iraq. Drama queens will go to no end to cry "the end of the world."
Death spiral? Hardly. If such a thing did come our way none of us would have to guess if it was really here, we'd all know it and there would be a revolution in the streets.
Saw the part of that interview where the builders were talking about trying to get rid of land. What a hoot!
Wasn't it just a few short months ago that they weren't making any more of that?
Now everyone is frantic to unload!
And it’s all the democrats’ fault!
Kilobar, you are right, the 80s collapse in both Denver and Houston were related to oil and telecomunications, job losses. Same here in Austin in 2000 when the dot.com meltdown sent something like 67,000 high paying jobs south and the economy limped along until 2005, home prices were stagnant, foreclosure rose, people left (many moved here but for lower paying jobs) and just now starting to recover.
Denver? Was there in September. Amazed at the growth from Colorado Springs to Denver and all over Denver. Still, not sure there are enough jobs there that pay enough to support home prices. Like in most places in the USA, the lack of wage growth has been the real culprit for most families.
Taxes too, personal and real estate.
Even if home prices per sq ft are reasonable adjusted for inflation the cost is higher because the size of those homes has doubled, although lower interest rates offset part of the affordability factor.
Then again the old mystery. Why do some places see double digit increases in price and others stagnant? Why are foreclosure rates higher in places where home prices are not the most expensive in the nation? Like Denver, Dallas, which are higher than say San Jose or San Francisco? And don't say higher wages since affordablility is the lowest in California and one of the highest in Texas (which has one of the highest foreclosure rates).
Still, there is no death spiral yet, since I defined death spiral as a total and complete meltdown. I guess since I bought a house in 1982 when the market had melted down and interest rates were just coming down (14.5% when I signed to build and it dropped to 11.5% when we closed and I thought that was a bargain) and I don't think that was a "spiral of death." Yes, certain cities historically have been hit real hard. Denver, Houston, Dallas, I think historically have suffered severe housing corrections but due to jobs more than price.
As long as people don't overpay, buy what they can afford on two very secure jobs or better one income, 20% down unless they can really afford less, have at least six months income in the bank, minimal debt, hopefully no car payments, they can afford to weather the ups and downs of the economy.
http://www.msnbc.msn.com/id/8874568/
msnbc video on the same conference - enjoy!
foxwoodlief, you're assuming people know the numbers killed in Vietnam, Korea, WWII, & WWI. Here on HP I would guess most have a reasonable idea of those numbers, but the general puplic doesn't seem to have the slightest clue. Jay Walking on the Tonight Show and similar displays of genius on other shows don't have to try hard to find these people. I have access to them on a regular basis. I teach computer science at the university level. For one low level course that is not part of the major, but that I teach fairly regularly, specifically Website Creation with HTML, CSS, and Javascript, students always need some content for their pages as they learn the technical stuff. Some years ago at the start of a semester, when I was teaching students about making lists in HTML I decided to make the topic of the lists "U.S. Wars of the 20th Century." I figured this would be an interesting topic and we would fill in information about the wars together, but I quickly found out that as a group my students knew next to nothing on this subject. As I realized the the truth of the situation I wound up doing a very fast history lesson, (glad there wasn't a Ph.D. in hstory observing.) I decided we would list out the number of US and total casualties for each war. I won't go into further detail than to say that for WWII, on total casulties the first guess was "about 5000" and I had to prompt them with "higher" more than 10 times to get it up to 50,000 by which point many in class were clearly shocked. I finally gave them the number and many couldn't believe it. An estimate of 20-40 million people killed in WWI it was unfathomable to them. A small handful of students had tears in their eyes upon hearing this. Since that semester I've done this list every time I teach the course and the result is almost always the same. On rare occasion I will have a student or two in a section who do know these things but even in those classes the rest are oblivious.
The saddest thing is that these are not stupid people as I can attest to based on their abilities in the class or classes they've taken with me and others in my department. They have just somehow gotten through life (and school) without picking up a few tidbits of infomartion that I would have previously taken for granted were ingrained in most adult's minds.
An estimate of 20-40 million people killed in WWI it was unfathomable to them.
Sorry typo:
WWI => WWII
And yes, I've heard other estimates that are larger, but these numbers tend to be well accepted.
Don't forget that the Christ-murdering, jewish communists are responsible for about 60,000,000 deaths of white Christians alone. This just in executions and starvations, not war....... It truely is a shame we fought on the wrong side of WW2. Our white European brothers should never forgive the "great" generation for their ignorance.
Honica, please.
Stalin wasn't a jew. Mao wasn't a jew. Hitler wasn't a jew.
Even if Stalin and Mao were jews (which we all know they were not) you can't blame an entire group (jews) for their actions as you can't blame all Americans for GW Bush's actions or Prime minister Olmert or Osama Bin Laden's actions. Please stop stereo-typing and bashing groups based on actions of individuals.
Stalin was half jewish, the bolshevik revolution was wholeheartedly a jewish communist revolution. jews throughout history have been responsible for more white European bloodshed than any other race. Things are no different today. Got jews? got wars, period.
Bank Calls Back Loan To Home Builder...
http:// www.tbo.com/news/money/MGBAG0DCDUE.html
Honica said, "jews throughout history have been responsible for more white European bloodshed than any other race."
Really? Mao wasn't Jewish, have you checked how many died during his reign of terror? Stalin? How about Gengis Kahn? Oh, the crusades? The inquisition? The murder of the first nations of America by Spain? WWI? Armenian massacre in Turkey? How about hour nukes in Japan? How about the Japanese slaughter in WWII?
Back to white blood? What is that? Blood is the same color in all races. Have you studied all the european wars where French kill German, German kills everybody else, French kill Russians, the list goes on? The six hundred year war? The Catholic Church is responsible for more white european deaths than the jews.
Why your hatred of Jews? Take a dna test, you'll probably be surprised of your origins. They had a good article last week here in Austin where a guy took one thinking it would give him more info on his imagined Irish/Scandinavian roots and he found out his dna had more in common with Jews, hispanics, than Irish or Swedes.
What is your religion and ethnic background? I've posted my background here when another person called me a racist and pig and a disgrace to my family name and stated my religous background and current lack thereof. If you are going to be taken seriously about your anti-jewish comments we should at least know your background and religion to figure out why you may be biased.
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