Man, I love Professor Shiller. David Lereah must hate this guy.
"Substantial risk that weakening trend can continue for years or more"
"Builders will still be building at a good rate... and that's what will bring home prices down even further"
"Homebuyers think that there's a correction and they don't want to be buying when it'll be lower in a month or year"
Stay online after the Shiller video is over to watch Lereah on CNN. Hilarious.
December 11, 2006
BNN has Robert Shiller on video discussing the housing collapse
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I'd love to see interest rates on that graph too. Does anyone have a source for historical interest rates?
Anybody think that the fed is not going to raise interest rates? If so you are an idiot!!!!!
A loan that'll get ugly fast
EVERY day, Will Hertzberg owns a little less of his three-bedroom house in Corona.
Like hundreds of thousands of other homeowners around the state, Hertzberg has a mortgage that lets him choose how much he pays each month.
Like many of them, he always chooses to pay as little as possible.
For the moment, this allows the 56-year-old Hertzberg to continue living in his tract home despite being only marginally employed. But his debt is swelling, and his mortgage company controls his fate.
"I am rather screwed," he said.
http://tinyurl.com/ymr3nc
It depends on the USD of course. I'm sure the FED would love to lower rates to 0% right now but the dollar is so weak they can't get away with it. Therefore, the FED will likely remain unchanged for the next few sessions and then move to protect the dollar (hopefully.) If they don't raise at some point soon, then it's Weimar Republic time and fiat currency meltdown.
Hey Borka - can you believe that asshole went out and bought a $32,000 toyota. What a f****ing IDIOT!
keith,,
read your blog with interest-- but you may be a little off on this one
"builers continue to build at a good rate will keep prices down"
I have to disagree here,, builders have been very bearish and have cut back dramaticallly, this will lend support to the housining marrket,going forward
Dont see it here (why not????) but
I got this off the motley fool website,, which as you know doesnt rah rah housing at all, pretty credible-
THE NEW HOUSING STARTS TO SALES RATIO IS NOW AT THE LOWEST ITS BEEN SINCE RECORDS HAVE BEEN TAKEN!!!!
in other words builders being bearish have actually cut DOWN on new [projects to the point that new buildig to sales ratio at historic LOW-- this portends inventory shrinkage coming next year at a rate that will surprise most according to motley fool.. and they are no idiot realtors or whatever
AND also new mortgage applications at sventh month high for purchases, according to the new purchase index
these are FACTS that dont show huge deterioration from here nationally,, but just the opposite-- the market goes BOTH ways - when mortgage apps down, invetory up, and builder bullishness- this led to weak market- but now the NUMBERS (not emotion but numbers show) a reversal of this and this MUST be considered in a serious unbiased discussion,,thanks...
I don't understand this board. I asked a fair question, with no bias in it, hoping to find some accurate information. In return, I get called an idiot.
I think the Fed is going to hold rates steady for a while, perhaps increase a bit, but nothing like they've done the past couple of years.
Does anyone have a chart of historical interest rates?
well salt lake ,
your not an idiot.. the majority of proffessionals in the market (who do this for a living) believe the next move is a rate cut by the fed
and if housing is as soft as those here believe that would even be another factor which would make the fed believe no reason to rise rates from here
dont take insults personally,,
this is mostly a rah rah board for people to root for ALL housing to go much lower,, not an unbiased discussion
MAny here think that all homeowners are underwater and will decide to sell their house to them anywhere in the country for 40% lower ,LOL im not kidding..
Hey Borka - can you believe that asshole went out and bought a $32,000 toyota. What a f****ing IDIOT!
---------------
For real, you would have thought he would have learned when he went sour on his dot.com stock...then the fool goes out and buys another losing asset and avalon..did you also see his porfolio of good time money:
Trips, home improvments, investments..good luck to him he is going to need it! If you read this blog sir please take our advice and leave the keys in the mail box and walk away, and hold on to as much as you can, while you still can.\
best of luck.
interesting that thestreet.com guy was interested in the 300 million people rather than the spread between construction and selling prices... how do those immigrants afford that gap when they're the ones making the spread possible?
Salt Lake, I thought you were a mortgage guy. If so, why are you asking about the fed funds rate? It has no relevance to housing or long term rates. Are you guys so dim on this subject you need to be schooled by the evil, bigoted, redneck anti-semite? Surely some here have a little better grasp on economics than the likes of rhoid right?
here is more great news, is this biased anonymous? or reality?
DaimlerChrysler could lay off up to 16 percent of the workers in its North American truck operations next year due to an expected downturn in demand, the head of the automaker's truck operations said on Monday.
Andreas Renschler, a member of DaimlerChrysler's board of management, also said Chrysler Group's Chief Executive Tom LaSorda has the board's backing, as the company's U.S. unit readies a turnaround plan intended to address swollen inventories and a drop in sales of almost 8 percent this year.
Renschler said the potential for up to 4,000 job cuts in the truck operations would include 800 layoffs that have already been announced and that will take effect in March.
http://tinyurl.com/yzksab
thing are looking up for sure...think ill go buy a house today
I believe the next fed move will be to raise rates to bluster the faltering dollar, unless the Democrats take the presidency prior to the next fed move, then anythings possible.
I believe this because the Republicans will act to protect their largely dollar-pegged assets and the value of money owed to them by others.
The economy is rolling along quite fine and liquidity is quite high. Meanwhile, the interest rates are already near historic lows. If the fed were to cut interest rates, they would add fuel to the flame of a free-falling dollar and would be emptying their quiver of silver arrows with which to stimulate liquidity in the future.
Dodge trucks are P'sOS.
The jews at the fed will leave THE FED FUNDS RATE, you know, the only one they control, unchanged this session.
slate lake: most people are predicting that the fed will hold rates steady at the enxt meeting. But in the future they will be pulled in two directions. Either they'll try to protect the dollar by raising rates or prop up the slowing economy by lowering rates.
That said, low rates are not necessarily the saviour of the housing market. Low rates + economic expansion would push house prices up, sure. but it's far from clear that low rates + recession would stop the decline.
freakin idiots.
From the capitol of the terroristic state of israel.
FORMER HEAD HYMIE SAYS ALL IS NOT WELL.
TEL AVIV (Reuters) - Former U.S. Federal Reserve Chairman Alan Greenspan said on Monday he expected the dollar to stay weak for the next few years and will continue to drift down, weighed by the U.S. balance of payments deficit.
"I expect that the dollar will continue to drift downwards until there will be a change in the U.S. balance of payments," Greenspan told a business conference here via video-link from the United States.
"There has been some evidence that OPEC nations are beginning to switch their reserves out of dollars and into euro and yen," Greenspan said.
"It is imprudent to hold everything in one currency," he said, adding that at some point the dollar will be moving lower.
"That will be the experience of the next few years," Greenspan said.
Greenspan said markets were so sophisticated it was very difficult to forecast the short term direction of the dollar.
Looks like the inevitable collapse of the dollar is happening!!!
http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=53311
I guess I'm an idiot since I think The Fed will hold steady for at least one more meeting and then raise the overnight rate. The last Anon gave the exact reason why the rate will be raised.
Either they'll try to protect the dollar by raising rates or prop up the slowing economy by lowering rates.
The Fed is interested in slowing the economy right now. So, their choices are to raise rates and help the dollar or raise rates and slow the economy. I do not see how lowering rates would even be an option right now.
Another Anon said
your not an idiot.. the majority of proffessionals in the market (who do this for a living) believe the next move is a rate cut by the fed
What professionals in what market are you talking about? Other than those employed by the REIC, the professional money managers I know believe the rate is going up.
Salt Lake Guy,
There has been a graph showing interest rates compared to periods of recession on this blog. I'm sure somebody has it. You could compare the two graphs for the info you need.
What "rates" does it show? I think he is looking for long term housing rates.
looking at those graphs... couldn't it be that going forward Building Cost Index climbs to the Housing price, as it did for two decades past 1940?
Maybe indeed if you don't buy now, you'll be priced out forever!
The Feds lowered the rates longer than they should have, then the Fed lifted rates longer than they should have, so it makes sense that they are going to leave them the same longer than they should.
Another gem from the anal obsessor. Each time I read one of his posts, I'm reminded of "a tale told by an idiot".
Does anyone know the rusults of this auction?
J.P. King Auction Co.'s plan to sell 100 Hamptons condo units Dec. 9 at the Grand Hyatt Tampa Bay hotel
I'm not really a racist anti-semite, I'm really just an angry dickless worm who blames the unseen evil jews for all my problems.
We can argue over the minutiae all we like, but the bottom line is this is a classic financial bubble, not supported by the fundamentals and it will end badly for many, many people.
honica jewinski said...
What "rates" does it show? I think he is looking for long term housing rates.
Your right. That graph shows the overnight rate.
Rhoid, I know you're a little slower than average, but damn! For the last time, the fed funds rate has no impact on long term housing rates!
Hey genius, most 5/1's are based off the LIBOR index.
"There just aren't enough $100,000 household incomes to continue to buy median priced homes at $634,000."
And with 20% annual appreciation off the table, how many will want to strech to have 30%+ of their take home income going to an asset that is, at best, flat?? Or worse, declining??
And wait 'til banks tighten and don't let people buy homes at 6x, 7x, 8x their annual gross income.
Anon 7:26:58 PM...
How dare you speak of such things here? Don't you know, only apocalyptic thoughts are welcome. Damn you heathen!!
Hard core eviction crew. [warning: foul language]
Low 5% range in 03? Are we talking 30yr fixed again here rhoid? If so, the fed funds rate or the libor is irrelevant. If you're talking 5/1's, they were in the high 3's low 4's for the fixed term around that time. What I'm stating here, as usual, is FACT. You don't have to "value" anyones opinion.
The thing about bubbles -- they pop.
What fantasy to think it will be a "soft landing." My only question is -- anybody having any luck when offering 50% yet? Are the 41% second home buyers out of the market yet, now that it is a loss of perhaps $12,000 per month? Are vacation homes plummeting yet, since they go first?
Buzz kill, "The Baltimore skinheads are comin' for you"????????? Oy vey!!!!!!
Anon 11:20, vacation homes here (median priced) are still going up.
the fed will raise rates if the dollar continues falling, their top priority is to keep the dollar strong enough so the US can continue to borrow money. the market thinks rates will stay the same or fall, as we know, the market is often wrong.
From England....[-] Text [+]
LONDON (Reuters) - House prices rose at their fastest annual rate in more than 1-1/2 years in October with prices in London leading the way, government data showed on Monday.
The Department for Communities and Local Government said house prices rose 8.6 percent year-on-year in October, up from 8.0 percent in September and the fastest annual rate since March 2005.
House price inflation in London accelerated to 10.6 percent from 9.0 percent in September -- its highest in more than two years.
"This confirms that the housing market, in London at least, continues to benefit from the boom in financial services -- a trend that is likely to continue in the near term as we enter bonus season," said Michael Every, senior strategist at RBC Capital Markets.
First-time buyers contributed to the upward momentum in October with house price inflation for those getting on the property ladder rising to 8.5 percent from 7.7 percent in September.
The government figures chime with recent surveys from mortgage lenders which show housing market activity has not been dampened by higher borrowing costs.
HBOS Halifax survey showed house prices rose last month at their fastest annual rate since March 2005 and Bank of England figures show mortgage approvals -- a lead indicator for the market -- remain near historic highs.
With two post of late, this one and a few weeks ago a post out of the Economist that showed home prices up in Australia with Perth up 48% could mean that there is still a lot of liquidity out there and that the markets still are inflating.
Remember both Australia and England have home values that have risen two to three times those levels of the USA if you recall other charts posted from the Economist.
Both countries showed a slight decrease in values only to surge forward again. I think maybe we'll see the same thing come next summer.
Tuesday, December 12, 2006 12:15:07 AM
Here in Florida we have seen some very interesting trends. Values seem to be holding while inventory has swelled. What the future is no one knows, but sellers are definatley no longer in the driveing seat. We have also seen a significant drop in the volume of transactions. For more information please visit us at www.appraiserking.com we are based in Orlando Florida.
For Home Depot to go from hiring plans to firing plans in a single month, things must have gone to hell in a handbasket in a hurry. There is no other rational explanation.
In summation, there is not a shred of evidence that suggests corporate spending is about to pick up. There is also not a shred of evidence that suggests that even if it did, it could possibly “take over where consumer spending left off.” The idea is not only illogical, it is unsupported by what is actually happening.
What is happening, however, is subprime lenders are blowing up and throwing more people out of work, furniture stores are blowing up and throwing more people out of work, proposed financial mega-mergers (if they happen) will throw more people out of work, Wal-Mart has recently cut back on expansion plans, Home Depot did an immediate reversal of expansion plans, and now we see a four-month-straight decline in nonresidential building.
The second wave down is coming, and this one will have far more serious consequences.
http://www.whiskeya ndgunpowder. com/Archives/ 2006/20061211. html
Whiskey & Gunpowder
December 11, 2006
By Mike “Mish” Shedlock
Illinois, U.S.A.
November Jobs Report
On Dec. 6, ADP said “private-sector jobs rise 158,000” in November: “Hiring pace is consistent with 'modestly below-trend' economic growth.”
Based on a string of huge misses by ADP, I predicted the official November numbers would badly miss as well, coming in at 88,000. Bart at NowandFutures. com predicted 116,500. I offered to wager a box of Omaha Steaks (10-oz. Rib-eyes) on the outcome. Fortunately for me, Bart declined. ADP was indeed high, but I would have lost the bet.
Here are the official employment numbers for November 2006:
“Nonfarm payroll employment rose by 132,000 in November, and the unemployment rate was essentially unchanged at 4.5%, the Bureau of Labor Statistics of the U.S. Department of Labor reported Dec. 8. Job gains continued in several service-providing industries, including professional and business services, food services, and health care. Employment declined in construction and manufacturing…
Why doesn't this loser get some renters to pay for his $400K bubble house? It's got two extra rooms and if he really needs the money he can rent out the third one and sleep in the living room.
He's a big man, so he doesn't have to worry about getting his ass kicked by some crazy renter.
He's an older version of Casey Serin! At least he did not have 5 houses to his name. I guess his generation just does not have the ambition that later generations have, like Casey's.
And there is some positive news overall: Patrick Lawler, chief economist for the agency that produces the price index, says, "The transition from sizzling markets to normal or weak markets has been orderly so far, and recent drops in interest rates lessen the likelihood that precipitous changes will occur."
To see the full third-quarter house price index, go to www.ofheo.gov.
Economist Mag Dec 9th issue, Bubble and squeak, says home prices rising again overseas, and that doesn't take currency values into account so in dollar terms the rise plus the devalued dollar makes our houses even less expensive.
New list for 2006 to 3Q, Demark up 23.3%, Ireland up 14.2%, Canada up 12.8%, South Africa up 12.7%, France up 12.5%, Belgium up 11.8%, Spain up 10.8%, New Zealand up 9.6%, Australia up 9.6%, Britain up 9.6%, the list goes on and does recognize that in those same markets some areas were flat, while others continue to rise.
It notes that in Australia prices rose rapidly in 2003, fell in late 2004/2005 and are no increasing with perth up 46% this year in the third quarter.
Looking at the price rise between 1997-2006, South africa up 327%, Ireland up 252%, Britain up 192%, Spain up 173%, Australia up 132%, France up 127%, Sweden up 123%, Belgium up 118%, Denmark up 115%, the USA up 100%.
Look at those numbers. Consider the rise in those countries and of course in Euros or pound sterling imagine the cost in dollars!
Think the US market doesn't have room to continue this madness? Barring WWIII I imagine as in Australia and New Zealand, both slowed, saw declines in their most expensive markets while the less expensive areas (like Perth) caught up, and then everyone starts rising again. The California syndrome here in the USA, our market always follows California, they export their ridiculous prices until they restore historic differences in price between them and the rest of us and then the march starts all over again.
I think the Fed will do nothing.
Think about it. If the Fed changes interest rates either way, it may trigger the collapse many are fearing. Do they want history to paint them as the people who destroyed America?
I think that things are going better than they could hope for right now and they'll do nothing to upset the apple cart.
What does that mean anyway, upset the applecart? What cart? Whose apples?
I hope this doesn't mean the Chrysler will not make the Smart Car for the U.S. I really want one.
http://aerohost.com/CarInsurance/SmartCar.jpg
Once prices start dropping faster the mortgage holders are taking an awful risk being lenient with delinquent debtors. Every month they wait to repossess the house, it could lost 4-5% of its value.
Yes, but what does Sophia Bartiromo think the Fed will do?
Why is it so hard for people to comment on the news of what is happening with home prices outside the USA? Do people think there is a disconnect between us and them? Do people not want to know that others are paying way more for homes than we? Sort of like gasoline? We cry that we pay $2.20 a gal and don't want to know that others are paying $4
Will people please comment on what they think or are we all going to be like Iran and the Holocaust conference and only say things or debate issues that support our view?
Economist Mag Dec 9th issue, Bubble and squeak, says home prices rising again overseas, and that doesn't take currency values into account so in dollar terms the rise plus the devalued dollar makes our houses even less expensive.
New list for 2006 to 3Q, Demark up 23.3%, Ireland up 14.2%, Canada up 12.8%, South Africa up 12.7%, France up 12.5%, Belgium up 11.8%, Spain up 10.8%, New Zealand up 9.6%, Australia up 9.6%, Britain up 9.6%, the list goes on and does recognize that in those same markets some areas were flat, while others continue to rise.
It notes that in Australia prices rose rapidly in 2003, fell in late 2004/2005 and are no increasing with perth up 46% this year in the third quarter.
Looking at the price rise between 1997-2006, South africa up 327%, Ireland up 252%, Britain up 192%, Spain up 173%, Australia up 132%, France up 127%, Sweden up 123%, Belgium up 118%, Denmark up 115%, the USA up 100%.
Look at those numbers. Consider the rise in those countries and of course in Euros or pound sterling imagine the cost in dollars!
Think the US market doesn't have room to continue this madness? Barring WWIII I imagine as in Australia and New Zealand, both slowed, saw declines in their most expensive markets while the less expensive areas (like Perth) caught up, and then everyone starts rising again. The California syndrome here in the USA, our market always follows California, they export their ridiculous prices until they restore historic differences in price between them and the rest of us and then the march starts all over again.
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