Is there any sane or unbiased person out there who would deny the housing bubble, or the current collapse underway?
Or are we beyond that now and simply in party clean up phase?
December 06, 2006
HousingPanic Stupid Question of the Day
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46 comments:
I don't buy that money suppy growth is an indication of inflation, it's simply liquidity, like an increase in ones credit limit. I think a better measure of inflation would be per capita gdp growth. Any graphs/tables of this? I looked around very quickly but no soup.
http://www.financialsense.com/editorials/kasriel/2006/1205.html
Here's a good article that says otherwise.
Meanwhile, everyone continues to ignore the derivatives market...
Up 24% in the first 6 months of 2006 to $370 trillion...
When those derivatives have to be 'integrated', how much liquidity are they going to "soak up"???
To quote Micheal Shedlock, aka 'Mish', there's nothing to worry about, because:
"Modern Financial Wizardry
In other news, a spokesman claiming to represent Greenspan reported that the entire risk of all derivatives trading to date has now officially been offloaded to Mars. A Martian spokesman verified that claim and went on to state that Martian risk has been offloaded to France. France in turn claims to have offloaded the risk to the MMMM corporation better known as Madame Merriweather's Mudhut Malaysia, the ultimate guarantor of $370 trillion in derivatives.
Leverage on the trade has not yet been calculated but Madame Tandalayo Merriweather of Kuala Lumpur has emailed me personally stating "Don't Worry, My Mudhut is Priceless". The key point here is the priceless nature of the Malaysia Mudhut which is a good thing given that it has taken two years and counting to straighten out the derivatives mess at Fannie Mae alone. In a miracle of modern financial wizardry, no one it seems has any risk associated with these derivatives, given they are all backed by something priceless."
Feeling better about "...about all that cash sloshing around"???
Only a person zapped with one of these would still maintain no housing bubble...just like a person claiming that solar will replace oil...or the illuminati are a saturday morning freeway clean up club...or global warming is not a human induced issue...
Only someone who would receive massive amounts of brain frying radiation would still be in denial...
Hmmmmmmmm...maybe most of us were zapped upon birth by one of these.
http://www.wired. com/news/ technology/ 1,72134-0. html
The crowd is getting ugly. Soldiers roll up in a Hummer. Suddenly, the whole right half of your body is screaming in agony. You feel like you've been dipped in molten lava. You almost faint from shock and pain, but instead you stumble backwards -- and then start running. To your surprise, everyone else is running too. In a few seconds, the street is completely empty.
You've just been hit with a new nonlethal weapon that has been certified for use in Iraq -- even though critics argue there may be unforeseen effects.
According to documents obtained for Wired News under federal sunshine laws, the Air Force's Active Denial System, or ADS, has been certified safe after lengthy tests by military scientists in the lab and in war games.
The ADS shoots a beam of millimeters waves, which are longer in wavelength than x-rays but shorter than microwaves -- 94 GHz (= 3 mm wavelength) compared to 2.45 GHz (= 12 cm wavelength) in a standard microwave oven.
The longer waves are thought to limit the effects of the radiation. If used properly, ADS will produce no lasting adverse affects, the military argues.
Documents acquired for Wired News using the Freedom of Information Act claim that most of the radiation (83 percent) is instantly absorbed by the top layer of the skin, heating it rapidly.
The beam produces what experimenters call the "Goodbye effect," or "prompt and highly motivated escape behavior." In human tests, most subjects reached their pain threshold within 3 seconds, and none of the subjects could endure more than 5 seconds.
We keep hearing from Greenspan and media outlets that "the worst is over" when in fact it has just begun. One article I read today stated that it is a positive that home prices remain at high values. So much for unbiased reporing.
I dont fall for the hle doomsday scenario either...but things will contract IE: Slowdown, I mean we are not building anymore land so construction jobs are going south for sure.
Prime example My neighbor sold their house in 2 weeks, 2 weeks! asking price $250,000/270,000...excepted $220,000 so that is a pretty good haircut..but in reality is probally was worth that much maybe less..the problem is people look at their 4 wall box as a cash cow and a jump into wealth...sorry to busrt your bubble..but its not, it is only worth as much as i am willing to pay for it.
And as a side note inflation is still up..food prices jump weekly and gas has gone up 20 cents
Bake says: "Obviously a 10% decline would impact some folks but the question I'm asking is whether the perceived impact is overstated by some?"
What about the higher taxes they're all paying now? How does that affect their spending power?
Even if you didn't play the game, you're still a loser...
"I think there is a correction on the way....and it will continue for at least 2 years...."
Globally - we will never pull out of this economic collapse - that's right NEVER.
And the reason why....
As oil and other fossil fuel energy sources continue to increase in price - everything will become much much more expensive and at some point gas will become cost prohibitive for the vast majority of us.
A manufacturing economy with available cheap oil could pull this crash out of a tailspin, but because cheap energy is a thing of the past - just when we need cheap energy most - IT WILL NEVER AGAIN BE AVAILABLE.
This housing crash will never end...this housing crash is the trigger for the 98% of the global population to be enslaved by the 2% that control the wealth.
Get used to legumes and tree bark.
Casey serin is bullish on houseing.No bubble whatsoever says the man of the year.
there are plenty of sane people saying the worst is over
supply has been going down in most areas www.housingtracker.net
the recent sales #'s showed 140+ areas vlue GAINING only 40+ declining- most here focus on the worst markets and generalize that to other areas
mortgage apps have been going up pretty sharply over the last month or so including new purchase apps.
Just TODAY the latest survey (covering apporx 50% of all loan activity ) showed a weekly seasonally adjusted increase of 8.1%- including UP 4.9% for new purchase applications
at the same time most amtateur market watchers are extremley bearish, and thats what youre seeing on all the magazine covers
you all are looing back to this summers #'s, and/or focusing on anecdotes like phoenix housing or my neighbors house in CA.
it looks much more then a bottom then a top if you look at national avgs of supply/demand recently and overbearishness as well (this blog is the PERFECT example- it bashes housing like other blogs were bullish on internet stocks before that crash, here its just the opposite, overbearishness before recovery
national median housing value numbers in a year are much more likely to be UP or flat , then dow 35% that most of you hope for for whatever reson , again NATIONALL median average, not taling about your neighbors overpriced house in ca or phoenix, thats not the whole country
talk about "sane UNBIASED people" as this stupid question of the day asks, the sane UNBIASED people certainly arent here thats for sure, its just a rah rah bash housing group cause thats the fad of the moment, lol
sane unbiased people would see that supply is going down on avg nationwide and demand up (see latest motgage application numbers for new purchases, and any website showing supply numbers for a large number of areas NOT just az, and CA for example) this is what unbiased people do
biased people on the other hand attack anyone who disagree with them, like on this blog, and focus on emotion and anecdotal examples ( ie the overpriced house in orange county, the foolish amateur investor with option arms and no reserves in scottsdale etc) thats what goes on here, much bias and little objective talk about the supply and demand situation unfolding at present which is less bearish then what peopl would like to think here...
go ahead bash these facts with ranting and nastiness as usual and show your sanity and unbiased nature....
talk about "sane UNBIASED people" as this stupid question of the day asks, the sane UNBIASED people certainly arent here thats for sure, its just a rah rah bash housing group cause thats the fad of the moment, lol
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TROLL ALERT!!!!!!!!!!!
It's THE DERIVATIVES MARKETS STUPIDS!!!!
On December 5th Toll Brothers reported 4th Quarter Earnings and the results were not exactly pretty.
Highlights
* 2006 4th Q net income declined 44% vs. 2005 from $310.3 million to $173.8 million.
* 2006 4th Q earnings per share declined 42% versus 2005.
* 2006 4th Q revenues declined 10.4% vs. 2005 from $2.02 billion to $1.81 billion.
* 2006 4th Q backlog declined 25.3% vs. 2005 from $6.01 billion to $4.49 billion.
* 2006 4th Q signed contracts declined 55.6% vs. 2005 from $1.59 billion to $706 million.
* 2006 4th Q cancellations came in at 585.
* 2007 Deliveries are expected to be between 6,300 and 7,300 homes.
* 2007 Land write-offs are expected to rise 375% from $16 million to $60 million.
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Here are you figures anonymous would these figure be categorized as emotion and anecdotal examples? Your arguments are baseless and nothing but words produce some facts IE: Mortgage apps have been going up.. I am sure they are with the ARM Tsunami coming I am sure the desk tops are full of apps...but are those apps being approved....produce your findings otherwise stop with the drival it really makes your argumant baseless.
Now I can see why the housing stocks are going up.
I guess the Fed wants to "soak up liquidity" by making some greater fools invest in housing stocks, then wiping them out.
I'll bet you 10 to 1 the housing CEO's are looking at their stock prices going, "WTF? We give them bad news after bad news and they keep buying! Oh, must be the same people who bought our overpriced houses!"
No! The party MUST continue! Big lines of coke for everyone! Now, drink, drink, drink, drink!
Tool Brothers has an estimated -58% earnings for next year.
Oh yeah, that's a gooooood stock!
As long as coal is cheap, bubble house owners will be able to afford presents for their little bubble kids.
Down in Naples, Fla., a fast-growing city on the Gulf of Mexico, there was an auction of houses about a month ago.
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More on Housing Prices (December 5, 2006) An auction isn’t the usual way to sell a home, but it can make sense for people who don’t want to leave their houses on the market for months at a time and also don’t want to take the first offer to come along. So on a Saturday morning inside the Naples Beach Hotel and Golf Club, a few dozen houses went on the block in front of about 500 bidders.
Based on the official housing statistics, you might have guessed that the sellers would have made out just fine, despite all the talk of a real estate slump. According to one widely followed real estate index — tabulated by the government agency that regulates Fannie Mae and Freddie Mac — the average house in Naples sold for 20 percent more this summer than it would have a year earlier.
But that wasn’t what happened at the auction. In fact, if you were at the beach club that Saturday, you could have been excused for thinking that the real estate market was crashing.
One three-bedroom ranch house with a pool sold for $671,000. In 2005, the same house sold for $809,000. Another house, just steps from Naples Bay, sold for $880,000 at the auction., compared with $1.35 million a year earlier. On average, the houses that changed hands at the auction had fallen about 25 percent in value since 2005, according to Thomas Lawler, a real estate consultant who analyzed the auction’s results.
Now, Naples is not a typical housing market. House prices nearly tripled in the first half of this decade, and speculators, who are more likely than residents to sell a house in a panic, flooded into the area in recent years. But with that said, Naples is not as unusual as you may think.
The truth is that the official numbers on house prices — the last refuge of soothing information about the real estate market on the coasts — are deeply misleading. Depending on which set you look at, you’ll see that prices have either continued to rise, albeit modestly, or have fallen slightly over the last year. But the statistics have a number of flaws, perhaps the biggest being that they are based only on homes that have actually sold. The numbers overlook all those homes that have been languishing on the market for months, getting only offers that their owners have not been willing to accept.
In reality, homes across much of Florida, California and the Northeast are worth a lot less than they were a year ago. The auction in Naples may have exaggerated the downturn in the market there, but not by much. Tom Doyle, a Naples real estate agent, estimated that a typical house there, sold in the normal way, would go for about 20 percent less than it did the previous fall.
In the Boston area, prices have fallen about 10 to 15 percent since the middle of 2005, estimated Chobee Hoy, who owns a real estate brokerage firm in Brookline. Jerome J. Manning, who runs the Massachusetts-based auction company that conducted the Naples sale, told me he thought that values had dropped about 20 percent around Boston. (The government, meanwhile, says the average price rose 1 percent from last summer to this summer. But here’s all you need to know about how well the government tracks the Boston market: the index excludes any mortgage larger than $417,000.)
In September of last year, Ms. Hoy sold a one-bedroom condominium in Brookline for $395,000. She recently sold another apartment of the same size in the same building for $300,000. Since March, her firm has been listing a house in the Fisher Hill neighborhood of Brookline that cost $995,000 when it last sold, in the summer of 2004. Ms. Hoy expects it to sell this time for less than $900,000.
The market in northern Virginia is similar: prices are down 10 to 15 percent, according to an analysis by Mr. Lawler, a former Fannie Mae executive who’s based there. In Portland, Me., the typical house has lost about 10 percent of its value in the last year and a half, said Bill Trask, the former head of the local Realtors’ board.
In New York City, where co-op boards generally bar the door to absentee speculators and creative mortgages, prices seem to have slid a bit in the last few months, but only to roughly their 2005 levels. In the New York suburbs, though, values have fallen perhaps 10 percent or more since last year. Prices also appear to be down in Sacramento and San Diego.
For many homeowners, of course, the decline doesn’t much matter. They didn’t really benefit from the run-up, and they won’t suffer from the decline. And for any renters hoping to buy a home, the fall in prices is downright good news.
Unfortunately, there are also a lot of families that took on huge mortgage debts based on the ephemeral peak values of their properties. In effect, they cashed in on the housing boom without cashing out. As Ed Smith Jr., the chief executive of Plaza Financial Group, a mortgage brokerage firm near San Diego, said, “So many people picked up their homes, turned them upside down and shook them like a piggy bank.”
The withdrawals have been so big that the average household in Boston now has
"Mortgage apps have been going up.. I am sure they are with the ARM Tsunami coming I am sure the desk tops are full of apps...but are those apps being approved...."
As a mortgage broker for 10 years, I am cashing in big right now on refi's, thanks everyone for hypeing the "dangers" of option arms, does nothing but drive those customers right into my office...thanks again...almost time for another refi boom.
Once again I agree with Richard. We are in uncharted territory. Expensive fossil fuel and a massive rush to entitlements for baby boomers will converge. Americans are too fat anyways...
USD depreciation prevents rate cuts. Ah yes, the external constraint.
That's what happens when a country turns itself into a massive external debtor. So, tighten belts and get ready for a hard landing.
dont count on that refi boom you speak of. And with so many upside down on their houses...where or how are you figuring your comps? Not by sales thats for sure...more like Appraisal fraud.
borkafatty,
the housing profits of homebuilders or BACKWARDS looking not forward looking
ie a year before housing softened, they were all making money, for example, so their profits are not relevant to the future
what is relevant is that they lost money as builders and got extremely bearish, therefore cutting back on new projects (and future supply) which is a support not a hinderance in relative terms to housing down the road
I can assure you my arguments are not BASELESS simply cause i dont agree with you
if housing in large part was going to soften in large part by builder overbuilding, home supply nationally going up and demand for homes (as first reflected in new mortgage purchase applicxations) decreasing, and interest rates rising , and overbullishness by the public
THEN WHY IS IT BASELESS TO ARGUE THE REVERSE WHEN ALL THESE FACTORS ARE NOW TRENDINT THE OTHER WAY , HELLO- you are just showing a bias
now supply nationally is down, demand as shown by purchase applications up, builders bearish and cutting back dramatically (NOT overbuilding like before) 10 year note down almost a full percent in yield, public sentiment bearish-
THIS IS EXACTLY THE REVERSE OF WHAT HAPPENED BEFORE HOUSING WEAKENED- if you have no personal bias then you should see that the possibility exists that markets are bottoming based on these FACTS not wishes (and most economists , yes economists not realtors or bloggers here agree that its botming not topping)
markets go both ways, being UNBIASED I can see that, and am just seeing the factors reverse which led to the decline (nationally on average , pls dont talk about overpriced house in AZ or phoenix as the whole picture)- the problem with 905 here is they cant see through their emotion cause they dont want the market to bottom and cant look objectively
of course I could be wrong, but am just calling the facts which have reversed- can you admit that YOU ALL could be wrong??? thats the question...
Anon 3:32:34, I hear ya on that one! I'm thinking about opening another office next year. I know the last refi boom was great! Just imagine what this one will bring! Can you say $500,000 a year boys and girls?
How do you have a price "correction" or reach bottom when prices have not dropped sufficiently to allow new blood to get into the market?
This thing has not played out. And, as for your economists predicting that the worst is over, did they predict what happend over the past year or were they "surprised" by the downturn.
And to that mortgage broker, I really do hope that you die a slow, painful and embarrasing death.
fair enough, but its not for you or I to decide whether prices fell enough, the market does that, and the fact that purchase apps have been rising consistently over the past while may mean that buyers and sellers have found equilibrium in many cases now, thats all just looking at the facts
PS i was just as quick to say housing is gonna soften about a year or so ago, when supply up/demand down interest rates up, overbullish public- now that thats reversed to some extent am just trying to stay consistent and say things may be bottoming, just as they were topping, is that so crazy?
I can assure you my arguments are not BASELESS simply cause i dont agree with you.
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Fair enough..but prices have to come down..incomes are not keeping up with the cost of housing..and this is where the fix comes in..IE: Toxic mortgages.
But we shall see, and by no mean am i asking you to agree with me or us Anonymous, its just from what i see and read..not just here, this is my last stop for economic issues, the writing is on the wall for a major 07 recession.
Unless of course someone can pull a rabbit out of a hat, and fix the current situation.
Our Foreign comrad Dollar holders are on to us, and can smell the printing press oil buning.
And please login I feel like i am talking to a wall.
thank you
NATO Prepares For Energy Wars
By Roman Kupchinsky
PRAGUE, December 5, 2006 (RFE/RL) -- During the recent NATO summit in Riga, U.S. Senator Richard Lugar urged the alliance to declare that an energy boycott of any member be seen as an act of coercion against all members of the alliance and one that requires a collective response.
U.S. Senator Richard Lugar urged NATO to update its charter. "We are used to thinking in terms of conventional warfare between nations, but energy could become the weapon of choice for those who possess it," he said.
Lugar warned the opening session of the NATO meeting that "it may seem to be a less lethal weapon than military force, but a natural-gas shutdown to a European country in the middle of winter could cause death and economic loss on the scale of a military attack."
Bake Mcbride said, "As much as we are addicted to their oil....they are addicted to our money."
Really??
TEHRAN, Dec. 5 (MNA) — Iran has started replacing dollar with euro in majority of its crude oil exchanges in the last several months, an informed source with Iran's Oil Ministry said here on Tuesday.
borkafatty,
thank you for the more civil response
yes the price income ratio is very important and was way out of whack in phoenix (the 40k a year millioaire syndrome) for example, but im sure youd agree , this all depends on what area of the country you are in- also , not discyussed much, but there are some areas where ration not as important ie high end resort areas (ex aspen) where "incomes are a reflection of working locals, and homeowners may have extremely high incomes not reflected (second homes) and prrobably no mortgage whatsoever
and id agree "toxic" or exotic morgtgages are a million dollar question, the answer is noone knows for sure the fallout yet in statisticall terms it may/may not be as bad as you think - the ability to convert to a fixed income product is more attractive and likely for many as the long term yield has dropped- also unemotionally you must note that foreclosure rate now 1n the 1% area NATIONALLY and even if this goes up 400% is not enough to crash housing significantly overall (im not talking about the foolish amateur in phoenix who bought 5 houses without experience or reserves, that guy is going under, doesnt effect everyone statistically)
and just as a sidenote, there truly are experienced and liquid buyers who use less then traditional mortgages too, i happen to have used full doc , no doc alt a, fully amoritizng, fixed rate , and arms over the years depending on situation and timing- and have high net worth, reserves, and perfect credit- also i know of someone personally who bought a condo in Naples for 2 million(gaasp)last year with a stated otion arm, boy sounds risky....well wait heres why you cant judge a book by its cover...the person was merely waiting to close his sale of his 6 nillion dollar home overseas (no mortgage) and didnt want to touch his private banking acct with chase and northern trust in the meantime...
so never judge a book by its cover , some of these "toxic" mortgages were designed to be used by sophisticated people with high net worths and oodles of complextax returns they dont want to have to go through simply to underwrite... do we shut down a product cause some yahoos ruin it for the responsible people??
finally, im thinking of logging in, but this site is often so negative and rude to people who disagree with the norm , that i dont know if i want to bother getting attacked by username all the time..
"finally, im thinking of logging in, but this site is often so negative and rude to people who disagree with the norm , that i dont know if i want to bother getting attacked by username all the time.. "
really - it's not that bad - (grin)
Americans are lazy, stupid, people and are getting what they deserve.
As a US born citizen, I will proudly be the first to sell off this nation's assets to the highest bidder... much as those clever Russian oligarchs did at the end of the Soviet Union.
Much like them, I despise this corrupt government and it's people; and I will gladly profit from their misery.
gee, have a nice day, you need to lighten up....
richard,
yes it is lol- please refer to the thread of the guy who bought a toll brothers house (in Austin) form a day or two ago and asked people here for "advice" brutal and Naaaaaaaaasty, couldnt even believe it, like feeding a fish to the vultures
actually im sort of lucky, no one here has called me idiot, dolt, clueless, moron, or worse here toady for not aying housings going off a cliff all over, at least not yet...
Georgia foreclosures jump 99%; rate is nation's 3rd highest
Homeowners feel pain as climbing adjustable mortgage rates bite back
http://tinyurl.com/y9z66g
yes rate is nations third highest , whats the average nationally , in the 1% range .. so is it now in the 2 % range for georgia...zzzzzzzzzz
sorry not gonna make the nations housing market crash my friend
Housing has been all about who can borrow the most money to purchase a house without crying "uncle". That is all going to change because high priced homes can only be justified if people are willing to buy at the bottom. People can no longer buy at the bottom because the bottom is too expensive. Thus the pyramid comes down. Probably very hard!!!
on bloomberg today
citigroup RAISE target price of 14 homebuilders
"teh rally is coming sooner then expected"
mortgage applications RISE to 7 month high!!!!for new purchases,
well , you all here wouldnt know a botom from a top, just wishful thinkers talking last summers numbers (and focusing on az and ca etc) when actually latest numbers 140 plus areas gain only 40 or so decline
again Ive been saying it for days to you all, but you wont listen to one who traded institutionally for a living... you all have classic retail psychology and are the people that are most bearish in a bottoming ...mannn
"I don't buy that money suppy growth is an indication of inflation, it's simply liquidity, like an increase in ones credit limit."
And you would be wrong. Inflation is defined as a growth in the money supply without any corresponding growth in productivity. From the looks of things:
http://tinyurl.com/kh74j
the Federal reserve has decided it's time to inflate or die. Keith is a doomsayer and thinks the Fed is powerless to stop a huge collapse in RE prices. I think he misunderestimates the financial tools at Mr. Bernanke's disposal. Oil may cost $120/bbl, and a Lexus coupe might be $150K in the showroom, but there will be no widespread HP.
It's THE DERIVATIVES MARKETS STUPIDS!!!!
++++++++++++++++
Yep, it's the collapse of the whole world-wide credit bubble that is bearing down upon us like a runaway freight train. The housing bubble is just a part of the general calamity now unfolding....
where would i have gotten the information that the average retired couple earn 32 thousand a year, and that the taxes on these high priced houses alone in some super bubble areas with hoas will take all of that, and the taxes compound, but without savings, their incomes will not?
none of the numbers add up!
may be the trillions already missing from the economy, were bogus assets, but the trillions are gone?
misinformation, in the information age!
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