How do these idiots keep their jobs, that's my question. Maybe we should send him a copy of "Manias, Panics and Crashes" too?
Gotta love calling bottom at the BEGINNING of a collapse. Lots of those idiots out there, but most were tied into the corrupt REIC and had a vested interest in lying, spinning and deceiving. When "analysts" and "economists" like this one get it so wrong, you gotta figure they're either corrupt too, or just not too bright.
At least the guy admitted he screwed up. But I think he's being conservative with his 20% to 30% drop prediction. House goes up 50% for no reason, it's coming down 33% at least just to get back to even. And why is everyone blaming subprime? That'd be like blaming a cold on a sneeze.
About-face
In his latest take on the Las Vegas housing market in light of new home sales remaining weak, new home prices dropping and inventory of existing homes increasing, Smith said he appears to have underestimated what was happening when he predicted at the end of 2006 that the market was bottoming out.
Smith said any suggestions that the market was going to improve by the end of 2007 appears to have been just wishful thinking. He said a recovery may not happen until 2008 or even 2009 based on the current trends.
Smith said he wouldn't be surprised if some neighborhoods saw home prices drop as much as 20 to 30 percent because of a glut in those areas. Other neighborhoods where fewer homes are on the market would remain the same, he said.
The fallout from the subprime market has been felt by the housing market because of tighter credit standards, Smith said. In some cases, it's taking a credit score of 720 to qualify for a 30-year fixed loan. Those with scores of 680 have to jump through extra hoops to try and qualify for a loan, he said.
"I have heard this from builders and lenders, and it is not helping sales," Smith said.
Smith said any suggestions that the market was going to improve by the end of 2007 appears to have been just wishful thinking. He said a recovery may not happen until 2008 or even 2009 based on the current trends.
Smith said he wouldn't be surprised if some neighborhoods saw home prices drop as much as 20 to 30 percent because of a glut in those areas. Other neighborhoods where fewer homes are on the market would remain the same, he said.
The fallout from the subprime market has been felt by the housing market because of tighter credit standards, Smith said. In some cases, it's taking a credit score of 720 to qualify for a 30-year fixed loan. Those with scores of 680 have to jump through extra hoops to try and qualify for a loan, he said.
"I have heard this from builders and lenders, and it is not helping sales," Smith said.
15 comments:
got to sell your product!
Just remember, coffee is for closers!
At least the guy recognized his mistake and admitted to 'wishful thinking' concerning is call of a bottom in the Nevada home price slide. But you should wonder if he's still doing some 'wishful thinking' when he predicts a drop of only 20 - 30%. If we get a mania in reverse then prices will drop much further than that.
Also, after reading the article, I have to question Smith's judgement and/or motives. He calls for regulation that would give owner/occupants (as opposed to 'investors') first dibs on foreclosure sales of a certain class of property (under $300k). Sounds good at first but only in the short term - in the long term it's a disaster for the lower middle class buyers (of which I am one) whome he purports to help.
Sure, it will result in lower prices since the investor element of demand will be eliminated. But who would build any of this class of property if they knew that demand and prices would be lower? Answer: landlords. Because lenders would be extremely cautious about lending to someone to purchase this class of property so you take away the ability of the lower middle class to bid on these properties at all.
But it's a windfall for landlords, isn't it? With limited demand to purchase this kind of property and limited supply of this kind of property you have a lot of pricing power if you own a whole building of them for rent. There will still be lots of demand from people who need to live in this class of property but are unable to purchase due to the reluctance of lenders. Smart money will buy whole buildings and then jack the rent up to the sky.
So I suppose Denis Smith is right - this is a great opportunity for those hoping to extort elevated rents from the young and the lower middle class. Brilliant!
Wonder if this might cause this individual to ask themselves if perhaps their tendency for "wishful thinking" and Casey Serin's "it's all good" over-optimism MIGHT be coloring their ability to analyze the market in a rational manner?
It seems some are returning to a more balanced view of the market, where the potential buyer SHOULD be looking for reasons NOT to buy a property, i.e. aspects that'll indicate they could be burned.
This is 180 degrees out of step with the thinking during the recent boom of 2000-2006, where potential buyers only were looking at HOW they could get into the property, regardless of prices/rates.
Oh, yeah, 20-30% decline, my ass. We've already hit 10% declines in many neighborhoods in my area, and we haven't even seen the effects of sub-prime metdown in Feb-Apr 2007 (it'll take 6 months to be reflected in official stats).
PS let the NARs median price figures be damned: they're worthless, hiding price adjustments during a decline).
Vegas is crashing hard. #1 city in the nation in foreclosures. Inventory levels breaking records. There were more foreclosures in February and March than were sales.
But it's also has the lowest collective IQ of people in the nation (see Osman's "creative class" post). It's easy for the papers to get away with quoting the local pundits bu**shit. Smith is a lone wolf now and will cast out by the rest of the pollyannas who are still denying the bubble (one recently said the bubble will pop when hell freezes over, see article). If you're tracking Vegas this has taken a new turn for the dramatic.
http://www.lvrj.com/business/
7116841.html
(PS - they allow comments on articles now)
Unbullieveable article, with a so-called "life coach" swept up in the speculative mania of housing:
Flippers flop as housing market cools
By Ryan Nakashima, AP Business Writer | April 29, 2007
LAS VEGAS --In the rampant real estate speculation of the Las Vegas valley three years ago, people lined up outside Pulte Homes sales offices overnight as if they were waiting for the release of the latest video game console or hot new movie.
Having seen his house in an upscale part of suburban Henderson, Nev. jump $200,000 in value in 18 months, Sam Schwartz felt he couldn't miss any part of the boom.
He spent the night in the parking lot with TV, snacks and drinks, along with about a hundred other people.
Schwartz intended to buy a new home and then quickly sell it within the year -- for a huge profit. Most people waiting were flippers just like him, he said.
"We had seen real evidence of what was possible in this crazy, inflated market, and we just wanted to get a piece of that investment equity," Schwartz said.
But when home prices unexpectedly took a backward step, many investors seeking to cash in quickly were left "upside-down," or owing more on their mortgages than what their homes were worth.
The result was a glut of homes in the marketplace, communities spotted with empty houses and for sale signs -- and a foreclosure rate in Nevada that leads the nation as owners unable to sell became saddled with unbearable debt payments.
Foreclosure filings across the United States rose 47 percent last month from a year ago to 149,150 -- one for every 775 households, according to statistics from Realty Trac Inc., a foreclosure listing service. And for the third straight month, Nevada's foreclosure rate led the nation when it rose 220 percent from a year earlier to 4,738 filings, or one in every 183 households.
In Clark County, which encompasses Las Vegas, one of every 30 homes began the process toward foreclosure last year.
The day Schwartz reserved his home, the sales staff was raising prices $20,000 after every fifth buyer came inside. The $500,000 house he and his wife were eyeing had shot up to $540,000 by the time they sat down. Somehow, it still seemed like a good deal.
"Everybody was thinking, 'Hey it's not the end of the world, because the homes across town are selling for $720,000. We have almost $200,000 in equity in the house and it isn't even built yet,'" Schwartz said.
He and his wife put down $5,000 on a home that would end up costing $560,000 with upgrades.
While the Schwartzes were able to cancel before closing on a property that suddenly was worth only $490,000 -- and recoup their deposit on a legal technicality -- others were less fortunate.
Schwartz, a 44-year-old life coach, said he "narrowly escaped financial disaster." But the effects of the housing crunch would reverberate for years, he said, something he expects to see among the clients he coaches to succeed in their lives and careers.
Read the rest of the article here:
http://tinyurl.com/2rryxj
The msm here in Wisconsin has only mentioned the housing crash when the story was about far away places, like Phoenix or Las Vegas. But today in the help wanted section of the newspaper I see several companies around town want to hire collections people.
No MSM stories here about the housing crash. The crash will only be mentioned if it is about far off towns and states. The MSM is in bed with their advertisers. So don't expect them to letting fly with any stinky stories about local real estate.
Glad to see the 'experts' hard @ werk!
Smith said any suggestions that the market was going to improve by the end of 2007 appears to have been just wishful thinking. He said a recovery may not happen until 2008 or even 2009 based on the current trends.
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I think that even this assessment is wildly optimistic. A bubble of this monumental size will not unwind in just 3 to 5 years. It will take longer.
Some suggest it will be the catalyst the trips the USA into insolvency. If THAT happens, what will we do? Threaten the rest of the world militarily so they'll keep buying our dollars'n'debt?
Ha, think that's far-fetched? I don't.
One could make the case that we're doing that exact thing right now.
Regarding Flippers flop as housing markets cool, you missed the best part of the article:
"There's going to be a lot of depression, a lot of anger. A lot drinking, gambling, and desperate stuff going on."
Classic.
SEATTLE IS NEXT
"The day Schwartz reserved his home, the sales staff was raising prices $20,000 after every fifth buyer came inside."
Yep, no mania/no bubble. :)
found a pretty place at a price one tenth the asking prices in Las Vegas, now if Vegas can get some 50 dollar a day motels near the fancy casinos where I gamble in, i might spend a winter there again, on interest earned, on saved money, and get to be a
'native", waiting for the 5 buck, done well. all you can eat, buffet, ala the old times.......
i
http://www.arizonarealestatenotebook.com/2006/11/16/im-giving-a-buy-signal-for-greater-phoenix-homes/
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