Bubble?

Sentiment surveys allow an investor to gauge the emotional enthusiasm of the market. The Daily Sentiment Index from MBH Commodities has been tracking the percentage of bulls and bears for 19 years. In mid-December, this survey recorded its highest long-term bullish reading ever.

More traders are bullish towards the S&P 500 (91%) than at the peak of the NASDAQ in 2000 (83%). Remember delusional investors were buying tech "ideas" in 2000. Now there is even more consensus that markets can only go higher (see below). This suggests a major correction.

You know how trends start in California then spread from there? Here's one - everyone loses their home!

Not only am I amazed that "option-ARM" loans are legal, not only am I amazed that in some towns in California 40% of new loans were written this way last year, but I'm also blown away that Congress hasn't stepped in to try to stop this disaster in the making. The California legislature is now at least holding investigations...

People who are not making the necessary payment on their home to cover the interest charges (let alone not paying anything toward principal), while at the same time housing values are tanking, are going to lose their homes, period. Nearly every one of them.

There will be so many foreclosures in California in the next few years, it'll seem like a neutron bomb went off in some cities - the people are gone but the buildings remain standing.

California lawmakers on Wednesday began considering restrictions on unorthodox mortgage-lending practices that have allowed hundreds of thousands of Californians to buy homes they otherwise could not afford.

About half of all new home loans in California are something other than the traditional 30-year fixed loan. They use features such as no money down and variable interest rates, while giving borrowers creative monthly payment options such as paying only the interest or even less than that.

Such low introductory payments or teaser rates are offered in exchange for higher bills that will kick in years later, sometimes tripling or quadrupling monthly payments. Regulators said many of those riskier loans were taken out in 2004 and 2005 and will start resetting to higher rates this year.

"The exposure to these sorts of products, the growth, is unprecedented," Raphael Bostic, an associate professor at the University of Southern California School of Policy, Planning and Development, told a Senate committee. "The regulatory oversight of these types of practices is relatively lax."

About 12.5 percent of riskier mortgages nationwide were delinquent by last fall. Nearly 1 million homeowners nationwide either lost their homes or missed monthly payments from July to September, according to the Mortgage Bankers Association.

"The market did not save them," testified Pam Canada, executive director of Neighborhood Works Home Ownership Center in Sacramento. "This was a nightmare with no happy ending."

The trend will worsen, the Center for Responsible Lending predicted in a December report.

The center estimated that nearly 20 percent of those who took out risky mortgages will lose their homes nationwide. In California, more than 21 percent are likely to default, with a foreclosure rate as high as 25 percent in some areas.

"The problem is that many consumers have not prepared an exit strategy," said Ed Smith Jr., chief executive officer of Plaza Financial Group Inc. of San Diego. "The key is customer education."

Phoenix housing Swann-dive update: 65,000 unsold homes + record low sales = now comes the mass auction and price collapse

What happens when nobody wants to buy a home, while at the same time tens of thousands just want out? Holy crap, it's getting uglier and uglier in Phoenix by the day.

Memo to anyone trying to sell a home in Phoenix - drop your price and drop it bigtime, now. Nobody wants your home. Your home isn't worth what it was a year ago. That was a bubble, a mirage, an investor-and-fraud-fueled mania and ponzi scheme, that suckered you into thinking your home was your ticket to riches and worth substantially more than it was just a few months prior.

It wasn't.

It's just a home. Just some land, wood and concrete. I sure hope you didn't do a HELOC and spend all that fake equity on yourself. And I sure hope you're not counting on your home to fund your retirement.

Auction capitalizes on housing surplus

Valley home sellers frustrated by a lack of action on their listings will soon have another selling tool: the auction block.

More than 100 homes are expected to go up for bid in a mass housing sale set for next month in downtown Phoenix.

Housing auctions, popular during the economic downturn in the early 1990s, are re-emerging as sellers look for different ways to make their home stand out from competing listings.

The Valley's housing market is struggling to pull out of the doldrums after the frenzy of 2004 and '05 when speculators and easy mortgage money created record sales and prices. In addition to the 40,000 resale homes on the market, it is estimated that there are as many as 25,000 "spec," or speculative, houses that home builders have completed or are working on but have not sold.

Caseython Verdict - most HP'ers want Casey to go homeless and eat twigs. A few want to give him $5 for a Happy Meal or a Jamba Juice

For the majority who want Casey to pay the ultimate price for his crimes, so be it. I can't argue with you.

For the minority with a soft spot and a kind heart who want to help the kid out (even if he doesn't deserve it) go to his site, scroll down and on the right is his paypal donate link. Go ahead, send the kid $5, feel good about it.

I hope the kid learns his lesson, files BK, stops with the real estate BS, but keeps on blogging. Man, that's one entertaining read... Best on the net.

I just sent the kid $20, so he and his wife can eat one day next month. Least I could do. Yet most I would do.

Also, for any HP'ers who want to do something good, yet not help Casey, I recommend the Denver Homeless Rescue Mission, HP's official charity. With the record foreclosures in Denver, which are only getting worse and worse (thank you corrupt mortgage brokers), you can donate here or at anytime via the link at the top of the page.

HP'ers - yes, we have a heart. Taking down this housing bubble for the good of society. And buying Casey a Happy Meal.

Let us know what you decide to do.

Crazy idea for open discussion: Should HP'ers give humanitarian aid to housing-bubble-causer Casey Serin of iamfacingforeclosure.com?

OK, I know it sounds preposterous. And I know your gut reaction will be "no fu**ing way! Have you lost your fu***ng mind!". But here me out...

Should we offer bubble-causer Casey Serin a helping hand?

Of course we wouldn't come to the aid of swine like Greg Swann or The Corrupt David Lereah - I suspect many of us are rooting for their demise. However, when it comes to a kid like Casey, who's coming clean - maybe TOO clean - on his blog about his lies, his fraud, how he gamed the system, and his impending bankruptcy, I think he may deserve our charity and goodwill. Americans are a very forgiving people, and we accept apologies well (Hugh Grant, Rob Lowe, Bill Clinton, etc).

Casey seems to me to be the ONLY, yes the ONLY, person in the USA who has admitted to crimes that helped cause the Late Great Housing Bubble, and is slowly on the way to redemption (after some jail time of course).

So my question is, is there anyone out there, ANYONE, who feels we should do something nice for Casey? Maybe send the kid some grocery gift cards or a case of Jamba Juice so he can eat next month? Or maybe everyone donate $5 to the kid, if he promises to only use it for rent, food, a lawyer, or small gifts for his wife (poor girl - she must be in hell)?

Or should we just hope the kid gets fed to the wolves, thrown out on the street or into a jail cell, and his life ruined?

Maybe we extend our offer to help, but with conditions (file bankruptcy, formally apologize, promise to use the help for food and shelter only, etc)

Let's hear what you think and we'll go from there. Would you pony up $5? I think it's a crazy idea, next cats and dogs sleep together, but man, what an unlikely shock if we did help.

Here's the latest from Casey - it's pretty obvious where this is heading isn't it?

So I basically have nothing left in my account to pay rent and next month’s bills. I don’t really have a stable job and I don’t know exactly how I will be supporting myself next month.

Here are the updated figures on my unsecured debt from my balance sheet:

Wife: $26,319 balance and 2,391 due to bring everything current. Payments are almost 30 days late or possibly even more than 30 (hopefully not)

Me: $148,402.08 balance and 8,390 due to bring current. Payments are way late and 2 of the accounts have already been closed so I have to make arragnements for payment or settlement with collections.

Is everyone enjoying the housing panic?

After being mocked for so long, laughed at when you said there was a housing bubble, called "chicken littles", "flying monkeys", "bitter renters" and "polyannas", aren't you enjoying the housing crash a little?

Isn't it fun to see real estate clerks spinning for their lives? Isn't it a joy to see The Corrupt David Lereah being mocked now by the MSM? And isn't it a blast to see the soaring inventory numbers, the collapse of the homebuilding industry, the exposure of rampant mortgage fraud, and the obvious freefall in home prices?

Come on, HP'ers, admit it. Even though the debt-fueled world economy is about to crash, and you'll probably lose your job too, you're enjoying this aren't you?

Sickos!

Welcome to "The Crash", "The Great Unwinding", "The Late Great Housing Ponzi Scheme". Here's a realtor quote: "I never saw values go down like this"

Why are we still debating with some the existence (and destruction underway) of the late great housing bubble? Isn't this as obvious as the sky being blue or gravity by now? Man, this debate is a frustrating waste of time. Probably like Galileo debating the pope. Let's move on. The bubble is now settled science.

Memo to the world:

These things exist - the housing bubble and current crash, evolution, the big bang and global warming.

These things don't exist - UFO's, the flat earth, soft landings and realtors with clients' best interests at heart.

Home price slide not over

The best that can be said about the Metro Detroit housing market is that some of the worst may be over.

And the worst that can be said is that the rest of the worst is yet to come.

Year-end numbers for 2006 show home prices across the region fell by 7.1 percent, their biggest drop since 1989. Home sales dropped, too, down percent, according to the multiple listing service Realcomp.

The only number that went up wasn't a good one. That's the number of homes listed for sale, and it soared across southeast Michigan by a staggering 41.2 percent.
after years of waiting out job uncertainty in our troubled auto-dependent economy.

Median sales prices dropped about 5 percent in Macomb and Oakland counties, almost 7 percent in Livingston County and more than 13 percent in Wayne County. That means the owner of a $200,000 home lost $10,000 to $26,000 in value.

The number of sales dropped, too, by a whopping 25.3 percent in Livingston and 22 percent in Oakland. Wayne sales fell 3.4 percent while Macomb saw an actual -- but slight -- increase of 1.2 percent.

But any good news from last year was more than offset by the soaring number of homes hitting the market. In Wayne, the number of listings increased 35 percent; in Oakland it was nearly 47 percent; and in Macomb, 50 percent more homes were slapped with "For Sale" signs.

"I never saw values go down like this," says Steve Cole, a 32-year real estate veteran with Weir, Manuel, Snyder & Ranke in Birmingham.