House Prices

[GaudiaRay]

Re: House Prices

As a returnee, please indulge me a moment as I refresh my and your recollection.

My posting in this thread about 1 1/2 years ago is below. It's as relevant today as it was then.

I must admit this GR guy certainly has a flair for words and isn't shy about posting his "opinion".

Do look over what others posted here as well. Each of our mettle is open for review. Is this a legitimate basis upon which to filter all future positional statements by any of those posters?

On housing: Bankruptcies are about 1 year out; massive, pervasive, and world-wide. The fantasy that Asia will delink from the US, UK, Spain, France, etc is total hogwash; it's highly dependent on inflows of foreign fiat to support the employment of MOST of their highest-paid people...not just the peons on the assembly lines.

There is one way out...galloping inflation. It won't happen, but the governments are shouting that they're doing it...massive CB loans (which turn out to be zero increase in real loans... a fraud which deserves the approbation of every human alive because some base their belief in truth on the utterances of the man who was a leader in the cause of this mess, Treasury Secty Paulson who we must never forget was King of Goldman Sachs, one of the eyes of the storm. Paulson's company robbed the pension funds of many of you reading this. But trust him if you will. If I lied to you and stole your money, would you yet allow me to not only give you advise but to make and execute policy affecting the welfare of your family?)

When PF Level 6 40%CFR shows up, and it will, the economic devastation being wrought now throughout the economies of the first world (and if you don't see it, please peer around the yearly corner) will have undermined the vigor of the response due to the disappearance of municipal funding. (I'll talk about that soon enough.)

For those who care, happy new year. For those more rational, the wounds are mortal; ask the dead. Currently there are enough greedy opportunists to pick over the bodies. Soon enough, they'll begin to rot in bankruptcy court, just like the hundreds of thousands of building pads sitting on previously valuable farmland and open space. I believe the major builders belong under those pads; economically, I'm getting my wish...Oh, I'm so surprised; it is so unexpected.

---------------------------------
GaudiaRay

Posts: n/a
Default Re: House Prices
Facts make news.
When we look at posts #32 and #34, TWO MONTHS AGO, we saw the same news as it was happening. And when we look further back in this thread and over at FClinic's gold and house price thread even prior to the birth of this place, we see smart people who foresaw this...and this, according to them, is the first kiss of the devastating iceberg which the arrogant US realtors have just slammed their clients, all called Titanic (fools) into.

Where are the thumbscrews when needed? The losses are not 2.5% or 10%. The losses will easily be 25% and im personal opinion, later 50%.

And what did gold do today? Welcome the news. Up went gold to 596, on its basing action, to return to 740 and 1300 and up. IMO inflation during BF, a rapidly occurring inflationary recession (got the message??? inflationary recession/depression, not deflationary recession/depression...we are all on the fiat teat and fiat will become as suspect as rotting 3 day old fish), will devastate all who hoard fiat in their bank accounts, bond accounts, and stock accounts. Real estate? Well, maybe if large enough, it can be sold to the state as a potter's field as every town will need one.

[sharon sanders]

Re: House Prices

Welcome back Gaudia!!

[hawkeye]

Re: House Prices

Welcome back GR. Certainly good to see you haven't lost your flair for words

[sharon sanders]

Home Sales Tumble Across US

The slump persists: Home sales tumble across US

2008-07-24 13:14:24
By MARTIN CRUTSINGER AP Economics Writer


<!--startclickprintinclude--> WASHINGTON (AP) ? Sales of existing homes fell more sharply than expected in June as the housing industry continued to be bruised by the worst slump in more than two decades.
The National Association of Realtors reported that sales dropped by 2.6 percent last month to a seasonally adjusted annual rate of 4.86 million units. That was more than double the decline that had been expected and left sales 15.5 percent below where they were a year ago.
The downward slide in sales depressed prices, too. The median price for a home sold in June dropped to $215,100, down by 6.1 percent from a year ago. That was the fifth largest year-over-year price drop on record.
The drop in sales pushed inventories of unsold single-family homes and condominiums to 4.49 million units, up by 0.2 percent. That represented a 11.1 month supply at the June sales pace, the second highest level in the past 24 years.
On Wall Street, stock prices fell Thursday as investors fretted over the steeper-than-expected drop in home sales and a big loss reported by Ford Motor Co. The Dow Jones industrial average was down 145 points in early afternoon trading.
In another troubling sign for housing, Freddie Mac's nationwide survey of mortgage rates showed a big jump, reflecting elevated market fears about the financial health of Freddie and Fannie Mae, the two giant players in mortgage markets. The rates on 30-year mortgages surged to 6.63 percent this week, the highest level in nearly a year and up from 6.26 percent last week.
Sales of existing homes dropped in all regions of the country in June except the West, which posted a 1 percent sales increase. Sales fell by 6.6 percent in the Northeast, 3.4 percent in the Midwest and 3.1 percent in the South.
Analysts said that until the inventory level is reduced to more normal levels, the slump in housing is likely to persist. The inventory level is being driven higher by a massive wave of mortgage foreclosures, however.
Seeking to address the housing crisis, Congress is moving to pass a sweeping package of rescue measures. The plan includes support to keep as many as 400,000 homeowners from losing their homes to foreclosure and a federal lifeline to bolster troubled mortgage giants Fannie Mae and Freddie Mac.
The House passed the bill Wednesday and the Senate is expected to pass the proposal in coming days, sending it to President Bush. The president on Wednesday dropped a veto threat over a portion of the bill.
Lawrence Yun, chief economist for the Realtors, said that the housing rescue bill should play a major role in helping the housing market to rebound. He said an especially significant feature is a tax break worth up to $7,500 for first-time home buyers who purchase between April 9 of this year and July 1, 2009.
Yun estimated that up to 3 million first-time home buyers could qualify for that tax break, providing a significant boost to sales at a critical time.
"I think we are very near to the end of the housing downturn," Yun said.
Other private economists are not as optimistic. They worry that the relief supplied by Congress will not be enough to relieve the pressure weighing on housing and the overall economy now.

http://www.myembarq.com/news/news_reader.php?storyid=16240736&feedid=272

[Giuseppe]

Re: Home Sales Tumble Across US

They continue to say that this development is unpredictable, unprecedented... Did we hear something like this before?

...Oh yes, it was bird flu!

Since 2003, most economic observers and researchers predicted a consistent loss of value of houses and durable goods, with a deflation and recession risk.

In 1997 a speculative economy in south east Asia was literally wiped-out, with disastrous consequences for some of the Asian Tigers (Thailand, Indonesia, South Korea) and at the basement of the skyscrapers jungles in various megalopolis such as Jakarta, Kuala Lumpur, or Bangkok, appeared another jungle, but made of slums.

If an $50,000 house of real value was sold for $100,000 where is the difference?

Today, an house owner if not longer able to pay the monthly rate, and tries to sell the house, cash for less than 40-45 if lucky?

[LilPatty]

Re: Home Sales Tumble Across US

My brother-in-law tried to get rid of his home in Miami but he said that there are currently so many properties for sale in Florida at the moment but it seems like nobody wants to buy them. His house is on the market for almost a year now and he couldn't manage to find a buyer since then. :/

[sharon sanders]

Re: House Prices

Foreclosures Hit Rural America, But Quietly

by Scott Finn

listen at

http://www.npr.org/templates/story/story.php?storyId=95431537

The RealtyTrac Numbers

The research firm RealtyTrac mapped out the number of households with foreclosure filings in August 2008. Gray areas represent counties omitted from the report.

Enlarge
<!-- END CLASS="PHOTOLINK" -->
A RealtyTrac map from August 2008 shows the limits of its reporting on American foreclosures. RealtyTrac




Morning Edition, October 7, 2008 &#183; U.S. policymakers who hope to address the nation's housing crisis may have a blind spot: rural counties.
A company called RealtyTrac provides some of the most widely followed statistics on home foreclosures, but it fails to report on more than 900 rural counties.


Critics say that omitting data from outside metropolitan areas gives the false impression that there is no foreclosure crisis in rural America. And, they say, it could undermine attempts to help homeowners.


RealtyTrac, based in California, compiles data that government officials — and journalists — rely on for a picture of the nation's housing market. But in West Virginia last year, it counted fewer than 500 foreclosure notices. New federal statistics counted 12,000 notices in the state, since the start of 2007.


One of those notices went to June Waselchalk, 79, who lives in a small cinder block house on Sewell Mountain, W.Va. A coal miner's widow, Waselchalk says a fast-talking mortgage broker convinced her to refinance her home.


"He had a whole bunch of papers, and he said sign here, sign here, sign here. He just said I was getting a loan, and my interest was going to be real low, and my payment was going to be real low," Waselchalk said.
But she did not read the fine print. Her monthly payments doubled, and the company threatened her with foreclosure.


Waselchalk turned to a nonprofit law firm called Mountain State Justice for help. And Bren Pomponio, a public interest lawyer at the firm, said Waselchalk wasn't the only one.


"The number of people coming to us to try to save their homes has steadily increased," he said. "It's almost more than we can handle."
Pomponio said he was surprised when RealtyTrac said that West Virginia has one of the nation's lowest foreclosure rates. And, it turned out, the company's data was wrong.


A color-coded map on RealtyTrac's Web site shows huge blank spots in the rural West, Midwest and South — the result of not counting foreclosure notices in 900 rural counties.


That means RealtyTrac's foreclosure rates are far too low for states like South Dakota, Vermont and West Virginia.


"We know we're underreporting in West Virginia. We know we're not covering the whole state as thoroughly as we'd like to," said Rick Sharga of RealtyTrac.


He admits his company only counts a fraction of rural foreclosures across the country. But, he says, RealtyTrac's first priority is large, urban areas.
"If I miss a county in California, I miss more in a month than I'd miss in West Virginia for the whole year," Sharga said.


In all, eight of the 10 most rural states in America are also on RealtyTrac's top 10 list for the lowest foreclosure rate.


Sen. Jay Rockefeller (D-WV) said he believes that rural states are being ignored.


"It's ridiculous, it's embarrassing, it's stupid," Rockefeller said. "And I'm going to fight to make sure everybody gets accurate information, and they get counted."


Rockefeller co-sponsored the Foreclosure Prevention Act, which Congress passed in July. The bill required the Department of Housing and Urban Development to measure foreclosure rates in each state.


On HUD's new list, rural states have significantly higher foreclosure rates. For example, RealtyTrac ranks Mississippi near the bottom. But HUD says it's in the top 10.


And that's important, critics say, because lawmakers depend on RealtyTrac's numbers. In West Virginia, a predatory lending bill died after legislators saw RealtyTrac's low ranking for the state.


"They were led to believe that West Virginia was unique and there wasn't a big problem here, which wasn't the case," Pomponio said. "So nothing ever got done."


HUD is using its new data to distribute money to each state for foreclosure relief.


But the agency has only agreed to gather the complete statistics one time. Rockefeller wants to force the government to continue tracking foreclosures — and not rely on incomplete numbers from companies like RealtyTrac.
Scott Finn reports from West Virginia Public Broadcasting.

[gsgs]

Re: House Prices

http://calculatedrisk.blogspot.com/2008/09/case-shiller-price-declines-by-city.html

there was another blog-post, where they estimated the amount
of bad house-credits, can't find it now...maybe someone can give the number

[sharon sanders]

Re: House Prices

I have seen estimates of up to 1 trillion dollars USD, but I think no one knows for sure. It depends how bad the economy becomes and what federal refinance programs are developed.

[sharon sanders]

Re: House Prices

Pending home sales index rises 7.4% in August



By Ruth Mantell
Last update: 10:01 a.m. EDT Oct. 8, 2008




WASHINGTON (MarketWatch) -- Despite a credit crunch that has driven world central banks to slash interest rates, the National Association of Realtors reported Wednesday that an index of sales contracts on previously owned U.S. homes rose 7.4% in August from the prior month. The index, which is considered a leading indicator of existing home sales, was up 8.8% from the prior year.

In August pending home sales rose in all four regions, with a gain of 18.4% in the West, 8.4% in the Northeast, 3.6% in the Midwest and 2.3% in the South. The July pending home sales index was revised to a decline of 2.7% from a prior estimate of a 3.2% fall. It's unclear to what extent contract activity will be impacted by the credit disruptions, said Lawrence Yun, NAR's chief economist.

http://www.marketwatch.com/news/story/pending-home-sales-index-rises/story.aspx?guid=%7bAC6E09EB-9D5A-4139-9542-8C514DB37764%7d&dist=hpmp&print=true&dist=printMidSection

[gsgs]

Re: House Prices

http://calculatedrisk.blogspot.com/2008/09/homeowners-with-negative-equity.html

estimates
about $1T mortgage losses for lenders

$700B bailout by US-government
$1.4T lost by US-shares

plus ~almost the same amount outside USA

plus cutting interest rates