Housing Rolling Along 2

http://www.moneyandmarkets.com/press.asp?rls_id=381&cat_id=6
.....borrowers are in such bad shape, they're barely able to make their first couple of payments....


http://www.dfw.com/mld/dfw/news/15265587.htm
“We know how D.R. Horton deals with success. Now we’ll see how the Fort Worth company handles adversity. It won’t be pretty, it won’t be subtle, and it won’t be alone.”‘June absolutely fell off the Richter scale for us.’


http://www.ketv.com/news/9680901/detail.html
“It’s a phenomenon being seen across the country as row upon row of unsold homes flood the market. Real estate experts said the national numbers of available homes are the highest they’ve been in half a century.....


http://www.realtor.org/PublicAffairsWeb.nsf/Pages/2ndQtrMetros06
‘David Lereah, NAR’s chief economist, said a market transition is apparent. ‘With more sellers competing for the pool of buyers, the pressure on home prices has evaporated in most metro areas,’ he said


http://www.latimes.com/business/la-...y?coll=la-mininav-business&ctrack=1&cset=true
Thornberg said his expectations are growing more gloomy. ‘My guess is we’re going to have a hard landing,’ he said. ‘It’s ugly out there.’”

“There has been large-scale overbuilding of homes and condominiums nationwide, he said. ‘And here in Southern California we have had this massive price appreciation that is just not justifiable by any kind of standards of reasonable economics,’ he said.”

“With interest rates rising in recent months and sales declining, ‘the bubble is popping, just like a bubble is supposed to,’ he said.”

 

Home builders' confidence falls to 15 year low.

http://www.marketwatch.com/news/story/BXSVWX021Qv3fgXqMSPwS8H?siteid=mktw&dist=TNMostRead

WASHINGTON (MarketWatch) -- The confidence of U.S. home builders collapsed in August, falling to the lowest level since February 1991, the National Association of Home Builders said Tuesday.
The NAHB/Wells Fargo housing market index dropped by seven points to 32 in August, indicating that most builders think the housing market is poor.
A year ago, the index was at 67. A reading of 50 would indicate builder sentiment was balanced between good and poor.
The index peaked at 72 in June 2005 and has fallen in 12 months since then. It's the fastest decline in the 21-year history of the index, which has had a fairly good record of predicting the number of new homes started.
Builders in all four regions of the country are pessimistic about the market.
"Two factors are coloring builders' perceptions of the market right now -- rising sales cancellations and substantial growth in inventories of both new and existing homes," said David Seiders, chief economist for the home builders' industry group. "These factors are largely the result of an increasing number of potential buyers adopting a 'wait and see' attitude because of uncertainty about where the housing market is headed.
Speculators are fleeing the market, he said.
High energy costs are also weighing on buyers' minds, Seiders said.
In August, all three components of the home-builders' index fell. Current sales index fell to 36 from 43, the expected sales index dropped to 40 from 46 and the traffic of potential buyers' index fell to 21 from 27.
The Commerce Department will report on housing starts for July at 8:30 a.m. Eastern on Wednesday. Economists are looking for a 2% decline to 1.82 million, according to a survey conducted by MarketWatch. See Economic Calendar.
Housing starts have fallen about 18% since the peak at the beginning of the year. New-home sales are down about 17% from the peak last July.
"The index is signaling more weakening in starts than has been reported to date," said Maury Harris, chief economist for UBS. "A 32 reading currently looks consistent with about a 1.375 million-unit pace in single-family starts, well below the June level of 1.486 million."
As housing slows, employment in construction, real estate, banking and related retail sectors has also weakened. Economists are divided over the potential impact on consumers from the deceleration in the increases in wealth that have helped to support consumer spending.
Consumers have been spending more than their disposable incomes for the past year, in part by taking out equity from their homes.

 

Half way through the year, we see U.S. home prices flatten in Q2 in most metro areas

"The National Association of Realtors said that of 151 metropolitan areas, 37 had double-digit year-on-year price increases for existing single-family homes in the April-June period, while 26 saw prices decline. Home price appreciation was in the single-digit range for the vast majority of areas.

The national median existing single-family home price was $227,500 in the second quarter, up 3.7 percent from $219,400 a year earlier.

Regionally, the strongest second-quarter, single family price gain was in the Northeast, up 6.3 percent to a median of $299,200. The Northeast condo median rose 4.9 percent to $257,800.

n the South, the median single family price rose 4.1 percent to $188,200, but the region's condo median fell 4.7 percent to $183,000. In the West, the median existing single family price rose 3.6 percent year-on-year, but the region's condo median fell 6.7 percent to $272,200.

In the Midwest, the median single family home price fell 2 percent to $167,400, while condo prices in the region rose 1.5 percent to a median of $190,100."

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Not bad given the monumental crash everyone has predicted for the past 4 years.

 

Still here, eh? I remember when you were crowing over every scrap of good news from the homebuilders ("Up, up and away!"). Now they're reporting demand dropping off a cliff and writing off assets, and you're reduced to digging up backwards looking statistics to show that the party's still alive. I admire your chutzpah, but have you looked at TOL or DHI lately?

You were right for a long time, I'll grant you that. I hope you enjoyed the ride and sold at the top. Now you're pushing your luck.

Martin

 

In sarasota bradenton there is still the inevitable buying because people want to retire here and some people are moving here for the schools. In fact if you were to remove the speculators from the buying statistics last year, buying may be improving. However, there is still a ton of inventory. if you do not have a newish home with the large diagonal tile and the granite, with a nice view, you have had to drop your price at least 10 percent from the high, maybe more from the top. (as I did to get out of my old house before I had to close on my new home.)

My new home that has taken 18 months to build is still up from its purchase price. I could probably get 100 more than I paid but it is probably down 150 from what I was being offered back in january. ( I tried to sell, but I could not because of family reasons, although I sure tried.)

I also think that the condo market is still in trouble here. I never understood condos here. People were paying for condos what they could have paid to purchase ocean front homes for in parts of San Diego.

Now to me it is a whole different story if you are buying a home or even a condo with a slip or lift for you boat and access to the gulf or at least the intracoastal.

To me if I have an extra mill or 2 lying around, I would be out right now looking for large docks and ocean frontage. I would check the records tax records for the large loans but an equity cushion and then I would find 10 homes that fit the bill.

I would then send out offers by fax saying I have sent out the 10, the first one that accepts my price has a deal. By the way that strategy is my own creation, most realtors can not advise their clients to do that because they are not lawyers (as I am not here in fl as well) and techinically we Realtors are trained to do one at a time. But the lawyer in me says bullshit that is a misuderstanding of the ethics code. Or the code misunderstands smart business. But the way that was my strategy for how I was going to buy a home in San Diego (where I am also a lawyer and realtor) but, my wife does not wish to return. so I may help may parents buy a small investment summer home that way.

However, I am not sure people in San Diego feel that desperate yet. (Finally I am sure some others have thought of this strategy. I just feel like it is my own because I have been sitting on it sit 1991.

 

edit the "not" above should have said "now".

I am licensed as a lawyer and a real estate professional in both statea.

 

http://www.baltimoresun.com/busines...3179443.story?coll=bal-realestate-headlines-1

Countrywide Home Loans quietly has begun sending out letters to thousands of borrowers who have been making only the minimum payments on the company's popular "PayOption" adjustable-rate mortgages.

The letters explain that "this is an early message to alert you that, based on your current payment trends and potential future interest rate changes, the monthly payment you will be required to pay may increase significantly." They include an example of what could be ahead for a California homeowner currently making only minimum payments monthly on a $402,000 loan.

The current full interest rate on the loan is 7.6 percent, but the borrower has been paying just $1,348.47, far less than what's needed to fully amortize the mortgage over its 30-year term.

If the loan reset at today's rates, the letter explains, the full payment required would be $2,887.50 - more than double what the homeowner has gotten used to paying. Future reset rates could be even steeper, making the potential payment crunch much worse.

 

well, its only 50 bucks a month moer than tehy should be paying and i assume they qualifed for that amount.

iif they have been adding $1,500/month to principal over 12 months, thats 18 grand... the payment on 420,000 at 7.6% over 29 yrs is almost $3,000.

 

Also in the article was this quote "given the option to make minimum payments, more than 7 out of 10 borrowers did so. In the process, those borrowers are racking up heavy additional debt balances and could be heading for payment shocks - or worse"

So many, actually MOST, of the borrowers are in over their head and trouble is brewing. Since most are making the absolute minimum payment, one can assume they will not be able to afford the properties when the payment doubles!!! In this stagnant real estate market can they sell these properties? No. Can they re-fi to escape? No, not when they already borrowed 100% of the value of the property going in, and now added to the principle balance with neg-am.

These people truly are walking zombies, they just don't know it yet. OWP

 

I guess that is a not so subtle hint to sell before foreclosure comes.


John