Housing Rolling Along 2

More good new about foreclosures...

The cheerleaders sound the same as when thh nasdaq went from 5K to 2K... it'll come back, it has too!

 

The OFHEO, which tracks home prices in the conventional market ($417,000 and less) show a 0.8% increase for 2007. Of course if the 4 states that are the cause of the problems are removed, its much better.

Even if we take the 4 problem states out of the Shiller index, its still not that bad out there. As one senator mentioned to Bernanke last week that the higher priced homes were distorting the data to the downside and that something should be done.

Nothing more than price consolidation for the country outside the 4 problem states. And zillow has to be the funniest thing I've ever seen. I've seen a few homes sell in the past month that are nowhere near what zillow reports. That site looks more like reassessment values, not home prices. In my area, take the zillow and take on about $100k.

 

Just 4 states you say... but they represent about half of the housing wealth in the US.

Martin

 

Dude, are you david lerea in disguise?

Your reality and my reality are seriously divergent.

 

Convert you must be smoking good crack. Real estate is destroyed....who are you trying to fool...I guess yourself.

 

+1

 

Didn't Ben say that 45% of foreclosures were in non sub prime areas... Prime, alt-a, etc.???

I thought this mess was contained to sub prime?

Or maybe as someone else put it, it's contained... to Planet Earth.

 

"Its just a flesh wound" (ignoring two gangrenous legs)....OWP

 

OFHEO is a government agency, and its home price indices are vastly different from those from the private sectors (Case-Shiller/Standard Poor). It is even different from that provided Freddie Mac who is regulated by OFHEO. Freddie Mac's indices has about 10% national average decline since the peak.

This is an example which shows much we can trust the government.

 

SoCal home woes could mean 50% price drop

June 20th, 2008, 12:02 am

Economist Chris Thornberg said Southern California home prices likely will continue falling until mid-to-late 2009. When the dust settles, he added, homes here could end up being worth half as much as they were at the peak of the housing boom.

“The reason prices are falling is because of gravity,” Thornberg (pictured here) told the Register after delivering the UCLA Extension Real Estate Forecast at the Skirball Cultural Center in Los Angeles. The run-up in home prices over the past decade was “ludicrous,” he said, noting that the increase wasn’t accompanied by a comparable increase in income.

(Thornberg’s not alone. CLICK HERE to read an interview with another observer who thinks a 50% drop is possible!)

By Thornberg’s math, a typical Southern California house payment equaled about a third of its owner’s gross annual income in 1999. By 2007, it equaled about 70%. “That’s why prices are coming down. They have to come down.”

Thornberg, founding partner at Beacon Economics and former UCLA economics professor, said home prices would have to fall about 40% from peak to trough to return to the historical norm. But add in the impact of rising gasoline prices, the subprime mortgage meltdown and rising foreclosures, and it’s likely prices will fall 50% peak to trough.

The S&P/Case-Shiller index shows that prices for the L.A./O.C. area are down 24% from the peak, so the region is about halfway to the bottom, Thornberg said.

In Orange County, price declines will be more severe at the bottom of the price spectrum than the top end, but “the top end is going to get hit, (too),” he said.

That will be a rude awakening for many homeowners suffering from what he called “homallucinations,” or the ability to convince oneself that while the price of everyone else’s home will fall, your neighborhood is clearly different.

Said Thornberg: “That’s what people go through — until reality kicks them in the butt.”