Housing: 2006 thread, use the 2007 thread instead.

[LegendKiller]

Originally posted by: dullard

Originally posted by: Engineer
There must be a ton of houses in the South selling to cancel out those LARGE negatives from the rest of the country

I haven't looked too much into those numbers, but they are new home sales only. New home construction in the south was big due to the hurricanes last year. Those homes should be finishing construction now. Thus, I assume new home sales will be temporarilly biased with heavy sales in the South. That is just my estimate. If you want, you can look up the regional new home sales info and confirm or deny my estimate.

Definitely a good point.

 

[Slew Foot]

Exactly as I thought out, new home sales are up as builders offer HUGE incentives to buy (which dont appear in the median price). Tomorrows exisitng home sales will show that the builders are cannibilizing the resale market.

 

[Finality]

Originally posted by: dmcowen674

Originally posted by: dullard

Originally posted by: Darkhawk28
Exactly. What would you "save" per month? $20?

The article gave an example, but I can elaborate. Median house price is ~$230,000. Lets use a fixed 6.5% interest rate for a loan today.

Length, Monthly payment, Total cost
10 yr: $2,612, $313,392
20 yr: $1,715, $411,556
30 yr: $1,454, $523,352
40 yr: $1,346, $646,344
50 yr: $1,297, $777,929

Going from 10 yr to 20 yr cuts the monthly payment by $897. Going from 20 yr to 30 yr cuts the monthly payment by $261. Both of these are significant monthly savings.

Going from 30 yr to 40 yr cuts the monthly payment by a measly $107. Going from 40 yr to 50 yr cuts the monthly payment by a scant $50. Who is willing to spend $131,585 more for a $50 a month savings? If you can't afford $50 a month, why are you buying a $230,000 house?

That's your American Sheeple bowing to the Corporate Whores they love.

While insignificant in terms of $ monthly payments you need to factor in inflation, even with a low 3% inflation rate the value of money between 30 & 50 years is about half.

 

[jlmadyson]

Existing-home sales fall 1.2% to 6.67 million in May

WASHINGTON (MarketWatch) - Resales of U.S. homes fell 1.2% in May to a seasonally adjusted annual rate of 6.67 million, the National Association of Realtors said Tuesday.

Sales of existing homes have fallen in three of the past five months.

"We're right on course for a soft landing," said David Lereah, chief economist for the real estate group. "Fingers and toes crossed."

The inventory of unsold homes increased 5.5% to 3.60 million, a 6.5-month supply, a nine-year high. It was at 4.3 months a year ago.

The median sales price increased 6% in the past 12 months to $230,000.
Economists were expecting sales of about 6.64 million, according to a survey conducted by MarketWatch.

Sales of existing homes in April were revised to lower to 6.75 million from 6.76 million.
Sales increased 0.7% in the West and 0.4% in the South. They fell 3.8% in the Midwest and dropped 4.2% in the Northeast.

Single-family sales fell 1.5% to 5.82 million from 5.91 million. Condo sales increased 1.9% to 852,000.

In a separate report released Monday, the Commerce Department said new-home sales rose about 4.6% in May to a seasonally adjusted annual rate of 1.234 million, the third straight increase.

The existing home sales report "is more reflective of what's happening in the housing sector" than the new-home sales or housing starts reports, which showed gains in May, said Lereah.

Lereah said he expects a quick transition to a better market once prices adjust. Demand for homes is still high with a still-growing economy.

He cautioned that consumers are being "hit in two or three directions" by higher interest rates, sagging home equity and higher energy costs. "I would hope the Fed incorporates all these factors" in its decisions about interest rates.

"The housing sector is very interest sensitive,"

 

[conjur]

Florida, U.S. foreclosure rates up
http://www.bizjournals.com/tampabay/stories/2006/06/26/daily32.html

National foreclosures increased less than 2 percent from April to May 2006, but are up 28 percent from May 2005, says RealtyTrac U.S. Foreclosure Market Report.

Report results also show a national foreclosure rate of one filing for every 1,247 U.S. households during the month.

...

Florida had the eighth highest rate, with an increase of more than 6 percent and 8,898 properties entering some state of foreclosure -- more than every state except Texas.

"The situation is particularly acute in Florida," says ForeclosureS.com President Alexis McGee. She added that foreclosure filings had increased 42.55 percent in the first quarter of 2006 over the fourth quarter of 2005.

Colorado, Georgia and Texas had the three highest foreclosure rates in May. Colorado reported 4,198 properties entering some stage of foreclosure in May, a 13 percent increase from the previous month.

...

 

[dullard]

Originally posted by: conjur
Florida, U.S. foreclosure rates up
http://www.bizjournals.com/tampabay/stories/2006/06/26/daily32.html

As many here predicted, foreclosures should soar in the coming year or two. That link already shows that they are on their way up. But are they up from a low point (ie just returning to normal)? Or are they up from a high point (ie going into extreme territory)?

I haven't kept up with these numbers at all.

 

[Slew Foot]

I think they are going from a low point entering into normal. Keeping mind that most toxic loans havent even begun to reset yet (they will 2007), by 2008 these suckers should flood th market. Like I said, 5 years to build the bubble, 4 years to burst it, 3-5 years of "muling", and then we repeat again.

 

[Dr. Detroit]

Poor Michigan & Detroit area. Economy is hurting due to the US automotove industry and their housing economy is crumbling.


http://detnews.com/apps/pbcs.dll/article?AID=/20060706/BIZ03/607060381

 

[piasabird]

There are a lot of people who have been buying houses virtually on balloon payments and Adjustable Rate Mortgages (ARM). Then there are a lot more people buying property as investment in areas that have seen huge increases in property values. They hold the property for 5 years and then sell it for a profit, just like stock.

 

[piasabird]

Real Estate is not an Asset for the owner who has a loan. It is a liablity. It is only an asset for the Bank that owns the loan. By definition an asset is something that makes money.

 

[LegendKiller]

Originally posted by: piasabird
Real Estate is not an Asset for the owner who has a loan. It is a liablity. It is only an asset for the Bank that owns the loan. By definition an asset is something that makes money.

That isn't completely correct, considering the asset that the owner has is the amount of wealth above which they owe debt. Their equity is an asset, unless, of course, you forfeit that asset through defeasence.

 

[conjur]

US Home Builder Index at 15-year low


Whoops.

 

[dmcowen674]

Originally posted by: conjur
US Home Builder Index at 15-year low

Whoops.

Waiting for Republican spin.......

 

[LegendKiller]

Originally posted by: dmcowen674

Originally posted by: conjur
US Home Builder Index at 15-year low

Whoops.

Waiting for Republican spin.......

Yes, just like we were waiting for your fearmongering divisiveness to enter into this thread to post more partisan (or anti partisan) vitriol. At least we know, while not very terribly analytical, you are at least dependable.

This isn't much of a surprise considering the increasing inventories and give-away programs they have been using to try and dump said inventories.

 

[conjur]

Originally posted by: conjur
Florida, U.S. foreclosure rates up
http://www.bizjournals.com/tampabay/stories/2006/06/26/daily32.html

Ohio foreclosures continue to climb
http://www.bizjournals.com/columbus/stories/2006/07/17/daily11.html

 

[Slew Foot]

Sacramento, San Diego, Placer, Yolo, Marin, El Dorado, Amador counties in CA all officially negative on a median YOY price basis, and even more so on a median $/sqft basis. The hurt is beginning...

 

[dullard]

June existing home sales down 1.3%. Third straight monthly loss. And this is in the summer season where home sales usually do well.

 

[Vic]

Originally posted by: dullard

Originally posted by: conjur
Rents up 0.6% as housing slows
http://www.marketwatch.com/News/Story/S...07%2DDF205AFC7C29%7D&siteid=mktw&dist=

As was predicted. As housing prices slow their growth rates, rents will soar. They move at opposite times.

Yet, one props up the other. As rents soar, buying becomes more attractive.

Originally posted by: dullard
June existing home sales down 1.3%. Third straight monthly loss. And this is in the summer season where home sales usually do well.

You are reading the data wrong. That's annual rate, not month over month. And even at this lower annual rate than last year's record, this will still be the 2nd or 3rd biggest year on record.

 

[dullard]

Originally posted by: Vic
You are reading the data wrong. That's annual rate, not month over month. And even at this lower annual rate than last year's record, this will still be the 2nd or 3rd biggest year on record.

Why am I reading it wrong? The OP clearly states that all numbers are annual rates. Everything I posted is annually adjusted rates (except for price which for some reason they don't adjust). The annual rate for existing home sales has dropped 3 months in a row.

Yes, it is a good year for housing, 2nd or 3rd best. However, my whole point of this thread is to say:
1) Housing is good now.
2) Housing is NOT growing anywhere near the pace it was growing at.
3) Signs are showing that it may be slowly going down instead of up. If you look at the graph in the OP, you'll see that all but one of the statistics there are down from this time last year (or 11 months ago, as I'm waiting for some data that'll be relased later this week). That one statistic that is the exception is median price which is up a measly 0.87% year over year.
4) People who were counting on a big price increase are to be warned, the 30% price rises are gone for now. If the deceleration in the stats continues even further, nationwide prices may actually go down for the first time in history. At 0.87% growth, we aren't too far from that occurance. Locally there may be a big price increase, but even those are becoming more scarce. Locally we are now seeing price decreases.

 

[Slew Foot]

If you like revelling in other people's misery, check out http://flippersintrouble.blogspot.com/ Keeping in mind that after costs/commissions are calculated, you can tack on another 6-8% to the loss column.

CA/NV/FL/AZ are starting to implode, the rest of the country will implode soon enough.

The amazing part to me is that is is happenning in May-July which are traditionally boom months, it could mean a long cold winter for desperate home sellers.

 

[Vic]

Originally posted by: dullard

Originally posted by: Vic
You are reading the data wrong. That's annual rate, not month over month. And even at this lower annual rate than last year's record, this will still be the 2nd or 3rd biggest year on record.

Why am I reading it wrong? The OP clearly states that all numbers are annual rates. Everything I posted is annually adjusted rates (except for price which for some reason they don't adjust). The annual rate for existing home sales has dropped 3 months in a row.

Yes, it is a good year for housing, 2nd or 3rd best. However, my whole point of this thread is to say:
1) Housing is good now.
2) Housing is NOT growing anywhere near the pace it was growing at.
3) Signs are showing that it may be slowly going down instead of up. If you look at the graph in the OP, you'll see that all but one of the statistics there are down from this time last year (or 11 months ago, as I'm waiting for some data that'll be relased later this week). That one statistic that is the exception is median price which is up a measly 0.87% year over year.
4) People who were counting on a big price increase are to be warned, the 30% price rises are gone for now. If the deceleration in the stats continues even further, nationwide prices may actually go down for the first time in history. At 0.87% growth, we aren't too far from that occurance. Locally there may be a big price increase, but even those are becoming more scarce. Locally we are now seeing price decreases.

A damn good thing too IMO, it was getting ridiculous. For a moment there it looked like people were expecting their 1000 sq ft 2 bed 1 bath to be worth a million dollars in no time.

I'm not worried about Sacramento. I predicted that market was overvalued 3 years ago, and I do expect it to be one those hit by a local price decrease. Most markets will not be so affected, but Californians should be used to this by now -- they've been through it before, and they bring it on themselves everytime.

I'm not worried about flippers either. Quite frankly, lenders are so sick of them that the very act of flipping is now considered to be fraud (because there is inevitably fraud involved at some point in a flippping transaction). If flippers are losing money now it's because we cut them off, refusing to finance properties for purchase that were just purchased within the past several months, and refusing to accept their exaggerated claims of appreciation, no matter what an appraiser says.

 

[dullard]

Originally posted by: Vic
I'm not worried about flippers either. Quite frankly, lenders are so sick of them that the very act of flipping is now considered to be fraud (because there is inevitably fraud involved at some point in a flippping transaction). If flippers are losing money now it's because we cut them off, refusing to finance properties for purchase that were just purchased within the past several months, and refusing to accept their exaggerated claims of appreciation, no matter what an appraiser says.

That is definately the bank's job - to determine if the buisness plan has a good chance of succeeding. If the flipper's business does not look profitable, the bank should not be loaning to this business. However, I suspect many flippers aren't getting business loans to finance this business. Is that part of what you consider fraud in the flipping transaction? Or is there something else you were thinking of.

Vic, that is the closest I've finally seen you go to saying appraiser's are problematic. I personally think the whole process needs overhauling. The appraiser should be completely independant and should NOT know the price of the mortgage/deal before doing the transaction. It just baffles my mind that many bankers tell the appraiser what the house needs to be appraised for and then it is often appraised for that amount to the penny. It should almost be a very rare coincidence when a appraiser coincidently appraises exactly down to the penny. But, it happened with my house, it happened with my coworkers' houses, it happens all the time. It is in the house buyer's AND the bank's interest to get a realistic appraisal not one based on the purchase price. True, there is some subjective leeway, so appraising can't be perfect. But what we have now is boarderline fraud in my opinion.

 

[Slew Foot]

When this whole thing shakes out, I think youll see a lot of fraud exposed on a lot of sides. When things were rapidly appreciating, people knew it was going on (appraisers, lenders, RE agents) but they just winked at each other since they were making hand over fist. Now that things are slowing down, everyone's trying to cover their ass. It amazing how much the tune of David Learah and Leslie Appleton (2 of the major talking heads of the Realtor group) has changed. Just 3 months ago they were saying this was a temporary blip, but now they even suggest a soft landing is wishful thinking. I wonder if they got some behind the scenes legal advice to change their story.

 

[LegendKiller]

Originally posted by: Slew Foot
When this whole thing shakes out, I think youll see a lot of fraud exposed on a lot of sides. When things were rapidly appreciating, people knew it was going on (appraisers, lenders, RE agents) but they just winked at each other since they were making hand over fist. Now that things are slowing down, everyone's trying to cover their ass. It amazing how much the tune of David Learah and Leslie Appleton (2 of the major talking heads of the Realtor group) has changed. Just 3 months ago they were saying this was a temporary blip, but now they even suggest a soft landing is wishful thinking. I wonder if they got some behind the scenes legal advice to change their story.

Personally, I think they are hedging their bets now. Either way they can say they were right.

I really don't think appraisers are solely to blame. Just like the stock market, people need to think logically and hold their brokers accountable for bad advice. People who play in single stocks need to know relative valuation and how to spot over price issuances. It isn't all that hard, considering Yahoo, Hoovers, Bloomberg and a number of other sites give you some great info for nothing.

People need to stop thinking that good times will always roll. I know two people that recently bought way over-priced houses in south west FL. I cautioned both to not do it, both ignored me thinking that I was bitching at them. Both are now contemplating selling before the prices go down too far, they were planning on holding for only a couple years on an IO until it appreciated enough to make a nice profit.

The stupidity of people and their irrational exuberance is amazing and saddening at the same time.

 

[LegendKiller]

Originally posted by: Slew Foot
When this whole thing shakes out, I think youll see a lot of fraud exposed on a lot of sides. When things were rapidly appreciating, people knew it was going on (appraisers, lenders, RE agents) but they just winked at each other since they were making hand over fist. Now that things are slowing down, everyone's trying to cover their ass. It amazing how much the tune of David Learah and Leslie Appleton (2 of the major talking heads of the Realtor group) has changed. Just 3 months ago they were saying this was a temporary blip, but now they even suggest a soft landing is wishful thinking. I wonder if they got some behind the scenes legal advice to change their story.

Personally, I think they are hedging their bets now. Either way they can say they were right.

I really don't think appraisers are solely to blame. Just like the stock market, people need to think logically and hold their brokers accountable for bad advice. People who play in single stocks need to know relative valuation and how to spot over price issuances. It isn't all that hard, considering Yahoo, Hoovers, Bloomberg and a number of other sites give you some great info for nothing.

People need to stop thinking that good times will always roll. I know two people that recently bought way over-priced houses in south west FL. I cautioned both to not do it, both ignored me thinking that I was bitching at them. Both are now contemplating selling before the prices go down too far, they were planning on holding for only a couple years on an IO until it appreciated enough to make a nice profit.

The stupidity of people and their irrational exuberance is amazing and saddening at the same time.