Another Housing Crash

[Terrel L. Shields]

active listings building starting 2005.

Not here. What was ballooning was new lot construction, dwelling sizes, new vendor spaces for Walmart vendors which was not leased, and buyers who were not leasing but were holding in order to flip as a new house. A!so over- borrowing and walking away. Unemployment was 2% until late 2008 early 2009.

 

[Joe Flacco]

This is the furthest back I have and it is for rowhouses in a single high density zip code. This is from a 2015 report. Between 2005 and 2006 it was 50% increase in active listings. Then prices peaked in 2007. I would bet active listings in 2005 was higher than 2004.

 

[Joe Flacco]

Median Price



Active Listings



This is what it looks like today and it kind of looks like prices are stabilizing here a bit actually. But recent months is off season so we will have to see what it looks like in a few months.

 

[gregb]

28 Year Market Trend (Santa Barbara Residential Only)

 

[Joe Flacco]

This is one of the only PA counties that I have access to but @Marion Rhodes, does this look like a crash is about to happen in Franklin county? Price still below peak, closed sales increasing, active listings declining. To me it looks like Franklin County is just about to start getting going. You go most places outside of big cities you are seeing something like this.

 

[Joe Flacco]

Out in the sticks Virginia. Price below peak. Closed sales increasing. Active listings declining. Typical picture outside of big cities.

 

[djd09]

American banks' secret subprime exposure stretches into the billions

How much banks are exposed in this manner to subprime loans – not just auto loans, but also subprime mortgages, and subprime consumer loans – is somewhat of a mystery. But some clues are percolating to the surface. According to an analysis by the Wall Street Journal of regulatory filings, bank loans to nonbanks lenders have surged sixfold since the Financial Crisis to nearly $345 billion at the end of 2017. Here are the top contenders:

1. Wells Fargo: $81 billion, up from $14 billion in 2010

2. Citigroup: $30 billion

3. Bank of America: $30 billion

4. JP Morgan: $28 billion

5. Goldman Sachs: $22 billion

6. Morgan Stanley: $16 billion.

https://boingboing.net/2018/04/12/systemic-risk.html

 

[Eli]

Still shadow inventory too. No doubt.

There are many houses that should have been foreclosed on years ago.

Gas prices and healthcare costs and taxes keep rising.

Let gas get out of control like to $4 or $5/ gallon and look out.

You know fire is one of the greatest gifts of all times. Gasoline prices could sink the economy quick.

 

[djd09]

Stagnant population, lower wages a drag on area home building

Richard Stock, a University of Dayton researcher, recently said the Dayton area has gained about 25,600 jobs in the past four years and 9,900 jobs in the past year alone.

But Dayton metro area lost about 34,800 jobs between March 2007 and March 2010, Stock noted. And wages have sunk. Wages in Dayton have declined from $918 in average weekly earnings in 2007 to $744 in 2017, he said.

“The jobs lost in this area have been tremendous,” Dungan said.

https://www.mydaytondailynews.com/b...ag-area-home-building/GdwD7RXmFdDRiWyvRN9CrJ/

 

[Overimprovement]

This chart shows delinquency rates for the largest 100 banks (blue line) and for the remaining 4,788 banks (red line):

But among the remaining 4,788 banks, the charge-off rate spiked to 7.99%, the highest since Q2 2010. The rate among smaller banks had peaked during the Financial Crisis in Q4 2009 at 8.78%:

In the overall scheme of things, these 4,788 smaller banks hold only a small portion of all banking assets, including credit card balances. However, these are the good times with unemployment below 4% and a growing economy.

What happens when the economy turns south?

I think what we are seeing here is the continued beginning of the end for small banks, which top brass in the industry have been predicting for 15 years. A small bank does not have the revenue diversification of insurance, trust, investments, etc, that the big banks do. When the interest rate spread gets squeezed, and a small bank's only revenue source is interest, they get pinched hard.

What I think the graphs are illustrating is that absent this revenue diversification, smaller banks have to take more interest rate risk just to make enough money to pay the bills. It all works well until the economy gets tight, when those higher risk loans (whether mortgage, car, or credit card) are the first to go south. If a lot of banks go south or merge in the next 'correction', that will only hurt appraisers as well, as the number of lenders/AMCs will also consolidate, meaning they will have more power in pricing. It also means more conservative times, which of course will even further reduce appraisal demand.

Lets all get plan B's going! You know, just in case.