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Housing Bubble Bursting?

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Am I reading that to mean so long as you can make the payments even if overpriced they have to hang on (i.e.-upside down stops sales?) Didn't Japan experience that? flat prices. low sales. stagflation? 15 years in the doldrums.

Liquidity in lending is a necessity to prevent a panic. Nevertheless that is not necessarily a "slow" hiss of the bubble.

the factors I see as relevant are the triple whammy. High energy (utility) cost, higher mortgage cost, and higher property taxes as reassessment in the past few years drives assessed prices skyward. Deflating prices will hurt government services, prevent people with low interest loans from refi'ing, blame oil companies etc.
 
rogerwatland said:
BTW, don't you think short sales helps the market avoid sales at distressed prices?
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No, not really. The ones I see here are being sold below the original purchase price and total mortgages. The second mortgage is getting burned. Some properties are in need of fixing up before the short sale. The buyer has to come in with total closing costs and other expenses. That really comes off the sales price.

Here are the most common reasons banks will agree to a short sale:
  • The mortgage is in arrears or foreclosure.
  • The property is in poor condition.
  • The homeowner has hardships and cannot afford the payments.
  • New homes in the area are being chosen over existing homes.
  • The area or neighborhood has depreciated in value.
  • An REO is a liability, not asset.
I guess the only market activity you were considering "market activity" was distressed sales?
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No. What happens when the real estate market goes into decline is the volume of transactions decline, first. Inventory starts building. Seller concessions become the norm. It becomes a buyer's market. Builder's are competing heavily for buyers of existing home sales. Short sales begin rising.

Now, if you don't have to sell in the above market conditions, you are doing just fine. This is where the DUH comes in. Why would anyone sell their house in such a market condition? Answer: Because they have to, they don't have a choice. How do you distinguish your property from the surplus of competing ones with limited buyers? Lower your price, offer concessions.
 
Just another builder showing retrenchment

M/I Homes Orders Drop; Most Markets Are `challenging'

07-11-06 10:46 AM EST

BOSTON (Dow Jones) -- M/I Homes Inc. reported second-quarter contracts fell 35% and said the situation in most of its markets is difficult.

The Columbus, Ohio, home builder (MHO) said orders totaled 764 versus 1,172 in the year-earlier quarter.

New contracts were hurt "by a combination of factors, including reduced traffic, softening demand, increased cancellation rates and higher unsold inventory levels," Chief Executive Robert H. Schottenstein said in a statement.

"As evidenced by these factors, housing conditions in most of our markets are challenging," he added.

The company delivered 987 homes in the quarter, up from 853 a year earlier. At quarter's end, the company's backlog of homes awaiting construction was 2,889 units, down 13% from 3,310 units. In dollar value, the backlog is $1.03 billion, down 2% from $1.05 billion.

The company said it had 165 active subdivisions as of June 30, compared with 127 at the same point in the prior year.

Schottenstein said that it expects to deliver a record 4,500 homes in 2006.

The stock lost 3% to $33.63 on Tuesday morning.
 
Existing Home Sales - July Report

Another factor affecting sales is that inventory levels are at record levels. Basically, what this means is that the ratio of sellers to buyers is growing.

At the current sales pace, it would take six and a half months to sell all homes currently on the market. As a "snapshot" - there were 3.6 million homes up for sale at the end of May. A year ago, 2.5 million homes were up for sale.

inventory.gif



"Annual Sales Pace" means that they take the number of homes sold during May and calculate how many would be expected to sell in one year at that rate. Figures are provided by the National Association of Realtors.

Compared to last year, the annualized sales pace is down across the board. Nationally, they are down 6.58%, 3.68% in the South, 5.04% in the Northeast, 5.63% in the South, and down by 13.5% in the West.

homesalesUSA.gif


usamedian.gif
 
Arrrrrrrrrrrrr ...... bang bang bang

The FED is between two LIONS .......

The FED is in the CROSS FIRE ......

Roger,

12 NINES .......... !!!!!
 
Randolph when I saw the photo I thought to myself…. if it’s a high-rise with 900 units, what is the big deal?…..but if it’s a 7 unit building, somebody needs to page Rachel Dollar. :)
 
Bucks, I tried to view that URL, but used a secure browser on my Mac.....Access denied!! I assume Randolph's system has been logged and his firewall breached:) Then again, maybe it is just a case of browser discrimination. I hate to risk the PC and a view via IE:unsure:

Randolph, you were a computer geek. Is it safe??

David, there is only 16 numbers on 2 bills,.......so I'm thinking about it:rof:
 
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