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Housing Bubble Bursting?

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Fed's Moskow Hints More Hikes In Store

http://news.morningstar.com/news/DJ/M11/D06/200611061147DOWJONESDJONLINE000392.html

Dollar Stronger As Fed's Moskow Hints More Hikes In Store

[FONT=Trebuchet MS, Arial, Helvetica][SIZE=-1]11-06-06 11:47 AM EST

[/SIZE][/FONT] The dollar gained some ground against major rivals Monday, moving up after Federal Reserve Bank of Chicago chief Michael Moskow warned that more U.S. interest-rate hikes could be on the way to help combat inflation.

The risk of inflation outweighs the risk of economic sluggishness, Moskow said, buttressing his point that it is possible the Federal Reserve may have to keep lifting rates. Moskow will be a voting member of the policy-setting Federal Open Market Committee next year.

Higher interest rates enhance the dollar's standing.
 
In Arizona, ‘For Sale’ Is a Sign of the Times

http://www.nytimes.com/2006/11/07/realestate/07land.html?th&emc=th

The influx of buyers from California, many of them individual speculators, was so strong that builders overestimated demand and constructed a lot more homes than there were people wanting to live in them, said John Burns, a real estate consultant in Irvine, Calif. He noted that investors bought roughly a third of homes sold in the Phoenix area last year, according to mortgage application data.
 
Home Builders: No Light Yet In Tunnel

http://www.marketwatch.com/news/story/Story.aspx?guid=%7B7338A3DA%2DEA5E%2D4F79%2DB7BE%2DEC746AFF36AB%7D&siteid=

BOSTON (MarketWatch) -- Leading home builders including Toll Brothers Inc. and Beazer Homes USA Inc. reported weaker quarterly results Tuesday on continued soft demand for homes, and said the light at the end of the tunnel isn't quite visible yet for the U.S. housing market.

Toll Brothers Inc., the Horsham, Pa. firm, said home orders for the quarter ended Oct. 31 fell to 1,035 from 2,426 a year earlier, while home-building revenues declined 10% and its backlog of homes awaiting construction fell 25%.

Toll said its orders were hit by higher cancellations, which as a percentage of contracts in the fourth quarter rose to 37% from 18% in the fiscal third quarter. Nearly 25% of all fourth-quarter cancellations were centered in its Orlando and Northern California markets.

"We continue to look for signs that a recovery is imminent but can't yet say that one is in sight," said Chief Executive Robert Toll in a statement.

Beazer Homes USA Inc.

Beazer closed 6,411 home sales in the quarter, up 1.1% from 6,339 a year earlier. The company received new orders for 2,064 homes in the quarter, compared with 4,937 the prior year, a drop of 58%. Operating-profit margin narrowed to 8% from 14.1%.

Most U.S. markets "continue to experience higher levels of resale home inventories, lower levels of demand for new homes, significant increases in cancellation rates and significantly higher discounting," CEO Ian McCarthy said in a statement.

WCI Communities Inc.

"Times continue to be challenging, with much lower aggregate demand resulting in lower gross sales, offset additionally by higher cancellations and defaults than the year-ago period," said CEO Jerry Starkey during the conference call Tuesday morning.

"Traditional home cancellations were about twice our historical rate during the quarter and we also experienced a higher rate of defaults in our tower division," he added in the earnings release.

Technical Olympic USA Inc.

Technical Olympic USA Inc. said it requires additional time to file its Form 10-Q for the third quarter ended Sept. 30 due to a change in its financial-statements presentation and the expectation it will report "a significant change in its results of operations" due to asset impairment charges.

The stock plunged more than 30% to $7.51 Tuesday morning.
 
Randolph Kinney said:
http://www.nytimes.com/2006/11/07/realestate/07land.html?th&emc=th

The influx of buyers from California, many of them individual speculators, was so strong that builders overestimated demand and constructed a lot more homes than there were people wanting to live in them, said John Burns, a real estate consultant in Irvine, Calif. He noted that investors bought roughly a third of homes sold in the Phoenix area last year, according to mortgage application data.
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Just had a friend who sold a house in Phoenix. About eight months on market... when I asked about profit they said they made some, over the price paid about four years ago... but not as much as they would have if they sold last year. I basically told them not to be cry babys because a lot of people are upside down.
 
Detroit, Ft. Lauderdale, Denver and Miami Top List of Nation's 10 Highest Metropolitan Foreclosure Rates

http://biz.yahoo.com/prnews/061110/laf010.html?.v=75

"The third quarter saw a marked increase in the number of properties entering some stage of foreclosure," said James J. Saccacio, chief executive officer of RealtyTrac. "It appears that a combination of factors, including a slowdown in home sales and lower home appreciation rates are contributing to higher numbers of delinquencies. It's also likely that part of the reason for the increased foreclosure rates is the long-anticipated effect of the first wave of adjustable rate mortgages re-setting at higher monthly payments, putting homeowners into financial distress."
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I'm thrilled that Denver has dropped down to the #3 spot.woohoo

It looks like the next new rising stars might be <drum roll please>........Chicago & Atlanta!

Although it ranked 19th among the top 100 metropolitan areas, Chicago posted the most new foreclosure filings for the third quarter, reporting 16,155 properties entering some stage of the foreclosure process. Second highest total was in Atlanta, reporting 13,562 properties entering the process, followed closely by Dallas reporting 13,422 properties in the foreclosure pipeline.
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Dee Dee said:
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It looks like the next new rising stars might be <drum roll please>........Chicago & Atlanta!
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I hope you are correct, we are sitting on a ton of cash at this point.
 
mike neff said:
I hope you are correct, we are sitting on a ton of cash at this point.
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I got one for you Mike. It is a short sale in my neighborhood. The guy paid $585,000 in August 2005, 100% financing. Last sale of this model was June 2006 for $565,000. They listed it for $579,000 in September 2006, then dropped the price to $569,000, dropped the price to $559,000, dropped the price to $549,000. Now it is listed as a value range of $519,000 to $549,000. You should be able to buy it for $519,000 with that ton of cash.

Because prices are falling, lenders will not loan at 100% and on this property, I suspect the buyer is going to have to put a significant down payment to get any financing.
 
mike neff said:
I hope you are correct, we are sitting on a ton of cash at this point.
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Not my assessment, but if it turns out that way then you'll be in a good position to take advantage of opportunites that might come your way. Seems like many buyers and most investors are retreating to the sidelines for the time being, and they all seem to be trying to figure out the $6,000,000 question, which is where the bottom might be.

At this point it would be tough to argue that there isn't a growing amount of "blood on the floor" in most markets. Hopefully not too much of it will belong to appraisers.
 
Randolph Kinney said:
I got one for you Mike. It is a short sale in my neighborhood. The guy paid $585,000 in August 2005, 100% financing. Last sale of this model was June 2006 for $565,000. They listed it for $579,000 in September 2006, then dropped the price to $569,000, dropped the price to $559,000, dropped the price to $549,000. Now it is listed as a value range of $519,000 to $549,000. You should be able to buy it for $519,000 with that ton of cash.

Because prices are falling, lenders will not loan at 100% and on this property, I suspect the buyer is going to have to put a significant down payment to get any financing.
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Haven't bought anything more than 150 miles from home and intend to keep it that way, but thanks anyway.

If YOU would like to buy it, perhaps we can make you a loan.:flowers:
 
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