Housing Bubble Bursting?

[Terrel L. Shields]

if Oprah can't sell the home????

Anyone seen her house in Telluride? Pix anyone or will you get shot?

 

[moh malekpour]

Still, only 3.5% overall? Looks like a classic- and minor, if Greenspan and others are correct about us being at the bottom of the curve- correction.
Brad

I don’t rely too much on Greenspan’s uttering on housing market. He was 3 years too early when he uttered his famed irrational exuberance on stock market. He said it in 1996 and the market bottomed in 2001. According to Greenspan's 3 years premature market timing, the housing market should get to the bottom in 2009.

 

[Randolph Kinney]

Mortgage delinquencies reach 10-year high

More homeowners with subprime mortgages -- home loans issued to borrowers considered to be higher credit risks -- are falling behind on their mortgage payments, according to a Wall Street Journal Online article. This year may be the worst year ever for these types of mortgages, with delinquency rates rising in the past year to the highest level in 10 years, the article says. The increase in such delinquencies is likely to negatively affect the already slowing housing market, as lenders become more cautious in their lending practices, WSJ.com says. A rise in mortgage delinquencies is common during housing slowdowns, since financially strapped borrowers have difficulty selling their homes and because falling housing prices make it more difficult to refinance (due to a lack of equity in borrowers' properties), the article says.

 

[Terrel L. Shields]

falling behind on their loan payments at an unexpectedly rapid pace.

Why does that not surprise me? And they predict 'double digit' defaults if housing prices FALL 5%??? Run for the exits...

 

[JSmith43]

I don't do much B/C, but I went to a presentation by one of the major investors & foreclosure/delinquency have hit sub-prime disproportionately hard....harder than expected It has been recently reflected in terms offered & decision engine programming alterations for the automated underwriting models that have recently appeared on the B/C scene.

 

[Dee Dee]

Why does that not surprise me? And they predict 'double digit' defaults if housing prices FALL 5%??? Run for the exits...

If all of the carefully hidden concessions and incentives were disclosed publicly, then I think everyone would know that we've already had that 5% fall in prices.

 

[JSmith43]

If all of the carefully hidden concessions and incentives were disclosed publicly, then I think everyone would know that we've already had that 5% fall in prices.

You mean, the 5% industry wide decline in entrepreneurial profit and coincidental increase in marketing expenses?

 

[Dee Dee]

You mean, the 5% industry wide decline in entrepreneurial profit and coincidental increase in marketing expenses?

Looks like you've got the Smoke Blowers Spin all figured out.

 

[Dee Dee]

News from NW Arkansas

This pretty much lines up with everything that Terrell has been telling us about NW Arkansas:

http://www.arktimes.com/Articles/ArticleViewer.aspx?ArticleID=15624253-587a-48d3-ac4c-a33a8323c8eb

 

[Terrel L. Shields]

Tom Terminella is a little more circumspect.
“In the last 24 months it’s been rather entertaining to watch this unfold,” he says. “It’s a very challenging market. I watched a lot of development that didn’t make sense at the time it was happening. Now, with the correction in the market, it makes absolutely no sense.”

He ought to know. He cause more rural sprawl than any man in the area. Spent a few weeks trying to drum up biz in Calif. I sent a couple sales out of one of his greenfield subdivisions to Pam. The banks took the keys to his helicopter and he was trying to sell his yacht he got from Don Tyson. He is personally responsible for raping about 4 sections of land NE of Fayetteville and NW of Springdale that was 'rural' a few short years ago...now it is just a clutter of housing.

Gary Head used to head up a bank in Fay. and started his bank about 3 yr ago along with about 4 other start up banks PLUS a slew of regional banks have moved in. To top that, outsider banks are here. I saw a sign the other day touting a subdivision financed by a bank from somewhere like Wellington or Winfield Kansas - 300 miles away..there's money for everyone. This surplus of money to lend meant many of them were lending anything to anybody..now they have sobered up a little..