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Housing Bubble Bursting?

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Report Reveals 2.2 Million Borrowers Face Foreclosure on Subprime Home Loans

The report discusses a number of factors that drive subprime foreclosures -- in the majority of cases, borrowers receive high-risk loan features, packed into an adjustable rate mortgage with a low start rate, that is approved without considering whether the homeowner can afford to pay the loan after the rate rises.http://biz.yahoo.com/prnews/061219/dctu021.html?.v=78
 
I see it where I live

CRL projects that the cooling housing market, will cause failure rates to rise sharply in many major markets. California, Arizona, Nevada, and greater Washington, D.C. will be especially hard hit.
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The nasty impact of defaults and foreclosures have not yet peaked where I am but each month Realtors are asking, "Is this the bottom?"

I can't wait for the NAR's report for existing home sales statistics for November 2006 that will be reported after Christmas.:(
 
Steve Owen said:
Still doesn't really look like what I'd call a bubble bust:

http://www.kansascity.com/mld/kansascity/business/16277889.htm
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It is too early to say. It is not the end of it yet. It just has started and it has a long way to go so, wait and see. This is a time when fixed rate mortgage is at 5,60% and 2.5 million homes are going to be foreclosure? If these folks had equity or good credit, they could refi them with that low rate but they don't and that is the big problem. It is like some starving people who can see and smell the delicious food but they cannot buy it. Problem is that both the subprime people and their borrowers thought by this time they would have enough equity to refinance it to a better loan but it didn't happened and longer they wait more loss they would accumulate
 
Bobby Bucks said:
Randolph as of yesterday they're "concerned" whatever that means. Concerned over lower and fewer commissions perhaps. :) http://www.realtor.org/press_room/news_releases/2006/nar_concerned_over_rapid_increase.html
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Well the concern expressed in that article is as follows:
Foreclosures are not only a disaster for families but also for communities. Problematic loans are often made in concentrated areas, and high foreclosure rates of single-family homes can seriously threaten a neighborhood’s stability and a community’s well being. “Foreclosures can lead to high vacancy rates, which in turn, can cause all homes in the neighborhood to lose value,” said Combs.
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What the NAR is not owning up to is the fact that these Realtors helped these poor buyers to afford to buy the home by steering them to MBs that specialize in 100% financing, option ARMs, HELOC second mortgages, etc. and the like in addition to rolling closing costs and other "fees" in the loan.

There are some neighborhoods here where the number of short sales and foreclosures are 50% of the listings. No doubt the number of transactions this year is way off and they have to give at least 3% to the buyer's agent plus cash incentives.
 
Before most recessions unemployment is low , Stock market rises ,Home prices rise and home inventory increases.This time it is not because of interest rates which makes this recession (By June 07) a nasty downturn taking mom and pop down to taking jobs as a greeter at Wal Mart.All this talk about bottom of the market ramblings was the same clap trap the "Experts"
were spouting just before the last two recessions hit the housing markets.This time (Since many are in De Nile , just a river) will be caught with thier mortgages rising and many new SUV'S in the drive way , until the repo man shows up.OOPS...Talking heads just dropped 3rd quarter GDP from 2.2% to 2.0%..Going down???
 
Here is an example of why some people don’t see a bubble crisis. This area has a declining population since 1990 and it has really dropped since 2000, has the highest unemployment rate in the sate and about 4th highest in the nation. Last year this time our oldest and historically the anchor of economic base industries, Dan River, Inc., was sold to an Indian company and moved to India. We have a total employed base in the MSA of about 22,000. In 2005 we lost two major tobacco companies with hundreds of jobs not to mention a few others. The latest numbers were released yesterday and we are down 3,000 jobs from last year this time.

Last year at this time when Dan River closed I thought you could have bought this area for a nickel. What happened in the following months? The answer is nothing. I had the best year I ever had and did it all in 8 months. January and February were slow but that was when the mills were shutting down. The hit didn’t show up until this December and a lot of that can be attributed to the Goodyear strike going into the third month. 10% of the population out of work and another 10% on strike with a population declining but business is booming. Even residential construction. Employers are complaining that they can't find people to hire.

The residential market is as dead of 4:00 PM in a government office while new residential construction continues but investors are sucking up all kinds commercial properties. My point is that after all of these bad economic events, the effects are about 18 months behind the cause. That is the part of economics most people don’t understand. It is like jumping out of an airplane with no parachute, there is no problem until you hit the ground. Before you hit the ground it is actually a real thrill floating through the air and it is hard to convence the jumper that he or she has a little problem in the mists of such a once in a life time thrill ride.
In my view the significance of this calamity will be in late 2007 or early 2008. The economic numbers on the national level won’t show up until later than that. I don't know if this thread will last another 2 years or not but that is how long it be before we know who was right. In the mean time, some of you guys enjoy your once in a life time thrill ride.
 
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Austin,

Form your post,

"The residential market is as dead of 4:00 PM in a government office while new residential construction continues but investors are sucking up all kinds commercial properties. My point is that after all of these bad economic events, the effects are about 18 months behind the cause. That is the part of economics most people don’t understand. It is like jumping out of an airplane with no parachute, there is no problem until you hit the ground. Before you hit the ground it is actually a real thrill floating through the air and it is hard to convence the jumper that he or she has a little problem in the mists of such a once in a life time thrill ride. "

You know this from personal experience? :rof: :rof:

Brad
 
Brad:
Enjoy your flight friend. You are not really falling the ground is just coming into focus. That ground is just like a feather pillow. We have nothing to fear but feat itself.

Apparently you missed the inconsistances in the story that explains things to some extent. High unemployment and people can't hire people; the real estate market is dead and residential construction continues, etc. The reason for the delay is that first people use up their savings and unemployment. That last about 8 months. Then thousands of people are getting government money for re-education and special health care services because this is a depressed area. That delays the fall for about 10 months. Then De Nile sets in and they get washed down the river. Goodwill Industries has very few donations this Christmas, the United Fund came up about 15% short of their goal set. A million here and a million there and pretty soon you are talking real money. Two local bond issues just got canceled and bridge and road projects put on hold because the city and county and state are running out of funds.
 
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