Housing Bubble Bursting?

[Greg Bell]

Wells Fargo.The stage coach may need some new wheels.

 

[Pamela Crowley (Florida)]

Terrel, I agree with your slow motion analogy. However, it is amazing that the news is very negative about housing. A 6.5% average increase from Feb. to March of homes for sale in 18 metro areas is not what I call good news. Where are the buyers?

Those figures include the thousands of cash back sales that never would have happened without the cash back fraud taking place. Some of you might be amazed of the fast growing numbers of these, many closing at $100,000 - $400,000 ABOVE what they had been listed for sale for, that are now being reported from all over the country, but mainly in the areas where exorbitant appreciation was found during these past few years.

If those deals were taken out of these stats, what would the real stats be???

 

[Randolph Kinney]

Home equity money propells Toyota past GM

http://www.bloomberg.com/apps/news?pid=20601109&sid=aW_r5od0RDrA&refer=exclusive

April 5 (Bloomberg) -- Two years ago, General Motors Corp. promised dealers it would do whatever it took to reverse falling sales in the American cities that set the industry's trends. The slump has only worsened.


Toyota Motor Corp. outsells GM two-to-one in Los Angeles and by a slightly smaller margin in Miami, according to U.S. data compiled by R.L. Polk & Co. In the New York City metropolitan area, where GM had a 4.5 percentage point lead in market share five years ago, Toyota has surged to a four-point advantage.


``In some of these markets, our share has fallen off rather dramatically,'' Mark LaNeve, GM's head of North American sales and marketing said in an interview. ``You can almost re-enter the market like you would enter a new country.''


Gaining market share in big cities is important to car companies because, like many other consumer trends, car-buying habits are set there. Without significant presence in places like New York, GM can't gain the brand awareness to attract affluent buyers and return to profitability.

Toyota sales have risen 36 percent in the New York, Los Angeles and Miami metro markets since 2002 while GM's dipped about 20 percent in those three markets combined, according to data compiled by Southfield, Michigan-based Polk.


GM lost more than $12.4 billion over the last two years.

 

[Randolph Kinney]

Those figures include the thousands of cash back sales that never would have happened without the cash back fraud taking place. Some of you might be amazed of the fast growing numbers of these, many closing at $100,000 - $400,000 ABOVE what they had been listed for sale for, that are now being reported from all over the country, but mainly in the areas where exorbitant appreciation was found during these past few years.

If those deals were taken out of these stats, what would the real stats be???

Speaking of "stats", how is it that NAR data is so far out of whack with other reporting agencies on things like inventory and sales?

You are right Pam, the level of fraud and cash back schemes or paying buyer's closing cost are not even mentioned by NAR, not even an attempt to quantify it.

Any news sources that put a number to the total problem?

 

[Greg Bell]

Here's and idea from some good time goofballs...

Activists want foreclosure moratorium
Housing activists say families that have mortgages with questionable terms should be given six months to work out deals.
April 4 2007: 1:33 PM EDT


WASHINGTON (CNN) -- Housing activists say most families with high-risk mortgages whose terms are questionable should not be kicked out of their homes when they are delinquent on payments. A coalition of groups Wednesday urged lenders to adopt a six-month moratorium on foreclosures to provide time to work something out.

"The debt is forcing people to take second jobs, sell family possessions, and rent out a second room," said Wade Henderson, the president of the Leadership Conference on Civil Rights.

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The problem hits the subprime mortgage market, where people pay more for their home loans because the prime market considers them to be higher risks than other borrowers. Activists told a Wednesday news conference lenders are misleading many borrowers, who are surprised and unable to pay when expensive terms of the loan kick in.

"It is not a surprise that so many homeowners are facing foreclosure when you take a look at the loan terms," Josh Nassar of the Center for Responsible Lending told reporters. "People are qualified generally just to pay for the initial rate, not the adjusted rate, which includes a payment shock of well over 30 percent."

When your lender goes bankrupt
His group estimates that about 20 percent of the sub-prime loans made in the past two years will go into default and result in families losing their houses.

Among demographic groups, African-American and Latino homeowners hold a large proportion of the sub-prime mortgages.

They were initially developed for people having trouble qualifying for a home loan, but unscrupulous lenders have teamed with real estate agents to put people beyond their means, according to Janet Murguia, president of the National Council of La Raza.

"In many cases these loans were never a good fit," she said. "We have been warning that Latinos were getting bad loans. It should not be a revelation, but it has taken families being taken out of their homes to shed light on this issue."

Members of the coalition, which also includes the NAACP, acknowledged in response to a question that no lenders have committed to a moratorium on foreclosures. But Henderson, with the Leadership Conference on Civil Rights, vowed to pressure the industry to throw out questionable mortgages in favor of repayment terms that homeowners can sustain.

"We have resources to generate pressure," he said, such as "the use of civil rights law, consumer laws, congressional pressure, and grass-roots advocacy."

 

[Greg Bell]

What's out of whack is the employment numbers on Friday states up 56K in CONSTRUCTION ,..Where are they building , Mexico City?..The government has cooked the books for so long I believe government stats are now taken from a large bowl of soup..

 

[Randolph Kinney]

What's out of whack is the employment numbers on Friday states up 56K in CONSTRUCTION ,..Where are they building , Mexico City?..The government has cooked the books for so long I believe government stats are now taken from a large bowl of soup..

Like NAR, the government reserves the right to revise the numbers a year later, after the news and no one is paying attention.

 

[Steve Owen]

A little bit of a new twist: housing's slump and its effect on taxes. I know it has been discussed here before, but maybe not in this much detail.

http://www.nytimes.com/2007/04/08/us/08housing.html?pagewanted=1&_r=1&th&emc=th

Of course, there is also this:

“Real estate is going to be a drag on the rest of the economy,” said Ryan Ratcliff, an economist for the Anderson Forecast at the University of California, Los Angeles, referring to California’s situation. “But previous recessions have always had construction plus something else combining to create job loss. Without a second source of weakness, we’re predicting sluggishness, but not a recession.”

 

[Randolph Kinney]

A little bit of a new twist: housing's slump and its effect on taxes. I know it has been discussed here before, but maybe not in this much detail.

http://www.nytimes.com/2007/04/08/us/08housing.html?pagewanted=1&_r=1&th&emc=th

Of course, there is also this: ... California’s situation. “But previous recessions have always had construction plus something else combining to create job loss. Without a second source of weakness, we’re predicting sluggishness, but not a recession.”

Great news! No recession, just sluggishness generating a $1 billion shortfall in tax revenues in January. 30% of car purchases were financed with home equity loans ... 8 of the 10 major subprime lenders are in California, all either in bankruptcy or soon to be there, laying off thousands of people. Not to mention record foreclosures and short sales, still rising in California.

Pollyanna is making a forecast of no problems in California, just sluggishness.

 

[Greg Bell]

180K New jobs , yahoo , no recession.Seems as though jobs are plentiful at McDonald's and Wal Mart.All these newly employed people can rush out and get a new home with no money down.Jobs are the LAST to indicated a recession.Recessions are well on there way long before the employment shows
any major drop , look it up Pollyanna's..