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Housing Bubble Bursting?

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Mr Rex said:
You really think the Realtors will ever admit a slowing much less a bubble bursting?:rof: I swear I believe they could pay Greenspan to deny the problems, they certainly have the cash, and Greeny might need a little retirement supplement.:new_smile-l: His replacement sure does speak wid forked tung.
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Here is David Lereah new forecast so we know that no bubble was formed or has broke yet:


Lereah's new forecast:
  • Existing home sales down 2.2% to 6.338 million in 2007 from 6.478 million in 2006. A month ago, Lereah was forecasting a 0.9% decline. Sales fell 8.5% in 2006.
  • New-home sales down 14.1% to 904,000 in 2007 from 1.053 million in 2006. A month ago, Lereah was forecasting a 10.4% decline. Sales fell 17.9% in 2006.
  • Housing starts down 18.4% to 1.47 million in 2007 from 1.80 million in 2006. A month ago, Lereah was forecasting a 16.7% decline. Starts fell 12.9% in 2006.
  • Spending on residential construction down 13.6% to $503 billion from $582 billion in 2006. A month ago, Lereah was forecasting a 12.8% decline. Spending fell 4.2% in 2006.
 
Just for the record - watch NAR's next existing home report

I am really watching closely NAR's published existing home sales reports. They have been revising 2006 median sales price data. I am posting the PDF version of February 2007 report so we all can see the changes.

Take note of the little "r" next to the February 2006 median sales price. It was $217,800 in the January 2007 report.
 
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moh malekpour said:
20% decline is huge in a year for U. S. home prices.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aQUrHEhPwpZU&refer=home
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I like this particular statement: " That would leave home prices at levels last seen in 2003 and 2004, the middle of boom that lifted prices to a record in 2005."

I see that now in some neighborhoods where they are trying to refinance but the values continue to fall. Just wait until the bulk of the ARM resets happen in the last half of 2007.
 
Bankruptcy law needs to change to save subprime borrowers

http://www.marketwatch.com/news/story/groups-call-bankruptcy-fix-aid/story.aspx?guid=%7B0590BD12%2D98B0%2D475D%2D8991%2D9F7597ECEF82%7D

WASHINGTON (MarketWatch) -- Consumer groups called Thursday for Congress to enact bankruptcy-law reform to save the homes of borrowers drowning in the rising tide of subprime mortgage foreclosures and stem the loss up to $164 billion in home-based wealth.


More than two million households in the subprime market have already either lost their homes to foreclosure or hold subprime mortgages that are likely to fail in coming years, according to the National Association of Consumer Bankruptcy Attorneys, the Consumer Federation of America and the Center for Responsible Lending.

The groups want a revision of the federal bankruptcy code to eliminate or limit the provisions that exclude home loans from bankruptcy protection.
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Countrywide foreclosures double in March

http://www.reuters.com/article/ousiv/idUSWEN638620070412

NEW YORK (Reuters) - Countrywide Financial Corp., the largest U.S. mortgage lender, said on Thursday the share of its mortgage portfolio that faces foreclosure nearly doubled in March from a year earlier in a difficult housing market.

Countrywide, which services $1.35 trillion of loans, said that pending foreclosures as a percentage of unpaid principal balances rose to 0.83 percent in March from 0.44 percent a year earlier and 0.80 percent in February.

Industrywide, foreclosures are rising and mortgage originations are declining as house price appreciation slows and lenders tighten their underwriting standards.


More than 30 subprime lenders, which make home loans to people with poor credit histories, have sold their businesses, quit the industry or gone bankrupt in the past year.

Last month, the Mortgage Bankers Association said the industrywide foreclosure rate was 0.54 percent in the fourth quarter, the highest in its 37 years of surveys.
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Not to worry, 0.83% of $1.35 trillion is $11.2 billion. The percentage is small, however, $11.2 billion of loans are not performing. Even a 10% loss realized on $11.2 billion loan balance is a large number for Countrywide to absorb.
 
Short-seller Chanos eyes more housing sector woes

http://www.reuters.com/article/GlobalHedgeFundandPrivateEquity07/idUSN1125694920070412

NEW YORK (Reuters) - Problems in the housing sector are likely to deepen and cause damage among financial institutions that loaned the industry money, a prominent hedge fund manager said on Wednesday.


"I think we'll continue to be surprised by the extent of the problems in the sector," James Chanos, president of Kynikos Associates, told the Reuters Hedge Funds and Private Equity Summit in New York.


Chanos, whose fund specializes in selling stocks short or betting their price will fall, said he was concerned about what he called "questionable accounting" at the home builders and the weak disclosure they provide to investors.


"The surprises continue to be negative," said Chanos, who also runs a hedge fund industry trade group called Coalition for Private Investment Companies.


He expects "the financial institutions" to bear the biggest brunt of the fallout at a time when the U.S. housing sector has taken a hit from slumping orders for new homes and a growing number of U.S. borrowers falling behind on payments on riskier mortgages.

Chanos' comments echoed what other investors have said at the summit. On Tuesday Jim Rogers, who helped found the Quantum Fund with George Soros, said he is shorting the housing sector.
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California Home Prices Rise as Number Sold Falls to 10-Year Low

http://www.bloomberg.com/apps/news?pid=20601206&sid=acKn5FlBVays&refer=realestate

April 12 (Bloomberg) -- California home prices rose last month, with the median price in Southern California setting a record even as the number of houses and condominiums sold was at the lowest level in a decade, DataQuick Information Systems said.


The median price paid for a home in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month was $505,000, the first time it was above $500,000, La Jolla, California-based DataQuick said today in a statement. The median in nine Northern California counties last month was $639,000, up 2.1 percent from a year earlier and the highest since July, when it was also $639,000. The median peaked at $648,000 last June.

``Part of what props that median up is a drop off in sales in starter-home markets'' in Southern California, DataQuick analyst Andrew LePage said in an interview. ``It's less clear that's happening as meaningfully in the Bay Area.''


A total of 21,856 new and existing single-family houses and condominium units were sold in Southern California last month, down 32 percent from a year earlier, DataQuick said. Last month's sales count was the lowest for any March since 1997, when 20,024 homes were sold. The sales drop was the steepest in Riverside and San Bernardino counties, each of which had a 47 percent decline.


It's likely ``much of the current sales lull may be due to the strong sales in 2004 and 2005,'' DataQuick President Marshall Prentice said in a statement. ``Some of today's demand probably got pulled into that period because of low mortgage interest rates and the availability of exotic mortgages.''
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I suppose the data does not count foreclosure sales and short sales in the median price number. Otherwise, that the median price number would be pulled down. You have more starter homes going to foreclosure and short sales than the big ticket price home.
 
Randolph,

I would suspect that the foreclosure sales are being counted. From what I know of the data base is is just raw sales numbers and I cannot figure out how they would sort those. Maybe they do this and do know how but in all my use of their data the foreclosures are always included in it- both into and out of foreclosure. But, not being inside their engine I cannot say for sure.

As to the mix of starter vs. high dollar homes all I have is my data and that suggests that there are plenty of high dollar ones going in as well.

Brad
 
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