Housing Bubble Bursting?

[Randolph Kinney]

Randolph,

Your quote,

"The problem with your comments, they don't make any rational sense. Are you still insisting that home prices are rising?"

Your problem is that you cannot hold on to statements you have made in the face of contrary data.

No- I am not insisting home prices are "rising"- I said that home price averages data showed an increase over the last 3 months and that medians were also up over 2 of the last 3 months- per NAR data.

Had I said they were rising and offered such an opinion that would mean that I expect that they will continue to go up over the coming months but I have already stated that I do not think that will happen each month- and certainly not this year or until late this year anyway.

This -obviously means you are having trouble with distinguishing facts from opinion.

As to your bubble basis comments, I do not recall seeing you do this either. In fact, I am the only guy who was willing to do so.

I'll just take my leave since this is a simple waste of time now.

B

Hey Brad, let me quote you in a different thread for what you said about prices are rising:

Rubbish. You can slice and dice this into as many strata as you like but you cannot deny the overall facts- prices have been rising for the last few months.
Brad

Now we know that you are referring to the national median data published by NAR. If you did not mean to state "prices have been rising for the last few months", you can can explain yourself what your comment means. Prices are rising? Or is it the data you refer to is misleading and prices are not rising over the last 3 months? I suggested to you that the data is skewed and that it may represent a collapse of the entry-level housing market. You called that slice and dice and insisted that prices are rising as represented by the NAR median data.

I have published on what causes bubbles, the why and how. You just dismiss anything that goes against your opinion and you conveniently redefine what your definition is, like demand. Like I said, kinda hard to have a rational discussion with you.

 

[Randolph Kinney]

===============
Thanks for the chart/ graph Randolf;
would call that 18% decline on chart, not a bubble ,but trouble.
And with high leverage, call it double trouble.

And dont know much about SD;

wonder if existing prices below median[new $689,ooo,] did better???

Murray, you can read an article on this at:

http://www.bloomberg.com/apps/news?pid=20601206&sid=a3dYTIjylQW4&refer=realestate

The median price paid for a home in Southern California was $505,000 last month. That matched a record set in March, and was up 6.1 percent from a year earlier, DataQuick said. When adjusted for the drop in lower-cost homes sold, the median price was about 1 percent below the year-earlier level, DataQuick said.

Data is being skewed as reported by DataQuick and NAR. If you don't do the analysis, just reporting the median or mean prices distorts what is going. Some people believe that prices are increasing. The move up market is stalling out because the entry-level market has collapsed. Couple that with the data of new homes and ask yourself, "Why is it that new home prices are falling so much and existing home sale prices are rising?"

 

[Greg Bell]

The government and the NAR have cooked the books for so long no one really knows what the real data is..

 

[Randolph Kinney]

Next subprime wave brings more bad news

http://www.inman.com/inmannews.aspx?ID=63211

Because the worst of the option ARM loans begin to mature through the last half of 2007 and all of 2008 there is more bad news coming.


Real estate professionals could be punished if Rep. Barney Frank, D-Mass, has his way. He wants to let delinquent subprime borrowers sue the investment bankers who bought the loans and turned them into securities. A major sea-change in mortgage lending would follow.


Big secondary market players like Lehman Brothers, Goldman Sachs and Merrill Lynch have largely escaped a full-blown consumer assault on them through the Tort Reform Act. A legal maneuver called "implied cause of action" has provided some protection. Congressman Frank would take the protection away and the trial lawyers of America would be forever grateful. Mortgage brokers and many wholesale lenders don't have the deep pockets the plaintiff's bar needs.


If delinquent borrowers are allowed to sue their way out of foreclosure, you can bet the loan terms for marginal borrowers and first-time homeowners will tighten considerably. But there's more to worry about. Housing needs a constant stream of mortgage money to stay healthy, and the latest subprime burnout has investors running for cover.


The real estate market will be left with three money sources for marginal home buyers: the Fannie Mae/Freddie Mac duo; the Federal Housing Administration (FHA); and finance companies. Mortgage brokers will sell to any of them but will operate under many added federal restrictions.

 

[murray stroupe]

RE; Trends

I wonder if this is the beginning of a trend.

http://www.denverpost.com/business/ci_5858052

=================
Dee D;
You sound like you know Colorado market. Cool.

Is 1 out out 98, in Adams county[1st quarter, in foreclosure;
1 out of 124 in Weld county, '' '', are those high numbers for Colorado??????

Nationwide, that sounds low, unless I am missing something?????. Thanks

 

[Randolph Kinney]

Foreclosures Spur States, Led by Ohio, to Rescue Homeowners From Defaults

http://www.bloomberg.com/apps/news?pid=20601009&sid=afU.aOTMRdIc&refer=bond

The worst housing slump since the Great Depression is driving Ohio and 20 other states to propose consumer protection laws and bond sales that would help homeowners stem the escalating defaults. Ohio, with the third-highest foreclosure total in the U.S. last month, is raising $100 million to help homeowners refinance risky mortgages. New York, New Jersey and Pennsylvania are planning similar sales.


Ohio home sales fell 5.8 percent in the first quarter and the average price declined 1.5 percent to $143,383 from a year earlier, according to the Ohio Association of Realtors in Columbus. Ohio had 11,431 default notices, auction sale notifications and repossessions by banks in April, 39 percent more than in March and 135 percent more than a year ago, according to the data from RealtyTrac. Only California and Florida had more.

 

[Randolph Kinney]

Bernanke sees limited impact from subprime

http://www.marketwatch.com/News/Story/Story.aspx?guid={E7E75A8C-0A89-49B7-87DB-A365A101BBD6}&siteid=nbk

WASHINGTON (MarketWatch) - The slowdown in the housing market probably has further to run, but it won't have a significant impact on the rest of the economy, Federal Reserve Chairman Ben Bernanke said Thursday.


Addressing a conference on bank structure at the Chicago Federal Reserve Bank, Bernanke promised that the Fed and other federal bank regulators have actively looking at tightening up the rules for mortgage lending to prevent the kinds of abuses that have been seen in the past few years.

"Combating bad lending practices, including deliberate fraud or abuse, may require additional measures," he said.


"Markets can overshoot, but, ultimately, market forces also work to rein in excesses," the top central banker said. "In the long run, markets are better than regulators at allocating credit."

Bernanke said the cooling in the housing markets has been an "important source" of the slowdown in the economy. And he gave no assurances that housing has hit the bottom.


The latest readings on home sales "indicate a further stepdown in the first quarter."

Banks and other lenders are tightening their standards for subprime, near-prime and even prime borrowers, a Fed survey of banks' loan officers showed earlier this week. At least 44% of banks were tightening their standards, including 16% in the prime market.

"Curbs on this lending are expected to be a source of some restraint on home purchases and residential investment in coming quarters," Bernanke said. And he predicted increases in delinquencies and foreclosures this year and next as adjustable-rate loans face interest-rate resets.

Bernanke traced the problems in the subprime segment of the market to exuberance about home prices, intense competition for lending, increased securitization of mortgages, and delusions and misrepresentations by lenders and borrowers alike.

 

[moh malekpour]

Bernanke Says Subprime Lending Curbs Will `Restrain' Housing

http://www.bloomberg.com/apps/news?pid=20601087&sid=aAT80Ibn_KfI&refer=home

May 17 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke said the housing market is likely to remain restrained in coming quarters as tighter lending standards limit mortgage financing to subprime borrowers and foreclosures rise.

``Curbs on this lending are expected to be a source of some restraint on home purchases and residential investment in coming quarters,'' Bernanke said at the Chicago Fed Bank's annual conference on bank structure and competition. ``We are likely to see further increases in delinquencies and foreclosures this year and next as many adjustable-rate loans face interest-rate resets.''

The Fed chairman maintained his forecast that troubles in housing would not spillover into the economy. ``We do not expect significant spillovers from the subprime market to the rest of the economy or financial system,'' Bernanke said.

Lawmakers and consumer advocates have blamed the Fed and other regulators for lax enforcement during the record $2.8 trillion mortgage boom between 2004 and 2006. The Fed didn't publicly rebuke any bank for failing to follow up on guidance on lending practices in the period. Regulators could have ``done more sooner,'' Roger Cole, the Fed's chief bank supervisor told legislators in March.

 

[Greg Bell]

Hmmmmm..Someone needs to tell Wal Mart not to worry.Americans can still spend all the money they don't have on some big screen TV'S and Boats.

 

[Randolph Kinney]

Bernanke Warns of Subprime-Led Housing Slump, Private Equity Lending Risk

http://www.bloomberg.com/apps/news?pid=20601087&sid=aaDHFNF5QJEw&refer=worldwide

May 17 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke issued a double-barreled warning on the U.S. economy, saying the housing market will continue to struggle and the Fed sees ``significant risks'' in the leveraged-buyout boom.


Bernanke, speaking at a conference in Chicago today, said curbs on subprime lending ``are expected to be a source of some restraint on home purchases and residential investment in coming quarters.'' And he said the Fed is ``beginning to look at'' what he called ``the risks that are associated with working with private-equity firms.''


The Fed chief's comments suggest the central bank has raised its guard against a second credit bubble emerging in the form of leveraged buyouts at a time when the U.S. economy is dealing with the mortgage bust. Lawmakers and consumer advocates have blamed the Fed and other regulators for lax enforcement while lenders wrote a record $2.8 trillion in mortgages from 2004 to 2006.

Bernanke said banks are appropriately reducing credit to the market for securities backed by subprime mortgages.


``We are likely to see further increases in delinquencies and foreclosures this year and next as many adjustable-rate loans face interest-rate resets,'' Bernanke told the Chicago Fed Bank's annual conference on bank structure and competition. Still, ``the vast majority of mortgages, including even subprime mortgages, continue to perform well.''