Housing Bubble Bursting?

[Greg Bell]

Tell that to Home Depot that just shaved a couple of Billion off the sale of their contractor section.No bankers were worried in August 1929 , all was well with the markets.I hope your banker friend has a little put away fro a rainy day...

 

[Steve Owen]

At last

An article about housing that makes sense:

http://appraisalnewsonline.typepad.com/appraisal_news_for_real_e/2007/08/what-direction-.html#more

 

[Mike Garrett RAA]

I was appraising in the mid 1980s when we truly had a declining market here in Colorado Springs. Lived through it and I am sure I will live through this one too.

 

[Randolph Kinney]

Steve,

Seems like good stats to me. Employment and credit are the key for housing purchases. It has been that incremental credit that is at risk of not being there for the incremental buyer. I am looking at the percentage of subprime total and the subprime delinquency rate.

An article about housing that makes sense:

http://appraisalnewsonline.typepad.com/appraisal_news_for_real_e/2007/08/what-direction-.html#more

Selected US Housing and Mortgage Statistics

• 2006 – Total US Housing Units = 126,221,886
• 65% of all homeowners have mortgages = 82,044,226
• 76% of all mortgages are fixed rate = 62,353,612
• 14% of all mortgages are sub-prime = 11,486,192
• Sub-prime ARM's are 8% of total mortgages = 6,563,538
• 15% of the sub-prime loans are delinquent or about 1,722,929+/- or about 2% of all mortgages.
• Historically, foreclosures average 1% of the housing inventory 1,262,219+/-
• Seasonally adjusted housing starts for 2007 are estimated to be down 17% from 2006.

Basic housing economics:

• Population growth equals demand for housing.
• Employment provides the ability to purchase housing.
• Credit (mortgage loans) combined with interest rates (lowering them) increases leverage and makes housing affordable.
• Housing prices and interest rates determine the ability to purchase.

 

[Randolph Kinney]

NAR - no problem yet

U.S. existing-home-sales data show inventory at 16-year high

WASHINGTON (MarketWatch) - Inventories of unsold single-family homes increased 2.2% to 3.85 million in July, sending the inventory in relation to sales to the highest level in 16 years, the National Association of Realtors reported Monday.

Resales of single-family homes and condominiums fell 0.2% to a seasonally adjusted annual rate of 5.75 million. The results were stronger than the 5.69 million sales pace expected by economists surveyed by MarketWatch, but still the slowest since November 2002.

Inventories of single-family unsold homes represented a 9.2-month supply at the July sales pace, the highest since October 1991.

For all homes - condos and single-family homes - the inventory rose 5.1% to a record 4.59 million, representing a 9.6-month supply. Condo inventories surged 20% to 742,000, an 11.9-month supply at the July sales pace.

Inventories typically fall in July, said Lawrence Yun, senior economist for the real estate trade group. The inventory figures are not seasonally adjusted.

But he also said the problems in the subprime market won't damage the broader economy.

Payment resets for subprime mortgages will cost borrowers about $30 billion, Yun said, a significant blow to those families but negligible in the $13 trillion economy.

My bold.

How high is the water? 9.6 months of inventory and rising. How high is the mortgage payment? $30 billion and rising.

I am comforted to know that housing is negligible in a $13 trillion economy. :new_all_coholic:

 

[Austin]

A good listen.

http://www.mediaplayer.telegraph.co.uk/?item=BCDCE441-23FC-4A7C-99C4-8F148B2E02BD

 

[Randolph Kinney]

A good listen.

http://www.mediaplayer.telegraph.co.uk/?item=BCDCE441-23FC-4A7C-99C4-8F148B2E02BD

Excellent. No one knows if this represents an insolvency crisis or a liquidity crisis. Big difference.

There is so much debt holdings backing derivative paper that is invisible by off balance sheet accounting, no one knows if the value of the debt can be collected or if the equity is large enough to satisfy the debt. That difference is multiplied by the derivative paper, up or down.

Oh! What a game of liar's poker! I call your bet, lets see whacha got.

 

[moh malekpour]

An article about housing that makes sense:

http://appraisalnewsonline.typepad.com/appraisal_news_for_real_e/2007/08/what-direction-.html#more

He has thrown some statistics that might be true but so what? Frankly, I don't get what is he trying to say again, that all those foreclosures and mortgage mess mean nothing, that the fed and politician are going to solve the problem and everything is going to be rosey. Just feel good, ingnore what is in the news because evrything in the news is bad news . It is nice to be optimistic at this time but lets not to forget or ignore the reality.

 

[MARK JOLLIFF]

Tell that to Home Depot that just shaved a couple of Billion off the sale of their contractor section.No bankers were worried in August 1929 , all was well with the markets.I hope your banker friend has a little put away fro a rainy day...

I saw an old friend Friday night who works at Home Despot. He said it's like February in the store. He also said people were getting laid off. February is one of the slowest month's. Me thinks this is a pretty good indicator of where the economy is heading. What say you?

 

[Greg Bell]

When Star Bucks starts showing a slow down , we are in BIG trouble.In the 80's it was Mrs Fields Cookies because they were in most every mall.When Mrs Fields cookies dropped in sales , poof a recession popped up..