Housing Bubble Bursting?

[Randolph Kinney]

NAR - mortgage availability is a big problem

Pending home sales drop like a rock, down 6.5%

'The volume of activity we're seeing today is below sustainable market fundamentals because some creditworthy people are trying to buy homes but can't because of the credit crunch.'
— Lawrence Yun, National Association of Realtors

WASHINGTON (MarketWatch) -- Flattened by the mortgage crunch, a forward-looking gauge of home sales fell further in August to its lowest level in more than six years, a real-estate trade group said Tuesday.

The pending home sales index fell 6.5% in August after dropping a revised 10.7% in July, the National Association of Realtors reported Tuesday. The index is at its lowest level since its inception in 2001.

Pending home sales are down by 21.5% compared with a year ago and by 22% compared with six months ago.

The trade group said an informal survey of realtors showed 10% of sales contracts in August fell through at the last minute because of canceled mortgage commitments. In some areas, 30% of contracts fell through.

 

[hastalavista]

Pending home sales drop like a rock, down 6.5%

'The volume of activity we're seeing today is below sustainable market fundamentals because some creditworthy people are trying to buy homes but can't because of the credit crunch.'
— Lawrence Yun, National Association of Realtors

How can someone be creditworthy and not get credit?
Maybe what was creditworthy is now uncreditworthy?

 

[Randolph Kinney]

How can someone be creditworthy and not get credit?
Maybe what was creditworthy is now uncreditworthy?

I will say this with a smirk and then tongue in cheek: NAR speaks out of both sides of their collective mouths.

On one hand, now is a great time to buy. On the other hand, you can't get a mortgage.

NAR has revised their forecast for 2007 seven times so far. I suspect they are warming up to the eighth time to revision of 2007 home sales. :laugh:

I believe the other part that is not told is the concession game of selling homes to keep the prices up is beginning to unwind and the level of bank owned properties that have already sold is bringing down the prices in the data bases. Fannie does want a valid trend analysis or your mortgage won't go through.

 

[Artemis Fowl]

Contain this!
http://www.safehaven.com/article-8529.htm

 

[Randolph Kinney]

Contain this!
http://www.safehaven.com/article-8529.htm

They give you the choice: Either housing prices fall relatively meaningfully from here, or US domestic wages rise relatively meaningfully from here to get the ratio of affordability back to the average for the time periord.

I vote for a relatively meaningful decline in home prices all through 2008 and 2009.

 

[MARK JOLLIFF]

O.k you guy's might think I'm goofy but I can honestly tell you that my job as a garbage man is a reliable indicator of current economic conditions. when the economy is slow our tonnage at the transfer station goes down. When it is good our tonnage goes thru the roof. Right now with this weather and time of year we should be buried. For the last 5 years at this time of year we were going like gangbusters and could barely keep up. We were even working Sundays which the company doesn't like to do cuz it's double time. right now we are practically empty. We will probably be working half shifts by Thursday. The tonnage is not coming in. The regular house waste is coming in as usual but the public area is EMPTY. We usually have lines all the way down the street and now you can drive in with no waiting. I know it sounds very unscientific but trust me when there is no trash then things are SLOW! It looks like February which is our slow time. My buddy say's things at Home Depot look like mid winter. So there you go. My contribution as an economic prognosticator!

 

[Randolph Kinney]

O.k you guy's might think I'm goofy but I can honestly tell you that my job as a garbage man is a reliable indicator of current economic conditions. when the economy is slow our tonnage at the transfer station goes down. When it is good our tonnage goes thru the roof. Right now with this weather and time of year we should be buried. For the last 5 years at this time of year we were going like gangbusters and could barely keep up. We were even working Sundays which the company doesn't like to do cuz it's double time. right now we are practically empty. We will probably be working half shifts by Thursday. The tonnage is not coming in. The regular house waste is coming in as usual but the public area is EMPTY. We usually have lines all the way down the street and now you can drive in with no waiting. I know it sounds very unscientific but trust me when there is no trash then things are SLOW! It looks like February which is our slow time. My buddy say's things at Home Depot look like mid winter. So there you go. My contribution as an economic prognosticator!

Mark,

I can call you and your job of trash collection a leading indicator. It would appear that consumption has declined significantly. Is this because of more vacant houses (lack of population)? Or is it a general lack of replacement items like computers, TV, audio, etc.?

 

[MARK JOLLIFF]

Mark,

I can call you and your job of trash collection a leading indicator. It would appear that consumption has declined significantly. Is this because of more vacant houses (lack of population)? Or is it a general lack of replacement items like computers, TV, audio, etc.?

It is across the board. Definately alot less construction debris and greenwaste. People are not doing landscaping projects as our sale of compost and mulch etc has been way off.Activity creates waste and it seems people are sticking to the bare essentials. Even the volume of house garbage is down a third. It's been years since I've seen it this slow at this time of year! Our roll off division( those boxes you rent for your driveway) are scrambling to keep people busy!

 

[Tim The Enchanter]

And I'm free. Free falling.

"This is still absolutely awful, confirming that the existing-homes market is now in freefall," wrote Ian Shepherdson, chief U.S. economist for High Frequency Economics.

 

[Randolph Kinney]

Housing throwing gas on job loss fires

Housing layoffs

2007 nationwide layoff announcements,
all industries

January 62,975
February 84,014
March 48,997
April 70,672
May 71,115
June 55,726
July 42,897
August 79,459
September 71,739
October n/a
November n/a
December n/a
Total 587,594


Struggling companies in the mortgage and housing sectors have cut nearly 100,000 jobs this year.