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mjs020294

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: June 05, 2008, 11:34:22 PM

I am sure the foreclosures will continue for a couple of years but there are other signs the bottom in the housing market is near.  The number of homes listed in one SW Florida country has dropped from over 2,500 to 900 in the last year.  That still represents about 11 months of inventory but the drop is a good indicator of a turn in the market.


cyberdude557

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#1 : June 05, 2008, 11:27:35 PM

WASHINGTON - The foreclosure hammer is hitting ever harder. People lost their homes at the highest rate on record in the first three months of the year, and late payments soared to a new high, too — an alarming sign that the housing crisis and its damage to the national economy may only get worse.

Dumping more empty homes on an already glutted market also is likely to put a further drag on home prices — extending a vicious cycle.

Slumping home values are being blamed in large part for the rising tide of foreclosures. Troubled borrowers are left owing more to the bank than their homes are worth. They can't sell without taking a huge financial hit, so they just walk away.

In fact, Americans' equity in their homes — usually their single biggest asset — now has dropped to the lowest level on record in figures going back to the end of World War II. Homeowners' portion of equity fell to 46.2 percent, which means the amount of debt tied up in their homes exceeds the equity they have built up.

"The economy is treading water, and the housing market is one of the undercurrents trying to pull it down," said Stuart Hoffman, chief economist at PNC Financial Services Group.

Nearly 1 percent, or roughly 447,723 loans, fell into foreclosure during the January-to-March period, the Mortgage Bankers Association said Thursday in its quarterly snapshot of the mortgage market. That surpassed the previous high of 0.83 percent over the last three months in 2007.

http://news.yahoo.com/s/ap/20080605/ap_on_bi_ge/home_foreclosures;_ylt=AqsZimI55VLFOS9aDmgwkCys0NUE

olafberserker

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#2 : June 05, 2008, 11:40:47 PM

Even Ed McMahon and Evander Holyfield have fallen prey to the rough housing market. 

ufojoe

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#3 : June 05, 2008, 11:48:14 PM

They're offering $450,000 homes for free in Escondido (near San Diego) if you buy a $1.4 million home.
Buy one get one free.

http://blogs.wsj.com/economics/2008/05/27/economists-react-little-indication-of-housing-bottom

May 27, 2008, 12:41 pm

Economists React: "Little Indication" of Housing Bottom

Economists and others weigh in on the latest data from the Case-Shiller house price indices, which showed a drop in prices, and new-home-sales data, which showed an increase in sales and a jump in new-home prices.

Both median and average sales prices [measured in the new-home-sales data] rose in April from last year's level. In March these two measures were both declining at a double-digit pace. Part of the turnaround may be due to a compositional effect. The only region where sales declined last month was in the South, also a region with below-national-average prices. The Case-Shiller index, out earlier this morning, controls for these regional mix-shifts and shows continuing rapid declines in house prices. ~Michael Feroli, J.P. Morgan

This is the third consecutive month The [Case-Shiller 20-city index] fell 2.18% month-over-month, continuing its now 5-month streak of greater than 2% monthly home price declines. Bought a house last October with 10% down? Congratulations - you're now underwater. Is all real estate local? Not anymore, but it is regional. Within individual metropolitan areas, there were a few surprises, perhaps the biggest being Dallas, which flip-flopped from a 0.67% price decline in Feb to a 1.10% price increase in March. California (not just southern) and Florida continue to live up to their reputations as the biggest post-boom bust locales... The sizeable March revision (-17,000) [to new-home sales data] was the bigger story, as it may suggest a higher level of abandonment by buyers who walked away from contracts. In light of the ~2% monthly decline in home prices nationwide, it's not surprising to see a tick up in abandonments.~Guy LeBas, Janney Montgomery Scott

House prices continued to decline in March but the drop in both the 10- and 20-city composite Case-Shiller housing price indices was slower than in the two previous months... Sales of new single family homes rose 3.3% but this initial estimate of the April sales totals matched the previous estimate for March, which had been the lowest level since late 1991. Indeed, the latest report included downward revisions to sales figures for each of the past six months. The median sales price was surprisingly higher than a year ago but, as with the big drop in the median price in March, probably reflected a shift in the regional sales mix. ~David Resler, Nomura Securities

New home sales extended their 33 months decline, which has now totaled 62.1%. Moreover, despite this month's increase, there is little indication that home sales are approaching a bottom. Inventories of unsold homes remain very high despite slipping for the thirteenth consecutive month. Prices [in the new-home data] posted an unusual gain but this was due to a shift in the composition of sales toward more expensive areas rather than stability in prices. Home prices are still falling on trend. ~Steven A. Wood, Insight Economics

Inventory of existing homes is still very close to its record high so prices will continues to fall rapidly. Since its May 06 peak the Case-Shiller index is now down 15.7%; we expect the peak-to-trough drop to reach 25-to-30%. ~Ian Shepherdson, High Frequency Economics

Despite the sharp drop in home prices, housing demand has remained depressed, leaving a huge overhang of homes on the market for sale. In addition, rising foreclosures puts downward pressure on home prices since foreclosed homes typically sell at a discount to the market clearing price. As such, we expect home prices to fall another 10% through the end of 2009 as the market slowly, and painfully, clears the hefty overhang of homes on the market for sale. ~Michelle Meyer, Lehman Brothers

Chatter about a possible turn in the housing market remains hopelessly premature. The latest Case-Schiller house prices indices, which it should be remembered cover repeat sales of single-family homes so exclude condos and that the data is also smoothed over three months, underlined that the housing market continues to go from bad to worse... Don't be fooled by the optical illusion of a month-to-month pop in new home sales in April, which will almost certainly be revised away. Seasonal adjustments also appear to be flattering the April data. Bottom line - demand for new housing is still falling & at a rapid pace. ~Richard Iley, BNP Paribas

The only tentative - and it is only very tentative - positive sign [in the Case-Shiller data] is that once we seasonally adjust the 20-city index the monthly rate of decline did not steepen, holding approximately constant at around 25%. Of course, prices are still falling at a 25% annual rate which is pretty horrendous, tons of excess supply remains and there have been temporary pauses before over this downturn. ~Goldman Sachs

Compiled by Phil Izzo

cyberdude557

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#4 : June 05, 2008, 11:51:50 PM

A lot of these empty homes though I wonder if are speculators that finally ran out of money.

I knew people during the boom that was buying up 4, 5, 6 houses and then trying to flip them and got caught. Now they are bankrupt.

JavaBuc

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#5 : June 06, 2008, 12:38:29 AM

I am sure the foreclosures will continue for a couple of years but there are other signs the bottom in the housing market is near. The number of homes listed in one SW Florida country has dropped from over 2,500 to 900 in the last year. That still represents about 11 months of inventory but the drop is a good indicator of a turn in the market.

I'm not so sure about that.   There were 20 houses for sale in my parent's neighborhood.   Those owners have had those houses for 30 years.   They didn't need to sell.   They just saw the prices go so high that they listed them.   They have now had those houses on the market for years with no success selling.   And they've seen the prices drop drastically from when they first listed them.   So they simply pulled them off the market.   I think there are 2 still on the market now, but only 1 of them ever sold.   In this case, I don't think it has anything to do with sales or a market turn.   It's just that the prices has dropped low enough now that they aren't listing just to list because prices were ridiculous before.

escobar

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#6 : June 06, 2008, 12:48:21 AM

I am sure the foreclosures will continue for a couple of years but there are other signs the bottom in the housing market is near. The number of homes listed in one SW Florida country has dropped from over 2,500 to 900 in the last year. That still represents about 11 months of inventory but the drop is a good indicator of a turn in the market.

I'm not so sure about that. There were 20 houses for sale in my parent's neighborhood. Those owners have had those houses for 30 years. They didn't need to sell. They just saw the prices go so high that they listed them. They have now had those houses on the market for years with no success selling. And they've seen the prices drop drastically from when they first listed them. So they simply pulled them off the market. In this case, I don't think it has anything to do with sales or a market turn. It's just that the prices has dropped low enough now that they aren't listing just to list because prices were ridiculous before.

I agree. I know several people who have pulled their homes off the market because they can't get nearly what they need to  cover their existing loan much less make a profit for a down payment on a different home.

I also have a couple of friends who want to take advantage of the low housing costs right now by trying to upgrade into a slightly nicer home, but can't because they are both trapped into their current mortgages (in both cases their first) and can't even think about putting their current homes on the market. One is upside down by 40k and the other by 30k. I'm VERY happy I wasn't in a position to purchase a home a few years ago or else I'd be in the same mess they are.

cyberdude557

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#7 : June 06, 2008, 12:50:54 AM

The problem is also that it is harder to get a mortgage. Several banks have gone under. And others have pulled their purse strings tighter.

buckit

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#8 : June 06, 2008, 07:54:11 PM

What's delicious is this:  Go on Craigslist and search for homes for sale with the keywords Owner Finance.  I know out here people are so desperate to dump properties they'll sign you over their's with $5000 down and payments only a few hundred dollars higher than the average rent. 

When there's blood in the streets, buy everything you can.  By buying owner finance properties, you can build a huge portfolio of real estate, under the radar (won't show up on your credit report) and worst case senerio, walk away from the whole lot with no damage to your personal credit.  Beautiful.  The other side of the coin is this--with foreclosures on the rise, more people are forced to rent, which drives up demand (and prices) for rental properties.  You owner finanace 3-5 properties, rent out at virtually no risk and sit back and watch your estate grow.  Remember, real estate is cicular.  It will ALWAYS come back.  Just gotta pick the bones of the good meat, and wait till the market blooms again...


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