20 replies to this topic

[atlasshrugged]

In the Late 1980's Deposits held by S and L's were lent for mortgages and depositors money was Federally insured. When the S and L's failed the gov bailed em out! Present Day: these mortgages that Bear Stearns buys acted as banker are NOT federally insured. They are packaged and sold to yield whores. Low rates over the past 10 years have caused these yield whores to chase the highest yield available with no FED insurance...they will lose and thats the way it goes... If the fed cuts are says the discount window is open which it always is..its irrelavent to these people holding mortgage back securities! They are going to foreclose because these home owners can not get qualified because the loans that they need don't exist any more...they got rid of the 100% financing deals and houses have not appreciated for there to be any equity since 2005!!! I just drove down a street in Las Vegas and out of 20 houses I would say would say 30% are for sale. And our economy is BOOMING or on the surface appears to be.... why are these houses not selling...to expensive except for californian's and because the loans are not available that were only six months ago...

Edited by iron cross, 04 August 2007 - 08:28 PM.

[JAP]

I just drove down a street in Las Vegas and out of 20 houses I would say would say 30% are for sale. And our economy is BOOMING or on the surface appears to be.... why are these houses not selling...to expensive except for californian's and because the loans are not available that were only six months ago...

Besides the points you mentioned, buyers are waiting for prices to slip even more. There are a lot of stubborn sellers out there who do not want to lower prices. Those beligerent sellers are losing more and more everyday hoping they'll get their price.

You should see the glut of inventory in the San Diego market. I'm gonna pick up a nice house at a big discount in a few years because I was anticipating all this would happen.

Edited by JAP, 04 August 2007 - 09:45 PM.

[Cirrus]

I just went house hunting in Richmond again today. NOTHING is moving. I've been tracking the market here for 18 months and very closely for 9 months. Listings are still growing and sales have virtually halted. IMHO the worst will be this winter or next spring when the season slows and nothing has sold. The RE debacle will be different in various areas of the country--location, location, location. I will say things may be worse than I thought and this will take a couple of years to get through. The builders are in big trouble. I think Cramer is correct...if the Fed doesn't inflate some and do something we are going to have a conusmer led slowdown in a big way. Homes just are not selling....except for the lowest price categories. As a buyer I'm a little uneasey in this environment as sellers are still dellusional from what I see. I see neighborhoods where a seller has come down and sold at a lower price and yet their 'neighbors' still think they're going to get 2005 prices for the same type of property. Appraisers have definitely sobered up, though. I've worked with an agent (seasoned 30 yr veteran of richmond) that is telling me the appraisals are coming down dramatically which will impact price. I think the price bottom is still many months in front of us as their will be a liquidation phase, IMO. The 'repo man' is going to have a field day as ownership on many properties will transfer to the bank. In the end it wouldn't surprise me if foreign capital gets involved with the low dollar and cheap RE prices.

[selecto]

"I think the price bottom is still many months in front of us..." I mean, what do I know from real estate, but "months?"

[ed rader]

I just went house hunting in Richmond again today. NOTHING is moving. I've been tracking the market here for 18 months and very closely for 9 months. Listings are still growing and sales have virtually halted. IMHO the worst will be this winter or next spring when the season slows and nothing has sold.

The RE debacle will be different in various areas of the country--location, location, location. I will say things may be worse than I thought and this will take a couple of years to get through. The builders are in big trouble. I think Cramer is correct...if the Fed doesn't inflate some and do something we are going to have a conusmer led slowdown in a big way. Homes just are not selling....except for the lowest price categories. [color=#FF0000]

As a buyer I'm a little uneasey in this environment as sellers are still dellusional from what I see. I see neighborhoods where a seller has come down and sold at a lower price and yet their 'neighbors' still think they're going to get 2005 prices for the same type of property. Appraisers have definitely sobered up, though. I've worked with an agent (seasoned 30 yr veteran of richmond) that is telling me the appraisals are coming down dramatically which will impact price. I think the price bottom is still many months in front of us as their will be a liquidation phase, IMO. The 'repo man' is going to have a field day as ownership on many properties will transfer to the bank.

In the end it wouldn't surprise me if foreign capital gets involved with the low dollar and cheap RE prices.

which is between 650k and 800k in silicon valley for the very cheapest starter homes with thousands and thousands and thousands of units under various stages of construction.

the problem here is price and growing supply, not interest rates.

ed rader

Edited by ed rader, 04 August 2007 - 09:54 PM.

[ogm]

Hmm... there are 2 things the Fed can do. First is to pump a load of money in themselves and create a massive inflation. Second.. is to beg China to step in and support the credit market. I think the second option is more realistic. China has a lot of dollars that they don't want to see devalued, and they certainly don't want to see the US economy collapse, since their fragile economy, which is heavily dependant on US won't handle that blow. Their own market will go into the tailspin and their still establishing financial system will suffer. I think China and maybe others will step in and support the US system here. But the Fed at the same time will try to keep the pressure on the banks to maintain higher lending standards. If the crisis is supported, then overtime the debt quality will improve, but the growth will be subpar. I think this is the best solution for the world here. If I was the President of the world, thats what I would do. What these dumbasses will do I have no idea

[Cirrus]

I think the Fed will do what it can to keep the US jobs market strong. A recession and housing 'crisis' together would make for something that they just don't have the stomach for. The one variable that I've always considered off the table is their willingness to allow a nasty recession and debt liquidation phase to take hold in the US economy. I've always assumed that we would get more CPI data from the commisar of the BLS and a Fed policy that was fearful of deflationary implications in a highly leveraged economy. I don't think Uncle Ben and his buddies have the guts for it.

[ed rader]

I think the Fed will do what it can to keep the US jobs market strong[color=#FF0000]. A recession and housing 'crisis' together would make for something that they just don't have the stomach for.

The one variable that I've always considered off the table is their willingness to allow a nasty recession and debt liquidation phase to take hold in the US economy. I've always assumed that we would get more CPI data from the commisar of the BLS and a Fed policy that was fearful of deflationary implications in a highly leveraged economy. I don't think Uncle Ben and his buddies have the guts for it.

with so many jobs tied to the housing market how does the fed accomplish that?

ed rader

[Cirrus]

Good question Ed. They will have to come to the aid of the homeowner, IMO. Mortgage resets will peak out (first peak from the charts I've seen) this coming winter. That means that they really need 30yr fixed rates to be down during this period. There are so many crosscurrents in the US and world economy right now it's a little 'scary'. We could be moving into trader's paradise for a while.

[ed rader]

Good question Ed. They will have to come to the aid of the homeowner, IMO. Mortgage resets will peak out (first peak from the charts I've seen) this coming winter. That means that they really need 30yr fixed rates to be down during this period.

There are so many crosscurrents in the US and world economy right now it's a little 'scary'. We could be moving into trader's paradise for a while.

so it sounds like to save one they'll have to save both....in other words same ole same ole. at some point the the note's gonna come due on this grande experiment.

i know some think i have been wrong on the housing market but i think i was just early and what's coming has been magnified by the prolonged period of super low interest rates.

when you're making $70k a year and living in a million dollar home you bought last year with nothing down and you're making payments only on the interest something is very wrong.

ed rader

Edited by ed rader, 04 August 2007 - 10:17 PM.