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[nimblebear]

Imagine what home sales will be doing over the next six months. The supply gut for homes is massive and getting worse. Its going to take months for credit markets to unclog, years for banks balance sheets to improve and maybe a decade or more for people to amass enough savings for a down payment and to rebuild credit ratings. Subprime is gone, and that takes out millions from the buy side of the supply chain.

Imagine how many factories will be idled just from this downturn in car buying. How many more millions will be unemployed reducing the home buying pool. Foreclosures will probably add another 2 million homes on the market as the last of subprime and alt a victims punt on their homes over the next 18 months.

The supply pool will likely go up to 9 to 10 million homes. Driving home prices down even further. I'd say on average another 25 to 30%.

Here is one guys take up in the NE. (posted at JSMINESET)

Last Thursday afternoon I dropped into the local Suzuki automobile dealer in order to have a look at the new SX4 AWD mini crossover. The sales manager and I got chatting about the economy and as it turns out, he was quite knowledgeable on the subjects that we all read regularly on JSMineset.com. This gent was involved in real estate investing on the side; specifically going to bank auctions, the ones where the bank is doing an absolute auction of properties they have already taken under a prior foreclosure.

He told me that one should not listen to any of the ‘reports’ of housing price declines, because they do not honestly reflect what is going on out there for the educated buyers. He told me that he was at an auction last week of several fairly new 3 bedroom homes on 4 acres across the street from a local lake here in New Hampshire with water rights and they were selling for $35K each at auction. I asked him how much these houses had originally sold for and he said $300K a few years ago!! I asked how many he picked up… he said none! I asked why at 11 cents on the dollar did he not buy anything? He told me that he is watching the stress in the markets closely and he feels they still have much further to go on the downside. His high bid was $25K and that’s all he is willing to pay.

He then told me of a very nicely renovated old farmhouse with attached large barn on an in town city lot of about ½ acre up near the lakes region in NH that was quite valuable that sold for $65K at bank auction a week or so ago. He said the inventories are full of this stuff and it’s going to get much worse. WOW! And none of this is being broadcast anywhere! He explained that he is on a series of auction listing sites which supply him the [real] data and offerings. It’s getting very ugly out there if this is all true information.

CIGA Bruce