The Housing Bubble - Page 2 of 5

OVERHEATED HOUSING MARKETS COOL DOWN Some - Page 2 - Politics, Business, Civil, History - Posted: 18th Jun, 2007 - 11:06am

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6th Jun, 2006 - 2:53am / Post ID: #

The Housing Bubble - Page 2

Amazing! The highest inventory in 8 years. So, the bubble is not bursting, but wheezing to an end wink.gif

QUOTE
EXISTING-HOME SALES FALL 2% TO 6.76 MLN IN APRIL
5/25/2006 12:02:00 PM
By Rex Nutting
12:02 PM ET May 25, 2006

WASHINGTON (MarketWatch) - The inventory of unsold homes on the market rose to an eight-year high in April as the sales pace dropped by 2%, the National Association of Realtors said Thursday.

Sales of existing homes fell 2% to a seasonally adjusted annual rate of
6.76 million from a revised 6.90 million in March, the realtors group said. Sales are down 5.7% from a year ago.

Inventories rose by 5.8% to 3.38 million homes for sale, a 6-month
supply at the April sales pace. It's the largest supply relative to sales since
January 1998. The supply has climbed a record 46% in the past year.

"This rate of growth in existing home supply will undoubtedly continue
to have a moderating effect on home price appreciation and future home building," said Phillip Neuhart, an economist at Wachovia.

"Demand for homes is cooling but at a gradual pace and to still-robust
levels," said Stephen Stanley, chief economist for RBS Greenwich Capital. "After a pullback late last year, the degree of further downward momentum in home sales has been limited so far this year."

https://www.marketwatch.com/News/

Reconcile Edited: FarSeer on 6th Jun, 2006 - 2:55am


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13th Jun, 2006 - 3:28am / Post ID: #

Bubble Housing The

QUOTE
MORE HOUSING MARKETS OVERVALUED
6/12/2006 5:12:00 PM
By Rex Nutting
5:12 PM ET Jun 12, 2006

WASHINGTON (MarketWatch) -- A growing percentage of U.S. housing markets are
"extremely overvalued" and are at risk of falling prices, according to a study based
on government data released Monday by Global Insight and National City.

In the first quarter, 71 housing markets, representing 39% of all U.S. housing, were
deemed to be "extremely overvalued" based on median sales prices, median income,
population and historic values.

That's up from 64 markets accounting for 36% of housing in the fourth quarter. In
the first quarter of 2004, just 1% of housing was considered overvalued.
To be "extremely overvalued," homes had to be valued at least 34% more than "normal." Read the complete report.

When prices do fall from overvalued levels, they typically fall by about half the overvaluation, DeKaser said. The correction usually takes three and a half years.


And, of course, the worst of the lot are in California and Florida (no big suprise there).
QUOTE
California and Florida accounted for 17 of the top 20 overvalued
markets, economists at the two firms said.


The area where I live is in slot #10 of the top ten group.https://www.marketwatch.com/

Reconcile Edited: FarSeer on 13th Jun, 2006 - 3:44am


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23rd Sep, 2006 - 6:49am / Post ID: #

The Housing Bubble History & Civil Business Politics

Depending on your point of view, or what side of the fence you stand on, is whether we'll have a swift, choppy landing, or a smooth, drawn-out landing. "Everyone" seems to agree that the bubble is done.

No one's arguing that the boom is over. But just how far prices may drop is much less certain. Here's what some economists expect nationally, along with predictions for 15 metro areas.
By Lacey Rose, Forbes.com


QUOTE
Few, if any, economists are enthusiastic about current market conditions, thanks to a host of bleak figures recently released by home builders, federal agencies and the National Association of Realtors (NAR).

On Aug. 22, luxury home builder announced that its net income fell 19% in the quarter ending July 31 from a year prior. Earlier in the month, the company said new orders had fallen 47%. According to NAR, the number of existing home sales plunged 4.1% in July to a seasonally adjusted annual rate of 6.3 million, the lowest since January 2004. Nationwide, the median sales price for an existing single-family home inched up a painfully small 0.9% compared to double-digits in 2005.

Down the road
But that's just today's pain. What about six months from now? A year? Five years? Opinions about the future range from hopeful outlooks to doomsday predictions.

"One possibility is that you get a quick return to normal, which is what the economists for the realtor groups tend to hope for," said Edward Leamer, director of the UCLA Anderson Forecast. "But there's nothing in the historical record that suggests that we're going to get a return to normal anytime soon."

"It is a question of whether it is deep and quick or not so deep and much longer," Leamer added. His prediction: "Not so deep and rather long."

The way Zandi sees it, the market is going to weaken considerably more. "It has been correcting for about a year, and it's got another year to go," he said.

Not surprisingly, Lawrence Yun, a senior economist for NAR, is more optimistic. He claims that the market has returned to more earthly figures after a period of unsustainable growth. "Any decline will be very short-lived," he said. "By the spring of 2007, the market will begin to see increased sales and strengthening in home prices."

Others are less willing to prognosticate an end date for the slowdown, due to a host of unknowns, including future interest rates and job markets.

Whatever the future holds, the present doesn't look good. The number of unsold homes on the market rose another 3.2% in July to 3.9 million, a 13-year high, according to NAR. If the current selling rate held steady, it would take 7.3 months for all of those houses to move.

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26th Sep, 2006 - 2:00am / Post ID: #

Page 2 Bubble Housing The

QUOTE
WASHINGTON (MarketWatch) -- The collapsing U.S. housing market crossed
another milestone in August, as the median sales price of existing homes fell for the first time in 11 years and for just the sixth time in the past 38 years, the National Association of Realtors said Monday.


That's a significant event, in my book.

They are saying that, even with these declines, the housing bubble didn't pop, but eased out with a "slow leak." Interesting at how optomistic they are. I wonder how many people will agree with that who bought their homes at over-inflated prices and are now "upside down" in their mortgages (I.e., their mortgage is more than their home is currently worth). The next 5 to 10 years will be a period of volitility, I think, as people become more aware of just how stuck they are.
https://www.marketwatch.com/News/[/code]


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17th Oct, 2006 - 12:54pm / Post ID: #

Bubble Housing The

Here is an interesting article, quoting a Fed Reserve Bank official who "heard" something! They're reporting on "hearsay" - I find that almost more interesting than the topic.

QUOTE
HOUSING SLOWDOWN CREATING 'GHOST TOWNS'
10/16/2006 6:20:00 PM
By Alistair Barr
6:20 PM ET Oct 16, 2006

SAN FRANCISCO (MarketWatch) -- The housing slowdown has turned some parts of the Phoenix and Las Vegas metropolitan areas into "ghost towns," where many
unsold homes stand empty, Janet Yellen, president of the San Francisco Federal
Reserve Bank, said Monday.

Yellen said that she heard the ominous description from a "major home builder," who
told her that the share of unsold homes in some subdivisions around the two Southwestern cities has topped 80%.

"Though the situation isn't that bad everywhere, a significant buildup of home inventory implies that permits and (housing) starts may continue to fall, and the market may not recover for several years," she warned, according to the text of a
speech delivered Monday at the Hong Kong Association of Northern California in San
Francisco.


It's a classic example of supply and demand, in my opinion. They can't just keep building up supply at the break-neck pace they've been building the past 2-3 years without finally overstepping demand.https://www.marketwatch.com

Reconcile Edited: FarSeer on 17th Oct, 2006 - 12:55pm


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18th Feb, 2007 - 6:14am / Post ID: #
QUOTE
By Chris Isidore, CNNMoney.com senior writer
February 15 2007: 6:46 PM EST

NEW YORK (CNNMoney.com) -- The slump in home prices was both deeper and more widespread than ever in the fourth quarter, according to a trade group report Thursday.

Prices slumped 2.7 percent in the fourth quarter compared to the fourth quarter a year earlier, according to the report from the National Association of Realtors (NAR). That's the biggest year-over-year drop on record and follows a 1.0 percent year-over-year decline in the third quarter.

In addition, 73 metropolitan areas reported a decline in the fourth quarter, compared to a year earlier. That outpaced the 71 that saw a gain. It was both a record number and percentage of markets showing a decline in the group's quarterly report. Five markets saw prices unchanged....

That decline was a far more widespread than the third quarter, when only 45 markets reported drops and 102 saw gains, or the second quarter when only 26 saw a year-over-year slump in prices. The national median price was still showing a year-over-year gain in the second quarter.

The most recent median prices are down even more: 3.4 percent since hitting record highs in the second quarter. Almost three-quarters of the markets, reported on by the group, saw declines in median prices over the past six months, with eight reporting double-digit declines.


The housing bubble continues to lose air - it's a slow deflation, but happening for sure.


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27th Mar, 2007 - 1:45pm / Post ID: #

The Housing Bubble - Page 2

First, the subprime lenders fail. (Subprime lenders are those who lend to people with "less than golden" credit.)

QUOTE
Irvine-based New Century Financial Corp., the largest independent sub-prime lender last year, appeared to be moving closer to a bankruptcy filing Monday as its leading creditor, Morgan Stanley, said it planned to auction $2.48 billion in New Century mortgages. The loans had been collateral for a $2.5-billion line of credit that Morgan Stanley had provided.

Like many other sub-prime lenders, New Century had relied on Wall Street banks to provide credit so it could fund loans and also to buy the mortgages and bundle them into securities. Its agreements with loan buyers specified that if the mortgages went quickly into default - an all too frequent occurrence last year - the banks could require New Century to repurchase them.

When New Century was unable to buy back all the dud loans, the Wall Street firms first cut off its funding, forcing it to stop making new loans, and now have begun moving to liquidate the loans themselves.

"It's coming to a head," said an analyst at one of the Wall Street firms, who wasn't authorized to make public statements. "If they're going to file [for bankruptcy court protection], they're going to have to do it soon."

https://www.latimes.com/business/

The next step? Bank foreclosures.

QUOTE
California had 16,273 foreclosure filings in February, up 79 percent from a year ago. Almost 12,000 of the filings were default letters, the first step in the foreclosure process. Nationally, filings rose 12 percent from February 2006 to 130,786.

"Based on our numbers for the first two months of 2007, foreclosure activity is running at a rate that would project a 33 percent increase (nationally) over 2006," said James J. Saccacio, chief executive of RealtyTrac. "It appears that as subprime and FHA loans default at higher than anticipated rates and lenders tighten theirunderwriting standards, we're going to see a spike in the number of homeowners facing foreclosure."  ...
...In California, there was one foreclosure filing for every 751 households, which was 1.2 times the national average.

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Post Date: 18th Jun, 2007 - 11:06am / Post ID: #

NOTE: News [?]

The Housing Bubble Politics Business Civil & History - Page 2

OVERHEATED HOUSING MARKETS COOL DOWN

Some of the nation's most overheated housing markets may be cooling off to more reasonable levels following their unprecedented run-up in the first half of the decade.
Ref. https://money.cnn.com/2007/06/14/real_estat...ility/index.htm

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