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VVance
1674 Posts |
 Posted - 07/24/2008 : 5:25:47 PM
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The Media Are Missing the Housing Bottom
Posted By:Larry Kudlow
Media reports painted a pessimistic picture of today’s release on existing home sales, which fell 15 percent from a year ago and recorded higher inventories. But inside the report was an awful lot of very good new news, which appear to be pointing to a bottom in the housing problem; in fact, maybe the tiniest beginnings of a recovery.
For example, the median existing home price has increased four consecutive months and is up 10 percent since February. Yes, it’s down 6 percent over the past year. But the monthly numbers show a gradual rebound. Actually, this median home price is $215,000 in June, compared to $196,000 last winter.
http://www.cnbc.com/id/25835877 |
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CoolMtgGuy
1964 Posts |
Posted - 07/24/2008 : 6:19:12 PM
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| Not in my neck of the woods. Florida has a long way to go. |
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waynepbright
3554 Posts |
Posted - 07/24/2008 : 6:21:51 PM
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For the most part, we have to agree, that the media is plain stupid - they don't dive
into the nitty gritty like we do as analysts so, in some parts, recovery has definately
begun! Bout damn Time  |
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d_damiano
522 Posts |
Posted - 07/24/2008 : 6:29:45 PM
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quote:
Originally posted by VVance
The Media Are Missing the Housing Bottom
Posted By:Larry Kudlow
Media reports painted a pessimistic picture of today’s release on existing home sales, which fell 15 percent from a year ago and recorded higher inventories. But inside the report was an awful lot of very good new news, which appear to be pointing to a bottom in the housing problem; in fact, maybe the tiniest beginnings of a recovery.
For example, the median existing home price has increased four consecutive months and is up 10 percent since February. Yes, it’s down 6 percent over the past year. But the monthly numbers show a gradual rebound. Actually, this median home price is $215,000 in June, compared to $196,000 last winter.
http://www.cnbc.com/id/25835877
yes but 40% of all purchase loans done in the last 90 days were fha + dpa and noe dpa will be dead.
Do the math |
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ritabradley01
2218 Posts |
Posted - 07/24/2008 : 6:37:48 PM
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| And remember it always picks up a bit this time of year. I suspect once summer is over it will slow a bit in many areas-but I've been wrong before. |
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VVance
1674 Posts |
Posted - 07/24/2008 : 7:08:11 PM
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quote:
Originally posted by ritabradley01
And remember it always picks up a bit this time of year. I suspect once summer is over it will slow a bit in many areas-but I've been wrong before.
Kudlow, along with Ben Stein, have been downplaying the entire housing problems for political reasons. I wouldn't take anything he says too seriously. |
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austinmp
152 Posts |
Posted - 07/24/2008 : 7:08:32 PM
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| Not even close. We are in this for a few more years most likely before things really start to look up in most areas. Too many issues we need to work through. |
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VVance
1674 Posts |
Posted - 07/24/2008 : 7:16:20 PM
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quote:
Originally posted by austinmp
Not even close. We are in this for a few more years most likely before things really start to look up in most areas. Too many issues we need to work through.
It's really contingent upon the entire econommy. I agree that on the whole, there's more decline in the offing. |
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propertylender.c
1067 Posts |
Posted - 07/24/2008 : 7:16:42 PM
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| In Los Angeles, we are in the second inning going into extra frames. |
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VVance
1674 Posts |
Posted - 07/24/2008 : 7:17:54 PM
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| Add...In our neck of the woods, applications have picked up. Trying to place and fund them, a whole different story. |
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waynepbright
3554 Posts |
Posted - 07/24/2008 : 7:20:20 PM
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Kudlow & Ben Stein are both "stoops" who just guestimate on market conditions and don't try to figure out the nitty gritty like us every day of the week. |
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SoCalRay
1171 Posts |
Posted - 07/24/2008 : 7:23:25 PM
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Seattle has started to have a decline and that was one of the few markets that was close to holding values.
The head of Pulte was on CNBC earlier today and he believes another 15% drop in existing home values
Off Topic
Does anyone else find Maria on CNBC Hot? |
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austinmp
152 Posts |
Posted - 07/24/2008 : 7:25:33 PM
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| You didn't think they had Maria on there for her amazing journalistic ability did you? |
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VVance
1674 Posts |
Posted - 07/24/2008 : 7:26:13 PM
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| I have to admit, I listen to Kudlow on the weekends at the office. Some of his observations are really delusional |
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MisterVA
5844 Posts |
Posted - 07/24/2008 : 7:26:21 PM
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| All I can tell you is that the last two weeks have been very brisk with purchase activity after a long lull. |
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VVance
1674 Posts |
Posted - 07/24/2008 : 7:28:31 PM
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quote:
Originally posted by SoCalRay
Seattle has started to have a decline and that was one of the few markets that was close to holding values.
The head of Pulte was on CNBC earlier today and he believes another 15% drop in existing home values
Off Topic
Does anyone else find Maria on CNBC Hot?
OT You're just now discovering that?? |
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SoCalRay
1171 Posts |
Posted - 07/24/2008 : 7:34:15 PM
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quote:
Originally posted by VVance
quote:
Originally posted by SoCalRay
Seattle has started to have a decline and that was one of the few markets that was close to holding values.
The head of Pulte was on CNBC earlier today and he believes another 15% drop in existing home values
Off Topic
Does anyone else find Maria on CNBC Hot?
OT You're just now discovering that??
No, But I do watch her show for more then just looking at her.
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bmoran
1083 Posts |
Posted - 07/24/2008 : 7:58:04 PM
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quote:
Originally posted by waynepbright
Kudlow & Ben Stein are both "stoops" who just guestimate on market conditions and don't try to figure out the nitty gritty like us every day of the week.
Thats funny !!! Larry Kudlow and Ben Stein are stoops |
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Dan-NewLifeLendi
131 Posts |
Posted - 07/24/2008 : 8:15:42 PM
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Never EVER buy at the bottom. You buy at the beginning of the recovery...it's a lot easier to confirm than the 'bottom' is, ya know? Basically, you want to buy on what traders refer to as a 'higher low'. In other words, don't wait for the first gains but rather wait until the following year to confirm trend.
Dan
New Life Lending
http://www.newlifelending.us
dan@newlifelending.us
"Wholesale Loss Mitigation, Loan Modification & Debt Settlement Services in 41 states. Our programs turn your impossible loans into cold, hard cash."
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benjamin
1634 Posts |
Posted - 07/24/2008 : 8:37:33 PM
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| NOT |
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ritabradley01
2218 Posts |
Posted - 07/24/2008 : 9:31:50 PM
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I don't know who Kudlow is, I formed this opinion on my own.
quote:
Originally posted by VVance
quote:
Originally posted by ritabradley01
And remember it always picks up a bit this time of year. I suspect once summer is over it will slow a bit in many areas-but I've been wrong before.
Kudlow, along with Ben Stein, have been downplaying the entire housing problems for political reasons. I wouldn't take anything he says too seriously.
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andyols
108 Posts |
Posted - 07/24/2008 : 9:35:13 PM
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| Depent the source, on FHA web-site average home price went up in Cook county Illinois +1.7% last 12 months. |
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mgraham224
957 Posts |
Posted - 07/24/2008 : 9:48:04 PM
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quote:
Originally posted by Dan-NewLifeLending
Never EVER buy at the bottom. You buy at the beginning of the recovery...it's a lot easier to confirm than the 'bottom' is, ya know? Basically, you want to buy on what traders refer to as a 'higher low'. In other words, don't wait for the first gains but rather wait until the following year to confirm trend.
Dan
New Life Lending
http://www.newlifelending.us
dan@newlifelending.us
"Wholesale Loss Mitigation, Loan Modification & Debt Settlement Services in 41 states. Our programs turn your impossible loans into cold, hard cash."
I just said something similar to a friend today, but this assumes you are buying at market value. I'm not sure if the post that followed this one with "not" was directed at this sentiment, but if so, remind me not to let him manage my investments.
The only mitigating factor in this industry is the "desperation effect." In the panic to 'get out' a home may become available for 15% less than it's appraised value today. yet when the market hits a firm bottom, it may only have dropped 13% from appraised value today. After that firm bottom, home's selling at a discount to appraised value becomes less and less likely. So a savvy eye could net a patient buyer their lowest possible price just before the bottom as opposed to much more safely netting them a historically low price just after the bottom.
point/counterpoint, but I agree with this sentiment in general wholeheartedly |
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KHufford
5116 Posts |
Posted - 07/24/2008 : 10:22:03 PM
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This guy has been spot on for years,
From Merrill Lynch Senior Economist, David Rosenburg:
Housing will not bottom until 2009
As for the housing cycle, we don’t see a bottom in starts until the first quarter of
next year at the earliest and another 30% downside to what would be a record
low of 675,000 units to clear out what is still a tremendously excessive 11 months’
supply of unsold new inventory overhanging the market. We still don’t see home
prices bottoming for at least another 18 months and look for a further 15%
downside risk.
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mgraham224
957 Posts |
Posted - 07/24/2008 : 10:40:22 PM
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Yep. Rosenberg is good. Couple other senior economists that put out the strategy statements for their firms are saying similar stuff. I'm more bearish yet on prices. These economists are citing current macroeconomic statistics which are tremendously accurate, but if you sprinkle in a few points of view unique to mortgage brokers on ground level, 2009 starts to look more like 2010 or later. plot a graph with two lines, one with home price spectrum dispersion (counting rentals and factoring interest rates) and the other with income dispersion. the x axis scale would correlate income with a home price assuming a 33% front end DTI, not looking so good.
Someone should really make that graph. I'm sure I'm not explaining my thought well, but the point is that house the available spectrum and number of homes is still priced so much higher than the available income s and number of people who earn them that could qualify for those homes AND there are more homes that I would wager 2009 (unless it's early winter) will not be late enough for us to see the bottom and know we are on the way up again. |
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KHufford
5116 Posts |
Posted - 07/24/2008 : 10:48:38 PM
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Spot on Matty Boy!
I get what you mean.
Now, its all full doc. People have to buy what they can afford assuming realistic DTI, along with the fact that people are not going to buy, if their monthly payments will outweight the benfit of owning.
They will pay a bit more, because of tax benefits and the fact that people generally like having ownership and modest appreciation expectations, but not too much more because people are no longer banking on huge appreciation to offset they larger payments.
So, prices must fall to a level that people can qualify for and justify paying vs renting. Right now that margin is way off, still.
Boom outta here!
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mgraham224
957 Posts |
Posted - 07/24/2008 : 11:13:47 PM
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Dude that's uncanny. Matty Boy was my nickname in my family growing up and still is among family, etc... Only a few people ever (maybe less than 5 but definitely less than 10) have ever busted it out unsolicited.
gold star.. |
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rtrefflich
2634 Posts |
Posted - 07/25/2008 : 12:07:42 AM
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If/when this housing bill goes into effect it will help a lot in the recovery. On principle I am against it for the fact that it will bail out the morons who made the products available in the first place, in addition to creating a precedent that the govt. will bail out stupid investors.
The positive side is that it will minimize, if not stop foreclosures. People will have to qualify for a lower mortgage, one they can afford, and the bank will write off the bad debt instead of foreclosing. This will in essence slow down short sales and foreclosures, the two things that are driving the market down. People will be able to stay in their homes, and only if those properties FC on the new loan, then it is guaranteed.
The questions I have is what will the max DTI be? Will there be a program for stated SE and how much will banks really write down to give the borrower a new loan. In the Inland Empire homes that sold for $350,000 are now going for $100,000 and dropping every day because they are not moving. |
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ML
2132 Posts |
Posted - 07/25/2008 : 05:05:47 AM
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| Existing home sales data does not differentiate REO from regular retail transactions. In many markets REO sales make up the majority of sales. If not for REO, existing home sales would be down at least 20%. Evidencing a complete and total disaster! |
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genealle
960 Posts |
Posted - 07/25/2008 : 05:44:34 AM
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Shows you how complex and impossible to understand the entire economy is. Analysts can even speak in broad generalizations and still be wrong. Then, when you take the RE segment and try to predict it's movement, you find out how varies from state to state, city to city, zip to zip, and block to block
I've been following a local market publication(reporting tax and RE records) and find some zips are up 35% in price from 2006 and others are down 30%, and all of those are very nice areas. I get the same info from the feds and other market experts...It looks good! No, it looks bad. There are just so many indicators they can't resolve the equation. You can only react to local conditions and have a plan in place based upon YOUR observations.
Then you get a TV reporter reading an article in the NY Post or WSJ, and it becomes gospel. I suppose I don't mind the faulty journalism because I long ago learned to doubt everything I read.
If you ever find an economist that can truthfully understand and explain the dynamics of the economy, you will be looking at the future richest person in the world.
I would like to believe the NAR info...it's always so rosy and optomistic.  |
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ritabradley01
2218 Posts |
Posted - 07/25/2008 : 08:46:16 AM
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quote:
Originally posted by mgraham224
Yep. Rosenberg is good. Couple other senior economists that put out the strategy statements for their firms are saying similar stuff. I'm more bearish yet on prices. These economists are citing current macroeconomic statistics which are tremendously accurate, but if you sprinkle in a few points of view unique to mortgage brokers on ground level, 2009 starts to look more like 2010 or later. plot a graph with two lines, one with home price spectrum dispersion (counting rentals and factoring interest rates) and the other with income dispersion. the x axis scale would correlate income with a home price assuming a 33% front end DTI, not looking so good.
Someone should really make that graph. I'm sure I'm not explaining my thought well, but the point is that house the available spectrum and number of homes is still priced so much higher than the available income s and number of people who earn them that could qualify for those homes AND there are more homes that I would wager 2009 (unless it's early winter) will not be late enough for us to see the bottom and know we are on the way up again.
Trying to time the market huh? Good luck with that. Some many factors come in to play.  |
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EMScommercial
4700 Posts |
Posted - 07/25/2008 : 08:50:44 AM
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| it hasn't begun here.... |
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rtrefflich
2634 Posts |
Posted - 07/25/2008 : 08:52:02 AM
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If it weren't for the REOs the prices would not have crashed like they did and the economy would not have tanked. Banks trying to unload REO's for whatever price they can get on them are driving down the prices and this is a huge part of the "crash".
quote:
Originally posted by ML
Existing home sales data does not differentiate REO from regular retail transactions. In many markets REO sales make up the majority of sales. If not for REO, existing home sales would be down at least 20%. Evidencing a complete and total disaster!
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mgraham224
957 Posts |
Posted - 07/25/2008 : 09:40:54 AM
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quote:
Originally posted by rtrefflich
If it weren't for the REOs the prices would not have crashed like they did and the economy would not have tanked. Banks trying to unload REO's for whatever price they can get on them are driving down the prices and this is a huge part of the "crash".
quote:
Originally posted by ML
Existing home sales data does not differentiate REO from regular retail transactions. In many markets REO sales make up the majority of sales. If not for REO, existing home sales would be down at least 20%. Evidencing a complete and total disaster!
OR, maybe there's a ton of bad loans that people can't afford to pay so values must come down in line with incomes, and the REO is the byproduct of not enough income in too much of a house. |
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Scrooge McDuck
7512 Posts |
Posted - 07/25/2008 : 09:47:57 AM
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massachusetts is truckin along. my brother flipped a condo over the last month. from his purchase, straight through to the closing for the buyer was about 34 days.
3 fams are under 300 now. sfrs that are worth buying are moving. realtors are still jackasses though. |
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rtrefflich
2634 Posts |
Posted - 07/25/2008 : 09:53:45 AM
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This is a huge misconception. People were able to afford the loans at the 2/3/5 yr intervals, it is when the recast that they could not afford them. If banks were willing to take a small loss then, readjust the interest rate to keep it steady for a lot longer, work with people to turn that ARM into a fixed, etc, people would not have lost their homes.
I agree that loans were made that should not have been, however if the banks that made the loans were concerned about their overall performance, instead of what the next quarter is going to do to them, they would have done what they are going to be forced to do now, work with borrowers to keep them into their homes.
Homes are now "in line" with income in many areas of Southern California. Why are they not yet selling? I was with clients last night looking at homes in Orange County and LA county and there are tons of homes that people with median incomes can afford. People do not want to buy, why, because they are waiting for the "self proclaimed prophecy" that prices will continue going down, why buy now.?
quote:
Originally posted by mgraham224
quote:
Originally posted by rtrefflich
If it weren't for the REOs the prices would not have crashed like they did and the economy would not have tanked. Banks trying to unload REO's for whatever price they can get on them are driving down the prices and this is a huge part of the "crash".
quote:
Originally posted by ML
Existing home sales data does not differentiate REO from regular retail transactions. In many markets REO sales make up the majority of sales. If not for REO, existing home sales would be down at least 20%. Evidencing a complete and total disaster!
OR, maybe there's a ton of bad loans that people can't afford to pay so values must come down in line with incomes, and the REO is the byproduct of not enough income in too much of a house.
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PinnaclePeters
1023 Posts |
Posted - 07/25/2008 : 10:44:35 AM
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Only the "end of the beginning" of the mortgage crisis.
Take a look at the article by Bart Dzivi (former Senate Banking Comittee counsel) in the July "Broker" magazine.
Those borrowers currently struggling are primarily the ones with sub-prime loans - both credit/income challenged home owners and a slew of investors caught with flip "flops".
He reckons the other shoe will drop in 2009, when "Option Armageddon" occurs.
Get familiar with commercial lending, folks.
Come, children...come to the light... |
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