The state of the housing market remains dismal, based on data released Aug. 26. Still, it appears the pace of declines for U.S. home prices is moderating, and the glut of unsold homes is easing—offering some reason for cheer.
New U.S. home sales jumped 2.4% in July to a 0.515-million-unit annual pace, but after a downwardly revised 0.503 million rate in June (from 0.530 million) and below the 0.525 million expected. May’s pace was also revised down to 0.514 million from 0.533 million previously. The months’ supply of homes for sale declined to a still-high 10.1 from 10.7 in June. The median sales price rose to $230,700 from $230,000, though it’s still down 6.3% over last year.
“The weaker than expected July sales rate, together with downward revisions in May and June, will likely add to market fears that the housing correction has further to go,” wrote S&P senior economist Beth Ann Bovino.
New Construction Builders Homes Inventories Drop….
Miller Tabak strategist Tony Crescenzi wrote in an Aug. 26 note that “inventories are now at their lowest level since February 2005, 154,000 below the June 2006 peak of 570,000, and not all that far from normal levels of about 350,000. The supply of new homes is controlled by home builders and is not subject to the direct influence of foreclosures, which explains why the supply of new homes is falling and the supply of older homes is continuing to rise.”
Decelerating Declines
The U.S. S&P/Case-Shiller 20-city composite home price index fell 0.5% in June to 167.69, a new record low. However, 11 of the 20 cities posted month-over-month declines, while 13 posted month-over-month declines in May. Phoenix (–2.6%) led the pace of declines, followed by San Francisco (–1.8%), Miami (–1.7%), and Las Vegas (–1.6%). The June index was down 15.9% on a year-over-year basis, after a 15.8% decline in May. All 20 cities saw year-over-year declines, with 10 cities seeing double-digit percentage declines. The biggest year-over-year declines were in Phoenix, Miami, and Las Vegas, down 27.9%, 28.3%, and 28.6%, respectively.
“[T]he monthly pace of decline is slowing rather dramatically from the hefty 2.1% to 2.6% monthly declines over the November-March period, which may mark the maximum rate of collapse for the U.S. real estate market in this cycle,” wrote Action Economics analysts in an Aug. 26 Web site posting.
“The bubble markets, such as California, Florida, and Arizona, which are struggling with excess inventory and rising foreclosures, continue to lead the decline in national home prices. On a positive note, home prices in some non-bubble markets are declining at a slower pace or even increasing,” wrote Lehman Brothers (LEH) economist Michelle Meyer in an Aug. 26 note.
The U.S. Office of Federal Housing Enterprise Oversight home price index was flat in June, after declining 0.4% in May (revised from –0.3%). On a quarterly basis, prices fell 1.36% in the second quarter, less steep than the –1.68% in the first quarter. The home price index was down 4.80% in the second quarter a year ago, below the –3.03% year-over-year pace in the first quarter.
“The deceleration in the pace of declines over the past three months, together with the better than expected Case-Shiller reading, may give markets hope that the housing market is nearing the bottom,” wrote S&P’s Bovino in a separate note.
Tuesday, August 26, 2008
What Does This REALLY Mean? …July Home Sales Data…
Sales of previously owned homes in the U.S. rose 3.1 percent in July. Nonetheless, the increase masked continued weakness in the housing market.
Resales increased more than forecast to an annual rate of 5 million, with at least one-third of the purchases coming from foreclosed properties, the National Association of Realtors said today in Washington. At the same time, the median price dropped 7.1 percent from July 2007, and the number of homes for sale jumped to a record.
Sales averaged a pace of 4.95 million the past three months, the same rate as the previous period, indicating that purchases may have touched a bottom. At the same time, the glut of houses for sale means property values will probably keep dropping, putting pressure on household wealth and consumer spending.
“Existing home sales have likely stabilized,” Michelle Meyer, an economist at Lehman Brothers Holdings Inc. in New York, said in an interview with Bloomberg Television. “In terms of demand, we’re probably close to the bottom. In terms of prices, we don’t think we’ll see a bottom until the end of next year.”
Treasuries, which had rallied earlier in the day, remained higher after the report. Benchmark 10-year notes yielded 3.78 percent at 11:14 a.m. in New York, from 3.87 percent at last week’s close. The Standard & Poor’s Supercomposite Homebuilding Index of stocks was down 1.1 percent at 285.89.
Economists’ Forecasts
Resales were forecast to rise to a 4.91 million annual rate, according to the median estimate of 75 economists. Projections ranged from 4.69 million to 5 million. July’s sales rate was the highest since February.
Sales were down 13 percent compared with a year earlier. Resales totaled 5.65 million in 2007.
The increase in sales wasn’t enough to keep up with the surge in properties coming into the market as foreclosures mount. There were a record 4.67 million unsold houses and condos on the market in July, representing 11.2 month’s supply at the current sales pace, matching the highest ever. The group has said a five to six months’ supply is consistent with a stable market.
The jump in inventory was driven by an increase in the supply of condos as projects started one or two years ago came on the market, the Realtors group said.
The median price of an existing home fell to $212,400 from $228,600 in July 2007.
“We are in a very tight credit-availability condition,” Lawrence Yun, NAR’s chief economist, said in a press conference. “Inventories continue to remain very high.” One-third to 40 percent of total sales last month reflected distressed properties, which include foreclosures, he said.
Market Composition
Resales account for about 85 percent of the market, while purchases of new homes make up the rest. Sales of existing homes are compiled from contract closings and may reflect contracts signed one or two months earlier.
For that reason, economists consider new-home sales, which are recorded when a contract is signed, a more timely barometer of the market. A report tomorrow from the Commerce Department may show new-home sales fell in July for the third consecutive month, according to the Bloomberg survey median.
Today’s report showed resales of single-family homes increased 3.1 percent to a 4.39 million annual pace. Sales of condos and co-ops climbed 3.4 percent to a 610,000 rate, the most since November.
Purchases increased in three of four regions, led by a 9.7 percent jump in the West. Sales fell 0.5 percent in the South.
Tight credit conditions and ongoing declines in residential construction will weigh on economic growth in coming months, Federal Reserve policy makers said at their Aug. 5 meeting. The Fed’s quarterly survey of bank loan officers showed 75 percent had made it tougher for prime borrowers to get a mortgage, more than in the April survey.
`Worry a Lot’
“I worry a lot about what’s happening in housing,” Martin Feldstein, a member of the committee that charts American business cycles. “The number of negative-equity homes is exploding. Housing prices will continue to go down, driven by the large oversupply of houses and the increasing number of foreclosures.”
The number of unsold previously owned homes has piled up as some owners resist lowering prices and banks repossess more properties.
Resales increased more than forecast to an annual rate of 5 million, with at least one-third of the purchases coming from foreclosed properties, the National Association of Realtors said today in Washington. At the same time, the median price dropped 7.1 percent from July 2007, and the number of homes for sale jumped to a record.
Sales averaged a pace of 4.95 million the past three months, the same rate as the previous period, indicating that purchases may have touched a bottom. At the same time, the glut of houses for sale means property values will probably keep dropping, putting pressure on household wealth and consumer spending.
“Existing home sales have likely stabilized,” Michelle Meyer, an economist at Lehman Brothers Holdings Inc. in New York, said in an interview with Bloomberg Television. “In terms of demand, we’re probably close to the bottom. In terms of prices, we don’t think we’ll see a bottom until the end of next year.”
Treasuries, which had rallied earlier in the day, remained higher after the report. Benchmark 10-year notes yielded 3.78 percent at 11:14 a.m. in New York, from 3.87 percent at last week’s close. The Standard & Poor’s Supercomposite Homebuilding Index of stocks was down 1.1 percent at 285.89.
Economists’ Forecasts
Resales were forecast to rise to a 4.91 million annual rate, according to the median estimate of 75 economists. Projections ranged from 4.69 million to 5 million. July’s sales rate was the highest since February.
Sales were down 13 percent compared with a year earlier. Resales totaled 5.65 million in 2007.
The increase in sales wasn’t enough to keep up with the surge in properties coming into the market as foreclosures mount. There were a record 4.67 million unsold houses and condos on the market in July, representing 11.2 month’s supply at the current sales pace, matching the highest ever. The group has said a five to six months’ supply is consistent with a stable market.
The jump in inventory was driven by an increase in the supply of condos as projects started one or two years ago came on the market, the Realtors group said.
The median price of an existing home fell to $212,400 from $228,600 in July 2007.
“We are in a very tight credit-availability condition,” Lawrence Yun, NAR’s chief economist, said in a press conference. “Inventories continue to remain very high.” One-third to 40 percent of total sales last month reflected distressed properties, which include foreclosures, he said.
Market Composition
Resales account for about 85 percent of the market, while purchases of new homes make up the rest. Sales of existing homes are compiled from contract closings and may reflect contracts signed one or two months earlier.
For that reason, economists consider new-home sales, which are recorded when a contract is signed, a more timely barometer of the market. A report tomorrow from the Commerce Department may show new-home sales fell in July for the third consecutive month, according to the Bloomberg survey median.
Today’s report showed resales of single-family homes increased 3.1 percent to a 4.39 million annual pace. Sales of condos and co-ops climbed 3.4 percent to a 610,000 rate, the most since November.
Purchases increased in three of four regions, led by a 9.7 percent jump in the West. Sales fell 0.5 percent in the South.
Tight credit conditions and ongoing declines in residential construction will weigh on economic growth in coming months, Federal Reserve policy makers said at their Aug. 5 meeting. The Fed’s quarterly survey of bank loan officers showed 75 percent had made it tougher for prime borrowers to get a mortgage, more than in the April survey.
`Worry a Lot’
“I worry a lot about what’s happening in housing,” Martin Feldstein, a member of the committee that charts American business cycles. “The number of negative-equity homes is exploding. Housing prices will continue to go down, driven by the large oversupply of houses and the increasing number of foreclosures.”
The number of unsold previously owned homes has piled up as some owners resist lowering prices and banks repossess more properties.
Friday, August 22, 2008
Fannie And Freddie Fallout…
Interest rates are INCREASING for the best borrowers….
Rates on average 30-year fixed mortgages rose to 6.37 percent this week, about the highest in six years. More than 70 percent of new home loans are bought or guaranteed by the government-chartered companies, known as “prime” mortgages.
Higher rates for the safest borrowers may exacerbate the worst housing market since the Great Depression and thwart efforts by Federal Reserve Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson to bring mortgage rates down. The slowest-growing economy since 2001 is already shutting out some buyers and increasing costs for those seeking to borrow with smaller down payments or below-average credit scores.
“New home buyers are going to have to get credit at reasonable terms for the decline to stop,” said Christopher Mayer, a real-estate professor at Columbia University’s business school in New York. “The price issue alone is having a very, very big effect.”
As rates rise, sellers are forced to lower prices for buyers seeking to make the same monthly payments. A rate of 6.37 percent equates to a monthly payment of $1,871 on a $300,000 mortgage, up from $1,739 when rates were as low as 5.69 percent in May, according to data from Bankrate.com in North Palm Beach, Florida.
Record High
Applications for mortgages fell 34 percent to the lowest level since 2000 in the week ended Aug. 15 from a year earlier, partly because of the increase in loan rates, according to the Washington-based Mortgage Bankers Association.
Paulson received authority from Congress last month to pump unlimited amounts of capital into Fannie and Freddie in an emergency after the debt yields rose and their shares tumbled 90 percent from a year earlier. Freddie paid its highest yields over Treasuries on record in a debt sale Aug. 19.
Fannie, the largest mortgage-finance provider, was created as part of Franklin D. Roosevelt’s New Deal in the 1930s and became a publicly owned company in 1968. Freddie was started in 1970, when the economy was strained by the Vietnam War.
The economy’s growth is forecast to slow to 1.5 percent this year, the slowest since 0.8 percent growth in 2001.
Outside People
Home foreclosure filings rose 55 percent in July and banks repossessed almost three times as many homes as a year earlier as falling prices made it harder to sell or refinance, according to RealtyTrac Inc., an Irvine, California-based seller of foreclosure data. U.S. home prices fell 15.8 percent in May, the most since at least 2001, according to the S&P/Case-Shiller home- price index.
Rates on average 30-year fixed mortgages rose to 6.37 percent this week, about the highest in six years. More than 70 percent of new home loans are bought or guaranteed by the government-chartered companies, known as “prime” mortgages.
Higher rates for the safest borrowers may exacerbate the worst housing market since the Great Depression and thwart efforts by Federal Reserve Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson to bring mortgage rates down. The slowest-growing economy since 2001 is already shutting out some buyers and increasing costs for those seeking to borrow with smaller down payments or below-average credit scores.
“New home buyers are going to have to get credit at reasonable terms for the decline to stop,” said Christopher Mayer, a real-estate professor at Columbia University’s business school in New York. “The price issue alone is having a very, very big effect.”
As rates rise, sellers are forced to lower prices for buyers seeking to make the same monthly payments. A rate of 6.37 percent equates to a monthly payment of $1,871 on a $300,000 mortgage, up from $1,739 when rates were as low as 5.69 percent in May, according to data from Bankrate.com in North Palm Beach, Florida.
Record High
Applications for mortgages fell 34 percent to the lowest level since 2000 in the week ended Aug. 15 from a year earlier, partly because of the increase in loan rates, according to the Washington-based Mortgage Bankers Association.
Paulson received authority from Congress last month to pump unlimited amounts of capital into Fannie and Freddie in an emergency after the debt yields rose and their shares tumbled 90 percent from a year earlier. Freddie paid its highest yields over Treasuries on record in a debt sale Aug. 19.
Fannie, the largest mortgage-finance provider, was created as part of Franklin D. Roosevelt’s New Deal in the 1930s and became a publicly owned company in 1968. Freddie was started in 1970, when the economy was strained by the Vietnam War.
The economy’s growth is forecast to slow to 1.5 percent this year, the slowest since 0.8 percent growth in 2001.
Outside People
Home foreclosure filings rose 55 percent in July and banks repossessed almost three times as many homes as a year earlier as falling prices made it harder to sell or refinance, according to RealtyTrac Inc., an Irvine, California-based seller of foreclosure data. U.S. home prices fell 15.8 percent in May, the most since at least 2001, according to the S&P/Case-Shiller home- price index.
Wednesday, August 20, 2008
Breaking News on Housing
U.S. builders broke ground on the fewest new homes in 17 years and producer prices climbed the most since 1981, providing no sign of an economic recovery or easing inflation.
Housing starts fell 11 percent in July to an annual rate of 965,000, the Commerce Department said today in Washington. The Labor Department reported the producer price index jumped 9.8 percent from a year before.
“There’s no doubt we’re in a period of stagflation now,” said Peter Kretzmer, a senior economist at Bank of America Corp. in New York who formerly worked at both the Federal Reserve Bank of New York and the Fed Board in Washington.
Compared with July 2007, work began on 30 percent fewer homes. Building permits, a sign of future construction, also fell in July, the Commerce Department reported. They were down 18 percent to a 937,000 annual pace.
Starts were projected to fall to a 960,000 annual pace, according to the median forecast of 77 economists polled by Bloomberg News. The median estimate for permits was 970,000.
`Pull Back’
“A recovery will not happen this year,” said Russell Price, a senior economist at H&R Block Financial Advisors Inc. in Detroit. “Not only are mortgage rates creeping up, but financing is becoming more difficult for a lot of people. Builders will continue to pull back.”
Construction of single-family homes fell 2.9 percent to a 641,000 rate, the fewest since January 1991, today’s report showed. Work on multifamily homes, such as townhouses and apartment buildings, dropped 24 percent from the prior month to an annual rate of 324,000.
“The news ahead for housing remains bad,” Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York, said in a Bloomberg Radio interview. “There’s a corrective process we have to get through here.”
Northeast Sales
The decrease in starts was led by a 30 percent decline in the Northeast. Construction fell 8.2 percent in both the South and West. Starts in the West slumped to a 26-year low. The Midwest showed a 10 percent gain.
The magnitude of the July drop in the Northeast reflected, in part, a payback from an unexpected surge the prior month. Starts and permits jumped in June as builders hurried to break ground ahead of new regulations in New York City’s building code that took effect July 1.
Underneath the gyrations, demand is weakening. Sales of existing homes fell to a 10-year low in the second quarter, according to the National Association of Realtors. A third of all sales were foreclosures or “short sales,” in which lenders take a loss on a property.
Financing is also becoming tougher, a quarterly survey of banks by the Federal Reserve showed. Compared with the April survey, more of the loan officers polled reported they tightened standards on prime mortgage loans and on non-traditional loans.
The five largest U.S. homebuilders reported a combined $1.08 billion in losses in their most recent quarters.
Builders are pessimistic as losses mount. The National Association of Home Builders/Wells Fargo’s sentiment index yesterday showed optimism held at a record low in August for a second month.
Housing starts fell 11 percent in July to an annual rate of 965,000, the Commerce Department said today in Washington. The Labor Department reported the producer price index jumped 9.8 percent from a year before.
“There’s no doubt we’re in a period of stagflation now,” said Peter Kretzmer, a senior economist at Bank of America Corp. in New York who formerly worked at both the Federal Reserve Bank of New York and the Fed Board in Washington.
Compared with July 2007, work began on 30 percent fewer homes. Building permits, a sign of future construction, also fell in July, the Commerce Department reported. They were down 18 percent to a 937,000 annual pace.
Starts were projected to fall to a 960,000 annual pace, according to the median forecast of 77 economists polled by Bloomberg News. The median estimate for permits was 970,000.
`Pull Back’
“A recovery will not happen this year,” said Russell Price, a senior economist at H&R Block Financial Advisors Inc. in Detroit. “Not only are mortgage rates creeping up, but financing is becoming more difficult for a lot of people. Builders will continue to pull back.”
Construction of single-family homes fell 2.9 percent to a 641,000 rate, the fewest since January 1991, today’s report showed. Work on multifamily homes, such as townhouses and apartment buildings, dropped 24 percent from the prior month to an annual rate of 324,000.
“The news ahead for housing remains bad,” Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York, said in a Bloomberg Radio interview. “There’s a corrective process we have to get through here.”
Northeast Sales
The decrease in starts was led by a 30 percent decline in the Northeast. Construction fell 8.2 percent in both the South and West. Starts in the West slumped to a 26-year low. The Midwest showed a 10 percent gain.
The magnitude of the July drop in the Northeast reflected, in part, a payback from an unexpected surge the prior month. Starts and permits jumped in June as builders hurried to break ground ahead of new regulations in New York City’s building code that took effect July 1.
Underneath the gyrations, demand is weakening. Sales of existing homes fell to a 10-year low in the second quarter, according to the National Association of Realtors. A third of all sales were foreclosures or “short sales,” in which lenders take a loss on a property.
Financing is also becoming tougher, a quarterly survey of banks by the Federal Reserve showed. Compared with the April survey, more of the loan officers polled reported they tightened standards on prime mortgage loans and on non-traditional loans.
The five largest U.S. homebuilders reported a combined $1.08 billion in losses in their most recent quarters.
Builders are pessimistic as losses mount. The National Association of Home Builders/Wells Fargo’s sentiment index yesterday showed optimism held at a record low in August for a second month.
Friday, August 15, 2008
Sour Housing News...Worst in 10 years!
Existing-home sales resumed falling in June and the median price also dropped as inventories crept higher. Home resales slid to a 4.86 million annual rate, a 2.6% decrease from May's unrevised 4.99 million annual pace.
The median home price was $215,100 in June, down 6.1% from $229,000 in June 2007. The median price in May this year was $207,900.
High inventories have exerted downward pressure on prices. Falling prices have kept would-be buyers from signing off on property as they wait for a better deal.
Lenders have tightened their standards on home loans, contributing to the credit crunch that is restraining the U.S. economy. Those tighter standards have priced marginal buyers out of the market and made purchasing more difficult and costly for prime borrowers.
Aside from prices sliding under the weight of bloated inventories and tighter loan standards, a weakening job market isn't helping the housing market. The key non-farm payrolls number in the government's monthly report on employment has gone down six times in a row; businesses worried about the bottom line clipped 438,000 payroll jobs in the first half of 2008, the latest Labor Department data show.
The June resales level of 4.86 million reported by NAR was below Wall Street expectations of a 4.95 million sales rate for previously owned homes. It was the lowest pace recorded since the first quarter of 1998, the NAR said.
The average 30-year mortgage rate was 6.32% in June, up from 6.04% in May, according to Freddie Mac.
Inventories of homes rose 0.2% at the end of June to 4.49 million available for sale, which represented a 11.1 month supply at the current sales pace. There was a 10.8 monthly supply at the end of May.
Sales fell 6.6% in the Northeast, 3.4% in the Midwest, and 3.1% in the South, Sales rose 1.0% in the West.
The median home price was $215,100 in June, down 6.1% from $229,000 in June 2007. The median price in May this year was $207,900.
High inventories have exerted downward pressure on prices. Falling prices have kept would-be buyers from signing off on property as they wait for a better deal.
Lenders have tightened their standards on home loans, contributing to the credit crunch that is restraining the U.S. economy. Those tighter standards have priced marginal buyers out of the market and made purchasing more difficult and costly for prime borrowers.
Aside from prices sliding under the weight of bloated inventories and tighter loan standards, a weakening job market isn't helping the housing market. The key non-farm payrolls number in the government's monthly report on employment has gone down six times in a row; businesses worried about the bottom line clipped 438,000 payroll jobs in the first half of 2008, the latest Labor Department data show.
The June resales level of 4.86 million reported by NAR was below Wall Street expectations of a 4.95 million sales rate for previously owned homes. It was the lowest pace recorded since the first quarter of 1998, the NAR said.
The average 30-year mortgage rate was 6.32% in June, up from 6.04% in May, according to Freddie Mac.
Inventories of homes rose 0.2% at the end of June to 4.49 million available for sale, which represented a 11.1 month supply at the current sales pace. There was a 10.8 monthly supply at the end of May.
Sales fell 6.6% in the Northeast, 3.4% in the Midwest, and 3.1% in the South, Sales rose 1.0% in the West.
Wednesday, August 13, 2008
Massive Blow To US Home Owners
Nationally, if you’ve purchased your home in the past five years, there’s a one-in-three chance that you’re “underwater” on your mortgage.
That’s the study of U.S. home values conducted by Seattle’s Zillow.com, which indicated that the median U.S. home value has plummeted to a level not seen since the fourth quarter of 2004.
In the U.S., 29.1 percent of homeowners who purchased a home since 2003 owe more money on their home than what it’s worth, which is called being “underwater” on the mortgage. Some U.S. real estate markets are faring much worse. Nearly every buyer (95 percent) in the Stockton, Calif., market, for example, who bought a home in 2006 owes more money on their mortgage than what the home is worth. Zillow said home values in Stockton fell 38.2 percent this quarter from a year earlier.
In the Seattle-Tacoma-Bellevue market, it’s not as bleak. According to Zillow research, home values have appreciated 8 percent since 2003, although in the past year, home values fell 7.3 percent to a current home value of $355,945. According to Zillow, of the homeowners who bought in 2003, only 0.3 percent have negative home equity. But those who bought in 2007 aren’t faring so well, Zillow reports, with 27.9 percent of those buyers with negative home equity.
That’s the study of U.S. home values conducted by Seattle’s Zillow.com, which indicated that the median U.S. home value has plummeted to a level not seen since the fourth quarter of 2004.
In the U.S., 29.1 percent of homeowners who purchased a home since 2003 owe more money on their home than what it’s worth, which is called being “underwater” on the mortgage. Some U.S. real estate markets are faring much worse. Nearly every buyer (95 percent) in the Stockton, Calif., market, for example, who bought a home in 2006 owes more money on their mortgage than what the home is worth. Zillow said home values in Stockton fell 38.2 percent this quarter from a year earlier.
In the Seattle-Tacoma-Bellevue market, it’s not as bleak. According to Zillow research, home values have appreciated 8 percent since 2003, although in the past year, home values fell 7.3 percent to a current home value of $355,945. According to Zillow, of the homeowners who bought in 2003, only 0.3 percent have negative home equity. But those who bought in 2007 aren’t faring so well, Zillow reports, with 27.9 percent of those buyers with negative home equity.
Monday, August 11, 2008
Are We There Yet? (Housing Crash Half Time Called)
U.S. house prices will fall by as much as 20 percent nationally and the current mortgage finance crisis is about half-way through, the chief of major mortgage financier Freddie Mac said Wednesday.
“Previously, we said house prices would fall at least 15 percent nationally, peak to trough. Today’s challenging economic environment suggests that the housing market is far from stabilizing,” Richard Syron, the chairman and CEO of Freddie Mac, told investors in a conference call held to discuss the company’s earnings.
“As a result, we now believe that national home prices will fall 18 to 20 percent peak to trough. … The long and short of it is that we now think that we are half-way through the overall peak-to-trough decline.”
“Previously, we said house prices would fall at least 15 percent nationally, peak to trough. Today’s challenging economic environment suggests that the housing market is far from stabilizing,” Richard Syron, the chairman and CEO of Freddie Mac, told investors in a conference call held to discuss the company’s earnings.
“As a result, we now believe that national home prices will fall 18 to 20 percent peak to trough. … The long and short of it is that we now think that we are half-way through the overall peak-to-trough decline.”
Friday, August 8, 2008
Foreclosure Scammers Alive and Well...Do you know what they look like?
You've seen the headlines that say....
We can save you credit!
We'll pay cash for your home!
Let us buy your house and rent it back to you!
We help people just like you!
We'll save your home from the banks by selling it or even paying you for it!
When they really should say....
We buy people's houses! Sell your house below market value and we'll make a killing!!!
These advertisers are absolute scavengers and real bottom-feeders. Their goal is to profit from the calamity of others. If they were truly compassionate, they would provide their services free of charge or at least something comparable to that. While capitalism and free enterprise are the cram of our economical crop, to prey on others' hardships in inexcusable. Let's take a gander at some of the examples listed above.
1) We can save your credit (for a small fee, of course)
This proclamation is heavily loaded. If your credit is in need of saving. It's probably pretty far gone. What they're actually promising to do is to take your money and your home. You pay them to buy your home and they assure you that you're sparing yourselves from the horrors of foreclosure and the hits to your credit. Possibly, yes. If you're not already tangled up in the process of foreclosure, you will be avoiding it; nevertheless, that's not necessarily the point here. They will only buy your home if you have equity because with equity, they cash out and you're left with nothing. At the end of the day, you paid them to take your home away from you.
2) We'll pay cash for your home (if you sign that sucker over to us)
This has the same outcome as number 1, except this time, they pay you. Keep in mind here that you're still losing out on your equity and they're not. For a few thousand dollars in cash, I've seen an elderly woman sell her house because she was frightened into thinking that she would end up a homeless old lady. With the equity she had in here house, she could have purchased a smaller, older one for cash.
3) Let us buy your home and rent it back to you
Wow-sounds great, doesn't it? They buy your house for pennies on the dollar and all you have to do is sign a lease to make monthly payments on it. The real story here is that these guys purchase your home and finance it. Your monthly payments are then made on the financing of your own home. Typically, these guys will flip the house knowing they have a guaranteed renter-you, the former homeowner.
4) We help people just like you
What they're really saying is that "we con people just like you everyday". They know what they're doing. The best advice in these situations is don't trust anyone who contacts you first. Build trust with those who approach. Be wary of e-mails, phone calls, mail and door-to-door solicitors. Remember, why would they seek you out? They are vultures and you're the prey.
5) We'll save your home from the banks by selling it or even paying for it
This one is a real gem. As real estate agents, these scavengers are real pros. At their behest, you sign a contract which lists your home for a period of time. The agent then turns around and buys your home at a discounted price. The key here is that they never really attempt to sell the house they use the intentional lack of interest in your property as proof that it can't go for the asking price. The only option is to sell your house to your agent at a discounted price. With a buyer already lined up, they flip the house. Remember to always use a local and trusted real estate agent, preferably someone whom you're referred to.
Bottom Line
Look after yourselves and protect what is best for you, not someone interested in your home!
Facing Foreclosure? Before you do anything give me a call. I don't charge any fees up front. I am a licensed Real Estate Broker in the State of Oregon and I am here to help you if I can.....
We can save you credit!
We'll pay cash for your home!
Let us buy your house and rent it back to you!
We help people just like you!
We'll save your home from the banks by selling it or even paying you for it!
When they really should say....
We buy people's houses! Sell your house below market value and we'll make a killing!!!
These advertisers are absolute scavengers and real bottom-feeders. Their goal is to profit from the calamity of others. If they were truly compassionate, they would provide their services free of charge or at least something comparable to that. While capitalism and free enterprise are the cram of our economical crop, to prey on others' hardships in inexcusable. Let's take a gander at some of the examples listed above.
1) We can save your credit (for a small fee, of course)
This proclamation is heavily loaded. If your credit is in need of saving. It's probably pretty far gone. What they're actually promising to do is to take your money and your home. You pay them to buy your home and they assure you that you're sparing yourselves from the horrors of foreclosure and the hits to your credit. Possibly, yes. If you're not already tangled up in the process of foreclosure, you will be avoiding it; nevertheless, that's not necessarily the point here. They will only buy your home if you have equity because with equity, they cash out and you're left with nothing. At the end of the day, you paid them to take your home away from you.
2) We'll pay cash for your home (if you sign that sucker over to us)
This has the same outcome as number 1, except this time, they pay you. Keep in mind here that you're still losing out on your equity and they're not. For a few thousand dollars in cash, I've seen an elderly woman sell her house because she was frightened into thinking that she would end up a homeless old lady. With the equity she had in here house, she could have purchased a smaller, older one for cash.
3) Let us buy your home and rent it back to you
Wow-sounds great, doesn't it? They buy your house for pennies on the dollar and all you have to do is sign a lease to make monthly payments on it. The real story here is that these guys purchase your home and finance it. Your monthly payments are then made on the financing of your own home. Typically, these guys will flip the house knowing they have a guaranteed renter-you, the former homeowner.
4) We help people just like you
What they're really saying is that "we con people just like you everyday". They know what they're doing. The best advice in these situations is don't trust anyone who contacts you first. Build trust with those who approach. Be wary of e-mails, phone calls, mail and door-to-door solicitors. Remember, why would they seek you out? They are vultures and you're the prey.
5) We'll save your home from the banks by selling it or even paying for it
This one is a real gem. As real estate agents, these scavengers are real pros. At their behest, you sign a contract which lists your home for a period of time. The agent then turns around and buys your home at a discounted price. The key here is that they never really attempt to sell the house they use the intentional lack of interest in your property as proof that it can't go for the asking price. The only option is to sell your house to your agent at a discounted price. With a buyer already lined up, they flip the house. Remember to always use a local and trusted real estate agent, preferably someone whom you're referred to.
Bottom Line
Look after yourselves and protect what is best for you, not someone interested in your home!
Facing Foreclosure? Before you do anything give me a call. I don't charge any fees up front. I am a licensed Real Estate Broker in the State of Oregon and I am here to help you if I can.....
Thursday, August 7, 2008
When Greenspan Speaks....You Better Listen!
Like it or not Greenspan has a habit of being right… “Former Federal Reserve Chairman Alan Greenspan said the U.S. is ‘nowhere near the bottom’ of the housing slump and is ‘right on the brink” of a recession.’More, from CNBC.com: “… he also warned that ‘Fannie and Freddie are a major accident waiting to happen.’
His comments came in an interview on July 31st with CNBC. I’ll look for more quotes on housing from the interview and add them to this post.
His comments came in an interview on July 31st with CNBC. I’ll look for more quotes on housing from the interview and add them to this post.
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