Why the Housing Crash is Far From Over // Source: thefastertimes.com JULY 28, 2009 There are some encouraging signs in the latest figures from the Case-Shiller housing index, released Tuesday, which found that the rate of decline in home prices slowed nationally during May for the fourth straight month, and has begun to level off and even reverse itself in certain metropolitan areas. The numbers echo other indications that the housing market may be stabilizing, as both new home construction and sales increased significantly in June. READ... Recovery Signs in Housing Market Stir Some Hope // Source: nytimes.com JULY 28, 2009 After a plunge lasting three years, houses have finally become cheap enough to lure buyers. That, in turn, is stabilizing prices, generating hope that the real estate market is beginning to recover. Eight cities, including Chicago, Cleveland, Denver and San Francisco, showed price increases in May, up from four in April and one in March, according to data released Tuesday. Two other cities, Charlotte, N.C., and New York, were flat. READ... Housing’s Tequila Hangover Isn’t Easily Shaken: David Reilly // Source: bloomberg.com JULY 29, 2009 A housing bust is a lot like a tequila hangover. After the most acute signs of distress have passed, it still takes a long time before things start to feel normal again. READ... Prepare for more foreclosures … many more // Source: crainsnewyork.com JULY 28, 2009 The deluge of home foreclosures swamping New York is nowhere near over, a report from the U.S. Government Accountability Office shows. The GAO study released Tuesday predicts that the number of foreclosures on homes backed by subprime or low-documentation mortgages could easily double in the coming months or years, which could put tremendous pressure on housing prices throughout the city and suburbs. READ... Subprime mortgage companies warn on U.S. foreclosures // Source: reuters.com JULY 28, 2009 Companies that service risky residential mortgages are warning U.S. officials that a key program to slow foreclosures may push some financing costs higher and derail their efforts, said a leading subprime firm. READ... Housing: Remember the Two Bottoms! // Source: calculatedriskblog.com JULY 28, 2009 With my post yesterday, Economy: A Little Sunshine and the New Home sales report this morning - it is worth repeating: There will probably be two bottoms for Residential Real Estate. The first will be for new home sales, housing starts and residential investment. The second bottom will be for prices. Sometimes these bottoms can happen years apart. I think it is likely that we've seen the bottom for new home sales and single family starts, but not for prices. READ... Subprime mortgage companies warn on U.S. foreclosures // Source: MISH JULY 28, 2009 Companies that service risky residential mortgages are warning U.S. officials that a key program to slow foreclosures may push some financing costs higher and derail their efforts, said a leading subprime firm. READ... Keepin' It Real Estate: Why Housing Prices Are Essentially Meaningless // Source: minyanville.com JULY 24, 2009 It took the Wall Street Journal an entire survey to prove what readers of this column have known for months: The housing recovery, as it plays out, will be a localized event, varying greatly city to city, neighborhood to neighborhood, street to street. READ... Incredible Shrinking Boomer Economy // Source: MISH JULY 29, 2009 Calling Mercedes the "the quintessential boomer brand", BusinessWeek estimates that Mercedes will sell a third fewer cars in America. The article also notes efforts by companies like Nordstrom (JWN), Starwood Hotels & Resorts (HOT), Outback Steakhouse, BMW and Target (TGT) to offer value shopping or "cheap chic" in an effort to reach out to generations X and Y. READ... US Lawmakers Sound Alarm About Commercial Real Estate Market // Source: nasdaq.com JULY 9, 2009 U.S. lawmakers rang alarm bells about the troubled commercial real estate industry, which has been walloped by the credit crunch and an implosion of property values. "The commercial real estate time bomb is ticking," Joint Economic Committee Chairman Rep. Carolyn Maloney, D-N.Y., said in opening remarks to a hearing before her panel Thursday. READ... Next Shock Coming: Commercial Real Estate // Source: Washington Post JULY 9, 2009 The Joint Economic Committee holds a hearing this morning on worsening conditions in commercial real estate – falling rents, fewer tenants, and defaults on debt down the road. This seems to be the first hearing on Capitol Hill to focus on these issues and what can be done. “Not much” seems to be the reasonable answer. READ... Manhattan Rents Decline as Unemployment Cuts Demand // Source: Bloomberg JULY 9, 2009 Manhattan apartment rents fell as much as 18 percent in the second quarter from a year earlier as rising unemployment curbed demand. The median price dropped 3.1 percent to $3,100 a month, appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said today. READ... Expect More Home Price Declines Almost Everywhere // Source: WSJ July 9, 2009, 10:54 AM ET Nearly 85% of the country’s housing markets are facing an increased risk of home price declines over the next two years, and prices are likely to slide in half of the largest 50 U.S. markets through the beginning of 2011, according to a report from mortgage insurer PMI Group Inc. READ... U.S. Housing Market Is Cursed by Brain Freeze: John F. Wasik // Source: Bloomberg JULY 8, 2009 If you are buying or selling a home in a market glutted with distressed properties, it’s time to change your attitude. Don’t be misled by pundits saying the bottom may be visible in this stultifying decline. The real-estate recession will continue unless a massive brain freeze thaws. Buyers are afraid of purchasing a home at the wrong price while millions of sellers are locked into unrealistic listing prices. READ... Let's Treat Borrowers Like Adults // Source: WSJ JULY 8, 2009 Imagine a man in California who speculated in real estate at the height of the housing bubble. He bought a house with no money down and an adjustable-rate mortgage. But before he could flip that house for a profit, the market collapsed. He then owed more than his house was worth, but he knew that under his state's laws it would be impossible for his bank to sue him for the balance of his loan if he abandoned the house to foreclosure. READ... Mortgage Defaults: Many Are Intentional, Study Finds // Source: TIME Tuesday, Jul. 07, 2009 Up to 26% of U.S. homeowners who stop paying their mortgage may be doing so intentionally, not because they can't make the payments but because they don't want to put money into a house that's worth less than what they owe. That finding, from a paper by economists at the University of Chicago, Northwestern University and the European University Institute, raises some doubt about the approach the Obama Administration has taken toward stabilizing the housing market. READ... Most U.S. homeowners think a bottom has been reached: Zillow // Source: REUTERS Thu May 14, 2009 8:20am EDT Most American homeowners believe their home's value has declined over the past year, but a majority also think a bottom has been reached, real estate website Zillow.com said on Thursday. READ... The Problem with Debt // Source: YAHOO! FINANCE May 14, 2009 09:00am EDT 15.4 million homeowners now owe more on their houses than their houses are worth, up from 13.6 million four months ago. The number will probably top 20 million when all is said and done. To mark this sad stat, we've updated our post from last fall on the power of leverage. READ... SEC staff recommends civil fraud charges against Mozilo of Countrywide // Source: LA TIMES May 14, 2009 Former Countrywide Financial Corp. boss Angelo R. Mozilo, whose embrace of exotic loans helped fuel the mortgage boom and meltdown, will face Securities and Exchange Commission fraud charges unless his lawyers prevail in an eleventh-hour appeal, people familiar with the SEC's investigation said Wednesday. READ... Government Grossly Underestimates Fannie and Freddie's Capital Needs // Source: SEEKING ALPHA May 14, 2009 The U.S. “Office of Management and Budget” released a grim report on the capital requirements of Fannie Mae (FNM) and Freddie Mac (FRE): at least $92.2 BILLION next year, alone. The one thing we know for certain regarding any and every budget projection for the U.S. government which looks out even a year in advance is that it will grossly understate reality. READ... US Median House Price Declines 14% // Source: Wall Street Journal MAY 13, 2009 The median price for a single-family house fell 14% to $169,000 in the first quarter from a year earlier, the National Association of Realtors reported. The trade group said first-time home buyers accounted for half of all purchases in the quarter, and many of them zeroed in on foreclosed homes. That dragged down the median, the Realtors said. READ... Will Renting Be The Undoing Of House Prices? // Source: 247WALLST May 13, 2009 at 4:12 am CNBC ran a brief segment on the number of people who have decided to rent homes and apartments rather than buy them. The point of the reporting was simple. People who need to move out of their houses sometimes cannot sell them. Instead, they rent wherever they have moved and hope to sell their homes later when the market improves. READ... Tax Credit as Mortgage Down Payment - Ugh // Source: FOREXHOUND 05/13/2009 - 7:44 a.m. EST I've become numb a long time ago ... but seeing these programs and "solutions" one after the other is simply.... I don't have words. Just enjoy - last week we mentioned how some states had created a work around to use the tax REBATE (i.e. AFTER you buy the home you get the handout) as a substitute for a down payment and closing costs [May 8: Minyanville - Subprime Lending is Back with a Vengeance] READ... Freddie seeks $6.1B more sweet taxpayer cash after $9.9B loss // Source: SEATTLE TIMES May 13, 2009 at 12:00 AM WASHINGTON — Mortgage giant Freddie Mac is looking for $6.1 billion in additional government aid as the cost to taxpayers from the housing market bust keeps growing. The McLean, Va.-based company, seized by federal regulators in September, on Tuesday posted a loss of $9.9 billion, or $3.14 per share, for the quarter ending March 31. That compared with a loss of $149 million, or 66 cents a share, a year earlier. READ... Op-Ed: The Real Housing Crisis Has Yet to Begin // Source: MINYANVILLE May 13, 2009 12:25 pm The average home size in the US has increased from 1,000 square feet in 1950 to 2,400 square feet today - a 140% increase. The average household square footage per person has increased by 218%. In 1950, only 1% of homes built had 4 bedrooms or more, but 39% of new homes had at least 4 bedrooms in 2003. We have one fewer person per household, but we’ve added one extra room. Our society has chosen to super-size our houses, our vehicles, our TVs, our kitchens, our burgers, our sodas, and our egos. This desire to "keep up with the Joneses" convinced millions to pour money into their homes and amenities. This seemed like a great idea when home prices were rising annually at a double-digit pace. READ...