Speculative Bubble Housing Blog

Construction Spending for November 2007

Thu, 03 Jan 2008 00:00:00 +0000

Report comes out today at 10am

Full article at census.gov

Construction Spending for October 2007

Fri, 30 Nov 2007 00:00:00 +0000

Report is released today at 10am

Full article at census.gov

Construction Spending for September 2007

Wed, 31 Oct 2007 00:00:00 +0000

Press release from the Census today at 10am

Full article at census.gov

Construction Spending for August 2007

Fri, 28 Sep 2007 00:00:00 +0000

Today at 10am is the press release

Full article at census.gov

Construction Spending for July 2007

Tue, 04 Sep 2007 00:00:00 +0000

The press release from the Census comes out at 10am

Full article at census.gov

Construction Spending for June 2007

Tue, 31 Jul 2007 00:00:00 +0000

The report comes out today at 10am

Full article at census.gov

Ten reasons to sell your house NOW.

Thu, 12 Jul 2007 00:00:00 +0000

Here is a top ten list of why you shouldn't wait to sell your house:

Renting is Cheaper - Renting is almost always cheaper than buying. You know why? Because when you rent, you pay for a roof over your head and that's it. When you buy, you pay for a roof over your head, you pay a bank for the privilege of borrowing money, you pay property taxes to the government, and you pay any and every maintenance fee associated with the upkeep of your house

The Joneses are Crazy - just because the Joneses own a home, it doesn't mean you should too. The Joneses may look cool, calm, and collected on the outside, but chances are they cry when they open their credit card and mortgage bills and are so overextended that the idea of being debt free is laughable.

Real Estate is a Terrible Investment - Unless you are able to pay for a home in cash (no loans), real estate is a terrible investment. Repeat. Your house is not an investment vehicle. Not anymore. Nowadays, it's just a dead asset.

Selling is More Profitable Than Renting - Unless you live in a rural area or an area where prices haven't been affected by the bubble, you will probably not make enough money in rental income to pay the mortgage payment and cover the hassles that come with being a landlord.

The Market is Cooling - Home sales are slowing, foreclosures are rising, and inventory is growing. Bottom line, the market is getting colder, not hotter. If you are waiting for buyer interest to get to the level it was a few years ago, you will be waiting a long time indeed. Your best bet will be to sell now and take what you can get before the competition gets worse than it already is.

Home Values Will Plummet - Home prices couldn't be more disconnected from fundamentals. In many areas, individuals who make the median income can't afford a median priced home. For this reason alone, current home prices cannot be sustained. Experts are predicting price drops of 25 to 60 percent in large areas.

Because Japan Says So - After home prices doubled nationally and tripled in Japan's largest cities, they fell sharply to pre-boom levels. Homes in Tokyo lost as much as 80 percent of their value and to this day the country is still is still struggling with the aftermath of a housing induced recession.

Location is Irrelevant - Many people think that because they live in a desirable area that they will not be affected by falling home prices. This assumption is generally incorrect. If prices have reached an unsustainable height, they are going to fall regardless of how nice it is to live there.

Recession is in the Air - Talk of a recession is at near manic levels. If the market crashes (and it will) the U.S. will be tipped into a recession that rivals the one seen during the Great Depression era. Selling now ensures that you won't have to struggle with a mortgage payment later.

Consequences of Not Selling are Too Ghastly to Consider - If you don't sell now, you might not have the chance to walk away later. Once prices fall, you could lose your ability to refinance, to borrow from equity, and to sell for a profit (or to break even). If you are left owing more on your house than it is worth and find yourself unable to meet your mortgage obligations for any reason, you're stuck. The bank will take your house and you'll be left in the cold

Full article at efinancedirectory.com

Hat tip to HP

Subprime Derivatives Explained

Wed, 11 Jul 2007 00:00:00 +0000

Thanks to Housing Crash TV and HP

Construction Spending for May 2007

Fri, 29 Jun 2007 00:00:00 +0000

Census press release comes out today at 10am

Full article at census.gov

Construction Spending for April 2007

Thu, 31 May 2007 00:00:00 +0000

The report comes out today at 10 in the morning

Full article at census.gov

Video : Right Now

Tue, 29 May 2007 00:00:00 +0000

From http://www.longislandbubble.com/

Ow! Ouch! OMG!!!

Construction Spending for March 2007

Mon, 30 Apr 2007 00:00:00 +0000

The report comes out today at 10am

Full article at census.gov

Construction Spending for February 2007

Fri, 30 Mar 2007 00:00:00 +0000

The report from the Census comes out today at 10am

Full article at census.gov

Mortgage Brokers >= Used Car Salesmen

Mon, 19 Mar 2007 00:00:00 +0000

All you have to do is open up your spam (e-mail) bin and you see porn spam, and you see Viagra spam, and you see mortgage spam - mortgage brokers are well on their way to overtaking used car salesmen on the list of professions least trusted by consumers.

In the last three months of 2006, lenders began foreclosure proceedings on about one out of every 200 mortgages, the highest rate on records dating back 37 years, according to the Mortgage Bankers Association

Some 1.5 Million homeowners will face foreclosure this year, research firm RealtyTrac estimates.

An American dream has become an American nightmare

The quality of the loan has everything to do with this crisis

Among the biggest culprits were the so-called "2-28" loans that offered low interest rates and payments for the first two years, but then spiked up

We're not anti-subprime. There's a role for them. They're important. But these exotic, nontraditional mortgages that are designed to strip wealth need to be eliminated

This promise of home ownership starts to elude families that tried to buy a home, bought into a loan that they really couldn't afford, and once they foreclosed, the possibility of owning a home again is really, really limited

Full article at reuters.com

Housing Blogger Network

Wed, 07 Mar 2007 00:00:00 +0000

Housing Blogger Network

Our mission is of economic and financial prudence.

We are not anti-housing or apocalyptic soothsayers of the future, but realist that believe housing will adjust and revert to a historical mean.

We believe that housing needs to reflect the incomes of those living in the immediate area.

We believe that easy access to credit and negligence of those offering loans inflated the housing sector.

We are against exotic and ridiculous financing offered to minimum wage works so they can purchase $400,000 mega mansions or 800 square foot boxes in California.

We vow to continue blogging in 2007 and 2008 to offer guidance to newcomers that are just having their eyes open to the housing bubble.

We understand that housing is an emotional and economic issue and that buying a home is not always based on what is economically right, but also the psychology of the current market.

We take an oath against giving in to the propaganda machine that all debt is good and that all debt equals freedom.

As housing goes bust, lenders turn predatory

Wed, 07 Mar 2007 00:00:00 +0000

We created as much debt in housing in the last six years as we did in the prior 50. CONGRESS is gearing up for hearings on predatory lending, the latest chapter in its long history of barn-door-closings on already-departed horses.

During a bubble, be it in the stock market or real estate prices, we want the government to stay out of the way. The bust produces finger-pointing, congressional hearings and new regulations.

Last week, federal financial regulators, including the Federal Reserve, Office of the Controller of the Currency and the Federal Deposit Insurance Corp., proposed a series of guidelines "to address certain risks and emerging issues related to subprime mortgage lending practices, specifically, particular adjustable-rate mortgage (ARM) lending products."

Investors were irrationally exuberant at the same time lenders and brokers were given incentives - a big pay package - to get customers into subprime loans

Innovation may have made it easier to mislead, But the key driver was the willingness on the part of lenders and mortgage purchasers to take on high risk, which will turn out to be a big mistake.

The interest rates weren't high, the standards weren't tight, and access to credit was wide open.

The problems in the subprime market may be just the tip of the iceberg, given the depth and duration of the housing bubble - and the money tied up in it.

"We've created an unproductive asset," says Joe Carson, director of global economic research at AllianceBernstein. "A house doesn't produce income."

Full article at insidebayarea.com

Phoenix - Housing prices stand firm

Wed, 07 Mar 2007 00:00:00 +0000

according to Arizona State University's latest edition of the Arizona Blue Chip Economic Forecast, It may take sellers a little longer to close a deal on their homes, but odds are they're not going to be losing any money.

Although sales are down and inventories are up, home prices have not collapsed. The experts say it increasingly seems unlikely that home price declines, if any, will be very large in Arizona.

Local housing analysts estimate the Valley still has a six-month inventory of new homes to be sold. And there are more than 40,000 single-family resale homes on the market.

Full article at phoenix.bizjournals.com

Construction Spending for January 2007

Thu, 01 Mar 2007 00:00:00 +0000

Report comes out this morning at 10am

Full article at census.gov

It was not a housing bubble, but a housing souffle?

Sat, 24 Feb 2007 00:00:00 +0000

If some of the key ingredients in the souffle were missing, it would go flat. But it was not a bubble...

CALIFORNIA: some economists such as Sean Snaith, a consultant with the Stockton-based Business Forecasting Center at University of the Pacific, say the fallout from the housing slump, as well as the slump's extent, has been overplayed by economists

"It was not a housing bubble, but a housing souffle," Snaith said. "If some of the key ingredients in the souffle were missing, it would go flat. But it was not a bubble."

Snaith argues that the housing market in California and the East Bay has actually been more resilient than some forecasters believe.

And the East Bay itself, along with the nation, has not careened into a recession because of the housing market's struggles. Snaith pointed to strong total economic growth in the fourth quarter for the nation, continued employment gains in California, and the East Bay's reaching a record number of payroll jobs in 2006.

"The East Bay and California are not one-trick ponies," Snaith said. "It is not just housing, housing and more housing for those regions. They both have very diversified economies."

Full article at thereporter.com

The souffle quote is from the bottom of the article

Shifting Housing Market Snubs Bad Credit

Sat, 24 Feb 2007 00:00:00 +0000

Homeowners with troubled credit histories are finding it 20 credit score points harder to get mortgages or refinance homes because softening in the housing market is making lenders less likely to handle riskier loans.

Several lenders of subprime mortgages have shown signs of trouble after the housing bubble popped and more homeowners began defaulting high-interest mortgages.

Subprime lender Novastar Financial Inc. set aside $45 million in anticipation of defaulting mortgages and said they were unsure Novastar would turn a profit in the next five years.

The shifting market is prompting investors to demand higher standards for loan approvals. Loans for 100 percent of a property's value required a minimum credit score of 580 last year, but now require at least a 600 score

A high-value loan with no income verification could be had last year with a credit score of 620 a year ago but now needs a minimum score of 640

Full article at news.moneycentral.msn.com

Although consumers with low credit scores will find it harder to get mortgages, they will still have some options "There's still a saturation of lenders still out there lending in the subprime market"