Housing Thread...5/26/09 - Case-shiller down another 2.1 percent, no bottom yet

[alchemize]

It's official, our idiot overlords in Washington took out the one possible way of stimulating the REAL housing market, you know the one where people with real jobs buy houses they can afford with down payments of real money. Here's to the next two years of forclosure dominating housing...

Working to accommodate the new, lower overall limit of the bill, negotiators effectively wiped out a Senate-passed provision for a new $15,000 tax credit to defray the cost of buying a home, these officials said. The agreement would allow taxpayers to deduct the sales tax paid on new car purchases, but not the interest on loans for the same vehicles.

 

[Pneumothorax]

CHANGE you can believe in lol! ReiPelosi probably took it out since it was a republican idea lol. Zealots can't stand a good idea coming from the other side. Most likely Pelosi wanted to add in some more liberal spending and threw out the $15K tax credit to help pay for it.

 

[BoberFett]

Sure, I'd like a free $15K, but in the grand scheme of things it's better not to prop up the ridiculously overpriced housing market.

Not that propping up the auto industry is any more worthwhile, but whatever. I'll gonna kick back and watch the collapse while drinking a cold beer.

 

[alchemize]

Can't find the link on NAR, but here's the article link.

Home prices in record plunge
National Association of Realtors reports that home prices dropped a record 12.4% in 2008 - the biggest fall in 30 years.

Whee! Let's ride this forclosure based market to the end, but we'll have green government buildings and state medicaid will be funded!

 

[Slew Foot]

cheap housing is good for everyone. it frees up money for indiiduals to spend on more consumer goods rather thanbeing slaves to a bank. Instead the govt would rather prop up prices and keep douchbags in houses they cant afford

 

[Xavier434]

Originally posted by: Slew Foot
cheap housing is good for everyone. it frees up money for indiiduals to spend on more consumer goods rather thanbeing slaves to a bank. Instead the govt would rather prop up prices and keep douchbags in houses they cant afford

Cheap housing is a good thing, but you need to ask yourself what the price is for that cheap housing and what exactly is going to stop it from dropping too low to the point where it damages so many other parts of our econ and it takes us a ridiculous amount of time to recover?

It is not going to prop up prices. It will hopefully end uncontrollable amounts of deflation though. Also, no one is going to get into a house they cannot afford. The banks are doing a great job seeing to that. Too good in a lot of cases. Those that are already in a position where they cannot make payments because they are truly irresponsible will be booted regardless of this bill and rightfully so. Those that are in that same position as a result of being laid off and unable to find adequate employment to keep the house will hopefully be helped enough until the econ recovers and they get regular employment again.

 

[BarneyFife]

It doesn't really matter anyway because prices will just drop that 10%.

 

[StageLeft]

The banks are doing a great job seeing to that.

Well, somebody isn't. APparently 58% or something like that of loans that were adjusted last year for bum-borrowers are back in a default situation already.

 

[Xavier434]

Originally posted by: Skoorb

The banks are doing a great job seeing to that.

Well, somebody isn't. APparently 58% or something like that of loans that were adjusted last year for bum-borrowers are back in a default situation already.

What I mean is that banks are not loaning to people right now unless they have some great credit and good amounts of cash. In addition, they are being really serious about demanding proof when it comes to paper trails of all cash involved when it comes to pre-approvals, approvals, downpayments, closing costs, taxes, etc. I am going through it all right now. It is quite insane. I do like how detail oriented they are being, but I also think that some of their rules are so tight that they are shooting themselves in the foot. They are turning down many more very fiscally responsible people with money than they should. That is why there is talk about them loosening up just a little right now. Doing so will both help them and the country without repeating past mistakes.

 

[StageLeft]

OK apparently it is now an $8000 refundable credit. Silly, of course, but that's what it is:

Link

 

[alchemize]

Originally posted by: Skoorb
OK apparently it is now an $8000 refundable credit. Silly, of course, but that's what it is:

Link

And only for first time home buyers.

Of course, we're wingnuts for not thinking that AMT stalling, green government buildings and funding medicaid for states won't help the economy more

In other news, housing starts continue to swirl down the toilet. This is necessary to deplete inventory, but shows that we're still not at any bottom. Of course, there is a bottom - zero housing starts

Pretty picture.

 

[Xavier434]

Originally posted by: alchemize

Originally posted by: Skoorb
OK apparently it is now an $8000 refundable credit. Silly, of course, but that's what it is:

Link

And only for first time home buyers.

Of course, we're wingnuts for not thinking that AMT stalling, green government buildings and funding medicaid for states won't help the economy more

In other news, housing starts continue to swirl down the toilet. This is necessary to deplete inventory, but shows that we're still not at any bottom. Of course, there is a bottom - zero housing starts

Pretty picture.

They are calling it "first time home buyers" but honestly that really isn't a good term because there are tons of people who are far from being first time home buyers that qualify. Anyone who has not purchased a home in the last 3 years qualifies as a first time home buyer as it is defined in this law.

What it doesn't do is help those who are unable to come up with the money up front to close which is a shame although I am already hearing about some banks offering deals where you sign a contract of some sort that basically acts as a loan for down/closing and isrequired to be paid back using this tax incentive. That should help. A lot of other people will be able to get gifts easier too since they are ensured to be able to pay them back. Then there are those like me who will both be paying gifts back and using the remaining funds to pay for repairs, furniture, appliances, and other various upgrades to the home I am getting. All of which circulates cash and stimulates the econ.

The other potential issue is the income cap. I am uncertain about whether or not that is a good thing. I mean, generally speaking the purchasing of homes and circulation of money is good no matter how much one makes so at the surface it would appear that a cap only harms us. However, I am curious as to the other side of the story. They did not add that in there "just because". There is a reason and even if flawed I would like to know what that reason is.

 

[dullard]

I realize that I'm slacking on the housing threads. So, I guess thanks for starting a new one. I'll keep updating my graphs here.

The number of homes started is bad, but the number of new homes sold is dismal. The new homes sold has dropped almost perfectly linearly since mid-2005 until now. If it keeps dropping at that rate, there will be ZERO new homes sold in Feb 2010. That is only a year away. The new home market has virtually vanished. With existing home prices falling below the cost to build new, this whole sector of the economy may be gone for quite some time. Note: that does help stop the bleeding of existing home sales though.

The other potential issue is the income cap. I am uncertain about whether or not that is a good thing. I mean, generally speaking the purchasing of homes and circulation of money is good no matter how much one makes so at the surface it would appear that a cap only harms us. However, I am curious as to the other side of the story. They did not add that in there "just because". There is a reason and even if flawed I would like to know what that reason is.

There is limited budget for stimulus. Giving $8k to Warren Buffet won't do a thing to persuade him to buy a house. So, that would be wasted stimulus money. First, he won't change his house for $8k and second, even if he did, buying one house would put his current house on the market and the housing glut won't be affected. Giving money to people to ENTER the market and giving it to people who would be swayed by money is the greatest way to solve both problems with limited funds.

 

[Slew Foot]

Originally posted by: dullard
I realize that I'm slacking on the housing threads. So, I guess thanks for starting a new one. I'll keep updating my graphs here.

The number of homes started is bad, but the number of new homes sold is dismal. The new homes sold has dropped almost perfectly linearly since mid-2005 until now. If it keeps dropping at that rate, there will be ZERO new homes sold in Feb 2010. That is only a year away. The new home market has virtually vanished.

No one wants a home that people wont bargain on, if its not a bargain priced foreclosure, its probably not moving.

 

[StageLeft]

What it doesn't do is help those who are unable to come up with the money up front

If the idea is that homes will no longer be given to people who cannot pay for them, perhaps this should be a litmus test; if a person cannot pay their closing, at the very least, no home. I mean, that should really be the least of their worries if considering a big purchase like this.

 

[alchemize]

I like to read the mortgage rates blog, this guy is super tied into housing and the economics around it. Some good news today...

http://www.mortgagenewsdaily.com/mortgage_rates/blog/

Yesterday we got the details on the Obama Administration's Plan to save the housing market. The initial reaction was expectantly downbeat considering the opening verbiage of the Treasury press release was....

"The Obama Administration today announced new US Department of the Treasury guidelines to enable SERVICERS to begin modifications of eligible mortgages under the Administration's Homeowner Affordability and Stability Plan."

We all know that loan mods will serve no benefit to mortgage bankers and brokers, so the initially angry reaction to the Housing Plan was quite warranted. But Fannie Mae came to your rescue late in the day with Announcement 09-04 : Home Affordable Refinance- New Refinance Options for Existing Fannie Mae Loans...

Besides that there are some AWESOME concessions made by Fannie Mae with this program. No credit score requirement, any occupancy type, reduced LLPAs (yes that pesky 75-01 to 80 adjustment was reigned in), no CLTV ceiling, no limit on multiple mortgages, document waivers, appraisal waivers, limited cash out is acceptable, no seasoning, NO CONDO PROJECT REVIEW, manual underwrites of "enhanced guidelines"...this program is aggressive.

ELIGIBILTY MATRIX

So we will be seeing the slowing of "up in coupon". This will make the MBS market more nervous of prepays and will push market participants away from the fuller side of the stack. If this bias can stick and the mortgage market "stars align" then your pipelines should be filled with new apps.

RIGHT NOW I am writing my full analysis of DU REFI PLUS and will post this afternoon. For now get your undies unwaded and dig deep into these underwriting guidelines. This program will be your portal to participation in the Housing Recovery.

Cheer up things arent looking so bad for us....

 

[Ozoned]

Originally posted by: alchemize


Besides that there are some AWESOME concessions made by Fannie Mae with this program. No credit score requirement, any occupancy type, reduced LLPAs (yes that pesky 75-01 to 80 adjustment was reigned in), no CLTV ceiling, no limit on multiple mortgages, document waivers, appraisal waivers, limited cash out is acceptable, no seasoning, NO CONDO PROJECT REVIEW, manual underwrites of "enhanced guidelines"...this program is aggressive.

To encourage participation, servicers will be paid $1,000 for each modification and will get an additional $1,000 payout each year for as many as three years, as long as the borrower continues making payments. Borrowers, meanwhile, can get up to $1,000 knocked off the principal of their loan each year for as many as five years if they make their payments on time. Neither party can receive the cash incentives until the modified loan payments have been made for at least three months.

:shocked:

 

[bobcpg]

Originally posted by: Ozoned

Originally posted by: alchemize


Besides that there are some AWESOME concessions made by Fannie Mae with this program. No credit score requirement, any occupancy type, reduced LLPAs (yes that pesky 75-01 to 80 adjustment was reigned in), no CLTV ceiling, no limit on multiple mortgages, document waivers, appraisal waivers, limited cash out is acceptable, no seasoning, NO CONDO PROJECT REVIEW, manual underwrites of "enhanced guidelines"...this program is aggressive.

To encourage participation, servicers will be paid $1,000 for each modification and will get an additional $1,000 payout each year for as many as three years, as long as the borrower continues making payments. Borrowers, meanwhile, can get up to $1,000 knocked off the principal of their loan each year for as many as five years if they make their payments on time. Neither party can receive the cash incentives until the modified loan payments have been made for at least three months.

:shocked:

NOW WE ARE PAYING PEOPLE TO MAKE THEIR MORTGAGES, MY GOD THIS HAS GOT TO STOP!

 

[alchemize]

Modest bump upwards this month in existing home sales. All this price pressure is bringing out some bargain shoppers I think, plus the ultra-low mortgage rates is making people think about buying. Dead cat bounce or bottom?

Recovery for housing is the theme of February's existing home sales report that shows a 5.1 percent month-to-month gain for a year-on-year rate that is showing significant improvement at -4.6 percent. Prices even firmed, up 0.4 percent in the month to a median $165,400 for a year-on-year rate that however continues to slide, now at -14.8 percent. Supply on the market is steady on a sales-adjusted basis, at 9.7 months.

The report is upbeat saying the effects of government programs could start appearing in three to five months and could add 1 million resales in the year. It also noted surprising strength in Southern California. The report said the housing recovery may prove to be V-shaped, an outlook that today's report points to. Good news on the housing sector is rare and today's report is likely to raise demand for investment risk. Stocks moved higher in immediate reaction to the data.

 

[dullard]

Originally posted by: alchemize
Modest bump upwards this month in existing home sales. All this price pressure is bringing out some bargain shoppers I think, plus the ultra-low mortgage rates is making people think about buying. Dead cat bounce or bottom?

I sure hope it is a bottom since I'm putting my house on the market next month.

This month so far has shown some signs of life in the housing market. Existing home sales are up from last month, existing prices are up (very slightly) from last month, Housing starts are up from last month, builder's confidence stopped falling, and on Wednesday I expect the release of March new home sales to be up from last month. Also, most government plans are all kicking in this month, some with very good incentives.

That said, all of those statistics are still significantly worse than last year and are right near their all-time or at least recent lows. I'm not going to call the bottom until we see at least a couple more months of positive news. It really did look like we hit a bottom in July 2006 and Sept 2007, but those bottoms both caved.

 

[StageLeft]

IF you want a negative interpretation of this figure, click this

The short form of the explanation for the rising prices in California in terms of "average resale" is extremely bad; foreclosures are now moving "up-market" - that is, having cleaned out all the "Starter Homes" we're now seeing the middle-market and higher homes go into foreclosure and as a consequence this "improvement" is actually a marker for severe distress in the broader economy in California.

 

[alchemize]

Existing Home Sales Up: NAR Says Buy Now
Fucking realtors..."look at the lovely fixtures" :roll:

Chicago now getting spanked.

Existing home sales in Chicago plunged 40.4 percent in February from a year earlier, and the median price dropped 24.7 percent, the Illinois Association of Realtors said Monday.

There were 841 homes sold, down from 1,412 in February 2008 and from 1,667 in February 2007. Prices fell to $218,250 from $290,000 in February 2008.

In the Chicago metropolitan area, sales dropped 28.8 percent to 3,082 homes from 4,326 in February 2008. Prices dropped 23.5 percent to $183,625 from $240,000 in February 2008.

My wife is in love with this McMansion
Sold for $611K, now they can't even get $490K for it, keep cutting, it's not selling...

 

[eleison]

Originally posted by: alchemize
Existing Home Sales Up: NAR Says Buy Now
Fucking realtors..."look at the lovely fixtures" :roll:

Chicago now getting spanked.

Existing home sales in Chicago plunged 40.4 percent in February from a year earlier, and the median price dropped 24.7 percent, the Illinois Association of Realtors said Monday.

There were 841 homes sold, down from 1,412 in February 2008 and from 1,667 in February 2007. Prices fell to $218,250 from $290,000 in February 2008.

In the Chicago metropolitan area, sales dropped 28.8 percent to 3,082 homes from 4,326 in February 2008. Prices dropped 23.5 percent to $183,625 from $240,000 in February 2008.

My wife is in love with this McMansion
Sold for $611K, now they can't even get $490K for it, keep cutting, it's not selling...

Wow that's close to 70k drop... I bought my home for 200k right by the lake around 2001. I wonder how much its worth now. Hopefully, its still worth something

 

[Slew Foot]

Originally posted by: eleison

Originally posted by: alchemize
Existing Home Sales Up: NAR Says Buy Now
Fucking realtors..."look at the lovely fixtures" :roll:

Chicago now getting spanked.

Existing home sales in Chicago plunged 40.4 percent in February from a year earlier, and the median price dropped 24.7 percent, the Illinois Association of Realtors said Monday.

There were 841 homes sold, down from 1,412 in February 2008 and from 1,667 in February 2007. Prices fell to $218,250 from $290,000 in February 2008.

In the Chicago metropolitan area, sales dropped 28.8 percent to 3,082 homes from 4,326 in February 2008. Prices dropped 23.5 percent to $183,625 from $240,000 in February 2008.

My wife is in love with this McMansion
Sold for $611K, now they can't even get $490K for it, keep cutting, it's not selling...

Wow that's close to 70k drop... I bought my home for 200k right by the lake around 2001. I wonder how much its worth now. Hopefully, its still worth something

611K-->490K /= 70K ?

POS cardboard bombed out shitboxes are still over half million in the bay area.

http://www.redfin.com/CA/Palo-...-Ave-94301/home/588339

http://www.redfin.com/CA/Redwo...Ave-94063/home/1973998

 

[BoberFett]

Well, your wife does have good taste. That's a great looking place. Love the open space.