Friday, August 31, 2007
He plans to announce a variety of measures in the Rose Garden on Friday morning that are designed to help struggling homeowners with subprime mortgages avoid foreclosure and will declare that lending practices need to be tightened, according to administration aides.
Bush will make clear, as he has in the past, that he does not plan to support a bailout for struggling mortgage lenders. But a senior administration official said aides are studying the possibility of “a broader federal role” in regulating mortgage brokers and originators." ( Politico 8/31/07)
Thursday, August 30, 2007
An example of the price declines over the past two years:
4610 HUMMINGBIRD WAY #97
FAIRFAX, VA 22033
List Price: $424,000
Prior Sale: $486,838 07/01/2005
Listing Date: 08/20/07 -12.9%
Courtesy of: Nova Fallout Blog
According to the the S&P/Case-Shiller Home Price Index the metropolitan Washington area experienced a 7% price decline from June 2006 through June 2007 level.
According to the Housing Tracker website the median price for listings in the Washington, DC area has fallen 11.1% from August 2006.
The pullback in the U.S. residential real-estate market is showing no signs of slowing down," said Robert Shiller, chief economist at MacroMarkets LLC, which computes the price index for S&P. (MarketWatch 8/28/07) The Washington, DC area will continue to see real dollar price declines for the remainder of 2007 and throughout 2008.
Wednesday, August 29, 2007
It is heartening to know that Mr. Lereah now admits that he was wrong. Notice how even though he admits his mistake, he is still busy pointing out that some of the bubbleheads (aka realists) were also wrong.
Perhaps the most prominent housing booster was David Lereah, the chief economist at the National Association of Realtors until April. In 2005, he published a book titled, “Are You Missing the Real Estate Boom?” In 2006, it was updated and rereleased as “Why the Real Estate Boom Will Not Bust.” This year, Mr. Lereah published a new book, “All Real Estate Is Local.”
In an interview, Mr. Lereah, now an executive at Move Inc., which operates a real estate Web site, acknowledged he had gotten it wrong, saying he did not fully realize how loose lending standards had become and how quickly they would tighten up again this summer. But he argued that many of his critics have also been proved wrong, because they were bearish as early as 2002.
“The bears were bears way too early, and the bulls were bulls too late,” he said. “You need to know when you are straying from fundamentals. It’s hard, when you are in the middle of the storm, to know.”
Monday, August 20, 2007
“One of mortgage planner Robert French’s clients, who earns about $700,000 a year and has a high credit score, was recently unable to get a stated-income mortgage. These loans became popular during the housing boom because it does not require borrowers to provide a copy of their W-2 tax form to the lender.”
“Stated-income loans, French said, are ‘just disappearing.’” (Boston Globe)
Oh! I wish it would!
Friday, August 17, 2007
Words of wisdom form Anonymous Poster on Hounsing Panic:
"Good God, Americans are so in debt that they can not afford for the nation to get back to normal interest rates, which is around 8%. The interest rates were lowered to the Eisenhowner era for debtors to go on a borrowing party to forget 911 and stimulate the economy. (Seems we may be following the path of Japan, 17 years of real estate declines in a nation where there is no more land.) The present American economy is not stable and looks more like a crack addict having withdraw symptoms, from easily borrowed money. "
Exactly. Do you see the runs on money at Countrywide Financial today? Where is Mozillo? Will he slither into hiding?
Thursday, August 16, 2007
"Countrywide Financial Corp. said Thursday it made the move amid a credit crunch that has driven a number of its smaller peers to bankruptcy." (AP News 8/16/07)
Will Countrywide go into bankruptcy like many of its former competitors?
Monday, August 13, 2007
"Art Godi, 71, a longtime Stockton real estate agent and the former president of the National Association of Realtors. When the housing market was hot a couple of years ago, Mr. Godi said, house prices here were increasing 20 percent a year. Now, he said, the prices are falling as much as 10 percent to 12 percent a year. " (NYTimes 8/13/07)
Real prices as well as nominal prices will continue to decline in most bubble markets for many more years. Prices declines in the bubble markets are very likely to vary between 20% - 65% in real dollars (inflation adjusted) from peak to bottom (it may take up to 8 years).