Lawrence Yun traveled to Denver and spouted more nonsense. The
Denver Post reports that:
“The subprime-mortgage crisis already is a thing of the past and should not affect the housing market going forward, Yun said. ‘The subprime mess is a Wall Street mess,’ Yun said. ‘They made a huge gamble, and they lost. Subprime is a past event that’s unrelated to homebuying.’”
The subprime mortgage crises is NOT a thing of the past. It is still very much a part of the housing market as over 250 billions dollars of subprime mortgages reset in the next couple of years (see chart below). Yun is a subprime economist and has lost his credibility.
Posts
Well, he's right. What I hear him saying is, the sub-prime mortgage doesn't exist anymore. The mortgage industry has re-adjusted to the new paradigm and it's time to move forward. Interest rates are still quite low so, if you qualify, you can do quite well in terms of loan costs.
ReplyDeleteHowever it seems in my area (Fredericksburg, VA) sellers are still desperately holding on. I predict that once the "Spring Buying Season" turns out to be a huge bust, they may come to their senses.
He also said that Denver shouldn't worry about national housing statistics as it's not relevant and that all real estate is local. Yet, he said the same thing in Baltimore last week. My guess is he's using that line everywhere he goes.... Yun, doesn't there have to be at least one place where their local housing slump is at least as bad as the national slump?
ReplyDeleteProblem is, things are as bad in Denver as anywhere. I don't think they really want to look at the local numbers.
Economist?
ReplyDeleteShouldn't the term be e-CON-omist?
(Yun the Con man for the NAR)
New comic book villian-
CON-nan the NARbarian
ConYun the Narbarian.
ReplyDeleteWe're all subprime now
ReplyDeleteI see a great future for Yun as a lobbyist for, say, the illegal waste disposal industry.
http://tinyurl.com/28xv37
ReplyDeletemoney, money, money...
ReplyDeletewhere do you come from, where do you go
http://video.google.com/videoplay?docid=-9050474362583451279
DC rental vacancy is at the highest since 1996. Rents are going up 1.8% per year and...
ReplyDelete"Despite our generally positive outlook on demand returning to historical norms, the ever-increasing pipeline of product leads us to expect vacancy rates to creep upward over our three-year forecast," the Delta report said.
In other words, no big rental increases for at least three years.
http://www.washingtonpost.com/wp-dyn/content/article/2008/01/18/AR2008011801829.html
just in case, I broke up the url:
http://www.washingtonpost.com/
wp-dyn/content/article/2008/
01/18/AR2008011801829.html
"The renters seem to feel right now that it's a renter's market," she said. "It's more competitive. People want more for less."
Considering how much supply is on the market, its a non-issue for renters. They know any vacancy rate above 2.5% is a renter's market. As noted in the article:
Of course, she said, it didn't hurt that plenty of landlords were offering concessions like free rent and discounts on monthly payments.
This is what happens when such a huge quantity of surplus supply hits the market quickly. Every part of the market is weak. DC is one of the most overbuilt markets in the nation. Oh, not as bad as Florida, Phoenix, Sacramento, or Las Vegas. But its worse than most markets.
Three years of surplus renting inventory... :)
Got popcorn?
Neil
In regards to money, money, money...
ReplyDeleteUnfortunately, the person who made that video doesn't understand fractional reserve banking. The expansion can only go 10:1. They can't immediately loan out $1000 on an initial $100 investment. They can only loan out $90. You must repeat over and over to get the 10:1.
That's a lot of work for someone who doesn't understand what they're talking about.
I am not sure what he is really thinking here. I want to believe he is just trying to make a name for himself by prophesying (in accurately in my mind), but to think that the impact is just wall street focused is absurd. Look at most people's 401ks and other securities investments. most are down and it is not because oil prices are at $90. When people's investments are down, they stop spending. A retraction in spending (big ticket or small ticket items) puts a strain on the economy.
ReplyDeleteSubprime is not just a Wall Street issue.
- Open House
That's a terrific -- and frightening -- chart about the resets. One question, though: what's meant by "agency," the type of loan shaded in gray?
ReplyDeleteYun should of gone to ASF in Las Vegas to find out how willing Wall Street is to fund loans. He would change his tone real quick if he understood anything about the affects subprime and Alt-A are having funding even for prime loans. Basically the guy is a cheerleader and should be held accountable for the rubbish coming out of his mouth.
ReplyDelete