Goldman Sachs' Take on the MBA Foreclosure Data

Earlier in the week Goldman Sachs (GS) commented on the MBA foreclosure data, and noted a few interesting tidbits:

If the "speculator states" of California, Florida, Arizona, and Nevada were excluded, then the national deliquency rate would have fallen, instead of showing a an annual rate of increase of 17%.

It noted a migration of credit problems from subprime to prime with exotic products getting the blame.

It also noted that it is bearish on the housing market seeing home prices 13% to 14% over-valued. Goldman is of the opinion that it could take "several" years for home prices to reach fair value.

It also indicates that the peak in subprime ARM resets won't occur until March of 2008, and resets on option ARMs won't reset until 2010!

It favors shorting originators like Countrywide (CFC), and Washington Mutual (WM).

Comments

[Real Estate...:]

If you are interested in the real picture of foreclosure property market in California, I have just published a California Home Foreclosure Market Statistics report that details the availability of foreclosure/distressed properties, home price movements, and housing inventory statistics by the different areas of California. For those who are interested to seek out these properties, this should give you some hints of where to find these properties.

- Henry
California Real Estate Search

2007 Sep 09 06:47 PM

[Joseph Sherman:]

It seems now that some markets near 40-50% overvalued in bubble markets.

Feb 19 09:19 PM

[Joseph Sherman:]

Consider money.cnn.com/gallerie...
which shows the 10 worst real-estate markets for 2009. Los Angeles, CA and Stockton, CA are down nearly 25%, and the market is still going down.

Feb 19 09:25 PM