swaps

Lennar Management: Housing Hasn't Yet Reached Bottom

No kidding, the housing melt down is not over yet.

I have seen a string of observers mostly say the mortgage mess is now maybe 40 percent over, with another 60 percent to go.

Last week it was reported on CNBC that observers just realized that about a third of the reported home "sales" were actually "foreclosures" meaning that sales are even worse than they statistically thought.

If you read Opdyke in the weekend syndicated Wall Street Journal today (we learn last week that he could not move to China to take a new job because he would have had to pay $4,800 a month rent there, plus carry his mortgage in Louisiana). He reports this week that his home is being kept on the market so he and Amy can downsize. Meanwhile, he notes that lower priced homes in his community are moving but his home listed among the higher priced ones are not. He says his home is priced right, but higher cost homes are just not moving. Do not know what overall percentage of the entire market is locked up in $400,000 plus homes, but the higher priced the home the more frozen it is right now in some markets, maybe many markets.

All the funny money lending that boosted the housing market will not come back for 20 years, until a new generation remembers.

I think this posting is correct in that it is not over. But I believe the wiped out consumers will not be able to fuel much of a recover when things stabilize either.