Griz

O.C. Housing Market: Sales Are Booming, Prices Are Not

If "50% price reduction in some markets" is not a free-fall, then I don't know what is. An interim burst of foreclosure-clearing activity does not constitute the bottom… probably just a clearing rally. Three things that will push prices down on the middle/upper end homes (i.e. the ones we've been waiting to buy): 1) Mounting job losses which will accelerate after the new year, 2) realtors have just about burnt through their cash reserves amassed in 2006-2007 and 3) a MASSIVE wave of Alt-A resets on the 3-27 and 5-25 products used extensively to purchase the mid-upper end homes, which will be peaking in 2009. Let’s not even talk about the long-wave impact of boomer’s retirement and their need to liquidate assets. All-in-all I think nominal prices will continue to fall until mid 2011 and will remain flat in real terms until the next bubble comes along.

NAR Metropolitan Home Sales Report: California Sees Largest Q3 Decline

What???! "stem the declines"? Don't you mean retard pricing from returning to normalcy? How about, keep assets artifically inflated? Or even, keep the myth of home equity induced wealth effect alive. We are finally seeing the largest global asset class let it's bloated air out. All fair valueists rejoice because the great wealth redistrubution from the haves to the have-nots is upon us.

Solve the Housing Crisis by Rewarding the Prudent

All of these "save housing" ideas are attempting to keep housing prices up which is wrong. Housing VALUE never really increased... price increases caused people to beleive there is more value in homes than they were worth. It was all a figment of you homeowner's imagination. The prices TEMPORARILY bloated and now are letting out gas. SSSSSSSSSSS, see that's the sound of your artificial wealth evaporating. As a matter of fact, anyone holing any type of asset is in deep do-do. Stocks, bonds, real estate, even gold; you name it, it all has been artifically inflated by excessive leverage in the system. As we deleverage (as last happened in the 1930's) asset prices, all assets will come down in value thus re-distributing wealth back to the people. So bring it on, keep your job if you can, and most importantly hold onto your cash (yes the dollar will probably survive for now) because the great global asset sale is about to happen and it'll be all at 90% off.

It Might Be Impossible to Stop the Decline of Housing Prices

I think we should ACCELERATE the decline in prices to stimulate more transactions. This should be done by re-directing some of the $700B to BUYERS and not sellers.

I have tried to do a short sale on the home we are renting but the bank will not come down to accept our offer (yes, it is an insulting lowball, but what the heck). My Realtor said that very few of these deals have been getting done so far because the bank doesn't want to "set a precedent" of accepting a lower price and causing market values to decline further (besides being very difficult to find out who actually owns the mortgage). I now think the $700B is actually just helping the banks to hold-out longer and delay the pain of getting this ever-growing inventory of homes off of their books.

If instead of bailing out existing homeowners (who inherently took on risk by investing, yes investing, in a home purchase), the banks are directed to use some of the $700B to pay for low-ball short sale purchases (as in the example above of helping yours truly out) wouldn't this cause things to start moving again?? We would accomplish the mission of encouraging more home ownership (as our house is going to the bank and will sit vacant anyway), and will generate more revenue for states and local economies as transaction volumes pick-up again.

See, I think everyone has been beating around the bush, proposing ideas that would help out the country when what they are really covertly proposing are solutions that are in their own best interest (typically existing homeowners looking to get bailed-out or stop asset price deflation, as in the case of my landlord). I instead am coming right out and suggesting a proposal that would benefit me. Yup, there it is, right out there for all to see... GIVE MONEY TO THOSE WHO WERE RISK-AVERSE INSTEAD OF THE RISK-TAKERS.

P.S. In addition to waiting for property values to hit 66% decline here in So Cal, I'm in 100% cash waiting for my Dow 5,000 entry-point too :)

The Shallowest Generation

An interesting tale comes to mind: Would you rather die owning a million or oweing a million? I think I've had it wrong all of my life by living within my means... I'm going to go run-up as much debt as I possibly can and then just squat in my house for a couple of years before they even can find me :)

John Berry: Homebuying Binge on East Coast, Too

I just can't wait to pick-up a $1M home (at 2007 valuation levels) in the OC for $350K, what it truely should be worth. As de-leveraging across all asset classes accelerates, Sept's foreclosure clearance sale will be regarded as a premature stop on our way all the way down to bottom (i.e. 2/3 reduction of housing values from peak to trough).

Is the Dow's Worst Yet to Come?

In 1930, after already losing 35% of it's value, many pundits were commenting on the Dow saying: "but this market has become very "investable" for those with a 10 year horizon"; the Dow promptly lost 80% of it's value from that point as it sank to it's depths of June 1932...

Please Close the Markets

Only thing that I'm scared of as I sit here gleefully getting in and out of put contracts on various ETF's, is that the gov't takes back the cash I have on the sidelines in CD's. I have been very quick to mop up all loose cash before the "Force Majeure" sets in because I believe (possibly foolishly) that these vehicles will be protected.

At some point the only thing left that really has value might be some farmland in Indiana...

Our Coming Depression

James Quinn your words are right on the money.

Hedging Your House Redux

I think the S&P Case Schiller Index futures are way too optimistic. I would buy a large position in the DMM as our bloated US housing asset further comes down to reality (far exceeding current futures expectations).

Home Prices See Record Declines in July

Ok, so I'll call the bottom: We're about halfway there.

Case-Shiller: U.S. Home Prices Slide, But More Slowly

How can accelerating year-over-year declines be construed as: "U.S. Home Prices Slide, But More Slowly" This is clearly a misleading title that even David Lareah would be proud of. The "stabilization" that we are seeing is the Spring/Summer seasonality effect where price declines appear to level off but as soon as the Fall/Holiday season comes in the price declines will resume in earnest.

Get Ready For Renter Onslaught With iShares' NAREIT ETF

What?! It sound like there are still some clueless people out there who think that real estate (in any form) might actually a good investment. This was a wicked funny (ie. pathetic) article.

Paulson/Bernanke: $700 Billion at 'Hold to Maturity' Pricing

I can't believe what I am hearing… “Hold to maturity”? It’s almost like these hypocritical socio-capitalists are now turning on the very principle that they promoted so earnestly on the ride up. Do we now all of a sudden no longer have an efficient market? Are the markets only efficient in measuring asset price inflation? Can real estate only go up? Hold to maturity is a f#####g insult to anyone with 2nd-grade education. It is blindingly insulting that Bernanke would propose some new “valuation model” and expect the taxpayer to feel better about it. It is outright lying!!

Bernanke Gives Up on Reverse Auction Idea

I can't believe what I am hearing… “Hold to maturity”? It’s almost like these hypocritical socio-capitalists are now turning on the very principle that they promoted so earnestly on the ride up. Do we now all of a sudden no longer have an efficient market? Are the markets only efficient in measuring asset price inflation? Can real estate only go up? Hold to maturity is a f#####g insult to anyone with 2nd-grade education. It is blindingly insulting that Bernanke would propose some new “valuation model” and expect the taxpayer feel better about it. It is outright lying!!