According to the article below (or click on title above) you can see that the "shadow inventory" we have been reporting is not only real, it's staggering. Banks are already sitting on close to 17 months worth of housing inventory THAT THEY HAVEN'T EVEN PUT ON THE MARKET YET!!! With defaults growing daily and not expected to peak until at least 2012 how much more shadow inventory is going to be created?
One report I read recently suggested that perhaps banks are accumulating this inventory to play a high stakes game of chicken with the US Government. There are currently very, very few banks who have the capital necessary to sell these properties and realize the losses that until now they have not had to acknowledge. If in fact banks are waiting for our politicians to bail them out yet again and somehow allow them to never have to realize these losses, who will ultimately pay for that? Whether the banks are bailed out or not, what will happen to prices as this shadow inventory is ultimately disposed of? Even an elementary understanding of the law of supply and demand would allow you to clearly understand that active supply on the market today is large enough to cause prices to continue to fall.
Couple all of this with rising unemployment, rising skepticism from potential buyers, rising interest rates (yes Toto, you will again see fixed rates in the 9-10% range and possibly much much higher,) a falling dollar, a continuing shrinkage in the availability of credit, the shadow inventory and the rapidly approaching demise of the commercial real estate market and you have a recipe for prices to fall, nationally, another 30%+ from today's current levels. The bottom, nationally will not occur before 2014, at the absolute earliest. Are you prepared? Would you like to be? Raise your hand, ask for help and I will contact you to discuss options, simply comment to this article with your contact info and I will be in touch.
http://www.businessinsider.com/chart-of-the-day-housing-overhang-2009-9?utm_source=Triggermail&utm_medium=email&utm_campaign=Clusterstock%20Chart%20Of%20The%20Day%2C%20Tuesday%2C%209%2F29%2F09
Thursday, October 8, 2009
Friday, September 18, 2009
How is rising unemployment good for real estate?
According to most politicians and The National Association of Realtors housing prices have hit a bottom, right?
And everyone knows that you can trust both politicians and Realtors, right?
So can someone explain to me how unemployment, which according to article below (cut and paste or click on title above) just rose in 42 states (isn't that most of them?) is good for housing prices???
Maybe you can explain to me how increasing unemployment rates will lead to fewer foreclosures?
Perhaps the fact that the number of people who have dropped out of the workforce and quit looking for employment growing will somehow help prices?
I also learned today that default rates on FHA loans is nearly 50% higher than non FHA loans. If FHA, and other government guaranteed loans now account for 80-90% of all loans in the country and we know that FHA buyers don't really have any "skin in the game," how likely is it that those defaults will not end in foreclosure?
I also learned that for the first time in it's 75 year history, FHA now is about to drop below it's required reserves for defaults. I wonder what that means for the future of foreclosures and housing prices???
Of course the politically appointed head of FHA said recently that "FHA will absolutely not require a tax payer bailout." That's probably true, right?
For many, many years I have been known as the "Dumb one" . . . that must be why I simply don't understand?!
http://finance.yahoo.com/news/42-states-lose-jobs-in-August-apf-1171568305.html?x=0&sec=topStories&pos=3&asset=&ccode=
And everyone knows that you can trust both politicians and Realtors, right?
So can someone explain to me how unemployment, which according to article below (cut and paste or click on title above) just rose in 42 states (isn't that most of them?) is good for housing prices???
Maybe you can explain to me how increasing unemployment rates will lead to fewer foreclosures?
Perhaps the fact that the number of people who have dropped out of the workforce and quit looking for employment growing will somehow help prices?
I also learned today that default rates on FHA loans is nearly 50% higher than non FHA loans. If FHA, and other government guaranteed loans now account for 80-90% of all loans in the country and we know that FHA buyers don't really have any "skin in the game," how likely is it that those defaults will not end in foreclosure?
I also learned that for the first time in it's 75 year history, FHA now is about to drop below it's required reserves for defaults. I wonder what that means for the future of foreclosures and housing prices???
Of course the politically appointed head of FHA said recently that "FHA will absolutely not require a tax payer bailout." That's probably true, right?
For many, many years I have been known as the "Dumb one" . . . that must be why I simply don't understand?!
http://finance.yahoo.com/news/42-states-lose-jobs-in-August-apf-1171568305.html?x=0&sec=topStories&pos=3&asset=&ccode=
Friday, September 11, 2009
Wake up and read this if you don't already know that the national real estate market is still at least 5 years from a bottom!!!
I just read where according to the head of Fannie Mae, 1 of every 25 homes in the US is currently in the foreclosure process, AND THE NUMBER OF FORECLOSURES WILL RISE FOR A FEW MORE YEARS!!!
As you have heard here and as I have been sharing for almost 5 years now, the largest wave of new defaults will begin in the 4Q 2011. How long will it take those defaults to turn into foreclosures? With today's smaller volume it is still almost 2 years from default until a property is foreclosed and comes back onto the market. IF lenders become more efficient and maintain that 2 year window with the higher volume (big IF!) that means that by 4Q 2013 we should see the maximum housing supply coming back into the marketplace. Assuming the government continues to use your tax dollars to encourage people with none of their own money invested to buy and demand stays at current levels (Probably will drop considerably) that would mean a market bottom would occur 6-12 months after the peak in supply, does that put us sometime late 2014? How many years from now is that? If we have thus far dropped 40% nationally since the peak 4 years ago, and we have 5 more years to go, how far down from today's levels is the bottom? Anyone want to bet that nationally housing prices have at least another 30%+ to go from today's levels before bottoming out? How about this bet, values in 2015 will be where they were, or lower, in 1998? Funny how no one ever wants to take those bets - hmmmm wonder what that says? Once we reach that bottom, do you expect people to rush back in or do you think they will be gun shy from the huge beatings they watched others take? Once we reach the bottom we will be flat for up to a decade, and then slowly (1-5%/yr) see an increase in prices. If you knew that prices peaked nationally in 1929 and didn't see those same levels again until 1954 (25 years later for those of you who are numerically challenged) and that correction from peak to bottom was less than one half of what we have seen already . . . how long do you think it will take to return to 2005/6 levels this time around?
I am sitting here in S California writing this and reading that over 50% of all mortgages in California in 2004 were interest only, many of which had 5 year resets at which time they may become fully amortized. I wonder what that means for the CA real estate market as those loans reset and payments increase significantly? Oh wait, what if there is no reset and only a refi option? Can those owners who have seen valuations drop drastically refi today? Uh no. They didn't qualify for a loan legitimately 5 years ago and damn sure don't qualify today! Buckle up CA you are in for a fun ride!
want more info, read the attached by clicking on title above or cut and pasting below
http://www.foreclosure-support.com/wp/foreclosure-homes/foreclosed-home-numbers-will-rise-due-to-interest-only-loans-09111007.html
As you have heard here and as I have been sharing for almost 5 years now, the largest wave of new defaults will begin in the 4Q 2011. How long will it take those defaults to turn into foreclosures? With today's smaller volume it is still almost 2 years from default until a property is foreclosed and comes back onto the market. IF lenders become more efficient and maintain that 2 year window with the higher volume (big IF!) that means that by 4Q 2013 we should see the maximum housing supply coming back into the marketplace. Assuming the government continues to use your tax dollars to encourage people with none of their own money invested to buy and demand stays at current levels (Probably will drop considerably) that would mean a market bottom would occur 6-12 months after the peak in supply, does that put us sometime late 2014? How many years from now is that? If we have thus far dropped 40% nationally since the peak 4 years ago, and we have 5 more years to go, how far down from today's levels is the bottom? Anyone want to bet that nationally housing prices have at least another 30%+ to go from today's levels before bottoming out? How about this bet, values in 2015 will be where they were, or lower, in 1998? Funny how no one ever wants to take those bets - hmmmm wonder what that says? Once we reach that bottom, do you expect people to rush back in or do you think they will be gun shy from the huge beatings they watched others take? Once we reach the bottom we will be flat for up to a decade, and then slowly (1-5%/yr) see an increase in prices. If you knew that prices peaked nationally in 1929 and didn't see those same levels again until 1954 (25 years later for those of you who are numerically challenged) and that correction from peak to bottom was less than one half of what we have seen already . . . how long do you think it will take to return to 2005/6 levels this time around?
I am sitting here in S California writing this and reading that over 50% of all mortgages in California in 2004 were interest only, many of which had 5 year resets at which time they may become fully amortized. I wonder what that means for the CA real estate market as those loans reset and payments increase significantly? Oh wait, what if there is no reset and only a refi option? Can those owners who have seen valuations drop drastically refi today? Uh no. They didn't qualify for a loan legitimately 5 years ago and damn sure don't qualify today! Buckle up CA you are in for a fun ride!
want more info, read the attached by clicking on title above or cut and pasting below
http://www.foreclosure-support.com/wp/foreclosure-homes/foreclosed-home-numbers-will-rise-due-to-interest-only-loans-09111007.html
Wednesday, September 9, 2009
Recession is over . . .
According to our government, the recession is over. Don't believe me? check out this article by clicking on title above or cut and pasting below . . .
http://finance.yahoo.com/news/Fed-survey-shows-US-recession-apf-3623088148.html?x=0
Think about it, we live in a country where our politicians agree to represent us and act in our best interest. So what they tell us must be real, valid, and accurate right? I mean come on, just because you know 100 people who are worse off financially today than they were 1,3 or even 5 years ago, for every 1 person you know who is better off, that doesn't really mean things aren't getting better . . . does it?
http://finance.yahoo.com/news/Fed-survey-shows-US-recession-apf-3623088148.html?x=0
Think about it, we live in a country where our politicians agree to represent us and act in our best interest. So what they tell us must be real, valid, and accurate right? I mean come on, just because you know 100 people who are worse off financially today than they were 1,3 or even 5 years ago, for every 1 person you know who is better off, that doesn't really mean things aren't getting better . . . does it?
Saturday, August 22, 2009
We're "Leveling Out?"
Well it looks like the recession is over or at least heading in that direction. Apparently there is no need to worry about a deeper recession and certainly not a Depression. We are out of the woods. Never mind the trillions of dollars of debt we have incurred over the past year as a country. Let’s just forget about the fact that companies all over the country are still closing their doors, unemployment continues to rise, and foreclosures are at an all time high. Forget about all that, we are safe! We are now moving towards more prosperity and better times. Well, of course, that is if you believe our Fed Chairman Ben Bernanke. If you believe the Washington Zealots and the special interests groups that helped put us in our current situation.
At a speech at the annual Fed conference (I wonder how much that cost us tax payers?!?) Bernanke says we are now “leveling out.” We are now seeing signs that growth is in the near future. On the surface this looks like great news. To the lay person this would give hope and reduce the pain and stress they have been enduring since the economy collapsed, but ask yourself this: is this type of news going to help or hurt our country in the near future? If people think we really are getting out of this economic disaster and the truth comes out that it’s still getting worse, could this actually hurt us more than help? What if the recession isn’t over, but that down the road we will experience hyper-inflation, further unemployment and a complete collapse of our dollar? If he is wrong, which I believe he is, couldn’t this further hurt the citizens of the Republic? If people believe good times are coming, is it reasonable to believe that they will lower their guard and not save, conserve and be frugal with their money and their spending habits? With these types of lies, could Ben Bernanke and our government be risking each citizen’s ability to prepare for an even worse economic disaster?
If you believe that this type of false information could further cripple the economy how can you help? How can you as an individual help and how can you structure your business to assist people in the future?
In the article, linked below, Bernanke gives no examples or evidence that the economy is on the rebound. He seems to forget that states like California and Michigan are virtually bankrupt. He seems to have amnesia about the idea that we have incurred trillions and trillions of dollars of debt just in the past 8 months. It also appears as though his brain cannot rationalize the dominion effect that results from business shutting down, employees being laid off and property being foreclosed. With less businesses operating, there will be less workers working causing more homes to be foreclosed. With this perpetual cycle showing no signs of restraint, do you honestly believe our Fed Chairman is telling the truth? As a quick side note, think about the impact Cap and Trade and adding 47 million more people to our health care system will have on our debt and our economy. With this administration it seems like they do and believe the opposite of what they say. Do you think these comments might be a distraction in order to boost the Obama Administrations objectives and popularity in the public?
http://www.foxnews.com/politics/2009/08/21/bernanke-economy-cusp-recovery/
At a speech at the annual Fed conference (I wonder how much that cost us tax payers?!?) Bernanke says we are now “leveling out.” We are now seeing signs that growth is in the near future. On the surface this looks like great news. To the lay person this would give hope and reduce the pain and stress they have been enduring since the economy collapsed, but ask yourself this: is this type of news going to help or hurt our country in the near future? If people think we really are getting out of this economic disaster and the truth comes out that it’s still getting worse, could this actually hurt us more than help? What if the recession isn’t over, but that down the road we will experience hyper-inflation, further unemployment and a complete collapse of our dollar? If he is wrong, which I believe he is, couldn’t this further hurt the citizens of the Republic? If people believe good times are coming, is it reasonable to believe that they will lower their guard and not save, conserve and be frugal with their money and their spending habits? With these types of lies, could Ben Bernanke and our government be risking each citizen’s ability to prepare for an even worse economic disaster?
If you believe that this type of false information could further cripple the economy how can you help? How can you as an individual help and how can you structure your business to assist people in the future?
In the article, linked below, Bernanke gives no examples or evidence that the economy is on the rebound. He seems to forget that states like California and Michigan are virtually bankrupt. He seems to have amnesia about the idea that we have incurred trillions and trillions of dollars of debt just in the past 8 months. It also appears as though his brain cannot rationalize the dominion effect that results from business shutting down, employees being laid off and property being foreclosed. With less businesses operating, there will be less workers working causing more homes to be foreclosed. With this perpetual cycle showing no signs of restraint, do you honestly believe our Fed Chairman is telling the truth? As a quick side note, think about the impact Cap and Trade and adding 47 million more people to our health care system will have on our debt and our economy. With this administration it seems like they do and believe the opposite of what they say. Do you think these comments might be a distraction in order to boost the Obama Administrations objectives and popularity in the public?
http://www.foxnews.com/politics/2009/08/21/bernanke-economy-cusp-recovery/
Friday, August 21, 2009
How about of dose of reality?
short thoughts on a big slap in the face . . .
Dow 6500 or lower by end of year
serious/major discussions of how to prop up the US dollar as it collapses by the end of the year
50% + of the US population ready to admit they are hurting and need help by the end of the year
anyone willing to wager that these predictions are wrong? let me know
click on title above or cut and paste below:
http://finance.yahoo.com/news/Is-This-Rally-The-Final-Kiss-etfguide-3572165417.html?x=0&sec=topStories&pos=5&asset=&ccode=
Dow 6500 or lower by end of year
serious/major discussions of how to prop up the US dollar as it collapses by the end of the year
50% + of the US population ready to admit they are hurting and need help by the end of the year
anyone willing to wager that these predictions are wrong? let me know
click on title above or cut and paste below:
http://finance.yahoo.com/news/Is-This-Rally-The-Final-Kiss-etfguide-3572165417.html?x=0&sec=topStories&pos=5&asset=&ccode=
Thursday, August 20, 2009
Dangers to our Economy
Is anyone concerned about what the media, the politicians and the average American are not currently focused on? Have any of you noticed that this month the debate is about Health Care Reform and last month it was about Cap and Trade and the month before that it revolved around Card Check? Have you noticed a trend that as we focus on what the flavor of the month may be, there is another government/media hand conducting business on another issue?
As we debate about Health Care Reform this month, don't forget about these other issues, as well as, topics that have yet to be deeply discussed. The Czars that the Obama Administration has chosen to run wild in our Republic add a scary element to this avalanche style government project to overhall our country.
Other big issues with huge implications for our future and our freedom include:
The regulation of conservative talk radio. If Obama's FCC Czar has his way he will require more frequent licensing renewals for radio stations and will require that more local and diverse parties share their views on the radio. The reason for this is obvious, where the "left" have a voice in the print media, the "right" have theirs' with the radio waves. If the government can silence their voice, people like Rush Limbaugh, Glenn Beck and Sean Hannity, what do you think they can do to you? How would they be able to regulate your freedoms, your "freedom" of speech, and your ability to earn an income and how can you protect against that government infiltration?
Another huge and very unknown threat to our freedoms is the current use of Shariah Law in our financial industry. Shariah Law, a law that governs the extremist of the Muslim faith allows for men to beat their wives, the stoning death of rape victims and the complete brutal rule of man over women. Shariah Law also requires that Muslims pay no interest on investments and requires any investment to fit their requirements under this law. That means, these investments can not include the pork industry, the alcohol industry and many other industries. The problem with this, is the fact that companies like HSBC, DowJones and others have hired a board of Muslim extremist, self proclaimed terrorist sympathizers and activits, to run and over see these investments. The money used in these investments is linked to terror groups all over the world and the more we allow Shariah Law to infilitrate our financial industry the more control these terrorists will have over our economy and ultimately our freedom. What do you think will happen to companies like HSBC and others the worse the ecomony gets? Will they reject these Muslim groups on the premise of what is moral and right, or will these greedy companies chase this money in order to make a buck in this struggling economy? Please also understand that state governments are starting to support this principle of allowing Sharia Law to dictate investing. In Minnesota, the government has authorized the use of "special" Shariah endorsed mortgages that allow Muslims to buy homes without paying interest. How scary? **important side note, the governor of Minnesota is Tim Pawlenty and he will probably run for president in 2012 for the Republicans. Can we really afford to have someone who supports this conduct to be our next president?
Other important issues, not including the Health Care debate is Cap and Tax, I mean Cap and Trade. Also Card Check, the desire for the government to reduce defense spending and the belief system of these Liberal Progressives. I strongly encourage you to read books, such as, Catastrophe by Dick Morris, American Progressivism by Ronald Pestritto, and most importantly the Declaration of Independence and the Constitution. Get to know your history, your rights, and what this Republic is all about. Be a voice and do not allow the corruption on both sides of the isle distract you from the truth and real issues that we face today. When the government is talking health care reform, or Cap and Trade, with their right hand look to see what their left hand is doing. See through the distraction, because if government truly wanted to create "change" they would not make everything so complicated.
Think about it. I can fit the entire Constitution and Declaration of Independence in my back pocket. The creation of our whole Republic, a very daunting and complicated task, can easily be read and understood in a matter of hours or at least days. Why? Was it because they were not articulate and educate or was it rather because they wanted every American to easily understand what freedoms and rights they had? Why do you think a single bill these days is over 1000 pages and 5 to 10 pounds in weight? If the two documents that provided our Freedom and Rights on Earth can be so simply written, why can't they all? Don't you think if the government truly cared about the people, they would simplify the process? And more importantly, are we as Americans and as the boss of these Congressmen and Senators going to continue to allow this to happen? I used to be a party guy, not a wild party animal but a supporter of the GOP, now I label myself as conservatively independent. I have chosen to support what is right and who follows the Constitution. Are you going to continue to be a "party" person or are you finally going to focus on what is best for the Republic regardless of which party or individual endorses or invents the idea?
As we debate about Health Care Reform this month, don't forget about these other issues, as well as, topics that have yet to be deeply discussed. The Czars that the Obama Administration has chosen to run wild in our Republic add a scary element to this avalanche style government project to overhall our country.
Other big issues with huge implications for our future and our freedom include:
The regulation of conservative talk radio. If Obama's FCC Czar has his way he will require more frequent licensing renewals for radio stations and will require that more local and diverse parties share their views on the radio. The reason for this is obvious, where the "left" have a voice in the print media, the "right" have theirs' with the radio waves. If the government can silence their voice, people like Rush Limbaugh, Glenn Beck and Sean Hannity, what do you think they can do to you? How would they be able to regulate your freedoms, your "freedom" of speech, and your ability to earn an income and how can you protect against that government infiltration?
Another huge and very unknown threat to our freedoms is the current use of Shariah Law in our financial industry. Shariah Law, a law that governs the extremist of the Muslim faith allows for men to beat their wives, the stoning death of rape victims and the complete brutal rule of man over women. Shariah Law also requires that Muslims pay no interest on investments and requires any investment to fit their requirements under this law. That means, these investments can not include the pork industry, the alcohol industry and many other industries. The problem with this, is the fact that companies like HSBC, DowJones and others have hired a board of Muslim extremist, self proclaimed terrorist sympathizers and activits, to run and over see these investments. The money used in these investments is linked to terror groups all over the world and the more we allow Shariah Law to infilitrate our financial industry the more control these terrorists will have over our economy and ultimately our freedom. What do you think will happen to companies like HSBC and others the worse the ecomony gets? Will they reject these Muslim groups on the premise of what is moral and right, or will these greedy companies chase this money in order to make a buck in this struggling economy? Please also understand that state governments are starting to support this principle of allowing Sharia Law to dictate investing. In Minnesota, the government has authorized the use of "special" Shariah endorsed mortgages that allow Muslims to buy homes without paying interest. How scary? **important side note, the governor of Minnesota is Tim Pawlenty and he will probably run for president in 2012 for the Republicans. Can we really afford to have someone who supports this conduct to be our next president?
Other important issues, not including the Health Care debate is Cap and Tax, I mean Cap and Trade. Also Card Check, the desire for the government to reduce defense spending and the belief system of these Liberal Progressives. I strongly encourage you to read books, such as, Catastrophe by Dick Morris, American Progressivism by Ronald Pestritto, and most importantly the Declaration of Independence and the Constitution. Get to know your history, your rights, and what this Republic is all about. Be a voice and do not allow the corruption on both sides of the isle distract you from the truth and real issues that we face today. When the government is talking health care reform, or Cap and Trade, with their right hand look to see what their left hand is doing. See through the distraction, because if government truly wanted to create "change" they would not make everything so complicated.
Think about it. I can fit the entire Constitution and Declaration of Independence in my back pocket. The creation of our whole Republic, a very daunting and complicated task, can easily be read and understood in a matter of hours or at least days. Why? Was it because they were not articulate and educate or was it rather because they wanted every American to easily understand what freedoms and rights they had? Why do you think a single bill these days is over 1000 pages and 5 to 10 pounds in weight? If the two documents that provided our Freedom and Rights on Earth can be so simply written, why can't they all? Don't you think if the government truly cared about the people, they would simplify the process? And more importantly, are we as Americans and as the boss of these Congressmen and Senators going to continue to allow this to happen? I used to be a party guy, not a wild party animal but a supporter of the GOP, now I label myself as conservatively independent. I have chosen to support what is right and who follows the Constitution. Are you going to continue to be a "party" person or are you finally going to focus on what is best for the Republic regardless of which party or individual endorses or invents the idea?
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