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So Much For Housing Optimism: Existing Home Sales Miss, Drop To Lowest Since November, Order Cancellations Surge
Remember that surprisingly strong home starts data from yesterday which drove the market by 100 DJIA points higher yesterday? Neither do we. According to the NAR, June existing home sales once again declined, this time to 4.77MM from 4.81MM, the lowest since November, and well below the expected rise to 4.90MM. This number was 8.8% below June 2010's 5.23MM. Total inventory increased by 3.3% to 3.77 million units, or 9.5 months of supply at the current sales rate up from 9.1 in May. The biggest question mark is the surge in order cancellations which soared from 4% in May to an unprecedented 16% in June. That's one in five home transactions being cancelled in the middle of the deal. Here is Larry Yun's explanation for this shocking development: "The underlying reason for elevated cancellations is unclear." So let's get this straight whenever the number is better than expected it is always due to the economic recovery. When it is worse, it is "unclear." Thanks Larry. Now go back to fudging data please.
More from the traditionally irrelevant and discredited NAR:
Yun cited other factors in the sales performance. “Pending home sales were down in April but up in May, so we may be seeing some of that mix in closed sales for June. However, economic uncertainty and the federal budget debacle may be causing hesitation among some consumers or lenders.”
The national median existing-home price2 for all housing types was $184,300 in June, up 0.8 percent from June 2010. Distressed homes3 – foreclosures and short sales generally sold at deep discounts – accounted for 30 percent of sales in June, compared with 31 percent in May and 32 percent in June 2010.
NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I., said home sales should be higher. “With record high housing affordability conditions thus far in 2011, we’d normally expect to see stronger home sales,” he said. “Even with job creation below expectations, excessively tight loan standards are keeping many buyers from completing deals. Although proposals being considered in Washington could effectively put more restrictions on lending, some banking executives have hinted that credit may return to more normal, safe standards in the not-too-distant future, but the tardiness of this process is holding back the recovery.”
All-cash transactions accounted for 29 percent of sales in June; they were 30 percent in May and 24 percent in June 2010; investors account for the bulk of cash purchases.
First-time buyers purchased 31 percent of homes in June, down from 36 percent in May; they were 43 percent in June 2010 when the tax credit was in place. Investors accounted for 19 percent of purchase activity in June, unchanged from May; they were 13 percent in June 2010.
Single-family home sales were unchanged at a seasonally adjusted annual rate of 4.24 million in June, but are 7.4 percent below a 4.58 million pace in June 2010. The median existing single-family home price was $184,600 in June, up 0.6 percent from a year ago.
Existing condominium and co-op sales fell 7.0 percent to a seasonally adjusted annual rate of 530,000 in June from 570,000 in May, and are 18.0 percent below the 646,000-unit level a year ago. The median existing condo price5 was $182,300 in June, up 1.8 percent from June 2010.
More made up "facts" can be found here.
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But, but, but... bitchez
Is this a good thing?
but but a Bloomberg Best analyst said this is a very good thing as it is looking backwards and signifies the bottom. Marge Brennan the forever optimistic anchorette shows you can take the person out of CNBS but you can't take the CNBS out of the person as she interviews LOL Brian Wesbury among whose many claims to fame were is 08 calls of no recession here...
Marge then follows up with a cheerful look at the Gang of Sellouts debt compromise with nary a mention of last nights vote in the house.
Ref. "Bloomberg" - and cross-Ref. "whenever the number is better than expected it is always due to the economic recovery. When it is worse, it is "unclear" -
Whenever numbers go down, all blowhorn sounds bites ubiquitously say UNEXPEDTEDLY.
Yes, folks, all things are expected to only go up - in the unreal and illogical world of market pumping and absolute commitment to naked bullshitting.
In Zero-Truth-HomeLand markets don't "climb walls of worry" - they pump for the dumb - who not only don't expect, but don't know, any reality - but only what the screen on the wall tells them. Mirror, mirror on the wall, who's the fairest of them all?
Denial, denial, denial - thy name is usa.
brilliant we need to get these guys to come up with a new translator for econmic CNBS
http://www.whoohoo.co.uk/speak
Ha! That's funny. You can get the same backwards looking optimism having fallen 50 floors from the roof of a 100 story building.
Video: Mortgage Bankers Association Strategic Default On 79 Million Dollar Office Headquarters They Put 5% Down On (they defaulted and rented space down the street for 1/12th the monthly nut)Yes, it's evidence of SOR2 (Summer of Recovery Part II), now run along and buy some stocks.
More like SORE - Same Old Rape Experience from the TPTB...
duplicate
lol
Just wait till next month when this month's 18,000 new jobs created number gets revised downward....lmao
You mean it could get worse?!?!?
lemme guess....Markets rally on renewed QE3 hopes now?
Lawrence Yun not only fudges the data, but he is a closet fudge-packer.
You're the packee?
He's the fudge.
bring back David Lereah ... the eternal optimist
Maybe... But he takes great pride in his work...
http://mistupid.com/pictures/images/fudge.jpg
Larry Yun is a clown. Here's what I wrote to him in an email back in 2008, after he described the housing market as a glass that's half full:
He actually replied with some nonsense about my not knowing what I'm talking about! Keep in mind this was 2008.
For anyone interested in contacting Larry today, here's his email:
LYun@realtors.org
For anyone interested in sharing their thoughts with Ron Phipps, also a clown, here's his email:
ron@phippsrealty.com
It may be worse than just a corrupt liar spewing nonsense. They may actually believe their nonsense. The quote I liked best was:
This is equivalent to Ben Bernanke says we don't really know why the economy isn't reviving. Phipps' views the world from his Warwick RI real estate broker's perspective. It is not that he is selling overpriced financial death traps during the Greatest Depression, it's the lack of easy credit, presumably due to evil bankers. It never occurred to Phipps that banks won't lend because it is stupid to buy a house today. The smart people who need housing are sitting on the fence like buzzards waiting for a deal.
bottom line, way too many houses, not enough income. Simple.
These idiots don't seem to understand that construction growth outstripped demand and the margin was a gigantic speculative bubble.
Prices are set at the margins by slack capacity.
And yet these fuckin HBs continue to go out and build...just insane. There are those in middle age right now who remember very clearly the 20/80 lending rule and other DTI hard-and-fasts. These could only be relaxed during a one-way price trend.
Buying a house right now is a gamble against your entire down payment with what in return? You have to really sit down with an accountant and compare the NPV of the cashflows of owning (with the MID tax break) and renting. Even if renting is a lower NPV, compare the VaR.
The housing market now is a classic case of where expected value analysis must be performed.
+1
Im in the process of moving. I can afford to buy a house clear or i can put that fiat into gold and rent and wait. Generally though the rentals within my budget are awful and yet oddly the houses to buy in budget are great. I know prices will get cheaper but what would your advice and the average ZH reader do? I do believe you are born short housing , so im short. I just dont know what will happen to property taxes and insurance - well i know theyll go up but how much...
Oddly , land in many decent areas is still relatively very expensive. The dream of building your own home works out twice as expensive as buying from a realistic seller , once you factor in land , architects , utilities etc.
If you believe they are destroying the currency, and that we have reached the point of no return, then the answer is easy. Save your down payment, and put the rest into PMs. When inflation goes vertical, buy the house and pay it off in funny money later. The time you sit waiting for the inevitable crash in the USD will get you a better price on a house because prices are unlikely to rise. You get the house AND a big nest egg.
PS: Hyperinflation happens fast. You have to be prequalified and you have to keep looking at available inventory so you can buy when events tell you it is time.
Smiddy , i agree but get this : im self employed and cannot get a loan. I wont go into nominal figures but im only after a modest sized house in a rural but relatively affluent area. Ideally i wanted to put down 80% and mortgage just 20% leaving me about 40% value of that purchase in liquid savings (ie i have 120% of the purchase price now) I explained this to the mortgage provider - i have a few years worth of savings after any purchase.
They didnt want to know.
That tells me all i need to know about the housing market. Its frustrating. But there it is. I have to buy free and clear and have a vastly reduced amount of PMs or i just rent in an overpriced hole. I do not want to compromise and move into a cheap , dense , neighbourhood so it looks like i have to find a very distressed seller.
this is easy...compare the cash flows, then compare expected VaR.
You have to do some outcome cases where you say, ok, home goes down by 10%, what are the odds, home goes up by 10% what are those odds, to see what your expected outcome is.
I think the probability of price increases are low. The odds that they stay flat are higher and the odds that they go down are higher still. Compare that versus your expectation on PMs, the cash flow difference, etc. You may still reason that buying is a good idea. Or you might not.
Sensible but i have a feeling we are in unparrelleled waters. There are alot of variables in this analysis - 10 to 15 years ago it was straight forward with fewer variables (we would probably be comparing stocks with housing rather than PMs with housing) but now i cannot compute how Gold will act in a hyperinflationary depression or in a deflationary systemic collapse. I have a firm handle that the dow-gold ratio goes much much much lower in either scenario (from 8 currently to say 2) therefore i have to believe housing follows stocks closer than gold.
I think ive answered my own question : if i could find a nice rental that was priced right , i would move in immediately. Ive sacrificed alot to get into this position , i guess i have to sacrifice more by living in overpriced rentals a bit longer.
Anyone have a nice rental at the right price an hours drive from Denver?
Id rather waste my free time here than sending those couple of clueless cunts an email.
I didn't think the NAR was capable of reporting a decline.
they just have to spin it
This was unexpected. Must be transitory. Etc.
Missed it by >that< much.
Could have missed it by > that < much.
#Winning by #Spinning
It can report a decline if Americans are not patriotic enough. This is their radio campaign in my area. True American patriots are willing to go up to their ears in debt on a McMansion to increase the GDP and save the country.
No joke, they are really running those (paraphrased) ads on the radio in my area.
the miniplenty will soon rectify these numbers via the minitruth and you go to Room 101
How much rent does miniplenty charge per month for Room 101? I know lots of people that should visit the rumpus room...
Heh, he ,he. I can literally smell the bullshit coming off the monitor.
Once it reaches 4.0 million we will be safely inside QE3 territory.
DANG and Case/Schills just said 'No housing double dip'!
Well I guess in a way they were telling the truth, cant have a double dip when we never got out of the first one.
As Reggie Middleton at Boom Bust Blog has pointed out, the Case Shiller index is a woefully incomplete measure of the housing market. It specifically excludes condominium sales and any sales out of foreclosure.
Charts that Middleton presented showed that the Case Shiller index pretty consistently lagged 6 mos. or so behind overall market price changes.
do you have a link to those charts or does one have to subscibe to his newsletter
Ty this...
http://boombustblog.com/subscribe
DaddyO
This " underwater " chart tells most of the story for the future...14 million mortgages under water, with nearly half under water by 30+%
http://www.doctorhousingbubble.com/wp-content/uploads/2011/07/underwater-mortgages.png
nevermind the vacant supply overhang. There are many millions of homes that are unsaleable for anything but a loss.
Who breaks for the exits first and starts the stampede? That's got to be the fear here. Anybody says fuckit and pulls the ripcord, the avalanche starts. The market will clear but it will be a very brutal few years while it does.
I agree with everything you've said, Trav.
Another massive factor coming down the pike is that the overhang of homes that's recognized officially is dramatically understated, due to the complex title, MERS, robosigning issues, and ALSO due to the fact that banks now servicing mortgages or proclaiming to hold the underlying note DO NOT WANT to foreclose, as they would damage their value or impair their solvency (by being forced to realize a loss) and/or they can't prove bona fide ownership and/or the value of the not is PERMAMENTLY impaired (i.e. they will never, ever NOT lose money on the asset at this point, no matter how long they wait) and they will literally give the house away to the government or any entity.
In just the first 6 months of this year, 1.7 million new foreclosures entered the pipeline, but that number should have been 2.7 million dwellings (take you guess as to the reasons why - see above).
Foreclosure Glut Pushes Filings Into 2012
By Jeanine Skowronski
everything about the housing market is crisis control. They have to hope they can trickle this into the market so that the downturn is slow and less-noticed.
I do not think algos read headlines at all...the just use daytrader vol to pump market...so manageable yet unrefined...
even if they dropped pricing 20% more, real estate will not get out of this funk.
heh, wait until financing is no longer available
Why buy the house when the government lets you squat in it for free?
Social Justice Bitchez!
Maybe, but if it drops 80% I'm a buyer.
I would wait for at least a 90% reduction.
Fools have been rushing in, mostly cash investors, looking to rent. As much as a full 50% of existing home sales have been either foreclosures or short sales.
I do wish them well and hope the non-primary residence property taxes, insurance, maintenance and other costs don't sink their expectations.
Property taxes and other heavy carrying costs associated with real estate is the anti-dividend.
Very well said. However, whether the buy point is at an 80% reduction, or a 90% reduction won't be determined by us, it will be determined by the death of the currency. When inflation picks up speed, real estate is going to look real good. Buy a casa, and pay it off with confetti.
No, it won't. If you can get the taxes paid, sure. But this is a different era than previous ones. The Party slaps a sticker on the front door and it's a bagel.
That they can say this with a straight face speaks volumes to their training regimen, but how can these both be true at the same time?
You keep using that word (affordable)...I do not think it means what you think it means.
That non sequitur really stood out. Freaking idiots.
Inconcievable!
Well my question is complety out of topic but... Do you think that 0,925 silver coins could be considered as an investment in silver? Im wondering because im able to buy coins for approximately 60PLN each where just silver in them is 26g = 90PLN. (they are not bullion but collectors and people who sells them are aware of silver prices).
Baxter, you know I don't speak Spanish!
Yes, because they still contain a verifiable amount of silver. Pre 1964 US coins are easily identified and their silver content well known.
Some if qualifiers for the programming:
if value of economic data = Miss, insert .01% drop in the markets until 2:00 pm and then rally on heat wave cuasing bottled water sales to soar.
if value of economic data = hit target or beat insert 3.00% increase in markets until 3:30 and release some bad news to cool down markets.
i have never understood why housing starts is useful....it seems particularly bad for housing when it goes up as sales go down...and the builders haven't shown any better reading of the market than anyone else....
Actually, here in Massachusetts, they showed a fair bit of discipline coming into the bursting of the bubble. We were probably helped by the very bad real estate market of 1991-1992. We have a client who had a condominium project approved in a very desirable suburb in late 2005 and he never moved a shovel of dirt because he saw that the market was turning.
Inadvertant duplicate, sorry.
Inadvertant duplicate again. Sorry.
All the developments out of Washington are merely adding to Biflation: cut anticipated retirement benefits (social sec, medicare, pensions), but provide lots of 'liquidity' to Wall Street (QE lite billions daily still ongoing, more stimulus to come) and banks (BAC needs $50 billion? No prob) and corporate welfare here there and everywhere (through tax subsidies).
And the middle class meat grinder will grind on
<<< And the middle class meat grinder will grind on >>>
You got that right.
Anemic job creation... Dismal interest earnings from fixed income securities (CDs, money market accounts, savings accounts etc.)... Nearly 45 million on Food Stamps... High food and energy costs... Soaring health care and tuition costs... and TBTF banks want another round of QE. Gee, I wonder who has the ear of our politicians.
Exactamundo.
This is an austerity program, nothing more or less.
America is special. We get the best show the uberclass has to offer, so it comes off clean. Not all messy like in Greece.
The best--here in the US of A--is being saved for last. Note the "Gang of Six" proposal includes "sale of government assets" to reduce the deficit.
Cancellations?? Hmmmm.
Could it be that the vultures circling the mortgage interest deduction are making it a little hard to figure out what the hell your monthly payment will be?
Seems to me that if this deduction were eliminated, many 'fully-bought' home-owners on the margin would end up defaulting on their mortgages as their taxes go higher, leaving not enough money for monthly expenses.
So the banks are not making the money of fees here....brokers are not making their commissions...appraisers...title insurance companies....its quite a drop in the GDP.....and they are only raising the debt 2.5 trillion.....or is that just for this 6 months....got gold
WHO CARES!
They can always build more houses right?
And why not get all Chinese on them? You build 1, blow up 2.
SUPPLY DEMAND COMMU STYLE!
I gave bbg TV a shot...b/c of the no commercials when streaming thing...they are now running the News Corp story...although thats important doesnt seem to be driving markets here
bbg is still the best out there but their radio is way better except when they simulcast Marge (they may as well just simulcast CNBS) - anyway all of Fox's competitors are going for the jugular as if it is relevant that a minor subsidiary in merry old england got caught doing something unethical. How about Steve Liesman's reporting on the fed is that ethical? Or pisssani's vicotry for the Bulls and who can forget their greenshoots nonsense.
agree bbg TV is the best available...arrangement should be made for a Liesman v. Santelli steel cage match...odds?
But still biased towards the never ending growth paradigm.
The good news is that in Japan real estate prices fell for two decades, and we're already five years into our decline.
Does anyone actually believe even the 4.77M number?!? That is just wildly preposterous!
The NAR is just a trade organization for syphilitic pimps and whores...
NAR (The National Association of Realtors) compiles the data using the Mutiple List Systems throught the United States.
NAR has already been forced to admit they overstate sales numbers by 10% or more in 2010 alone...
NAR has admitted revisons are neccessary in all their "data" 2008 to 2011, but have been stalling... read here... and here...
NAR = Douche bag propaganda whore sales bitchez...
The great paper shuffle grinds to a halt. All the make work that was associated with it. lolz
In this unprecedented time of central bank and government interventionism and media propaganda when it comes to all things economic and markets, if you don't care for the weather, just wait a day.
Long term forecasts and projected conditions change by the day, if not hour.
No wonder why so many truly successful large AUM guys have returned investor capital and "retired' over the last year. The robots are now swapping shares of LULU and NFLX with each other, and I'm sure this will all end as well as the LTCM experiment did (only on a vastly larger, global scale, this time).
#global economic depression w/ government induced-sugar high bear market rally, ft winning.
Is it a sign of a economy shift when the trend for New Homes Sales is up but the trend for Existing Home Sales is down, or is this just a reflection that given the choice at a comparable price new is better? If the former, then is this the first sign of a real break between who can afford what, or if the latter, then how will existing homes ever recover without another step down in prices?
Some people just want a new house like a new car. There will always be a market for new, aside from market collapse. Western Washington has a fairly strong new housing market. Not everybody is looking at a house as an investment as they shouldn't be. It is a fucking roof over your head and a place to reside, raise a family etc.
Good point.
Everything in housing was peachy yesterday. Yeap the Lies continues.
Day 2 of dollar wants to pop, and euro wants to drop.
The cost of living index for the homeless is going up ! Track the price of Seven-Eleven chili dogs ! Monedas 2011 Good job Mark Belling and Mark Steyn ! Rush is baaaaack !
Does bad data really matter anymore?
The cost of living index for the homeless is going up ! Track the price of Seven-Eleven chili dogs ! Monedas 2011 Good job Mark Belling and Mark Steyn ! Rush is baaaaack !
Beautiful chart, can point out, almost to a T, QE1 and 2.
I love it when people say, "well housing prices have gone down so far, they can't go much lower." Completely irrational, immature, magical thinking. Especially when they are buying a fucking overpriced condo in D.C. as an investment.
The public doesn't think in terms of nominal and real valuations. This is the tool of the banking thieves. The public also thinks that what always happened to fiat currencies in the past can't happen to the USD in their lifetimes.
I guess those at Borders that were buying a home cancelled. :(((
wow thats a bit scary, that we thought the same thing at the same time
im sure all the Borders employees just cancelled their orders for a new home in September, doesnt matter that most probably couldnt afford a house even on their full time Borders salary
Why buy the house when you can squat in one for free?
20 Signs That The Fabric Of American Society Is Coming Apart At The Seams
http://endoftheamericandream.com/archives/20-signs-that-the-fabric-of-american-society-is-coming-apart-at-the-seams
they should correctly identify the diversity in those 20 signs. The KO mobs and the mass beatings came from one particular group, as well as all the Atlanta cheating and crime. In fact, over half of the violent crime nationally (which thankfully continues to decline) is attributable to one group, which we hear daily crocodile tears over incarceration rates for
When this finally ends, 99% of the mortgages will be owned by the government.
Are you in that 1%?
The Fundamental Flaws of Capitalism – Why We Never Learn: Joseph E. Stiglitz
http://www.economywatch.com/economy-business-and-finance-news/the-fundam...
Stiglitz is another proud socialist IMF banker, like DSK, who knows full well that the fundamental flaw of capitalism is oligarch banksters like him pushing crony capitalism and socialism for sovereigns like crack cocaine and letting fiat currency and fractional reserve banking do the rest.
Fait accompli. Stiglitz said privately in 2009 that US unemployment was going to run 10% for years and years. Of course, he can never say it out loud in too many venues because he is also an Obama economic advisor.
Who cares. Apple doesn't build houses. Rally on.
Melissa Lee said this morning that AAPL is its own asset class, and people are under-invested in it.
Gold watched silently.
“Even with job creation below expectations, excessively tight loan standards are keeping many buyers from completing deals. Although proposals being considered in Washington could effectively put more restrictions on lending, some banking executives have hinted that credit may return to more normal, safe standards in the not-too-distant future, but the tardiness of this process is holding back the recovery.”
Are you fkn kidding me? Standards have tightened a bit, but we're still a long way from old-school, twenty percent down, standards. As far as credit returning to "normal, safe standards", does he mean the lax standards (no money down, interest only, liar loans, exploding ARMS, etc.) that caused this mess?
If this guy said this with a straight face, he really ought to run for public office.
I've been following housing pretty closely (renting since 2007, looking to buy after another 30% drop) and I've seen a ton of cancellations over the past six months - a realtor I've been working with (one of the few good ones) told me why. The banks know prices are going down, and they're not appraising a lot of homes at their sale price. For example, if you work out a deal with a seller and you agree to pay $500k for a house, say you'll put down 20% down payment (100 grand for the math challenged). The bank comes along and appraises the house at $440 - so if you still want to buy it, you'll have to put down an extra $60k out of your own pocket. Sale cancelled.
Larry Yun - what a douchebag. Of course he knows this...
Solution, buy a bank-owned condo. Betcha their story changes.
+500,000
That what the banks should have been doing in 2007. What the fuck do you and your " good realtor" think they should do? Appaise it for what ever the fuck the buyer wants? Fucking stupid and your realtor friend is fucking stupid too. For the economically challanged the fucking bank is the one that owns or has the lean on the house or piece of real estate.
lets say you are the bank. Why don't you and your stupid realtor look at it that way. Do you want to loan someone $400,000 dollars on a asset that is depreciating and could soon be worth $375,000. That is how we got in this fucking mess!!
Junked for the hateful response. Max didn't imply that banks are wrong for doing this; he is merely providing an explanation for all the cancellations.
your name say it all. Go cry to your mom.
This is coming from a guy that thinks "alot" is a word, and uses will instead of we'll. Please try again c-sucker.
Have you thought about a personal exercise program!?
Tuco Benedicto Pacifico Juan Maria Ramirez
An easy way to resolve this is to force the banks to release all that shadow inventory. That will help prices find market equilibrium. But taxpayers continue to bail out these banks, allowing them to hold onto properties at a loss much longer. People are wising up to paying over assessed value, which is the reason why sales are slumping. Doesn't take a genius to figure all this out.
Max,
Had that happen to a friend as well. You are absolutely correct. Banks know prices are coming down because they are holding onto a crap-load of shadow inventory. They also know how many homes are close to foreclosure as home owners are not making payments on their mortgages.
I'm kinda glad the pricks and liars use weasel words and rose-colored glasses when they editorialize the data.
It's better than white hats and black hats for separating the good from the bad.
Larry is a fudge packer.
Phoenix area had record sales in June. Granted prices are still declining slightly except in certain areas where there are multiple offers. Rental inventory is low with mulit-family occupancy well above 90% on apartment complexes; seeing alot of 94% to 96%. New multi-family units are under construction.
Look at this point the banks will release inventory when prices are stable or rising. This is going to take another 4 to 7 years so month month data is not going to be the "zerohedge" collapse all are looking for. Shit will just start another fucking war if we have too.
record sales - compared to???
Ever. Just the number...over 11,000 in one month
Sales up, prices collapse.
http://www.mybudget360.com/desert-heat-melts-arizona-home-prices-phoenix...
Look at your median home prices. Sales are doing well because prices are tanking. You are down 70% from the highs.
a house vacant for 7 years in pheonix? you will need a shovel to get rid of the mold.
Ah ok... your point?
banks will not be able to hold vacent houses for 7 years in stealth inventory.
Bullsit. How many years have they ben holding already?? Alocal bank in Wahsington state was taken over by the feds and gave the new bank 8 years to clear out the inventory.
I was a real estate developer by trade. Why do you think CRE hasn't collapsed. It is because the banks can't take the product back and sell it. We had a project and didn't meet equity so I asked the bank what they were going to do? What do you think he said?? NOTHING!
He told you "nothing" but I would not belive him.
..mold in Phoenix ?? you need the shovel to get rid of the dead cockroaches.
And a war would be good for the economy!? Take that to myth busters!
Tuco Benedicto Pacifico Juan Maria Ramirez
Currently banks can claim 1. The value if the mortgage 2. The monthly mortgage that was never received 3. Late fees that were never received - all as Receivables - even though the house is EMPTY and the banks WILL NEVER get those payments. The banks ONLY take the loss when the house sells - usually for less than the note, much less the missed pmts and fees. Take those monies off the books and the banks are Bankrupt - so the banks can't sell those houses - except a very few at a time in order to offset any profits.
they just had ass clown Brian Westbury on Bloomberg radio, blamed it on the tornadoes in south and midwest, LOL
ah ha!!! the weather! Always the safety comment. Next week it will be the excessive heat....
How does this track w/ Consumer Durables? When you stop to think about it, housing after the bubble is pretty much behaving the way a consumer durable would. A few, really well-built and designed ones will be classics and pay huge investment dividends. Most of them, by-and-large will lose tons of value after 15 years of fair wear and tear.
Ha,ha. Well put T. D.!
Tuco Benedicto Pacifico Juan Maria Ramirez
PREDICTION ... Feck a nice suit,
Eventually, 10 Ozs of Gold will buy you a nice house.
& the government will charge you 20 ozs of gold a year for the pleasure of living in it...
That's the problem. I wouldn't take property now if you gave it to me.
Goobermunt just raised the tax assessment on my property 20% for no reason other than they want more money, money, money. Hit my neighbor for 100% because he added a garage.
You won't win this game. Goob wants all the houses.
Or 150 ounces of silver. -- Tuco
Blame it on Bush, this group of jackoffs in the media will spin that story.
I think this makes sense. Deals are getting canceled because eventhough people are willing to make offers (contingent on getting financing) the banks are rejecting a large percentage of the applicants. Also appraisals are coming below offers on many of the homes due to the number of "short Sales". In my area, sales of existing townhomes are in the dumps. One reason is many brand new townhomes are getting built, some of those developements were started in 2007, but the prices are 25% -30% less and those are selling pretty good which is killing the sale of older homes.
I was hoping for some negative news to goose the market into positive territory.
BAC is up > 4% on the news....
The reason for the cancellation's are two fold.
1. The Appraisal is lower than the sale price.
With the Appraisal lower than the sale price the Buyer has to come up with more cash or the Seller has to reduce their price. Or a combination of both. Sellers are reluctant to lower the price being they sold the house for more. The Buyer more than likely cannot come up with more cash or does not want to pay more than the Appraisal.
The Banks now control the Appraisal process and they in my opinion are under Appraising the Houses just to make the Buyer come up with more Money. This increases the Equity on the Loan for the Bank.
The Banks Foreclosures are damaging Comperable's for normal sales.
2. The Banks will not give a Loan to anyone that is not absolutely stellar. Credit is being damaged by having a Credit Card Balance too close to the limit. You could lose 30 credit points just because of a Credit Card too close to is Credit Limit.
If you are a buyer, why would you pay more than the appraised value and start with negative equity right off the bat, specially when you keep hearing there is another 20% decline coming in the next couple of years?
That is exactly what Buyers think. Yet, remember that the Appraisal Process is being controlled by the Banks. In my opinion they are intentionally under Appraising propertys to build in more equity for the loan.
Also keep in mind that if the Appraisal comes in at the Sale Price the Lender has the right to lower the amount of the Appraisal before it is issued.
Also, keep in mind that if the Banks cause a Cancelation of a normal sale, that it creates another potential Buyer for one of THEIR Foreclosure Sales.
+1 Great insight
Why would banks lower the appraised value ever? They make more money on interest if they keep prices up. That also increases comp which allows them to list their inventory at higher prices.
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