This page has been archived and commenting is disabled.
Still Think The Housing Recovery Is Sustainable?
While hope springs eternal that the US housing sector 'record-inventory-compression and foreclosure-stuffed' 'recovery' will become self-sustaining, there are two rather disappointing 'facts' to ruin the 'fiction' that all is well. As Gluskin Sheff's David Rosenberg notes, not only are mortgage applications for new purchases stalling rather notably from a 'red-hot' +16% YoY in January to a mere +3% in the last week; but an even more critical indicator of housing's health just turned negative after providing hope for the last 14 months. The year-over-year growth in bank-wide real estate credit has turned down again - after first turning positive in February of 2012. So the first (and second) derivative of real-estate credit is now on the down-swing - not the stuff of sustainable housing recoveries.
Mortgage applications for new home purchases are fading fast...
But real estate loans outstanding is now negative YoY and falling...
Charts: Bloomberg
»
- 23456 reads
- Printer-friendly version
- Send to friend
- advertisements -
Shit, humanity isn't sustainable. Location, location, location, bitchez.
I guess purchasing $45B in MBS isn't enough.
Now the Fed will just skip the middlemen and buy the houses.
Yes, the point is that the houses that they will be buying, won't be in desirable locations.
You clear them of the tenets and buildings. Think of it this way Obama can bill it as infrastructure stimulus. Rebuild America plan were they own all land and buildings. We get to rent for a low price of having to work for them for the rest of our lives whether we like it or not comrade. Broken window policy.
they can set up federal reserves on every street corner
And then knock them down, broken windows and all.
Fuck you Bernanke! Fuck you Obama!
Fuck you King Abdullah! Fuck you Xi!
and Fuck you Bernadette, for breakin' my heart in 1987
She was a fuckin hoo-wer
OBAMA Houses!!!
For everyone!!!
bitchez.
If you are still here it's sustainable.....*
*untill i'ts not
Here is the only chart one needs to see about housing:
http://research.stlouisfed.org/fredgraph.png?g=7iv
That's 1980s level, people, no make that 1970s level. With 40-50 million more people walking around looking at mortgage rates a fraction of what they were then. And yet that's all this economy can do -- 1970s level.
Behold what happens to an engine when you pinch its fuel line. It's not going to get better.
The E word. Ever.
That is one amazing chart. So with a population up at least 20% and interest rates lower by at least 40%, we are at the '70's level.
Why did WB ever buy USG? Almost as dumb as his move into US Airways a few years back.
Take another look.
The 60's were **higher**.
holy shit!
double plus good post, CiO
I read that two more companies are moving to Texas ( location) so there are at least two places that houses are selling, N. Dak. is the other. Frack you, obama.
My big-titted, bright-eyed, blond bombshell of a realtor told me that THIS IS DEFINITELY THE TIME TO BUY!!! Her neck line of her shirt is much lower than usual, skirt seems shorter, and she kept touching my junk. She HAS to be right!
Mine became a stripper, too, after the bust.
"Bust" pun intended? TITS TITS TITTIES wooohhooo!
After the bust or because of her bust??????
all the real estate derps around my neighborhood are gay men. i dont answer the door when they knock....
You shouldn't be living in the White Swallow Motel.
i bet they have some fabulous opportunities for you
be careful though - they might charge you up the ass
Are they knocking on your back door?
Dicks seldom point north so they make a lousy compass...
What was she selling?
Mine shows me her tits when we play tennis. But I'm not biting.
With the way you describe her I would have thought she was mor about "renting" than owning business.
Yeah. It begins with the promise of her beautiful body being put to work for your satisfaction.
It ends in a seedy motel room with you eating the nastiest pussy you can imagine while getting fucked in the ass.
Caveat emptor.
I hope housing crashes. No offense to home owners. But i need a house.... Cheaper than this bs market
True that
"I'd settle for a fucking job first"
-Generation Y
Your goals are too high low, you should strive for a free house before a job, make the Socialist system work for you, not vice versa.
Vote yourself wealthy.
Everybody should be demanding a free house before amnesty, c'mon people lets shake these asshole foreign Socialists printers down, take 'em to the cleaners with their own fiat.
Lets out Cyprus the Socialists.
The Dollar is guaranteed by the Dollar.
We just have to press the buttons in the right order, free houses then amnesty, then free healthcare then amnesty, then free luxury autos then amnesty, we can get whatever we want as long as we agree to amnesty (later)
Patience grasshopper.Rent , no hurry to be an underwater debt slave.
Another 50% price drop is coming.The long term demographics, and falling disposable incomes
make it inevitiable, without the dollar losing reserve currency status,in which case it will
be 75% in real terms.
Do you promise? I want to build, but am not ready to pull the trigger, yet.
Also, will new-construction costs plummet as well as existing homes? If commodities go up due to inflation (dollar debasement), but debt instruments (such as houses) deflate due to credit collapse and/or rising interest rates, what happens to the cost of building a new home? Today it requires both hard assets (lumber, concrete, copper, steel), but in most cases, also debt. I could foresee a situation in which existing home prices take a 30% hit, but new construction costs don't budge much.
Plot price way down, materials up,unless you scavenge.
Look at this carefully, some homes are going for much less than the cost to build. The problem might be location again, do you like the neighborhood.
Also, consider both technology and taxation. The 1990s boom brought us McMansions, with lots of rooms. Another one of the big "features" in modern construction was homeautomation, data wiring etc. People who can afford large homes are having less kids, or are done having kids (boomers). And the kids can get much more out of a wifi connected tablet than a room full of dolls, toys, etc.
Taxation and corruption are another big thing to worry about, or something your let you landlord worry about. Busybodies on the city council want to build __________ using the constuction ________. If the landlord tries to pass the 6% property tax increase on to you, you move.
I'm patient since 2008 and I'm affraid I might become a lost decade generation. My kids soon might go to college and we are still renting and waiting for prices to drop...
Yup. This is the one point on which I disagree with Kyle Bass. He is long US housing, but I don't think the indicators are there to support his hypothesis that housing won't get much worse and may improve slightly. Maybe for the next couple years as Bennie continues to print his bux and as the rest of the world goes to shit and sees the US as a 'safe haven'. But much beyond that, the fundamentals simply aren't there. Baby boomers wishing to retire, move, downsize. Their heavily student loan-indebted children who are moving home to live with them, who won't be buying any time soon, the so called lost decade. The fact that incomes still aren't improving. The shadow inventory that still exists. I think KB should have a little chat with Dr. Housing Bubble. The good Dr. certainly makes more sense when it comes to housing. Unless KB does in fact know whats up and is set to make his biggest profits yet.
totally agree with you. i disagree with kyle as well. note that his thesis for investment in housing is based upon a 6.5 year cycle repeating itself. i dont know if i can simply trust that fact when all the other economic factors are pointing south.
Bass also thinks rates CANT go up. We will see
I agree with you on all points ... and add to that the repairs , property taxes and oversupply... rates WILL go up , economic activity in general will crash , home sales will halt. I forsee K.B. holding many thousands of housing units with "renters" unable to pay and kept in place without eviction by gov't edict while he is forced to make repairs when any one of them complains.
I moved last year back to the same neighborhood where I lived as a kid. When I was a yute, houses would be up for sale for a month at the most before they were sold. My parents sold the house I grew up in back around 2000, and it sold in two weeks. This isn't a ritzy part of town, just a typical middle-class neighborhood, though a small golf course was put in nearby by some developers around the time W. decided to whack Saddam.
Anyway, this same area now has houses for sale all over the place, probably an average of two per block, and most have been on the market for at least six months. At least half aren't occupied at all. It's depressing as hell to see the neighborhood you grew up in go to shit.
McMolotov if you can rustle up 300k you can move in not far from me.
http://www.mlsli.com/homes-for-sale/NY/Plainview/11803/11-Linda-Ln-88268336
Is the whole neighborhood like that?
300k for that dump...and the taxes are 12k/yr!!! Welcome to Lawngisland. See you at the Mawl!
300k seems a bit low. Crack den upstairs, meth lab in the basement... what's not to love?
@fzn 343861
if you can rustle up 300k you can move in not far from me.
dood, i can't thank yo enough. that's zactkly what i'm looking for....it's totally section 8 and all of the meth lab crack house improvements are already made!!
Buying season is a perrenialism in the real estate industy. The market will pop again in middle may and continue through august. This is nothing to be worried about. Don't get me wrong though, Washington has been blowing smoke up our asses with low country boil cooked data for 4 years.
Nothing new to see here. Move along.
Selling all silver to buy a slum in a zombie apocalypse warzone policed by Jewish Mexican pyschopaths on meths.
got life insurance I hope.
No need, I been practising Left for Dead.
LA?
Stockton or Riverside.
TD, didn't you get the memo? None of it matters. Short yen, long everything else. Who needs US banks? There's plenty of free money to be had from the BoJ. (And we're putting covers on the TPS reports now, BTW...)
I cant see how any of this is sustainable when more and more people are either becoming unemployed and being squeezed by inflation. Health care costs are beginning to hit, and I have never seen the government so desperate to do anything to gin up the markets, not to mention the complete disregard for the laws as written. The higher the markets go, the more I fear, because its not real, and the snap-back will be vicious, and ergo, the desperation.
We have seen nothing yet.
Nope, never did.
Anyone who says otherwise is a realtor.
"Yes we can!"
Who would buy a house with cash these days with interest rates so low. You would have to be retarded to not see home prices are still artificially high.
If you must buy this inflated market - hopefully only as a principal residence, 3% is a high rate of return, and will be for many years...
Well at least in Detroit it's not getting worse! It's down right popping in the Seven-Hoover arena! And don't even get me started about the Van Dyke-Outer Drive zone! Yeah baby!!
detroit is the WORST in terms of bubbles - in fact, a house i saw the other day DOUBLED in price over the weekend.
i mean, seriously - who can afford a $20 asking price?
LOL, I can laugh since I know the area you refer to. : )
At the same time though, a friend of mine rehabs houses. She just listed a 3 bedroom in Farmington Hills just off 8 mile east of 275. Listed at $139,000 this past Friday night. by Sunday afternoon she had 35 showings and 3 offers: $145,000, $149,000 and $159,000. At least one was a cash offer if I recall correctly.
Not justifying anything, just sayin'.
Hey, Dick. She told me the same thing. Do you think she says that to all the guys?
Housing MUST come down. Wages aren't supporting the bubble prices. My newly graduated from college kids aren't making enough to ever afford a house at these inflated prices. Sure it's great for my paid-off house value, but housing is simply out of reach of the upcoming generation of want-to-be homeowners. The market simply HAS to come down if wages are going down....
Socal is getting really stupid again. The original ask price for this was 795k. Check out what it sold for.
http://www.redfin.com/CA/Culver-City/4230-Revere-Pl-90232/home/6722472
Insanity.
There's a future foreclosure at almost a $1,000 per square foot.
850k...mother fucker. Thats insane for a shotgun house. It would be cheaper moving a house that size from Detroit on the property.
Sorry. 749k was the original not 795k. Only 101k over original asking price. A real bargain.
Damn damn damn
those crafty Chinese have just made Roche's Tamiflu obsolete
http://www.bloomberg.com/news/2013-04-11/tamiflu-resistance-gene-in-h7n9...
Nah. New label, new name. BamaFlu. Same shit.
Selling real estate is so easy right now....I just over price a listing by 10%...then get @ 12 offers, pick the best one and is under contract in less then a week. Somehow the appraisal come in. I get offers from people that haven't even seen the house too, that kinda scares me. It wasn't this hot in 2006. But sadly I had one seller cancel because they couldn't find a decent move up house for more then double what they had their house under contract for. Can't win them all. By the way the market is only so hot because the inventory is so constricted. If the banks need liquidity and they have to put a lot of properties on the market (gulp) then all bets are off...
sounds totally sustainable
Agreed, In 2006 I sadly bought into the hype a bought some real estate not wanting to miss out, not this time around.
See my post above about a friend in the Detroit area.
Interesting, I see that every day. Problem is getting the inventory to sell, which I am currently out of.
Property taxes will go up, at least. The assessor feels things have never been better.
If they'd let students use their loans to buy houses the housing recovery would be sustainable.
You can buy 2500 sq ft 2-flats for $4,000 in Chicago. Fuck, you can buy a whole block for less than $100K but you'll need to 'associate' yourself with the Vice Lords/Gangster Disciples if you want to actually live in one of those houses. Big $$ firms are buying up blocks at a time and renting to section 8er's. There is no recovery.
its about that time to check my crackhouse.
David seems to miss one crucial development: people who can afford to buy homes can afford to pay cash.
No need to bring in the parasite banksters and let them stay between a buyer and his property ownership any longer.
I drives me nuts that the govt wants to make housing more affordable for ...pick your preferred group... yet, won't let housing prices to fall to actually be more affordable.
You must be deaf, dumb, and blind to miss the horrid maggot-infested stench of death, decay, misery, and destruction attached to this quasi-black slave to banksters and Israeli mass murderers AKA Obamanista.
Dead...Cat....
I still have the front page article from my local paper (June 2006) that ranked our area of coastal Florida as one of the best values in the entire country. The article went on to project a 60% increase over the next 5 years. "Buy now" The experts claimed.
We all know what happened next.
Home values continue to remain @ 50% of their bubble value. Lower than where they began.
The area is approx 1/3 high end coastal & riverfront (real value 3+mil), with much of the remainder being middle income (150-275).
The lower end properties (real value of approx 70-120) have been selling short or in foreclosure sales for 30-65 for 3 plus years now, with plenty of shadow inventory remaining, and a bunch more resets coming. It's going to get worse here.
Going on 4 free years of living for some. No eviction notice in sight. Squatters in million dollar homes.
It'll be 5-7 more years (if at all) before this area recovers.
The taxing authorities love the higher prices to pay for their bloated public union salaries and pensions.
At $9,000 to $26,000/year it's like paying another mortgage. Your renting the house from the government.
Housing doesn't have to go down, but density has to go up, they have big immigration plans and SF just licensed 200sq ft apartments/condos.
That 1200' bachelor unit just became a 6 unit apartment building-for singles-that aren't monks.
And that 1600 sq ft house, raize it a build a 4800 sq ft 24 unit apartment building in the same space.
Look at Banglidesh, densities can get much much higher.
There's really no limit to how high they can drive housing with their foot on the ZIRP immigration gas pedal and other foot on the ZERO development brake, this is basic econ 101
holland is the worlds most densely populated western city..
you can buy 1800 square feet for just 260,000 dollars and thats in the middle of a property "crash"
http://www.jlgrealestate.com/English
FONZANOON ARE U FUCKIN SERIOUS?!?!??! I WOULDN'T PAY A 100,000 FOR THAT PIECE OF SHIT HOUSE FUCK PLAINVIEW BRO!!! HOW THE FUCK DOES WELLS FARGO APPRAISE THAT PIECE OF SHIT PROPERTY FOR 300,00. RATHER LIVE UNDER A FUCKIN BRIDGE
heh...theres a few bridges close by under the express/parkways and check out the smug smile on the realtors face..he knows some idjut will but it
It's demographics. Too few Xers. Minellinials with student debt, no jobs or low wage jobs. 2018 is the demographic valley before things turn up. Add five years to that before confidence returns. That's ten years from now.
Inflation, deflation, declining wages and job scarcity only add to the confusion.
Poor Boomers. Lived large and lost. Xers and Millennials rising. Take that to the bank.
Bitchez.
Won't be long before "values" justify friendly bankers pushing new HELOCs, returning your not-yet-dry home into another ATM to fund the recovery.
Are you a patriot? Then get out there: BORROW and SPEND!!!!!
It depends where you are talking about. We are thinking of buying a "scary" foreclosure on St. Charles, a decent suburb of St. Louis. Good schools, low crime. 3 bed 3 bath rehabbed go for $150K. The one were looking at is $65K. Needs 25K of material and a lot of hard work, we might go for it.
My sister bought a house last year that was built by a contractor going through a divorce. He built it himself - materials only - had $230K in it and the 3 acres, septic, road, etc. The bank ended up selling it for $110K. Sis put another 10K in it and have a beautiful 2,300 sf house.
bottom line - Around here, you can't buy materials and build yourself for even close to what the foreclosures are going for. If you have some construction/design experience, used housing can be a great deal.
On the other hand, when I see HGTV on occasion and people are going ga ga for a 3 bedroom shack with granite counters for $400K - I just scratch my head.
You can't make a house payment if you don't have a job.
Record lows in Labor Force Participation + Record rolls on Food Stamps + Record ranks of people on Disability = No housing recovery.
And to add a bit of info...
The foreclosures around here have usually been empty for over a year and have all utilities off. You can't buy one with a conventional loan unless you can convince the bank to turn the electric/gas on to get the inspections done. Therefore, 95% of the low-end foreclosures are only open to cash buyers, which easily shaves off 20K off the list price on a 100K house, because the buyer pool is so tiny.
It IS a catch 22. the homes that are perfect for first time buyers because of cost and condition are not something a bank is lending for. You need to have 60K cash - if you have that, you're probably not a first time buyer!
Adverse possession bitchez. Stick it to the banks, if they won't sell take them outright. Get a bunch of homeless people, prepare the proper legal paperwork and dump them off in a few forclosures. Roll in a few 55 gallon drums and couple of cases of Mad Dog 20/20 at the same time just for dramatic effect.
https://en.wikipedia.org/wiki/Adverse_possession
Adverse possession is a process by which premises can change ownership. It is governed by statute concerning the title to real property (land and the fixed structures built upon it). By adverse possession, title to another's real property can be acquired without compensation, by holding the property in a manner that conflicts with the true owner's rights for a specified period. For example, squatter's rights are a specific form of adverse possession.
Let the Detroitification of white middle class America start. It might just start snapping some people out of the matrix and back into reality when they have to see it right in their own backyard.
I was all set to do some RE investing after the 2008 crash, but the FED decided to prop up the market. Five years later, I'm no longer interested.
FUCK YOU, FED! YOU CAN FUCKING EAT THOSE HOUSES NOW!!!
I do insurance inspections. We started doing inspections for Lender processing services to confirm if properties are conveyable back to the lender. We get keys to all foreclousers in the state. Not 1 single house has passed my inspection. There is a 48 hour window from time to inspect to completeion. I see fraud day in day out. I expext most of these to be bulldozed.
Curious what kind of fraud you are seeing. I'm not saying if it's fraud, but there seems to be some loophole where banks are selling to another branch of themselves. A house I was interested on came one the market for less than a day - the company who bought it got it for 15K and it was easily worth 60K. I later found out that company was a sister company of the "seller."
I heard of someone getting a pennies on the dollar appraisal, buying the property, then giving the appraiser a chunk of $ - totally unethical.
The other thing that has happened is realtors not turning in all offers by the deadline, then buying it themselves. That's more uncommon - but it did happen once!
Scammers are making it harder for the ethical, like usual.
Wait to buy real estate until there is blood in the street. It might be difficult to complete the transaction because a lot of that blood will be from bankers & real estate brokers, but endeavour to persevere.
Go long RV's. Houses on wheels are going to be all the rage to stay one step ahead of the repo/tax man when you can't make your car/mortgage payments. You watch and see you are going to be seeing slick used car salesmen pimping RV's and subprime autoloans as mortgage equivalents real soon. It is easier from a legal standpoint to forclose on a RV including paying someone to repossess it.
Since we are living the commrade economy they can have GM as the official house builder of America also at the same time.
You see that weird obsessions show with that chick eating drywall....get that bitch some weed..and shell clear up all the excess inventory. :)
HAAAAA.....Winning.
Shits gonna crash
Banks are holding onto inventory through foreclosures to prevent the market from flooding.
A few squatters have claimed properties, and won, while the banks game the system.
In short, what a bloody fucking mess.
When all the baby boomers die who will buy all those houses?