Real Estate Crash thread

[liv2ski]

http://www.bloomberg.com/news/2011-0...es-appeal.html

The median U.S. home price tumbled 32 percent from a 2006 peak to a nine-year low in February, data from the Realtors show. The retreat surpassed the 27 percent drop seen in the first five years of the Great Depression, according to Stan Humphries, chief economist of Zillow Inc., a Seattle-based real estate information company.
Not Risk-Free

“If we’ve learned anything from this mess, it’s that housing is not a risk-free investment,” said Michelle Meyer, a senior economist at Bank of America Merrill Lynch Global Research in New York. “Everyone knows someone underwater in their mortgage or struggling to sell a home.”

About 11 million U.S. homes were worth less than their mortgages at the end of 2010, according to CoreLogic Inc., a Santa Ana, California-based real estate information company. An additional 2.4 million borrowers had less than five percent equity, meaning they’ll be underwater with even slight price declines, according to the March 8 report. The two categories add up to 28 percent of residences with mortgages.
Future Plans

The share of Americans who said they plan to purchase a home in the next six months tumbled 23 percent in March, according to the Conference Board research firm in New York. The National Association of Realtors probably will say tomorrow that existing-home sales were at a 5 million annual rate in March, up 2.5 percent after a 9.6 percent plunge in February, according to the median estimate of 74 economists surveyed by Bloomberg.

[cramer]

http://www.bloomberg.com/news/2011-0...es-appeal.html

The median U.S. home price tumbled 32 percent from a 2006 peak to a nine-year low in February, data from the Realtors show. The retreat surpassed the 27 percent drop seen in the first five years of the Great Depression, according to Stan Humphries, chief economist of Zillow Inc., a Seattle-based real estate information company.
Not Risk-Free

“If we’ve learned anything from this mess, it’s that housing is not a risk-free investment,” said Michelle Meyer, a senior economist at Bank of America Merrill Lynch Global Research in New York. “Everyone knows someone underwater in their mortgage or struggling to sell a home.”

About 11 million U.S. homes were worth less than their mortgages at the end of 2010, according to CoreLogic Inc., a Santa Ana, California-based real estate information company. An additional 2.4 million borrowers had less than five percent equity, meaning they’ll be underwater with even slight price declines, according to the March 8 report. The two categories add up to 28 percent of residences with mortgages.
Future Plans

The share of Americans who said they plan to purchase a home in the next six months tumbled 23 percent in March, according to the Conference Board research firm in New York. The National Association of Realtors probably will say tomorrow that existing-home sales were at a 5 million annual rate in March, up 2.5 percent after a 9.6 percent plunge in February, according to the median estimate of 74 economists surveyed by Bloomberg.

Ill pull a ben and only show the good news:
MANATEE -- Investors and cash buyers boosted local home sales last month to levels not seen in nearly six years, according to figures released Wednesday.

Read more: http://www.bradenton.com/2011/04/21/...#ixzz1K8RK31YJ

Either way, id like to see my house stop losing 1k a month and start inching up.

[liv2ski]

Home Prices Off to a Dismal Start in 2011
According to the S&P/Case-Shiller Home Price Indices
New York, March 29, 2011 – Data through January 2011, released today by Standard & Poor’s for its
S&P/Case-Shiller1 Home Price Indices, the leading measure of U.S. home prices, show further deceleration
in the annual growth rates in 13 of the 20 MSAs and the 10- and 20-City Composites compared to the
December 2010 report. The 10-City Composite was down 2.0% and the 20-City Composite fell 3.1% from
their January 2010 levels. San Diego and Washington D.C. were the only two markets to record positive
year-over-year changes. However, San Diego was up a scant 0.1%, while Washington DC posted a
healthier +3.6% annual growth rate. The same 11 cities that had posted recent index level lows2010, posted new lows in inJanuary.
http://www.standardandpoors.com/serv...e=trueDecember

[iceman]

Hey l2s I know you're anxiously awaiting the apocalypse and all, but that report came out a month ago and you know it (hell it says so right in it). It was even discussed in this thread, I saw it and I rarely bother to read the thing. What's your point?

[ass-to-mouth]

New report. Same old story.

Home prices fall for 8th month in February: S&P/Case


REUTERS/Jonathan Ernst
Tuesday April 26, 2011, 9:26 am EDT

NEW YORK (Reuters) - U.S. single-family home prices fell for an eighth straight month in February, inching closer to an April 2009 trough, a closely watched survey said on Tuesday.

The S&P/Case Shiller composite index of 20 metropolitan areas declined 0.2 percent in February from January on a seasonally adjusted basis, slightly better than economists' median forecast for a drop of 0.3 percent.

The 20-city composite index was at 139.27, holding just a hair above its 2009 low of 139.26. Average home prices across the United States are back to levels where they were in the summer of 2003.

Prices in the 20 cities have fallen 3.3 percent year over year, in line with expectations.

"There is very little, if any, good news about housing. Prices continue to weaken, trends in sales and construction are disappointing," David Blitzer, chairman of the Index Committee at S&P Indices, said in a statement.

"Recent data on existing-home sales, housing starts, foreclosure activity and employment confirm that we are still in a slow recovery."

The glut of houses up for sale has kept prices low and the market has struggled to regain traction since a home buyer tax credit expired last spring.

Other data in the last week has suggested some stabilization in the market with sales of new and existing homes rising in March.

Financial markets were unchanged by the Case-Shiller data on Tuesday, with U.S. stock index futures pointing to a higher open with investors focused on earnings from major companies.

(Reporting by Leah Schnurr, Editing by Chizu Nomiyama)

[cramer]

New report. Same old story.

oh but the story changes...

http://online.wsj.com/article/BT-CO-...05-700009.html

they are adding 350 people at my site alone...I had 600 boxes show up, 200/pc's laptops and 600 monitors for dual monitor setup. Shits about to change if you have a loan with bofa and thinking about loan mod, short sale or foreclosure. You'll speak to 1 person and one person only. I know we are looking to clean up the mess on our books from the countrywide purchase. we lost 1.5 bil last qtr in our mortgage unit. All of our other untis hitting profits and record profits (thanks merrill lynch purchase_. Government pretty much forced this down so other banks should be doing the same soon.

[snowsprite]

The crash is alive and kickin':

http://online.wsj.com/article/SB1000...810406782.html

Home Market Takes a Tumble
Turnaround More Distant After 3% Drop, Steepest Quarterly Decline Since 2008
BY NICK TIMIRAOS AND DAWN WOTAPKA

Home values posted the largest decline in the first quarter since late 2008, prompting many economists to push back their estimates of when the housing market will hit a bottom.

Home values fell 3% in the first quarter from the previous quarter and 1.1% in March from the previous month, pushed down by an abundance of foreclosed homes on the market, according to data to be released Monday by real-estate website Zillow.com. Prices have now fallen for 57 consecutive months, according to Zillow.

Last year, the housing market showed signs of improving as price depreciation slowed in some markets and ...

(to read article free today in wsj go here: 4th item on google news Spotlight far right column)

Sprite

[liv2ski]

If you thought the housing crisis was bad, think again.

It's worse.

New data just out from Zillow, the real-estate information company, show house prices are falling at their fastest rate since the Lehman collapse.

Average home prices are down 8% from a year ago, 3% over the quarter, and are falling at about 1% every month, according to Zillow.

And the percentage of homeowners in negative-equity positions — with a home worth less than its mortgage — has rocketed to 28%, a new crisis high.

Zillow now predicts prices will fall about 8% this year and says it no longer expects the market to bottom before 2012.

"There's no way we can get to flat, from these depreciation levels, in the last nine months of the year," says Zillow economist Stan Humphries. "Demand is a lot more anemic than we had previously thought."

When in 2012 does Zillow see the market bottoming out? Humphries won't say.

What a foolish boondoggle those tax breaks for home buyers have turned out to be. The government spent an estimated $22 billion between 2008 and 2010 on tax breaks to prop up the housing market. All it achieved was a brief suckers' rally that ended last summer.

"As we said at the time, it was a giant waste of money," says Mark Calabria, economist at the conservative Cato Institute. "None of these things really turned the housing market around. They just put off the adjustment for awhile."

It's hard to overestimate the scale of the carnage in the housing market. Zillow found prices fell in all but four U.S. metro areas.

http://finance.yahoo.com/banking-bud...d=bb-budgeting

[neck beard]

If you thought the housing crisis was bad, think again.

It's worse.

Wasn't there talk of this second wave ever since the first crash in '08? It certainly appears to be happening and is a point worth paying attention to. And at the same time some countries spared or propped up during GFC are now apparently lining up for their downturn - for example, parts if Canada and small places like Australia (which has had approx 10% capital growth since the GFC thanks to government market intervention). The second wave seems to have caught in Ireland as well.

Oh dear.

[AdironRider]

This prospective home buyer is loving all this doom and gloom. Let the market tank for all I care, sucks to be the morons who took the free money from the feds but are going to end up paying it back 5 fold over in their higher mortgage.

[montanaskier]

got updated tax valuation #s in Eagle County (Vail), Co this week. HO-LEE SHIT. No idea that kind of depreciation in 2 years was even possible. We won't be moving for awhile....like 20 years! Just had a re-fi and was able to do it without an appraisal THANK GOD! Nobody would have believed you 5 years ago if you would have told them this was going to happen.

[Benny Profane]

This is a sobering look at things: http://seekingalpha.com/article/2680...ousing-markets
There is so much distressed property out there, one has to wonder about this "28% underwater figure" being thrown around for the entire country. What if all the the pent up demand suddenly appeared not to buy, but, to sell? It's almost rhetorical to ask, because there still won't be any market other than bottom feeding shark "investors" paying cash. What then, when all of that product that was so fluid just five years ago came on the market? And then, what happens when mortgage rates rise to a "normal" level around 8%? (I kinda doubt that will happen - we are Japan II, for sure).
Florida just kills me. Kills me. I called a bottom to that market almost two years ago, but it's still dropping like a stone. Where are the Boomers? You would think they'd all be down there in heaven's waiting room by now. Christ, you can buy a nice little 2-3 with a pool and/or a dock or room for a pool for less than 100 grand, and, if you're really good and vigilant on the courthouse steps, as much as a nice car! There's just thousands of them on Zillow. Furgetabout a decent condo close to the beach or town. Take your pick for pocket change. And they're talking about Florida dropping another 20% overall, especially the high priced holdouts like Naples. Hey, the turnover is fast down there - they all die off soon after the pool gets filled.

[AdironRider]

While Japan II Im not so sure, theyre a nation of savers we've only heard of in books and magazines, I do agree low interest rates are here for a while.

[liv2ski]

While Japan II Im not so sure, theyre a nation of savers we've only heard of in books and magazines, I do agree low interest rates are here for a while.

I would not count on that, as a matter of fact, just look at rates in Greece. 15-18% because the fuckers are up to their ears in debt. The USA is about 2 -3 years behind them at our present rate of spending.

[Eldo]

Just about everybody I know in Canada is shopping for real estate in the U.S. due to the crazy low prices.

Note that these people are looking to buy a place to hold longterm and use as a winter escape, not as an investment.

Can 30 million Canadians eager to buy make a dent in the supply of surplus real estate in the States?

[snowsprite]

Just watched a report on NBC news NYC talking about the foreclosed slum-nemants in the city. These shitholes are rat-infested, full of squatters, and a real public hazard. Parts of the City are looking like Detroit. Very sad, especially for the tenants who get left waiting when landlords have to bail and banks are holding properties they do jack shit about/for. Even sadder for the people around those 'hoods who have to deal with the trash, rats, and squalor.

Yeah, we're living in some interesting times. I wouldn't gloat too much about the great deals out there. You know, when the shit hits the fan everyone ends up getting dirty somehow.

I really, really hope things start looking up.

Sprite

[cramer]

If you thought the housing crisis was bad, think again.

It's worse.

New data just out from Zillow, the real-estate information company, show house prices are falling at their fastest rate since the Lehman collapse.

Average home prices are down 8% from a year ago, 3% over the quarter, and are falling at about 1% every month, according to Zillow.

And the percentage of homeowners in negative-equity positions — with a home worth less than its mortgage — has rocketed to 28%, a new crisis high.

Zillow now predicts prices will fall about 8% this year and says it no longer expects the market to bottom before 2012.

"There's no way we can get to flat, from these depreciation levels, in the last nine months of the year," says Zillow economist Stan Humphries. "Demand is a lot more anemic than we had previously thought."

When in 2012 does Zillow see the market bottoming out? Humphries won't say.

What a foolish boondoggle those tax breaks for home buyers have turned out to be. The government spent an estimated $22 billion between 2008 and 2010 on tax breaks to prop up the housing market. All it achieved was a brief suckers' rally that ended last summer.

"As we said at the time, it was a giant waste of money," says Mark Calabria, economist at the conservative Cato Institute. "None of these things really turned the housing market around. They just put off the adjustment for awhile."

It's hard to overestimate the scale of the carnage in the housing market. Zillow found prices fell in all but four U.S. metro areas.

http://finance.yahoo.com/banking-bud...d=bb-budgeting

I guess it depends on where you bought...

Zestimate $222,000 $198K – $244K +$4,000 $120 05/06/2011

that +4000 is my 30 day change.

There is no double dip. There is a slow and steady decline in house prices. A little note, all the short sale and foreclosure folks who walked when this all started happening are up for FHA loans next year. I know plenty of them that are ready to get out of their rental and get a house again. You heard it here, 2012-2013 the prices will stabalize and slowly inch up. Especially with huge amount of loan mods and short sales that will be approved over the coming year. I'd pounce as i always say, now. As soon as people start being eligible for loans again, hello uppity interest rate. Just my .02 for the long term young family that is in a position to buy a home. Buy a newer home that wont drop much and lock in at a low interest rate now on a 30 year fixed.

[neck beard]

Just watched a report on NBC news NYC talking about the foreclosed slum-nemants in the city. These shitholes are rat-infested, full of squatters, and a real public hazard. Parts of the City are looking like Detroit.

And when people try to make an effort...
http://www.detnews.com/article/20110...troit-landlord

[liv2ski]

Submitted by Charles Hugh Smith from Of Two Minds

The $6.5 trillion lost in the bursting of the housing bubble is not a "paper loss," it is tragically real.

Is anyone surprised that housing continues to slide? According to this report, Home Market Takes a Tumble: Turnaround More Distant After 3% Drop, Steepest Quarterly Decline Since 2008, housing has declined in value for 57 straight months, almost 5 years.

Since the housing bubble topped in most areas in 2006, and it's now 2011, that makes sense: 2006 + 5 = 2011.

American homeowners have lost $6.5 trillion in equity in those 57 months. Here is the data from the Fed Flow of Funds household balance sheet:

Homeowner's equity:
2006: $12.8 trillion
2011: $6.3 trillion

Net decline: $6.5 trillion

That is a big number, and the analysis I presented in The Housing Bubble Broke the Middle Class (April 27, 2011) suggested that this $6.5 trillion was roughly half of the middle class's total net assets.

It's difficult to grasp such large numbers, so let's look at some actual houses. The sales price of houses is public record, and more or less at random, here is a selection of recent home sales here in Northern California. I purposefully selected sales from a spectrum of neighborhoods ranging from working-class to very desirable, exclusive suburbs (the price will telegraph the property's desirability).

The key point here is that these catastrophic losses are taken by someone: either the homeowner, the lender, or the taxpayer. The gains were paper, but the losses are real. That is the ongoing tragedy of the housing bubble.

1. Recent sale: $820,000
Last sold 2007: $1.172 million
Nominal loss: $355,000
(does not include transaction costs or losses due to inflation)

Even if owner put down 30%, their equity was wiped out.

2. Recent sale: $110,000
Last sold 2005: $370,000
Nominal loss: $260,000

3. Recent sale: $160,000
Last sold 2004: $455,000
Nominal loss: $295,000

4 Recent sale: $175,000
Last sold 1999: $205,000
Nominal loss: $30,000

Nationally, prices have round-tripped to 2003, but that masks the reality that in many locales, prices have returned to 1998 or even lower.
http://www.zerohedge.com/article/gue...one-house-time

[Benny Profane]

Damn you and your Zero Hedge, liv. I was going to use that post for the fifth year anniversery of this thread in a week or so. Oh well, happy fifth, people. Sure glad I rent.

[Benny Profane]

http://www.calculatedriskblog.com/20...ned-15-in.html

[iceman]

More people, scarcer resources, housing will come back. Eventually.

If people would just live in their houses and take their deductions (like your parents or grandparents did) and stop thinking of them as "investments", they will end up with equity eventually, most likely a lot of equity if they have a long time window. People just need to chill the fuck out. A house is for living. If you make a bunch of money, great. But you gotta live somewhere.

[gunit130]

"Real Estate Investment" is one of the greatest scams in history.

[4matic]

"Real Estate Investment" is one of the greatest scams in history.

As a place to live, yes. Lots of people have gotten very rich with real estate investments other than personal residence.

[gunit130]

As a place to live, yes. Lots of people have gotten very rich with real estate investments other than personal residence.

More often than not, someone gets rich off of a scam.