Housing Doom

Bubbledom, rejoice!  This just in from the National Association of Realtors:

WASHINGTON, April 30 /PRNewswire-USNewswire/ — David Lereah, senior vice president and chief economist of the National Association of Realtors(R) for the past seven years, is joining Move Inc. as executive vice president of a new business entity, effective in mid-May.

Move Inc. operates NAR’s official Web site, http://www.realtor.com/, and http://www.move.com/.

Lereah will act as chairman and partner of the new enterprise under Move Inc. that will launch in the third quarter of 2007. He will serve with Allan Dalton, who will be president and CEO of the new business entity, which will be transformational for both consumers and real estate professionals.

"David is an expert on real estate and the economy, and his stature and expertise enhanced NAR’s position as the most credible source on economic and policy issues affecting the housing industry in the United States and abroad," said Dale Stinton, NAR executive vice president and CEO. "We wish him the greatest success in his new endeavor."

Read the rest of this entry »

Doomers, let’s hope the U.S. government doesn’t read this one.  The New Zealand government has a plan to artificially prop up home prices, I mean help first time home buyers. They are launching a plan to kick in 25-30% of the purchase price of a home: [Hat tip once more to Ken!]

The Government has confirmed plans to unveil a shared equity scheme to help people buy their first homes.

Housing Minister Chris Carter said tonight it would be a way to provide direct financial assistance to buyers faced with prices which would otherwise stop them getting into the housing market.

"You would have partial ownership and share the results of any increase in value," he said on TV3 News.

"It’s a new concept for New Zealand, we’re not sure how it will work, but it will only work if we make more affordable homes available."

TV3 said a pilot scheme was likely to start in Auckland next year which could involve the Government paying for a 25 per cent or 30 per cent stake in a house.

Read the rest of this entry »

It’s Monday Morning and the MSM seems fast asleep.  Indeed in France and other countries that take May Day seriously, many "building a bridge" over this isolated business day may not be up for much before Wednesday.

Read the rest of this entry »

We here at Doom have lamented the spin from the REIC in the U.S. and Canada, but spin seems to be a global, not just a North American phenomenon.  New Zealand is a case in point.  Kiwis have been experiencing a bubble of their own, but people are starting to get nervous that maybe all is not right with the housing market.  [Hat tip to Ken, who keeps me abreast of the New Zealand market!]

From yesterday morning’s Sunday Star Times (Auckland), Mortgagee [Foreclosure] Sales Double:
Read the rest of this entry »

On Friday the Census Bureau released its report of vacancy rates and homeownership.  According to Reuters:

The share of U.S. homes owned but empty rose for the 10th straight quarter at the end of March to a record 2.8 percent, the Census Bureau said Friday.

The number has been steadily climbing since the fourth quarter of 2004 when it was at 1.8 percent and indicates a housing market bloated with speculators, said William O’Donnell, head U.S. government bond strategist at UBS Securities LLC in Stamford, Connecticut.

What is most striking is the rise in vacant properties that are for sale:
Read the rest of this entry »

The May issue of Realtor magazine is out.  It includes an "economic report" by the National Association of Realtor’s chief economist, David Lereah. I thought I would share just a bit of his "Subprime Reckoning" article:

Now, about one in eight adjustable-rate loans (a quarter of which are subprime) totaling some $325 billion are in foreclosure, many in high-cost states like California. More trouble could be on the way. A bit more than $300 billion in subprime ARMs is due to reset during the next two quarters. Most lenders will try to work these out, but in some cases the loans will be foreclosed and the houses put on the market, adding to already ample supply and holding down prices.

Without sugar-coating reality, there is some good news: These foreclosures are occurring in relatively healthy local markets, with solid economic activity and job growth, improving the prospects of the properties selling without too much delay.

Read the rest of this entry »

Who says there’s no more land? Why just last Tuesday a Swiss Scientist announced the discovery of Gliese 581c, an earth-like globe just 20 light years away. Coming soon — The Space Cadet, starring Donald Trump!

Read the rest of this entry »

Long time readers know that I take exception to the MLS reports, and in particular to the reports from the National Association of Realtors. [OK, you only had to be a reader since yesterday to know that, but that's beside the point.]

Part of the problem with these reports is the willingness of the cheerleaders to torture the data rather than analyze it.  We’ve been told the market has been "stabilizing" or "bottoming" for months, only to be told about a new "stable bottom" the next month. 

Lousy analysis isn’t the only issue.  Probably the bigger problem is the nature of the MLS. The MLS was designed as a tool to help agents sell houses, and not as a resource for researchers.  Consequently, you can’t count on the "purity" of the data. Let me demonstrate: [Thanks L for your help on this one!]

Consider this home for sale in Glendale, AZ:  [MLS#2744925]

4 bedroom, 2 bath, 1,865 square feet.

Then there is this home, also for sale in Glendale:  [MLS#2744897]
Read the rest of this entry »

An article from the Online Journal quotes Henry Paulson:

Treasury Secretary Henry Paulson delivered an upbeat assessment of the slumping real estate market on Friday saying, “All the signs I look at” show “the housing market is at or near the bottom.”

Paulson added that the meltdown in subprime mortgages was not a “serious problem. I think it’s going to be largely contained.”

It’s difficult to see how "containment" can be achieved though when subprime mortgages are out there masquerading as less risky loans.  One of the methods being used to gussy up a subprime borrower is to use a "credit repair" service.  From a thread on Broker Outpost yesterday:
Read the rest of this entry »

As you can imagine, as the mother of five, I know a fairy tale when I see one.  Consequently I recognized this one right away from the Arizona Republic:  [Hat tip M.R.!]  It was entitled U.S. Housing Market Worsens as Valley Improves.  Like all works of fantasy suited to the minds of children, I recognized that this fairy tale needs pictures.  So here is my illustrated version of their article:

Newly released data show that U.S. home prices fell their steepest in almost 15 years in February. And the industry got another shot of bad news when sales of existing houses plunged in March by the largest amount in nearly two decades.

The news was better here in the Valley, where the housing market actually began to show signs of life in March.

Oops I mean:
Read the rest of this entry »