It’s Friday, and thanks to cpgone for sharing Clusterstock’s Brief update on the mortgage collapse. They have a bunch of interesting graphs that pretty much look like a collection of hockey sticks. Here’s one we were told we’d never see:
So what else is interesting out there today? This is an open thread, so let us know what’s on your mind.
Northern Virginia Housing Bubble Fallout
Mish's Global Economic Analysis
Ohio Fraudclosure
UK House Bubble
Bubble Meter
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Wow…we’re still patiently waiting for prices to stabilize at the jumbo prime level here in DC. I agree with the outlook that there is another major leg down coming after the home buyer tax credit frenzy dies down and foreclosures and unemployment continue to rise.
Also, I’m hearing folks talk about intentionally not paying their mortgage, NOT because they can’t afford to but because its a free-rent strategy with very little downside from their view (jingle mail at some point, with a lawyer and accountant on their team to help them avoid any serious liability). This is from double income no kids people in their early 30s with good credit.
DC-
Now the moral hazard kicks in big time. I suspect that a lot of folks are now thinking “They can’t foreclose on all of us.” You can always put the payments in the bank, and if the bank gets too pushy, get the mortgage caught up.
This is the price of all the bailout/intervention.
Find out the unemployment rate among these people, because these are the Bachelors and above people who own these houses. When the unemployment rate of this class of people reaches 40%,you will have revolution.
But not less than 40%.
According to new research from the University of Chicago’s Booth School of Business and Northwestern University’s Kellogg School of Management.
“26% of the record numbers of home mortgage defaults across the country are “strategic” — that is, calculated economic decisions to bail out of loans by owners who actually have the money to make the payments but can’t handle the negative equity they’re carrying caused by local property value declines.”
Nationwide, according to data from Zillow.com, 22% of all homeowners were underwater, with mortgage debts that exceeded their home values, in the first quarter of 2009.
In some parts of California and Nevada, more than half of all households have negative equity.
“In a few localities, the size of the equity deficit is staggering: In the Salinas, Calif., metropolitan area, for example, the median equity for people who bought their homes in 2006, near the peak of the boom, is now a negative $214,305, according to the study.”
Read More: http://www.housingnewslive.com
John-
I really liked the “Clunker-like” link you found for the sidebar. I agree that with them that the “housing stimulus” is just stealing from future demand:
He sees a risk regional and local housing markets that have not touched bottom will be artificially inflated, while borrowers lured by government stimulus could rush into still-sinking markets.
“This manipulation is going to be disruptive in different ways for different markets,” he said.
I wonder if someday students will sit in macroeconomic classes studying this period of time. I picture the instructor saying something about how this was America’s experiment with a centrally planned economy- and what a miserable failure it was.
Igor is disgusted- so am I
twist1 -
I’m hoping for “someday soon.” Yesterday I sent the link for the new subprime II transcript off to one of the biz profs at St Mary’s, suggesting that the set (we should have a handle in I – V & “Danish pretty soon) would make a dandy resource for a term paper or class discussion.
Glad you liked that one, as I’ve been mostly off the sidebar and hiding in the dungeon with Igor beating subprime IV into some kind of shape.
[1]: making some progress with the HTML for footnotes. Neat, eh?
Poor Cato Institute. Everyone laughs at them because, although they seem to oppose the status quo, they undercut their own position by adopting the terms of the status quo.
“Demand” for housing? Housing has NEVER been about demand in the United States. It has always been a very controlled, statist program. So to what are they comparing it to come up with the notion of “demand.” Not life on this planet.
“Demand” is one of those mythical terms (like the gods dining on Olympus) designed by the power structure as tool with which they can manage us.
If you start thinking of housing in terms of something other than “demand,” then…
you have actually started to think. Try it sometime!
And by the way, those people not paying as part of their strategy, that’s why I’m saying, find out what their unemployment rate is.
Nothing is going to make them think except NO INCOME. Until, they’ll just keep gaming the system. Why not? It’s a system set up for homeowners. It’s THEIR system. Why shouldn’t they loot it? It’s our feral bourgeoisie. They’re going to keep sawing on that branch they’re sitting on til they fall to their deaths.
Why do you WANT to reform that system? Why do you WANT to protect them. It’s like saying, “It’s 1938 and I wish the German people well.” No, in 1938 you do NOT wish the German people well: you wish them DEATH.
Who killed America? Americans. Don’t cry over the collapse of this continental criminal conspiracy.
No wonder the jumbo loan market is/was so frozen up, potential for much greater losses vs. your basic 100k home?
JR (#8) -
Come back tomorrow and you should get something to really sink your teeth in
Yeah, nothing is selling in the high end. The low end has been doing pretty good though – but we’ll see what happens when the tax credit expires in November. All the activity is short sales and reo’s. The Gainesville Foreclosures page on our site receives 90% of the total site traffic.
Take a look at this 30 year chart of collapsing home prices in Merced, CA.
Merced Real Estate
That link is worth a thousand words!