Housing Doom

“He who defends everything defends nothing.” - Frederick the Great

October 30th, 2009

Op-Ed Friday: Vacancies Headed Back Up Again

It’s Friday, and while vacancies are supposed to be down from the first quarter, it looks like they are headed up again:

Oct. 29 (Bloomberg) — About 18.8 million homes stood empty in the U.S. during the third quarter as banks seized properties from delinquent borrowers and new home sales fell in September.

The number of vacant properties, including foreclosures, residences for sale and vacation homes, rose from 18.4 million a year earlier and 18.7 million in the second quarter, the U.S. Census Bureau said in a report today. The record high was in the first quarter, when 18.95 million homes were vacant. The homeownership rate, meaning households that own their own residence, stood at 67.6 percent.

The reporter must have needed a positive comment- this seems to be the happy thought de jour:

“We are bumping along the bottom of the housing market,” said James Lockhart, vice chairman of WL Ross & Co. and the former director of the Federal Housing Finance Agency. “There is the potential for another swing down.”

Somehow that reminds me of Robert Toll’s famous "dancing on the bottom" comment back in 2006- we all know how well that one worked out.

Read the rest of this entry »

October 28th, 2009

AEI Subprime VI: Zimmerman Presentation

Doom Transcripts: Index & Guide

Housing Doom is pleased to present a second selection from our under-construction transcript of the American Enterprise Institute’s October 22, 2009 event "The Deflating Bubble, Part VI: The Lessons of the Bubble and Crisis".1

The event site has a number of resources, including an audio and video of the proceedings. There is as yet no official transcript.

This is the presentation by UBS fixed income researcher Tom Zimmerman.  Tom’s the most moderate of AEI’s Six Bears but in my opinion the scariest, because he usually brings the hardest data to the table.


Tom Zimmerman: [0:11:43] Thanks a lot, Alex, it’s great to be here again. [slide 02] What’s amazing about coming down here every 6 months is that I’m usually viewed as one of the more bearish people in my shop, and also when I speak at conferences around the country I’m usually sort of sitting on the bearish side of these discussions. But I come down here, [laughs] and I’m not … it’s a … I feel like I’m a raving bull about what’s going to happen in the world when you listen to some of these people talk. So anyway, that hasn’t changed, in the last 6 sessions, so …

We had lunch together today, and it’s exactly the same.

I see some green shoots here and there, but I think that it’s not something the other panelists see some real major problems down the road.

What I thought I’d do today is just continue some of the things I’ve talked about before in terms of the housing market, mortgage market. And then at the end talk about some of the lessons that we’ve learned from this bubble which isn’t over with yet, but we’ve learned some lessons or at least some take-aways from it.

Read the rest of this entry »

September 10th, 2009

New Home Market “Stabilizing”? Maracay Homes Doesn’t Think So

 

You can watch the news to find out how the new home sale market is "stabilizing" and homebuilder sentiment is "improving", or you can do like I do and take a peek into L’s junk mail for a more realistic view of where builders think the market is headed: [Thanks L- it's great to have you back!]

Read the rest of this entry »

June 9th, 2009

Kat Sanders: Problems in the Construction Industry

Doomers please welcome Kat Sanders, who has been kind enough to submit the following general commentary on the Home Builders to Housing Doom.  Kat blogs at her Construction Management Degree blog and, within that site, at The Fixer-Upper Blog. She invites your comments and questions either below in the comments or at her email address katsanders25@gmail.com.

 


Problems in the Construction Industry

by Kat Sanders

It’s not a good time to be connected in any way to the real estate or construction industry. The recent subprime crisis and the disastrous consequences that followed have taken its toll on everyone connected in any way to the real estate and building industries, and as recent statistics portray, there is no sign of a let up any time soon. A look at the figures shows that:

  • More than 60,000 workers in the construction industry have lost their jobs
  • There is a significant slowdown in the real estate industry with property values falling sharply.
  • The severe credit crunch and the sharp fall in the demand for and price of houses has pushed the construction industry to the back foot.
  • Builders are being pushed to conform to green building standards and use sustainable material and environmentally friendly designs to construct new buildings
  • There is an increasing shortage of skilled workmen and labor
  • Contractors are being forced to declare bankruptcy or go out of business
  • Construction spending has fallen by as much as 50 percent over the past year
  • Contractors who are still in business are trying to hold their heads above water by cutting costs and selling all the assets that they don’t really need but which cost them money to maintain.
  • Commercial property prices have plunged leading to reduced salaries and the forcible laying off of staff.

The solutions to these problems may not be easily visible now, especially with the economy still struggling to look up. The only way to tide over this crisis is to cut costs and hope to stay in business till things start to look better. There have been reports that prices in the housing sector have bottomed out and that there are signs of revival in the market. If that is true and if these early trends show promises of continuing, then the problems that the construction industry is facing will solve themselves.

Read the rest of this entry »

|