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Tuesday, September 29, 1981

Friday Open Thread

This is your open thread for today. Please post random links and off-topic discussions here.

18 comments:

Richard said...

Here's an article about the dramatic downturn in raw lumber prices. How dramatic? "prices are close to the cost of production"

Lumber Prices Getting Cut by Cooling Housing Market

With the drop in prices of raw materials and the growing surplus of construction workers it's not inconceivable that builders will be able to put up houses for less money than they could last year.

Christina said...

How long will housing slump last?

S Crow said...

Richard -

Absolutely true!

A year ago OSB sheathing was upwards of $18/sheet.

Today, Home Depot selling OSB for $5.95/sheet.

I noticed lumber prices dropping drastically.

S Crow said...

Reading the housing feeds & market news this morning I found this snipit fom blogger 'Bri up in Seattle':

"Just a little tidbit from up here[Seattle],Just saw yesterday on the back inside page of Seattle Weekly, condo ads for Epic Condominiums. Price reduced on 2bd/2ba condos from 425,000 to 359,900 and now with 2 parking spaces..15 percent price cut. I think these are brand new, not conversion."

synthetik said...

..and builders lowering prices and offering incentives follows other patterns around the country.

Bloomberg article about cancellations.

``Since the start of 2005, the inventory of unsold new homes has climbed 29 percent, while the stock of unsold existing homes is up a staggering 82 percent,'' Carson says. ``During the sharp, protracted housing downturn of the early 1990s, these inventories actually declined, helping to cushion prices.''

And CNNMoney has housing starts fall, confusion rises

I am not confused, are you?

plymster said...

Nice post S Crow. National builders are hemorrhaging money elsewhere, so they need capital NOW. As a result, they'll lower prices in Seattle to get it. This will result in downward pressure on homes/condos in the area, killing the specuvestors, and driving the market down even further.

Denial and stubbornness will keep the Seattle down RE market "sticky", but as the housing-led recession hits, those $200K households will vanish, leaving no one left to buy the inflated homes.

The dominos are falling.

Matthew said...

http://www.clubvibes.com/forum/topic.asp?topic_id=425277&whichpage=1

a little debate I'm getting into right now with a half rate fly by night 25 year old college drop out mortgage broker.

Good for a laugh.

Nolaguy said...

Cashtration (n.): The act of buying a house, which renders a person financially impotent for an indefinite period of time.

Christina said...
This comment has been removed by a blog administrator.
msrelo said...

He sounds like the kind of guy that would advise you spend the old heloc on a set of dubs and new H2...

synthetik said...

matthew... for a second I thought you were the stick figure avatar. ;)

Speaking of tools, that guy is poised for a serious life adjustment. Sounds like a real catch with the ladies too; awwww yeah!

plymster said...

For the record, I can stand the occasional spelling error. For example, I have a problem remembering how to spell "occasional" (but that's what www.dictionary.com is for). But matthew's little friend, "KenDoll911" who claims to be a mortgage broker, really needs to learn to spell "amertized" and "princepal" correctly.

[rant]
These are the sorts of douchebags that deserve all they'll get in the coming red crush. These are the free-wheeling, risk-taking, H2 driving c***suckers that are begging for a major reaming. At least during the tech boom, it was mostly college grads with some technical training that were cashing in. In this nutty RE "boom", any walking weiner with a Carlton Sheets guide or a copy "Rich Dad, Poor Dad" and no docs (for his no doc loans) could start screwing the economy up.

Justice awaits.
[/rant]

Wanderer said...

I absolutely LOVE Kendoll911's explanation of adjustable versus fixed rates. Even if his discussion of compound and simple interest rates was correct, it seems he is confused between a fixed rate loan and a negative ammortization loan. I would love to discuss finance with him, but I fear that joining the Club website might get me addicted to raves and X.

CRichard said...

The new OCC lending guidance came out today, but no one seems to know if it represents a bang or a whimper. I have been waiting for this because for a while because, if it is applied seriously, it will certainly eliminate a huge portion of buyers in bubble areas. For this same reason, however, I expect it to be largely ignored. Winter and spring could get interesting.

SeattleMoose said...

"With the drop in prices of raw materials and the growing surplus of construction workers it's not inconceivable that builders will be able to put up houses for less money than they could last year."

Not to mention that the number of people robbed by men wielding hammers will increase exponentially.

synthetik said...

File this under "Gee, we couldn't see this coming at all!"

---nip

"Federal regulators directed banks today to properly explain the risks posed to borrowers from interest-only and other nontraditional mortgages.

The guidance was aimed at addressing the fear that consumers don't understand all the repayment risks involved in these mortgages, including rising interest rates which could greatly increase their monthly payments.

The regulators said that banks needed to make sure that the loans they made were "consistent with prudent lending practices, including consideration of a borrower's repayment capacity."

"Mortgage delinquency rates are rising and foreclosure rates are also beginning to pick up. This could begin to affect the financial health of the banking system," said Mark Zandi, chief economist at Moody's"

---tuck

That guy is a freakin' GENIUS!

Crashcadia said...

Richard

Thank for the link to the article on lumber prices.

I got into a debate a few days ago with coworkers about this but could not find the article to support my argument.

By the way, my coworkers still deny that there is a bubble.
They probably will deny it all the way into the pending recession.

SeattleMoose said...

Check this out...