Wednesday Open Thread
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News and discussion about real estate & the housing bubble, specifically as it pertains to the Seattle area.
This is your open thread for today. Please post random links and off-topic discussions here.
Just some guy, living and letting live.
20 comments:
How about bringing back the anonymous comments? The traffic here has dropped by more than half and the discussions aren't as ....lively ;-) .
Actually traffic (as measured by site hits) is still about the same. But I do notice that there are a lot fewer comments. I want to give the experiment a full week. This weekend I may turn anon commenting back on.
Well, there is still the larger macro-trend of housing affordability being several multiples of median income then the historical trend. Especially in the light of median wage drops in this state...
I don't see any evidence of that...unless your a subprime borrower
Based on numbers from S-crow, most of the new loans are sub-prime.
So I ask you, how many comps set the price in a neighborhood?
The Housing Report That Mattered:
http://tinyurl.com/l6zgz
"Joe Soccer Mom is running out of available cash. Latest data on demand deposits on hand shows only $266.9 billion, the lowest number since 1991.
Unfortunately, Joe has a heck of alot more debt and high costs to service than in the past, see chart 1 and 2. On the third chart notice the wide, but declining defibs over the last three years in demand deposits. This simply shows the impact of mortgage payments towards expensive housing, and then the dependency on borrowings to keep cash on hand. According to a new report from Piscataqua Research, consumers relied on new debt for 88% of their cash flow in 2005."
http://www.xanga.com/russwinter
AP article on August new home sales (via the PI).
Choice quotes:
"The increase in new home sales contrasted with earlier reports showing that sales of existing homes fell in August for a fifth straight month..."
"Sales of new homes were up in every region of the country except the West, where they dropped a sharp 17.7 percent."
Also interesting...the August macroeconomic data looks bad. Spending is down, big-ticket purchases are down, and commercial aircraft sales are flying into the ground:
"last month...orders for commercial aircraft fell by 21.9 percent. Orders for military aircraft rose by 9.8 percent."
...goodbye Space City, hello Motor City?
These kinds of month-to-month numbers are mostly meaningless.
Agreed. However, this is the fifth consecutive month of declining existing-home sales, and that seems like a trend. The broader macroeconomic data just indicates that there might be an economic slowdown underway.
I don't know why new-home sales would be on the rise, unless it's just a statistical hiccup.
From Paper Money:
The fact is, July’s national new home sales number was revised down 5%, yielding a more dramatic percentage change to the August number which will, in all likelihood, be revised down as well.
Additionally, look at the other numbers found in today’s report:
National
1. New home sales were down 17.4% as compared to August 2005.
2. The number of new homes currently for sale increased 19.1% as compared to August 2005.
3. The number of months’ supply of the new homes has increased 43.5% as compared to 2005.
Regional
1. The West was down 17.7% as compared to July 2006 and down 34.7% as compared to August of 2005.
2. The Midwest was down 19.6% as compared to August 2005.
3. The South was down 10.2% as compared to August 2005.
Don't give up yet, Tim. Maybe some of the regulars are off on vacation or something.
kaleetan - Thanks for the softball.
* Leading Indicators are falling.
* The Dollar is falling.
*Median prices are dopping for the first time in 11 years, even as inventory climbs.
* How can Consumer Confidence be considered "up" to
104.5, when it was 107 in the previous month? What's more this is likely based on the price of gas, which has clearly been manipulated (when was the last time you saw gas prices go DOWN just before Labor Day).
* And as Mr. Bubble points out, new home sales are still down 17% on the west coast.
* Inflation being contained means that rental rates aren't increasing - even more reason not to buy, and further incentive to sell (since homedebtors can't rely on rent to cover their higher payments).
Hi All...I like the no anon policy. I hope it stays.
I'm playing at a big festival this week...busiest time of the year for me so I'll be laying low until I get back.
This just in...
1) A purchase transaction placed in our office fails to close on time due to borrowers own home failing to close in a state south of Washington State that is experiencing, as the appraiser involved in the sale says, "falling home values."
2) Short Sales are becoming more frequent. One of the more recent ones was a mind blowing loss to the lender. Yes, lender fraud was involved.
Big deal you say, foreclosures occur all the time. Yep, but,our office closed next to zero short sales in 03','04, and '05. Why? The market was screaming along so people could sell with ease, possibly making a profit.
The short sales we were involved in were obviously financed with 100% ARM products.
3) Had met with and helped a seller with signing documents who asked, "the buyer is getting a 100% loan and we increased my sales price over the list price to offset the closing costs we paid on behalf of the buyer. Is this common?"
I smiled and said, "yes, 100% loans are exceptionally common."
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Gotta love our weather though! Nearly October and 75-80 degrees!
Of course you like the anon policy, Meshugy...75% of the people calling your bluff post as anons.
That said, I used to post anonymously, and I probably still would, if only because blogger makes it obnoxiously difficult to post using an account (I had to retype my password/CAPTCHA 3 times to make this post!)
S Crow:
Define "short sale"...I'm unfamiliar with the terminology (applied to real estate, anyway).
Seattle Native APB-
Please e-mail me at tim@legacyescrow.net. I'd like to talk with you about the DR Horton issue. Your e-mail will be kept confidential.
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MisterBubble-
Short sale defined:
A short sale is generally when a homeowner owes the lender more than they can sell the home for and the homeowner may also be currently in default (usually the case.) When this occurs escrow then is in contact with the lender and assists in negotiating the lender taking less than owed. THIS DOES NOT NECESSARILY RELIEVE THE BORROWER FROM THE DEBT.
For example: An owner owes the bank $100,000 (after refinancing 3 or 4 times or obtaining the home financed at 100%, I digress). The owner is forced to sell because he has already received a NOD (notice of default) letter from the lender (some lenders actually record this at the county in which the home is located) OR realizes in order to cut his looming losses further and try to salvage credit rating, they elect to sell.
Unfortunately, in a FLAT or single digit appreciating market or Falling market, the owner realizes a few things:
1) The home is only worth $89,950. They owe $100K. They have selling costs such as Realtor fees at 6% of the sales price,title & escrow fees, recording fees, reconveyance fees, & excise tax. All said, this seller is probably underwater to the tune of around 10% of the sales price or more.
2)they may have to bring money to close
3)the home CANNOT be sold with enough sale proceeds to cover the mortgage debt, thus it is a SHORT SALE---and escrow then is in contact with the lender regarding the short sale.
Note: in most of these short sale scenarios most lenders require the seller to make -0-, nothing, nada, zippo on the sale.
The traffic here has dropped by more than half and the discussions aren't as ....lively
While I can't take responsibility for the livliness of the conversation, the fact I'm in the middle of a move, a whopper work schedule, a bazillion kiddie activities, and getting rear-ended, I have not had the time to clog up the threads, as is my habit.
I assure all those that yearn for pointless, and long-winded bloviations from The Big E, you shall be satisfied in the very near future.
Tim,
Keep the anon posts off the site. It's better this way.
Here a softball for all the renters(er.. i mean bears)..
It looks like a definate soft landing as we are starting to see some great economic news lately. Consumer confidence is UP, New housing starts are UP, Inflation is being Contained nicely, interest rates are trending DOWN. Are people still thinking we are going to see some gloom and doom crash? I don't see any evidence of that...unless your a subprime borrower. If we are in a bubble, its not popping any time soon.
Reference stocks in the winter of 2000, and get back to me.
Just about all the good news on the stock market has companies resorting to all sorts of excuses, one time charges, and accounting gimmicks. There really isn't much in the way of fantastic news - certainly not the kind that justifies the current stock prices.
Government econ numbers are just numbers the gov't churns out to make Wall St. tick. They are political and vary in definition from administration to administration.
I wouldn't chirp too much about gov't inflation numbers. They back out things like food, energy, housing - you know, the frills that nobody uses. They weight heavily on consumer electronics, because they show rapid deflation. So, if you are an anorexic, Amish that rents and uses alot of BestBuy stuff, those inflation numbers are meaninful. If not...
The soft-landing bravo-sierra is just the Wall Street Industrial Complex keeping their puppets in power this November.
I am a Republican, but even I can see just how transparent all this is.
New home sales in the U.S. unexpectedly rose in August from a three-year low the month before, signaling a possible pause in the housing slowdown.
Mortgage apps are down 5%, and sales only rose when compared to adjusted numbers. With an apples-apples comparison, sales fell.
Here a softball for all the renters(er.. i mean bears)..
Plymaster just cranked a 500' homerun
nolaguy put one in the cheap seats
mrbubble hit a screamer down the 3rd base line
crichard lined one to the left field gap
kaleetan,
Do you pitch for the M's?
I have been extremely busy at both work and home lately as well, and thus haven't been able to visit much. This probably won't change for the next few weeks, so I may still be a bit scarce. I still check in once or twice a day to see what's going on, and I like it without the "tomoato-throwing ghosts" as someone put it. I'd prefer we kept the anonumous posting out.
being a "new" home buyer I can relate to why new home sales are up vs existing homes sales...
New homes are being offered with great incentives and at a lower price than most existing homes...
New homes come with a warranty and inspection is usually a non-issue vs existing homes that potentially could be a money pit...
Builders also have a bigger incentive to sell the house... an existing home seller needs to move one house... a builder needs to move 100 homes...
Interestingly, when I shopped for houses in May, the builders were laughing when I asked for free upgrades/incentives... so I walked away from them... that same house is still on the market 3 months later... I know they must be sweating bullets by now and prices are about to drop...
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