US - Housing 01 (Dec 09 - Feb 12)

US - Housing 01 (Dec 09 - Feb 12)

Postby winston » Tue Dec 01, 2009 8:44 am

Sjuggerud: Why the government will do everything possible to hold up home prices
By Steve Sjuggerud in True Wealth:

Federal Reserve Chairman Ben Bernanke has bull-horned his strategy for years. And his strategy is he will not let prices fall in the long run. He will do whatever it takes – print money, cut interest rates to zero, buy trillions worth of investments nobody else wants. (He's done all those things.)

The government is doing all it can, too. Just [recently], the Obama administration extended the $8,000 first-time homebuyer tax credit, it added a $6,500 provision for move-up buyers, and it increased income limits. It'll keep Fannie Mae and FHA on life support.

While I mentioned the Obama administration, this is not a partisan deal... Every congressman knows he needs housing to go back up again to get reelected. When 25 out of every 100 voters are upside-down on their houses, they're going to be unhappy voters. So the congressmen think, "If I could just sprinkle a little fairy dust and make their house values go up again, I'd have a much better chance at getting reelected."

So the most important "fact" is that the government will do everything it possibly can to prop up the housing market. And it will keep going until it succeeds.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118528
Joined: Wed May 07, 2008 9:28 am

US - Housing

Postby LenaHuat » Thu Dec 03, 2009 9:56 am

The housing crash pulled the boards that underpinned the US bank's balance sheets. I created this thread to monitor this as housing news get buried in many other threads.
From this CNBC thread, we gotta remind ourselves :-
Last month the Omaha administration extended the $8,000 first-time home buyer tax credit, added a $6,500 credit for home owners buying a new residence, and increased income limits. Eligible borrowers must sign contracts by April 30 and close loans by June 30. (Lena : 2010 dates)

Zandi said another significant obstacle to a housing market recovery is the number of mortgages that are "underwater," where borrowers owe more for the loan than the residence is worth.
This negative equity disqualifies many homeowners from refinancing and prevents some from selling their homes.

Our house price outlook is dependent on two other key assumptions, including a more stable job market by early 2010 and that interest rates on fixed-rate mortgages remain well below 6 percent throughout the year," he said.


Zandi's full report is here:http://www.cnbc.com/id/34242187
Please be forewarned that you are reading a post by an otiose housewife. ImageImage**Image**Image@@ImageImageImage
User avatar
LenaHuat
Big Boss
 
Posts: 3229
Joined: Thu May 08, 2008 9:35 am

Re: US - Housing

Postby winston » Thu Dec 03, 2009 10:29 am

Why RIGHT NOW Is Deal Time in Real Estate By Dr. Steve Sjuggerud

U.S. home prices are down 70% in terms of gold.

Everything else on the planet is up: gold, stocks, bonds, emerging markets, commodities – you name it. But home prices are down... And I'm buying. Here's why:

* U.S. homes are more affordable than ever. Right here, right now.

* You can get truly "stupid" deals right now. I'm not sure how long they'll last.

I'll show you affordability first. Then we'll quickly get to the "stupid" deals...

People buy homes based on their mortgage payments. They ask, "How much can I afford per month?" So housing "affordability" is a matter of three things:
1) home price, 2) mortgage rate, and 3) family income.

Home prices have crashed, and mortgage rates are at record lows. But family incomes have held up... So falling home prices plus ultra-low mortgage rates mean homes are more affordable than ever. Take a look...

Homes Have Never Been More Affordable

The last time home prices were even close to this affordable was the early 1970s. And you can see, home prices nationwide soared from those cheap levels. But affordability has NEVER been as great as it is right this minute!

Sure it feels bad out there in real estate. But that's the feeling you need to get some truly "stupid" deals...

Let's use the last big bubble as our guide... the dot-com bubble of 2000. Take a look at the chart. The story is simple...

Bubble, Bust, Bounce... Then Grind

After the Nasdaq Bust, the biggest gains were made in the Bounce... from October 2002 to January 2004. In just 15 months, the Nasdaq nearly doubled.

Much bigger gains are possible in real estate.

You can make bigger gains because, unlike the stock market, you CAN find absolutely stupid deals in real estate. All real estate is local... and each piece of property is unique. That's not true for, say, shares of Apple. And you would never have the chance to buy shares of Apple way below the market price. But the seller of a unique property may be desperate and ready to sell at a huge discount.

Right now, the same sequence is happening in real estate as in the dot-com days: Bubble, Bust, Bounce, and then the Grind.

We're Seeing the Same Thing in Real Estate

I believe we're in the end of the Bust and the beginning of the Bounce. This is where the deals will happen. Finding a deal now will be your only legitimate shot at making triple-digit gains in residential real estate over the next few years.

But you have to do it right. You're not going to make triple-digit profits buying at market price and selling at market price. You must buy WAY BELOW market price.

I expect the real estate Bounce will be meek. So you CANNOT count on price appreciation to make you your money. Instead, you have to buy at the first red star – cheap, cheap, cheap – and sell at the next red star – which is STILL below market price.

Personally, I have made lots of offers... I was on the courthouse steps just yesterday to bid on a property. I've bought some property at ridiculous prices, so I can personally attest that there are extraordinary opportunities out there.

What I'm talking about takes a lot of work. And I've done a bunch of homework and still not gotten a property. That's OK. Be stingy... only be willing to pay less than 50% of market price. (You can use your county property appraiser's website to see the tax-assessed value of a property.)

Look, homes are more affordable than ever. But it feels bad out there. This creates your opportunity. It's deal time in real estate. Get started!

Source: Daily Wealth
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118528
Joined: Wed May 07, 2008 9:28 am

Re: US - Housing

Postby winston » Sat Dec 05, 2009 3:05 pm

Economist: U.S. Housing Crash Isn't Over Yet
Wednesday, December 2, 2009 3:17 PM

The meltdown of the U.S. housing market is not over yet, and home prices will soon start trekking downward again as a flood of foreclosures looms, a well-known economist said on Wednesday.

Mark Zandi, chief economist at Moody's Economy.com in West Chester, Pennsylvania, said in an interview with Reuters home prices will resume their decline by early next year as foreclosure sales pick up again.

"The housing crash is not over," he said.

The U.S. housing market has suffered the worst downturn since the Great Depression, and its impact has rippled through the recession-hit economy as well as the rest of the world.

A setback for the hard-hit housing market could portend problems for the U.S. economy.

Home prices, as measured by the Standard & Poor's/Case-Shiller U.S. National Home Price Index, will trough in the third quarter of 2010 after declining 38 percent, Zandi said.

The index peaked in the second quarter of 2006 and hit a trough in the first quarter of 2009, a drop of about 32 percent.

Home prices in many regions have been rising. That is because foreclosure sales fell over the summer and fall as mortgage servicers have tried to put stressed homeowners into the Home Affordable Modification Program and other modification plans, he said.

"This lull in foreclosures sales has resulted in the price gains in the past few months," he said.

"Foreclosure sales will increase, and home prices will resume their decline by early 2010 as mortgage servicers figure out who will not qualify for a modification," he said.

Zandi said 7.5 million foreclosure sales will have taken place between 2006 and 2011. The majority of these sales, however, have not emerged yet, with 4.8 million foreclosure sales expected between 2009 and 2011.

Attractive rates and high affordability have been positives for the U.S. housing market, which has been showing signs of stabilization. Sales have surged in recent months as buyers scrambled to take advantage of the government's first-time home buyer tax credit, which was originally set to end November 30.

Last month the Omaha administration extended the $8,000 first-time home buyer tax credit, added a $6,500 credit for home owners buying a new residence, and increased income limits. Eligible borrowers must sign contracts by April 30 and close loans by June 30.

Zandi said another significant obstacle to a housing market recovery is the number of mortgages that are "underwater," where borrowers owe more for the loan than the residence is worth. This negative equity disqualifies many homeowners from refinancing and prevents some from selling their homes.

Borrowers in negative equity are also more prone to defaults and foreclosures.

Zandi said about 25 percent of single-family homes with mortgages have negative equity.

"With so many homeowners so deeply underwater and unemployment very high and on the rise, the foreclosure crisis will continue putting more pressure on home prices," he said.

The U.S. Labor Department said the unemployment rate reached a 26-1/2-year high of 10.2 percent in October. November's unemployment rate in November will be announced on Friday.

"Our house price outlook is dependent on two other key assumptions, including a more stable job market by early 2010 and that interest rates on fixed-rate mortgages remain well below 6 percent throughout the year," he said.

The unemployment rate will peak at 10.7 percent in the third quarter of 2010, Zandi forecast.

http://moneynews.newsmax.com/economy/ho ... 93354.html
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118528
Joined: Wed May 07, 2008 9:28 am

Re: US - Housing

Postby winston » Sat Dec 05, 2009 5:04 pm

Finally! Rent Covers Mortgages Again By Dr. Steve Sjuggerud

Nobody has noticed... but an incredible thing has happened: Rents are finally covering mortgage payments again in residential real estate.

Earlier this week, I gave a speech to Jacksonville's business leaders on where to invest in 2010. After my talk, a local bank president gave me some great insights. The biggest was this... For the first time in years, rental income can pay for your mortgage in smaller residential properties.

It might not sound like much. But it actually led my family to amass much of its net worth...

My family didn't come from money. And my family members didn't have fancy jobs. But they did do one thing right... They bought rental properties over the years when the rent exceeded the mortgage payments.

Then the "miracles" of inflation and leverage made them a whole lot of money. Let me explain...

If you believe the government is willing to destroy the value of the dollar, then buying a rental property where the rent beats the mortgage payment is a no brainer now.

You see, if inflation arrives and the dollar's purchasing power keeps crashing, that little $100,000 rental property might someday cost $200,000 in weakened U.S. dollars.

As the value of the house goes up... as inflation goes up... you can keep increasing what you charge in rent. And if you buy it with a FIXED-RATE mortgage, then your COST in dollars stays the same.

Your cost stays flat. But your rent can go up. And the value of the property can go up. By buying a rental property with borrowed money (a fixed-rate mortgage), you're doing what my family did... using inflation and leverage to your advantage.

Your total return on the small amount you put up for this deal could be extraordinary.

Your downside risk is simply that you tread water... since your rent covers your costs. (Of course, there are maintenance issues with a rental property to watch out for, too.) Your upside potential is huge – in both price appreciation and future rent increases.

The facts are clear:
Housing prices have fallen by a third nationwide... even farther in many desirable places like my home state of Florida.
Mortgage rates are the lowest they've been in my lifetime.
The government is doing everything it can to prop up home prices.
The government is printing money at a rapid pace... which should lead to inflation.
You are setting yourself up to capitalize on inflation and leverage. When you compare your initial outlay to the money you could make, it's just silly.

The right thing to do is take advantage of all this silliness. Buy a rental property today where the rent more than covers the cost. It's a no brainer...

It worked for my family. It can definitely work for you, too... Between low home prices, low mortgage rates, and likely inflation, now is the best time I've ever seen to do this... Look into it!

Source: Daily Wealth
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118528
Joined: Wed May 07, 2008 9:28 am

Re: US - Housing

Postby winston » Mon Dec 07, 2009 10:21 pm

The Case Against Paying Your Mortgage

Stop paying your mortgage.

At least that's the message from a University of Arizona law professor. Brent White's new paper argues just this tactic, and it is hitting a nerve as the nation's housing crisis enters its fourth year.

White is hardly first to talk about the idea of walking away from a mortgage that is bigger than the value of a home.

Nonetheless, his suggestions have gone viral and are popping up online, in newspapers and on television.

http://moneynews.newsmax.com/streettalk ... 94536.html
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118528
Joined: Wed May 07, 2008 9:28 am

Re: US - Housing

Postby winston » Mon Dec 21, 2009 10:53 pm

The gains in U.S. home prices in recent months may not be sustainable and increases in some areas of the country appear to be in "bubble territory," an economist known for his property market expertise said on Tuesday.

Robert Shiller, an economics professor at Yale University and co-developer of Standard and Poor's S&P/Case-Shiller Home Price Indices, told Reuters Television he does not give quantitative forecasts on where home prices are headed but is concerned about the recent pace of increases.

Home prices in certain areas, such as Minneapolis and San Francisco, have risen by double-digits over a mere four months, and if viewed on an annualized basis, they look like they are in "bubble territory," Shiller said.

Source; Newsmax
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118528
Joined: Wed May 07, 2008 9:28 am

US - Economic Data & News 5 (Aug 09 - Jan 10)

Postby kennynah » Tue Dec 22, 2009 11:30 pm

Existing Home Sales Increase By More Than Expected In November
12/22/2009 10:27 AM ET



(RTTNews) - With first-time homebuyers rushing to close sales before the original November 30th deadline for the recently extended and expanded tax credit, the National Association of Realtors released a report Tuesday showing stronger than expected existing home sales growth in November.

The report showed that existing home sales rose 7.4 percent to a seasonally adjusted annual rate of 6.54 million units in November from a revised 6.09 million in October. Economists had expected existing home sales to rise to 6.25 million from the 6.10 originally reported for the previous month.

Lawrence Yun, NAR chief economist, said, "This clearly is a rush of first-time buyers not wanting to miss out on the tax credit, but there are many more potential buyers who can enter the market in the months ahead."

"We expect a temporary sales drop while buying activity ramps up for another surge in the spring when buyers take advantage of the expanded tax credit, which hopefully will take us into a self-sustaining market in the second half of 2010," Yun added.

While the first-time homebuyer tax credit had been due to expire at the end of November, President Barack Obama signed a bill that extended and expanded the tax credit.

The bill extends the $8,000 first-time homebuyer tax credit through April 30, 2010 and expands it to include a $6,500 credit for people who have lived in their current homes for at least five years.

The stronger than expected existing home sales growth reflected increases in sales in all four regions of the country.
Options Strategies & Discussions .(Trading Discipline : The Science of Constantly Acting on Knowledge Consistently - kennynah).Investment Strategies & Ideas

Image..................................................................<A fool gives full vent to his anger, but a wise man keeps himself under control-Proverbs 29:11>.................................................................Image
User avatar
kennynah
Lord of the Lew Lian
 
Posts: 16005
Joined: Wed May 07, 2008 2:00 am
Location: everywhere.. and nowhere..

Re: US - Economic Data & News 5 (Aug 09 - Jan 10)

Postby mojo_ » Wed Dec 23, 2009 12:00 am

grandrake » Thu Sep 25, 2008 4:41 pm wrote:
mojo, do you now what's the "preferred" supply level for the US housing market that the experts are looking at? I think I've read somewhere that it would be a good thing if this level dropped to somewhere in the region of about 6 months, but I can't recall where I read it, and whether 6 months is the correct number I saw.


mojo » Thu Sep 25, 2008 5:21 pm wrote:
You're right:
Six months' supply of homes at the current sales pace would reflect a balanced market for existing homes, according to the Realtors. New homes "should be around four or five months at the most,'' Dotzour said.

Latest 2009 data
Category NOV OCT SEP AUG JUL
Existing Home Sales 6.54M 6.09M 5.54M 5.09M 5.24M
Months Supply 6.5 7.0 8.0 9.3 9.3
Median Price Y/Y -4.3% -7.1% -7.9% -12.7% -13.6%
Not what but when.
User avatar
mojo_
Foreman
 
Posts: 384
Joined: Sun May 11, 2008 6:44 pm

Re: US - Economic Data & News 5 (Aug 09 - Jan 10)

Postby mojo_ » Wed Dec 23, 2009 8:22 am

http://www.channelnewsasia.com/stories/afp_world_business/view/1026489/1/.html wrote:
Traders focused on industry figures showing existing US home sales surged 7.4 per cent in November to the highest level since February 2007, as buyers rushed to take advantage of tax credits.

Sal Guatieri, economist at BMO Capital Markets, said that even though the housing sector had help from hefty tax credits and easy money, it has been important to reduce the glut of unsold homes.

"The US housing market is now balanced for the first time since the bubble burst, thereby stabilizing prices," he said. "The latter is a key ingredient for sustaining the economic recovery in 2010."

After the tax credits expire and as interest rates increase, will unsold homes inventory become destabilised again?
Not what but when.
User avatar
mojo_
Foreman
 
Posts: 384
Joined: Sun May 11, 2008 6:44 pm

Next

Return to Archives

Who is online

Users browsing this forum: No registered users and 5 guests

cron