Home sales may dry up in December

BusinessWeek's Hot Property blog warns that home sales will dry up when the $8,000 tax credit goes away:Just when the home building industry seemed to be bouncing back, news from California raises troubling questions. The California Building Industry Association says its members reported a significant drop in traffic to their developments in July because the state stopped taking applications for a $10,000 tax credit for new home buyers.The $10,000 credit was authorized by the state legislature last February as a way to jump start California construction...

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Has housing hit bottom?

The arguments for and against a bottom, by USC professor Richard Green:Everybody wants to know if we have hit bottom. There are three indicators suggesting we have—and three suggesting not. The good: prices in many markets have fallen below replacement cost (which is a pretty robust fundamental in the absence of population declines). Morris Davis at Wisconsin has shown that rent to price ratios have returned to be more in line with long term ratios, and given how low mortgage rates are, this is comforting. And resale inventories in California have...

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Housing has likely bottomed. New bubble forming?

I hate to be the bearer of bad news, but as I'm sure you're already aware, almost all data seems to be indicating a bottom in housing.Despite the claims of the Calculated Risk blog (which I have echoed), the bottom appears to have occurred simultaneously in permits, starts, sales, and prices.The bottom also appears to have occurred simultaneously in nearly all parts of the country. The S&P/Case-Shiller seasonally-adjusted home price index shows...

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Case Shiller Price Index Up

"The prices of single-family homes in 20 major cities rose a seasonally adjusted 1.4% in June, the second increase in a row after falling every month for three years, according to the Case-Shiller home price index released Tuesday by Standard & Poor's." (Market Watch)Fully 18 of 20 markets in the Case Shiller Home Price Index showed a rise in prices, demonstrating that the trend is broad-based. Only Las Vegas and Detroit saw declining overall prices in June. Nevertheless, on a year-over-year basis prices still are off by a considerable margin,...

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More bubbles to come

"Helicopter" Ben Bernanke, a guy who cannot recognize asset bubbles, is to be reappointed Chairman of the Federal Reserve. From The Wall Street Journal:President Barack Obama will announce the nomination of Ben Bernanke to a second term as Federal Reserve chairman on Tuesday, opting for continuity in U.S. economic policy despite criticism in Congress of the low-key central banker's frantic efforts to rescue the financial system.Mr. Obama's decision...

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Correcting two related housing bubble myths

A number of times I have heard journalists—who helped cheer-lead the housing bubble and who regard any price correction as a bad thing—falsely claim that the housing bubble began around 2003-2004. After all, that's when the bulk of the sub-prime lending began so that must be when the bubble began. A look at the inflation-adjusted data, however, shows that the bubble began growing in 1998 and we were clearly in mild bubble territory by 2000.The extensive...

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An economic recovery forecast

The Economist makes its prediction for the shape of the economic recovery:A gloomy U with a long, flat bottom of weak growth is the likeliest shape of the next few years.They also have a discussion about the housing market he...

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Urban planners vs. "suburban sprawl"

Cato Institute Senior Fellow Randal O'Toole discusses urban planning and suburban spra...

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Existing home sales are up, but...

From CNBC's Diana Olick:Just like in retail, where the big bargain stores are showing gains, only the low end of the housing market is moving. ... I spoke with Spencer Rascoff of Zillow.com today, who claims, "this is not a real recovery." Higher sales on one end of the market do not a full recovery ma...

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1 in 8 mortgage borrowers behind on their mortgage

More mortgage borrowers are falling behind:More than one in every eight homeowners with a mortgage was behind on home loan payments or in some stage of foreclosure at the end of the second quarter, as mounting unemployment aggravated the housing crisis, the Mortgage Bankers Association said on Thursday. ...Jay Brinkmann, chief economist at the MBA, said signs were growing that mortgage performance is being affected more by unemployment than by the structure of risky home loans, indicating a new stage in the foreclosure crisis...While the proportion...

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Ever wanted a house on the Chesapeake?

Here is Zillow.com's estimate of ten years' of home values on Kent Island (specifically Stevensville, MD) on the Chesapeake Bay. Give it time. Prices are still falling.Kent Island is where the Chesapeake Bay Bridge crosses. It's circled in the map below.The only downside (besides the current price): Mapquest says a commute to DC takes roughly an hour each way. Anybody know of good jobs available in Annapol...

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Robert Shiller: "There could be another bubble. Absolutely. There could be."

...But the market is predicting flat housing prices over the next five years.It's a 10 minute intervi...

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Quote of the day

Megan McArdle:People still have something of a bubble mentality. They want to get in now, when things are cheap, because they expect that we'll return to the housing price inflation of the 1990s, if not the last decade.Her entire blog post is well worth readi...

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"Most of the country is about half-way there"

Update: As a loyal reader points out in the comments, Kendra Todd is an idiot. To quote Kendra from September 26, 2006:You can't go anywhere without hearing people talk about "the real estate bubble." Such talk drives me to distraction, and I'll tell you why. It's because there is no real estate bubble. Bubbles are for bathtubs. Despite a thousand articles in Sunday newspaper real estate sections, the bubble is a my...

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Lawrence Yun Makes Another Inane Comment

With all the competition in the market for mid- and low-priced homes, Yun said there are reasons for potential homebuyers to be optimistic about the current market.“People who are buying today might see a home equity gain a year from now,” he said. “Further decline in prices could be minimal -- if there are price declines at all.” (San Diego Source)What is this statement supposed to be? Spin. More Spin. Another inane statement from Lawrence Yun,...

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An interview with Karen Weaver

Here's an interview with Karen Weaver, one of the Deutsche Bank analysts who predicts that 48% of all mortgage borrowers will be underwater by 2011.Here's an sampling:The obvious takeaway of falling home prices and being underwater is what it does for defaults. But there's a bigger implication, which is that when we look at the economy over the past decade or two, it's been very much a consumer economy.What has been driving the consumer hasn't been gains in incomes. What has been driving them is easy credit and rising home values. And the fact...

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Home price reductions

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Zillow COO's housing prediction

Zillow.com's Chief Operating Officer, Spencer Rascoff, gives his prediction for the housing market:"In the second half of 2009, home values are going to continue to decline. Foreclosures are going to keep making up a significant part of the sales, probably about a quarter of all sales in the back half of 2009 nationwide will be foreclosures," says Rascoff, adding, "I think you'll have those homes clear off the market but new foreclosures come on the market right behind them."Rascoff believes we are a full year away from a true national bottom in...

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Dow Jones: Home prices have not bottomed

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Foreclosures up 32% year-over-year

More bad news for homeowners, foreclosures keep rising:The foreclosure plague continued to devastate last month.There were more than 360,000 properties with foreclosure filings — including default notices, scheduled auctions and bank repossessions — an increase of 7% from June and 32% from July 2008, according to RealtyTrac, an online marketer of foreclosed homes. In fact, one in every 355 U.S. homes had at least one filing during July. ...The jump...

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Another major mortgage provider goes belly up

A major bank seizure occurred this weekend:Troubled Colonial BancGroup will be bought by rival BB&T Friday, the government said after state regulators closed the bank whose assets had been frozen by a federal judge.The Montgomery, Ala., bank, which has 346 branches spread across Florida, Alabama, Georgia, Nevada, and Texas, is the sixth largest bank failure in U.S. history and by far the largest failure of 2009.With $25 billion in assets and $20 billion in deposits, Colonial is 100 times larger than the typical bank to have failed this year....

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Ask your landlord for lower rent

MarketWatch.com gives the reasons why:There are several reasons landlords may be willing to make a deal these days.Eighty-eight percent of property owners who participated in a recent Rent.com survey said that job losses are contributing to vacancy rates. Fifty percent said would-be tenants can't afford rent or are trying to save, and 45% said that the trend of more people doubling up with roommates is causing units to sit vacant. The survey polled owners representing 3,192 apartment communities throughout the country.Plus, there's even more inventory...

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Have home prices hit bottom?

The Center for Economic and Policy Research (CEPR), one of the first organizations to spot the housing bubble, has a new paper out analyzing home prices in different markets throughout the U.S.A. Here's the introduction:As explained in our earlier papers, home prices have typically risen at approximately the rate of overall inflation over the course of the last century. Keeping with economic theory, which contends that a home’s sale price is derived from the rents it can generate, home prices in the United States have also moved in line with rental...

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Freddie Mac: Housing recovery is only seasonal

Via Calculated Risk, Freddie Mac says the housing recovery is "largely seasonal."Do you agree? Will home prices continue their decline once the spring/summer selling season is ov...

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A creepy way to get a bargain on a house

I'd rather pay more mon...

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BubbleSphere Roundup

Research on Homeownership Rate through 2030 (Calculated Risk)NODs Increasing, Foreclosures Decreasing (Calculated Risk)Government's Mortgage Company Turns a Profit. What's Next? (O.C. Regist...

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The recession is ending; may be over

The number of new job losses continues to decline. Compare these U.S. Bureau of Labor Statistics job loss numbers with the numbers from Automatic Data Processing, which I published on Wednesday.The unemployment rate is no longer spiking. It may drift upward at a slower pace if we have a jobless recovery, but the end of a sharp upward spike has historically been a sure sign of the end of a recession.Weekly initial unemployment insurance claims peaked...

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48% of homeowners with mortgages to be underwater by 2011

That's the forecast of Deutsche Bank, via The New York Times:The percentage of U.S. homeowners who owe more than their house is worth will nearly double to 48 percent in 2011 from 26 percent at the end of March, portending another blow to the housing market, Deutsche Bank said on Wednesday.Home price declines will have their biggest impact on prime "conforming" loans that meet underwriting and size guidelines of Fannie Mae and Freddie Mac, the bank said in a report. Prime conforming loans make up two-thirds of mortgages, and are typically less...

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July 2009 ADP employment report numbers

Source: Automatic Data Processing, Inc.It looks like the recession is slowly ending, but it will still take a while. Note that job gains need to be positive just to keep up with population growth. The government's numbers come out on Frid...

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Home rental scams

From the FBI, via Bruce Schneier:Nigerian scammers find homes listed for sale on these public search sites, copy the pictures and listings verbatim, and then post the information onto Craigslist under available housing rentals, without the consent or knowledge of Craigslist, who has been notified.After the posting is listed, unsuspecting individuals contact the poster, who is Nigerian, for more information on the "rental." The Nigerian scammer will state that they had to leave the country very quickly to do missionary or contract work in Africa...

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DC area tiered house price indexes

From Calculated Ri...

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The Daily Show makes fun of Tim Geithner

The Daily Show With Jon StewartMon - Thurs 11p / 10cHome Crisis Investigationwww.thedailyshow.comDaily ShowFull EpisodesPolitical HumorJoke of the ...

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Back from vacation

In answer to David's earlier question, I was in Maine. Unfortunately, the weather was lousy except for 3-1/2 sunny days.Here are some photos from the few good days:For those who weren't aware, the three short blog posts that I posted over the past two weeks were pre-scheduled. I created them before I left for vacation, then had them appear while I was gone so I could be sure the blog would remain somewhat active. Thanks to David for stepping in while...

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