[emersonbiggins]

$this->bbcode_second_pass_quote('ThunderSnow', '')$this->bbcode_second_pass_quote('emersonbiggins', '')$this->bbcode_second_pass_quote('Sabibaby', 'N')ot to hijack this thread but can anyone tell me why the housing bubble isn't effecting Las Vegas?

[KevO]

Selling prices of new US homes saw their biggest fall in more than 35 years in September, although the pace of sales continued to rise.

Commerce Department figures said that median price for a new home sold in September was $217,100 (£116,000), 9.7% below that reported in 2005.

But there was little sign of the feared housing market crash, with the number of new homes sold rising more than 5%.

It was the second consecutive rise in sales after three months of declines.
HERE

[PrairieMule]

$this->bbcode_second_pass_quote('Sabibaby', 'N')ot to hijack this thread but can anyone tell me why the housing bubble isn't effecting Las Vegas?

I'm not the type of person who could live in Vegas but over the past few years the housing market in Vegas has skyrocketed and I'm trying to understand what the big draw to living in Vegas is all about.

It's the desert, no easy access to water or food... Seems like a bad place to be if PO hits!

[PrairieMule]

BTW- I believe 90% of the bitching, moaning, and mashing of teeth originates from mortgage originators and realators who can no-longer afford to cherry pick deals. They are trying to keep what few crusty deals they can scrounge up. There is a urgent sense of desperation in their tone when they call us up.

[mmasters]

$this->bbcode_second_pass_quote('PrairieMule', 'B')TW- I believe 90% of the bitching, moaning, and mashing of teeth originates from mortgage originators and realators who can no-longer afford to cherry pick deals. They are trying to keep what few crusty deals they can scrounge up. There is a urgent sense of desperation in their tone when they call us up.

[TreebeardsUncle]

Hi.
Well, the current correction is responding to the slightly higher interest rates as well as the market prices becoming more unaffordable for most first time buyers and others relative to their incomes, it still doesn't take into account the excessive indebtedness of much of the populace. Even when the market recovers, there should be no great runup in prices as there was over the last several years. In the future due to the excessive debt load and the previous runup to a high price level, housing price levels will not be so responsive to interest rate reductions to such low levels.

[evilgenius]

Wait until the great run to the bond that is coming. With or without the Fed interest rates will go up.

Why a run to the bond? First, the DOW 12,000 run gains have to be solidified. Second, if the PTB are operating according to a knowledge of the peak (assuming OPEC has peaked) they will want to be in an advantageous dollar position.

Of course the Fed could cut rates and slow the run down, but that wouldn't be good whoring.

[evilgenius]

Yeah, I know higher price = lower return, but foreign investors are going to demand a yield comparable to what they can get to be in euros or pounds. Good whoring demands that they get what they want.

[NeoPeasant]

Jim Kunstler is fond of pointing out how much of our economy is dedicated to growing suburbia and its associated furnishings, roads, utilities, and retail centers. I don't think even those on the housing bubble blogs who are predicting economic difficulties are aware of the full extent of the trouble that might result from the collapse of the housing speculation bubble. Their most dire predictions are that housing prices will bottom out in 5-10 years and good times will return. They are mostly unaware of, or unconcerned about the effect peak oil will have on suburban real estate.
I think the collapse of the speculative housing bubble will leave suburbia and those heavily invested in it reeling, and then peak oil will come and deliver the mortal blow.

[Kingcoal]

Domino one.

[AgentR]

$this->bbcode_second_pass_quote('Kingcoal', 'D')omino one.

[Cynus]

Reuters

The scariest thing from this article:

"As much as $1.5 trillion in adjustable-rate mortgages are due to have their rates reset this year, according to the Mortgage Bankers Association. Many recent homeowners are already struggling to make those higher payments and are drifting toward loan default and foreclosure, said James Saccacio, chief executive officer of RealtyTrac."

[RonMN]

I've been googeling "foreclosures" for about a month now...the situation is gettin' quite scary!

[RdSnt]

http://www.financialsense.com/

A good resource.

[NeoPeasant]

Be sure to check in at The Housing Bubble Blog from time to time. Combine what you learn there with what you learn here and you will really understand why the near future is going to be a very much different place than the present.

[Cobra_Strike]

Can you shorten the link? There is a nice little link button that would make less of a scrolling hassle...

[FoxV]

$this->bbcode_second_pass_quote('Cynus', 'T')he scariest thing from this article:
"As much as $1.5 trillion in adjustable-rate mortgages are due to have their rates reset this year"

[TreebeardsUncle]

Hi.
Read an article in the San Francisco Chronicle which acknowledged that defaults and foreclosure were rising and had reached a level more than a factor of 2 higher than the previous December. However, the article's writer claimed that the rate of increase was slowing down and a turn around was on the way soon. Also, it was stated that the number of defaults and foreclosure was much higher in the LA and Central Valley areas than in the SF Bay area.
I read another article in the business section of the Sacramento Bee that also acknowlged that defaults and foreclosures were way up, but still below historical highs back in 1996 or so.
Here are some key excerpts:
Arvanitis called the foreclousre numbers "inevitable with the type of financing that most consumers were forced to accept to get into a house before [because!] they could no longer afford it. A majority of boom-era home-buyers used adjustable - rate loans that offer initial low payments for a specified number of years and then adjust to new interest rates and higher monly payments.
... More ominous, the number of people who receive such notices [of defaulting on their loans] and then lose their houses to banks reached 32 percent in the fourth quarter. That's up from 8 percent the same time in 2005.
..." I think they're [over-leveraged mortgage-holders] less and less willing to make extraordinary sacrifices to remain current on their home because they can't see any hope going forward."
Many of the homeowners are now experiencing financial stress over mortgage payments they took on as the housing boom reached its zenith in 2005. As sales prices have fallen, many owe more than their houses are worth and have few refinancing options to escape growing mortgage burdens. That's a recipe for more home losses in the short [and mid} term.

And finally:
DataQuick's Karevoll said Wednesday the foreclosure numbers are still too low to become a drag on property values. But he said foreclosures are likely to continue to rise in the short [and mid] term.
Wednesday's release of the foreclosure and notice of default numbers came as Walnut Creek based PMI Mortgage Insurance Co. ranked the Sacramento region as the nation's leading market for risk of price declines during the next two years. The company, which provides mortgage insurance to buyers making less than 20 percent down payments, said sales prices have a 60.4 percent chance of decining after more than doubling between 2001 and 2006.
*****
So, home prices are going to continue to fall in this area so more mortgage holders will end up upside down or close to it. More properties will go into foreclosure. More ARMS will readjust putting more people into a position where they are unable to make their montly mortgage payments and will owe more on their houses than they are worth. In many cases they won't be able to sell since they won't be able to pay off the difference between what the mortgages are and what the houses would sell for. However, the banks can foreclosure on them. Soon, the foreclosure listings will reach a sufficient mass to drive down the prices lower than they would be due to lack of demand and ARM readjustments alone. The question is how low will the prices go before a flood of buyers boosts the prices back up. I figure prices will come down around 20% in the Sac area by the end of 2008 before there is a real turn around.

[NeoPeasant]

$this->bbcode_second_pass_quote('TreebeardsUncle', 'I') figure prices will come down around 20% in the Sac area by the end of 2008 before there is a real turn around.

[Petrodollar]

Here' some eye-opening data for the Sacramento, CA area...how about losses on residential properties ranging from approx. 12% to 33% in just one year....

http://flippersintrouble.blogspot.com/