Blame it on the Weather
[Existing-home sales plummeted 8.4 percent from February (6,680,000 units) to March (6,120,000 units) and 11.3 percent since March 2006 according to a report released by the National Association of Realtors (NAR) Tuesday. Erratic weather across the country and unrest in the mortgage industry are being blamed for the drop.
"For the last couple months we've been expecting a weather 'hit' on home sales finalized in March, but looking at overall activity in the first quarter we see that existing-home sales averaged 6.41 million -- a figure that is moderately higher than the sales pace during the second half of 2006," said David Lereah, NAR's chief economist. "We also may be seeing some losses as a result of the subprime fallout. However, this is masking improved fundamentals in the housing market, with lower mortgage interest rates and motivated sellers."]
Full article...
posted by Little_Silvered at 9:21 PM
23 Comments:
Check out all three parts - here's part one...And compare Dr. Thornberg, a real economist, to the laughable Corrupt David Lereah
http://housingpanic.blogspot.com/2007/04/hp-favorite-thornberg-lecture-on-late.html
next part
http://www.youtube.com/watch?v=ILW8OolM0Lo&mode=related&search=
Rising foreclosures have widespread fallout
Filings in the U.S. were up 47% from a year ago, leaving a wake of vacant homes and overgrown yards for state and local governments to contend with. Even lenders are trying to help troubled borrowers.
By Melinda Fulmer
The number of foreclosure filings -- from default notices to repossessions -- continued to surge in March, increasing 47% from the same period a year earlier and 7% from February. The 149,150 filings represent a foreclosure rate of one in every 775 households, according to Irvine, Calif.-based RealtyTrac.
The March increase in foreclosures bucks the historical trend, lenders say. Typically, foreclosure activity declines in March, as more homeowners use tax refunds to bail themselves out of mortgage shortfalls caused by job loss, health problems or divorce.
But this year, industry insiders and economists expect it only to get worse, as more adjustable-rate mortgages reset and borrowers with risky loans continue to falter.
"I don't think we've hit the bottom of the market yet," says Rick Sharga, RealtyTrac vice president. "We should see at least one more short-term spike," as more subprime loans continue to go into default.
Subprime loans add to problem
Subprime lending has grown rapidly in recent years. These loans accounted for 2.4% of all outstanding loans in 2000, according to the Mortgage Bankers Association. But by the end of last year, they accounted for 13.7%.
Nevada, which has had a lot of speculation and risky lending, had the highest foreclosure rate in March. The number of filings there increased 29% in the last month to 4,738, or one new filing for every 183 households. This was more than triple the amount reported the same time last year and four times the national average. Las Vegas had one of the nation's highest metro foreclosure rates in March, second only to Detroit.
"You take high-risk properties and layer on high-risk loans and you have a recipe for high foreclosure rates," Sharga says.
More on MSN
In California, the link between subprime lending and increases in foreclosures is even more clear. By the end of last year, California residents had the most subprime mortgages of any state -- 22% of all mortgages by the end of 2006, according to First American LoanPerformance, a unit of mortgage giant First American Corp. Foreclosures in California surged 36% from the previous month in March, with 31,434 foreclosures, or one in every 389 households. This represented the greatest number of any state and accounted for 21% of the nation's total.
Indeed, six of the 10 cities with the highest foreclosure rates in the nation were located in California. No. 1 was Stockton, Calif., with a 137% spike in foreclosure activity between February and March to 1,477 -- or one in every 128 households. That rate was six times the national average. Other California cities with foreclosure rates in the top 10 included Vallejo-Fairfield at No. 3, Modesto at No. 5, Sacramento at No. 6, Riverside-San Bernardino at No. 7 and Bakersfield at No. 10.
Lenders reacting to subprime mess
The huge casualties from subprime lending and so-called "no-doc" or "Alt-A" loans that don't require verification of income has helped slow the economy and affected the entire mortgage business, causing a credit crunch that has some borrowers unable to secure financing for a home.
Democratic Sen. Charles E. Schumer of New York has proposed new legislation that would crack down on subprime lending and ban Alt-A loans, often referred to as "liars' loans." "The subprime market is the Wild West of mortgage loans, and it's time we brought a sheriff into town," Schumer said on a recent conference call.
For their part, lenders are scrambling to contain the crisis. Citigroup and Bank of America, in conjunction with the Neighborhood Assistance Corporation of America, recently set aside $1 billion of mortgage money to help about 7,000 victims of abusive lending practices avoid losing their homes.
And Wells Fargo is enacting new policies, allowing struggling homeowners to refinance at a lower rate, change the schedule on their interest rate increases and fold unpaid mortgage amounts back into the outstanding principal. "We want to give them back that affordability," says Patrick Carey, Wells Fargo senior vice president of default and retention operations. "Foreclosures don't benefit anybody. They are bad for the customers, the community . . . and we don't make money on them."
States, local governments jump in
States and municipalities are also getting into the act, trying to boost their local economies.
In Ohio, where a wave of foreclosures has saturated some suburbs with vacant houses, a new state program is helping to refinance subprime borrowers with a low fixed-rate mortgage. State officials hope the program, funded by a state bond sale, will rescue at least 1,000 borrowers who might otherwise lose their homes.
Maryland, Rhode Island, Massachusetts and Virginia are already running similar programs. And Florida has a new foreclosure prevention hotline which is getting about 100 calls a week, says manager Mario Silva. California, Colorado, Washington and Wisconsin are also said to be mulling similar bailout programs.
Of course, some skeptics wonder whether these bailout programs are only delaying the inevitable or helping some unscrupulous buyers avoid payment.
Jason Allnut, vice president of credit loss management with Fannie Mae, says he's heard of people refinancing time after time and never making a single loan payment. "There's been an abuse of modifications historically, which just creates bigger losses for the investor," he says.
Some lenders are requiring that borrowers trying to get their loan refinanced go through consumer credit counseling first.
In Euclid, Ohio, the city maintains vacant homes
Still, analysts say it's clear that something must be done about the foreclosure problem, which is expected to further depress real estate values and increase crime in many neighborhoods.
Euclid, Ohio, located 12 miles from downtown Cleveland, for one, is taking matters into its own hands. About 300 to 400 of the town's 17,400 single-family homes now sit vacant. That's too many, says Mayor BillCervenik. "It sends a message that there's a problem here."
Euclid has begun using city funds to maintain and repair these houses, doing everything from cutting the grass, to repairing gutters to repainting vacant eyesore properties. "We've put together a nuisance-abatement program," Cervenik says.
With a $1 million loan from the country treasurer, city officials hope to buy back more properties for demolition, or rehabilitation so they can be put back on the market. Cervenik says the city will recoup these expenses in property taxes when these properties are sold. But in the meantime, it has begun charging fees for upkeep to the lenders who refuse to take care of the repossessed properties, spurring many into action.
"When we know who the owner is, we charge $150 to cut the grass. That gets their attention," Cervenik says.
After all, he thinks the lenders share much of the blame for the area's woes.
Ahead, 'another leg down' for housing
All of northeastern Ohio has felt the pall cast by these mortgage problems, Cervenik says, and he believes it could be three or four years before the market improves.
Economists echo that prediction for the rest of the country.
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HERE THE HAMMER FALLING? IT'S NOT ON FLOOR JOISTS OR DRYWALL. IT'S ON "CREATIVE TALKERS" LIKE THE NAR'S LEREAH AND SOME OF OUR LOCAL BUILDERS/SPIN DOCTORS. OH, BUSINESS IS GREAT AND GETTING BETTER ALL THE TIME! CAN THEY SPIN THEIR WAY OUT OF THIS ONE? WITH ADJUSTABLE RATES STILL RESETTING FOR THE NEXT 2 OR 3 YEARS IT'S GOING OT BE A TOUGHER ROAD THAN WE CAN EVEN IMAGINE. READ BELOW.
************************
"We are forecasting another leg down in the housing market," says economist David Shulman of the UCLA Anderson Forecast. "This could last into 2009 or 2010."
Indeed, with many adjustable rate mortgages originated three years ago now resetting, he notes, the pace of foreclosures should continue to accelerate through the end of this year and extend into other segments of the mortgage market.
New mortgage applications, which have already begun to decline as a result of tighter lending standards, should also continue to decline, he says. "We are only in the second inning of the game now," Shulman says. "(This problem) is going to take a while to play out."
Here's Motley Fool's Seth Jayson on The Corrupt David Lereah
His column looks straight from HP today (come on Seth - at least give us a link) but nice to see the knives come out against The Corrupt David Lereah...
http://housingpanic.blogspot.com/
Quick Take: Housing's Biggest Cheerleader Moves
By Seth Jayson
I've written over and over again about the housing-market pumping in which National Association of Realtors Chief Economist David Lereah has engaged. His ability to make bad predictions was, to my mind, only surpassed by the magnitude of his bombast, or perhaps his ill timing.
This is a guy who looked at dwindling numbers from the likes of Hovnanian Enterprises and KB Home, saw subprimes melt down at New Century Financial, watched Alt-A get worse for the likes of Indymac and Motley Fool Income Investor pick Washington Mutual, yet consistently told the press that all was well.
I still have no idea how self-respecting business journalists anywhere could have parroted his biased misinformation for so long.
For those of us who simultaneously looked forward to and loathed his monthly trade-group propaganda, today is a day of mixed emotions. Apparently, Lereah is moving on to Move.
Move runs Internet real estate sites, something I think is a pretty bad business to be in, unless you're The Google and can throw something together that just might up-end the entire apple cart.
According to an NAR press release, Lereah will be in charge of a new venture. Note to self: Look at Move and get ready to short.
By the way congress and private lenders are looking to create new tools to help prevent mass foreclosures in the ailing subprime sector nationwide.
Hi,
I’ve decided that this season I will rent my shore house, hold on one more season and watch the market..
Brits getting slaughtered in Florida housing "spectacular collapse"
http://housingpanic.blogspot.com/2007/06/brits-getting-slaughtered-in-epic.html
Property-mad Brits (they love their housing ladder), who also love going to Florida on holiday (why for the life of me I can't figure out) are getting destroyed now that Florida's housing market is crashing.
And it's not just the price cuts - if they borrowed from their bank in GBP the exchange rate and transfer fees to US$ are killing them too.
Bollocks!!!
Funniest thing is you have conmen and sweet talkers still aggressively courting ignorant property-mad Brits to invest in Florida property. Take this one for example. Or this one. Crashing market? Terrible fundamentals? Exchange rate nightmare? Nah! Now's a great time to buy!
Florida is a HOT market for Foreign National's to purchase both Second Homes and Investment Properties.
This is a great time and a great market for their purchases. With the weak dollar and the strong Euro and British Sterling, European investment in Florida is at an all time high!
However, here's the truth, thanks to the Daily Mail:
Britons count the cost of the Florida property slump
Hundreds of British investors who pumped their money into Florida's soaring housing market have been caught out in its spectacular collapse.
Many bought apartments off-plan, hoping to sell them on at a huge profit as soon as they were built.
However, they have been left with property they can't sell - even for less than the original price - because of rising interest rates and a glut of condominiums for sale.
Florida house prices have been plunging for 18 months, but research shows investors in high-rise condos have been hurt the most.
There isn’t one day that passes that you don’t see bad financial news in the newspaper or on the television or radio. Well that’s all going to change now, especially if you live in the New Jersey Shore towns of Avon, Belmar, Spring Lake, Sea Girt, Manasquan, Point Pleasant, Bay Head, Mantoloking, Normandy Beach, Chadwick, Lavalette, Ortley Beach, or Seaside Park. According to Paul R Hauke, a Realtor Associate with Prudential Zack Shore Properties with 11 offices along the Jersey Shore, a specialist in Ocean Front, Waterfront and Resort Properties along the New Jersey Shore prices are holding steady and in many areas increasing. The reason is that people are buying along the Jersey Shore and the demand is strong. For instance many buyers who have large amounts of cash sitting in bank accounts that are earning very, very low interest have been buying Jersey Shore Resort Homes for cash. They are figuring on getting the rental money and the appreciation on the property. They figure the return will absolutely beat whatever they are earning in the bank and they also have the use of the property when not rented. Smart buyers.
On the other hand are the sellers. Sellers in such great Jersey Shore towns are reaping the benefits. There prices have been holding and they are reaping the gains. There are properties from the mid $200,000.00 range up to multi millions. Along the price range there are new and converted condos and new and completely renovated houses and of course one of a kind mansions and estates.
On the waterfront at the Jersey Shore prices are still climbing. Paul R Hauke, a Realtor Associate with Pruzack, studies and tracks the real estate values along the Jersey Shore and has found that Waterfront properties prices have been escalating. Properties with docks for boats and easy access to the Bays and Ocean are still high on demand. Small homes in such areas as Ocean Beach , with docks , can still be had for $300,000.00 to $400,000.00 with a moderately priced waterfront home with deep water docks and easy fishing access still bringing $1,000,000.00 plus. In towns like Point Pleasant Boro. Ocean front homes, both on the beach and across the street from the beaches, in such towns as Spring Lake, Sea Girt, Bay Head, and Mantoloking bring three, four and five million.
Many Jersey Shore Real Estate buyers are looking for second homes now that they can make year round homes later. Such houses between $900,000.00 and $2,000,000.00 have seen a 25 % increase in pricing. Some Jersey Shore Realtors have reported their sales up as much as 26% over last year.
Whatever your desire the Jersey Shore offers great Real Estate and great family memories and great pricing. There never has been a better time to buy and invest in real estate at the Jersey Shore.
T o view properties for sale at the Jersey Shore from Atlantic Highlands to Long Beach Island go to www.asburyparklife.com/jerseyshorerealestate.html , the # 1 source for activities, events, and real estate along the Jersey Shore.
There isn’t one day that passes that you don’t see bad financial news in the newspaper or on the television or radio. Well that’s all going to change now, especially if you live in the New Jersey Shore towns of Avon, Belmar, Spring Lake, Sea Girt, Manasquan, Point Pleasant, Bay Head, Mantoloking, Normandy Beach, Chadwick, Lavalette, Ortley Beach, or Seaside Park. According to Paul R Hauke, a Realtor Associate with Prudential Zack Shore Properties with 11 offices along the Jersey Shore, a specialist in Ocean Front, Waterfront and Resort Properties along the New Jersey Shore prices are holding steady and in many areas increasing. The reason is that people are buying along the Jersey Shore and the demand is strong. For instance many buyers who have large amounts of cash sitting in bank accounts that are earning very, very low interest have been buying Jersey Shore Resort Homes for cash. They are figuring on getting the rental money and the appreciation on the property. They figure the return will absolutely beat whatever they are earning in the bank and they also have the use of the property when not rented. Smart buyers.
On the other hand are the sellers. Sellers in such great Jersey Shore towns are reaping the benefits. There prices have been holding and they are reaping the gains. There are properties from the mid $200,000.00 range up to multi millions. Along the price range there are new and converted condos and new and completely renovated houses and of course one of a kind mansions and estates.
On the waterfront at the Jersey Shore prices are still climbing. Paul R Hauke, a Realtor Associate with Pruzack, studies and tracks the real estate values along the Jersey Shore and has found that Waterfront properties prices have been escalating. Properties with docks for boats and easy access to the Bays and Ocean are still high on demand. Small homes in such areas as Ocean Beach , with docks , can still be had for $300,000.00 to $400,000.00 with a moderately priced waterfront home with deep water docks and easy fishing access still bringing $1,000,000.00 plus. In towns like Point Pleasant Boro. Ocean front homes, both on the beach and across the street from the beaches, in such towns as Spring Lake, Sea Girt, Bay Head, and Mantoloking bring three, four and five million.
Many Jersey Shore Real Estate buyers are looking for second homes now that they can make year round homes later. Such houses between $900,000.00 and $2,000,000.00 have seen a 25 % increase in pricing. Some Jersey Shore Realtors have reported their sales up as much as 26% over last year.
Whatever your desire the Jersey Shore offers great Real Estate and great family memories and great pricing. There never has been a better time to buy and invest in real estate at the Jersey Shore.
T o view properties for sale at the Jersey Shore from Atlantic Highlands to Long Beach Island go to www.asburyparklife.com/jerseyshorerealestate.html , the # 1 source for activities, events, and real estate along the Jersey Shore.
we shouldn't blame it...but whatever reason it falls we should always be ready to face this kind of instances...
______________
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Yeah weather makes such a big difference.. They say the best time is fall..
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Buy and Sell
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Eton
Filings in the U.S. were up 47% from a year ago, leaving a wake of vacant homes and overgrown yards for state and local governments to contend with. Even lenders are trying to help troubled borrowers.
Ayala Land Premier
"You take high-risk properties and layer on high-risk loans and you have a recipe for high foreclosure rates," Sharga says.
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