Just repeating condoshack, can’t take credit for that one. All the credit goes to BOOOOOOYAAAAA.

Two reasons for my view are the impending wave of foreclosure and the drying up of liquidity in the housing market. Given that more than half of the mortgage market now consists of subprime loans, what happens when these borrowers, (i) fail to get loans for home purchases because of tightening underwriting standards (not to mention the fewer number of solvent subprime lenders) and, (ii) for those who did get these loans, default in large numbers? I think the result is that lower-priced homes don’t get sold and subsequently the current owners can’t trade up and secondly, that more housing is available because of both lack of buyers and increasing numbers of REOs.

For a numerical example, the article referenced below (which I think was posted here previously) has some numbers: more than $800B of subprime loans originated last year (which represented more than half of last year’s MBS issuance), and currently 4% of securitized subprime loans are 60 days or more delinquent. Assuming that the delinquency percentage doesn’t go up (unlikely), thats about $32B of loans that’ll probably go REO. The total number that will go REO will be higher, simply because securitization underwriters diligence loan pools and reject obviously bad loans before they go into a standard securitization (eg, the EPD loans). It’s no wonder that the ABCDS market is tough lately.

-P

http://www.moneyweek.com/file/22805/the-us-housing-market-is-different-this-time—its-worse.html

Sad, but funny.

Debt slavery.

Housing market pain not revealed by stats

Home sellers are crying but the data doesn’t seem to reflect their woes.

http://money.cnn.com/2007/01/11/real_estate/housing_pain_statistics/

“CondoShack” – it sounds like the condo version of RadioShack. I never go into RadioShack unless I need bizarre arcane techie things such such as calculator batteries, maybe a new computer keyboard after I spilled coffee on the old one….

What do they sell at CondoShack?

New: an old ahem “friend” of mine used to live in a converted firehouse in Hoboken on Grand Street between Fourth and Fifth. I think it says “No. 5″ on the front. Cool cavernous layout….

Yes, I’ve noticed that. I would hate to live in a state that only had affluent towns, then I’d have to move to North Carolina sooner than expected. I am thankful towns like mine exist where I can actually afford a place to live and not have to worry about crime. It’s a nice deal for someone like me :)

SAS

In my experience, in most area, WalMart brings down residential properties. Now, if you own a plot of land, something of that nature, thats a different story.

You want a real good example of land going up, buy yet, home prices going down.

Look up “lacrosse street in rapid city, South Dakota” that is a very good example.

hope that made sense and helps some.

SAS

A new Walmart opened up in my town some years ago, right before the RE boom … the boom still happened. It didn’t seem to have any effect. Maybe the boom would have been bigger if the Walmart never opened… I guess we’ll never know.