From Bloomberg:
Pending Sales of Existing Homes in U.S. Fell 4.9% in March
An index of pending sales of existing homes in the U.S. unexpectedly fell to the lowest level in four years in March, signaling the real-estate slump may linger as prospective buyers hold out for lower prices.
The index of signed purchase agreements, or pending home resales, fell 4.9 percent to 104.3, the lowest since March 2003, after a revised 1.1 percent gain in February, the National Association of Realtors said today in Washington. The index was down 10.5 percent from March 2006.
A wave of subprime mortgage defaults is throwing more homes back on to the market and prompting banks to tighten lending standards. Many buyers are also waiting for prices to fall further before venturing into the market, economists said.
“The housing market continues to soften,” Michael Gregory, senior economist at BMO Capital Markets in Toronto, said before the report. “There is a lot more correction to come, and that will put a damper on construction, sales and prices.”
Economists expected pending sales to rise 0.1 percent after an originally reported 0.7 percent gain in February, according to the median of 22 forecasts in a Bloomberg News survey of economists. Estimates ranged from a decline of 4.2 percent to a gain of 2 percent.
…
Today’s report showed pending resales declined in three of four regions. They decreased 7.1 percent in the South, 6.9 percent in the Midwest and 4.9 percent in the Northeast. Sales rose 1.6 percent in the West.
From MarketWatch:
U.S. March pending home sales fall 4.9%
Pending sales of U.S. homes fell by 4.9% in March, indicating sales closed in April are likely to remain soft, the National Association of Realtors reported Tuesday. The group’s pending home sales index was down 10.5% from March 2006 and is the lowest in three years. David Lereah, the NAR’s chief economist, predicted that home sales will be “relatively sluggish” in the second quarter but that a “modest uptrend” is on the horizon for the second half of 2007.
From the National Association of Realtors:
““modest uptrend” is on the horizon”
sure. :)
It looks like the northeast had the largest YOY pending sales drop of any region, (-15.4% non-seasonally adjusted).
I still don’t understand how you can seasonally adjust year over year as is shown on the Pending Home Sales chart.
““modest uptrend” is on the horizon for the second half of 2007.”
OK. The spring is turning out to be a bust but a modest upturn will occur in the 2nd half? Quite possibly, another one who is analyzing the charts upside down?
Headline ISM comes in strong, from Bloomberg:
U.S. April ISM Manufacturing Index Rises to 54.7
Manufacturing in the U.S. grew in April at the fastest pace in almost a year more than forecast in April as orders jumped and production improved, an industry report showed.
The Institute for Supply Management’s manufacturing index rose to a higher-than-forecast 54.7, the highest since May 2006, from 50.9 in March. Readings greater than 50 signal expansion.
After reining in inventories for the last two quarters, companies may now be in position to boost production and place more orders to satisfy demand. An acceleration in manufacturing would help the economy withstand continued declines in housing.
This “gives us our first signal of some stabilization in the manufacturing industry,” said Joseph Brusuelas, chief economist at IDEAglobal in New York, before the report. “We’ve got cautionary inventory building going on” and companies are spending more.
Economists forecast the Tempe, Arizona-based institute’s index would rise to 51, from 50.9 in March, according to the median of 77 projections in a Bloomberg News survey. Estimates ranged from 49 to 52.5.
The group’s gauge of prices paid jumped to 73, the highest since August, from 65.5 in March. The index averaged 53.9 last year and economists’ had projected it would increase to 67.5 in April, according to the Bloomberg survey.
a modest uptrend” is on the horizon for the second half of 2007
The master of spin doesn’t disappoint!
TOT (totally off-topic):
jb,
science times article today is
right up your (coral) alley!
sl
“An index of pending sales of existing homes in the U.S. unexpectedly fell…”
Unexpectedly? Only for someone living on a desert island. For anyone else, paying even moderate attention to what’s going on, it was very much expected, and more pain is on the way — several years worth.
Just trying to help set expectations, don’t want anyone unexpectedly caught off guard.
SL,
I’m set for the 12th, in Paramus. Will you be there?
A house in a “top town” just came on the market, priced over $700K.
6 years ago it was bought for $350K.
5 years before that, it was bought for $325K. That’s right, only $25K appreciation in those 5 years.
Don’t be caught holding the bag. 10% off 2005 prices is not a “good deal.”
The correction has a long way to go…
Wait dummies ’til Misery Spring 2008
Then we won’t have to listen to these greedy starving dopes calling a bottom every week.
If you ain;t worried yet grubbers / starving bunch I assure you that come May 2008 you will have raised the white flag.
Then a few show & tellers are going to pay dearly for your patience & time.
hehehehehehee
don’t giv’em any scraps.
NOOOOTTT”ING.
It’s payback time.
You bleed every friggen last concession out of these show & tellers.
This is business a transaction nothing more. You get the best deal for yourself.
BOOOOOOOOOOOOYAAAAAAAA
Bob
From NJ.com Cape May forum:
“You keep looking at the short term. Real estate has in the last 200 years always appreciated! What Wildwood has is unique and if you wait, as did all the “smart” people who waited last time YOU WILL BE LEFT BEHIND AND LOSE! I have been doing this a long time and I can asure you, you will make money. Your problem is you just read, you have no experience I DO,Take my advise BUY NOW, BORROW AS MUCH AS YOU CAN AFFORD FOR AS LONG AS THEY WILL GIVE IT TO YOU. Thats how you make money in real estate!! Now go back to your 1 bedroom bungalow and stay out of Cape May, its clear you cant afford it.”
Short term….Ask those so called NYC CO-OP buyers in 1988 that did not break even for about 12 years.
12 years!
12/80 years = 15% of your life underwater on a property.
12 years is a long time to be underwater.
oh over that 12 year period CO-OP prices were down nearly 50%!
hehehehehehhehe
Alot of misery I can assure you.
From MarketWatch:
U.S. pending home sales fell 4.9% in March
The group’s pending-home-sales index declined 10.5% from March 2006 and sits at its lowest level since March 2003.
…
David Lereah, the NAR’s chief economist, predicted that home sales will be “relatively sluggish” in the second quarter but that a “modest uptrend” is on the horizon for the second half of 2007.
“Although the weather improved in March, we’re starting to see the effects of a decline in subprime lending and tighter lending standards,” Lereah said in a news release.
Ian Shepherdson of High Frequency Economics said the drop was a big surprise.
“This is much worse than we expected,” Shepherdson said in an e-mail. “The warm March weather ought to have persuaded more people to go house-hunting, and that in turn ought to have increased the number of contract signings, which is what the pending-sales index measures.”
I always look forward to reading PIMCO monthly commentary.
First link is from their senior portfolio manager Mark Kiesel who sold his house in April 2006 to rent while the housing downturn played out.
June 2006 commentary
Second link is from today, and his update after a year of renting on his current housing outlook
May 2007 commentary
Very interesting last paragraph….renters should rent for a while.
jb, my comment #16 is awaiting moderation since it has 2 links.
Can tolls ease traffic in N.J.?
Tuesday, May 1, 2007
The Port Authority is studying ways to manage traffic by charging those who create it.
New York Mayor Michael R. Bloomberg made waves last week when he proposed a separate toll to drive into the most congested parts of his city.
But New Jersey could be close to doing the same thing — charging drivers to enter the Garden State.
Faced with stifling traffic at river crossings, the Port Authority is studying ways to manage traffic by charging those who create it. So-called “congestion pricing” could be coming to a bridge or tunnel near you.
The Port Authority’s new study, funded by the federal government, weighs whether to end the free ride back to New Jersey, according to the Federal Highway Administration (FHWA). Drivers would pay to both enter and leave New York.
…
“It would be irresponsible for us to not look at different options for how we can relieve congestion in people’s commutes,” said Marc La Vorgna, a Port Authority spokesman.
Changes that encourage off-peak driving could be implemented as early as 2008, when the authority has signaled it may hike tolls at the river crossings.
The two-way toll proposal would have to surmount opposition from some New Jersey politicians, who have called Bloomberg’s proposal a “commuter tax.” But drivers might find that reduced tolls for off-peak travel induce some of them to avoid the typical rush hour.
“With a one-way toll, there is no incentive” to avoid the rush hour, said Jeffrey M. Zupan, a consultant and senior fellow at the Regional Plan Association.
…
“There is a movement in this country that recognizes the costs of building highways is so expensive,” Zupan said. “We have to look for ways to have new tolls pay for much of the bonding.”
More TOT…
BC,
I am an ER doc, actually. My soap-box rants from a week ago were the direct result of seeing enormous numbers of patients in my ER lately who have been
1) neglecting routine preventive testing,
2) told by me that they have a cancer (often one that would have been diagnosed earlier with testing.)
3) without health insurance and therefore have skipped regular testing/checkups such as Pap smears, cardiology screening for high risk history and lifestyle (smoking, early cardiac disease in first degree relatives) — and skin screening for cancers. Not just for light skinned folks either as dark skinned folks can get melanomas in odd spots such as on the soles of the feet.
These are just a few examples — it gets really disheartening. I see more and more people without health insurance and I have bent over backwards to point them in the direction of free or low cost care.
Some of these people come in happy to report to me that they have castrophic medical insurance. I explain that it is usually a waste of money. Mostly these are policies sold to uninformed folks who might not understand the implications of a $10,000 dollar deductible and 50/50 split for the balance. One lady sold her car so she could keep up with the premiums after losing her job and not being able to afford the COBRA insurance amount.
Anyway – that’s a whole other soapbox issue.
And finally, I’m guilty too… Had my own mammo probably 3 yrs later than I should have. Now I need other involved testing.
You know, 20/20 hindsight.
Good luck with your screening. JB has my email if you have any questions you need answered “off-line.”
sl
SL,
Thanks.
“a modest uptrend” is on the horizon for the second half of 2007
Yeah, there will be a modest uptrend on the horizon by the second half of 2007
So glad booya’s back
KL
“The index of signed purchase agreements, or pending home resales, fell 4.9 percent to 104.3, the lowest since March 2003, after a revised 1.1 percent gain in February, the National Association of Realtors said today in Washington. The index was down 10.5 percent from March 2006. ”
Why is the emphasis on the 4.9% and not on the 10.5%??? To me, the y-o-y numbers are more meaningful.
>>The correction has a long way to go…
you going to sit around in your rental for 5 years with house envy? enjoy that.
“you going to sit around in your rental for 5 years with house envy?”
yes and i’m going see you come on this blog and cry everyday.
The man we all love to hate is on his way out.
http://money.cnn.com/2007/04/30/news/newsmakers/bc.usa.subprime.lereah.reut/index.htm
The problem was Lereah was that he was branded as “economist” when his job was shill, a job he performed to the utmost. The next NAR mouthpiece will be pretty much the same.
Ford U.S. auto sales drop 13% as cars weigh
http://www.marketwatch.com/news/story/ford-us-auto-sales-drop/story.aspx?guid=%7B4FDCF23F%2DC292%2D43BB%2DA06D%2DEDE0EBACE976%7D
Richard Says:
May 1st, 2007 at 12:10 pm
>>The correction has a long way to go…
you going to sit around in your rental for 5 years with house envy? enjoy that.
MAY I USE YOUR NICKNAME? DICK!
Don’t forget that this number reflects signed agreements. This is before those people go to get a mortgage and get turned down due to tighter underwriting standards. Expect a higher percentage of deals falling through due to borrowers not being able to get financing, as compared last year. Actual closed sales statistics for April and so on will be very grim.
The correction has a long way to go…
you going to sit around in your rental for 5 years with house envy? enjoy that
What’s the alternative? Make double the monthly payment to live in a comparable place to what I currently rent; watching my hard earned down payment get eroded by the day by depreciation; waiting to see what the next property tax increase brings? No thanks.
The NAR is an organization that contributes nothing while defrauding unwary folks of huge sums of money. David Lereah will be testifying before a Senate hearing somewhere in 2009 exercising his 5th Amendment privileges on numerous occasions with a bunch of “can’t recall” statements strewn about.
you going to sit around in your rental for 5 years with house envy?
Richard,
Can you have house envy if you currently rent a house?
jb
Richard,
Seriously, why would anyone want to plunge tens of thousands of dollars into a house only to be left with little savings, if none, and a monthly ball and chain of $3,000 plus in PITI for some piece of sh*t that’s small, smells like a corner tavern and needs thousands of dollars worth of work?
I mean, I’m asking the question honestly and politely… doesn’t it make sense?
Cohen looking for Goldman and the NJ DOBI to set up a foreclosure hotline.
http://www.assemblydems.com/pdf/ltrcohen050107.pdf
jb
chicagofinance Says:
May 1st, 2007 at 12:23 pm
Richard Says:
May 1st, 2007 at 12:10 pm
>>The correction has a long way to go…
you going to sit around in your rental for 5 years with house envy? enjoy that.
MAY I USE YOUR NICKNAME? DICK!
That was not nice!!!
There is no reasons for name-calling….
Now to answer Richard’s question:
The more I am looking at the houses and at home-owners – people at my work the more I am reinforced in my decition to buy only when it is economically cheaper than renting.
There as soo much hidden expenses in owning a house and with AMT limits not being adjasted tax breaks fast dwindling, and according to goverment in 2011 70% of people will be subject to AMT. Here goes your mortgage deduction….
IN addition I like going to parks, BBQing and resting on the weekend vs. Doing seemingly endless home improvements projects and around teh house maintenance wich everyone else doing during weekend. In addition paying LESS in rent than most people’s at work Property TAXES – is priceless…
(Granted they do have nice houses but nothing what i would call million dollar house just 5 years ago)
So I guess to answer Richard:
Yes I will gladly rent for 5 years while dealing with my House Envy..
Listening to people at work complaining about lawn moving, garage, roof, plumbing, flooding problems, dealing with local township authorities, JUST TO GET permission to cut ONE tree in “their own” back yard!!!! – helps quite a bit with this one.
And thats just a short list of what home owners are complaining about……
David Lereah will be remembered as the Irving Fisher of our time.
“you going to sit around in your rental for 5 years with house envy?”
Such a rational statement. Think about the poor house that will be sitting empty for years.
I’m sure many are certainly envious of those that are paying 10-12k, in taxes, for an asset that is declining in value. More like sympathy.
I’m still not sure why someone so happy and comfortable with his decision to purchase, like Richard claims he is, comes here all the time to try to make other people feel bad about their decisions. Happy and secure people don’t do that.
CNBC calls the current RE sales numbers –
A nail in the coffin!
Now, that’s something to be envious of.. NAAT!
you going to sit around in your rental for 5 years with house envy? enjoy that.
Richard, the house envy hardly compares with the satisfaction of some of us renters socking away an extra 10-15% of gross salary for retirement, vacations, etc since there is no bone-crushing PITI payment in the interim.
Run the numbers for buying a depreciating asset over the next 5 years and you’ll be scratching what’s left of the little hair on your head by then.
Lipstick on the Housing Pig
From Fool .com
Consider it an unsightly, smeared, parting smooch from housing’s biggest cheerleader, the National Association of Realtors’ ex-economist, David Lereah.
The NAR’s newest pending sales report is an absolute hog. March pending sales were down a whopping 10.5% from 2006, and they even managed to score a sequential drop of 4.9%, something that should not happen as we head into the spring buying season. But the NAR is ever willing to put lipstick on the pig.
In typical Lereah fashion, this further evidence of the deflating bubble is good news. “We’re fortunate to have a positive economic backdrop now, with job growth and low mortgage interest rates to provide opportunities for buyers who’ve been on the sidelines or were unable to get into the market during the boom, especially with inventories favoring buyers,” reads Lereah’s latest pap. Oh, and he also says housing will bounce back soon.
Don’t you believe it. This comes from the same guy who, last fall, was consistently predicting a Q1 uptrend — at least in public. (Check out this NAR PowerPoint presentation that tells the truth that the association wasn’t comfortable sharing in its press releases.) http://tinyurl.com/mefvp
Here’s the reality I see. Homebuilders … stuffed this country to the gills with properties, and now they can’t dump them quickly enough. They only reason they sold so many at such insane prices over the past few yeas was because crummy lending from the likes of New Century Financial and Countrywide Financial made it easy for anyone with a heartbeat to borrow more than they could afford.
Now that it’s becoming clear that a pulse doesn’t guarantee cash flow, lending is getting a bit tighter, and the mainstream media has reported on the awful fallout, there are fewer and fewer suckers out there willing to pay two or three times equivalent rent to get in on “the American dream.” This isn’t a buyer’s market yet. Just wait until the crummy loans of the last couple of years reset in 2008. Then find a property you like, and make a bid at 20% less than list.
Paying less than rent for more space in a place you want to live — that’s the real American dream. Sometimes you have to wait for it, not to mention earn it.
That presentation is incredible. Why didn’t Lereah and the NAR share that information with the public in August of 2006?
Absolutely unbelievable, it’s the Blodget emails all over again.
jb
jb,
let me add…
can you have house envy when you rent a house and see your neighbors renting money for their house?
afe
I just went through the presentation cited in the lipstick on the housing pig article.
http://tinyurl.com/mefvp
This was a presentation put together by David Lereah for the NAR leadership. The presentation was very well done and presents a much different view of the housing market than Lereah expresses in public.
For anyone debating whether Lereah really believes his own BS, or if he is just a shill paining a rosy picture to keep the commission checks flowing to his minions of Realtors® at the expense of the home buying public, this should solve that debate.
Its worth the time to check out.
I saved a copy of that presentation, just in case it “disappears”.
jb
Slide 35 makes me want to vomit:
Prices Do Decline
(mostly in the late 80s or early 90s)
Peak to Trough Decline Duration Time required to climb back to original peak
Boston 25% 5 years 9 years
New York 10.0% 7 years 11 years
Los Angeles 21.4% 7 years 9 years
San Francisco 3.8% 4 years 7 years
Houston 23.1% 5 years 9 years
Honolulu 24% 9 years 13 years
Toyota Motor USA April Sales 210,457 Vs 219,965!!!
renting,
Thanks for the link. Those slides are unbelievable. I guess he is a two-faced housing pig. I thought he really believed all that rhetoric he was spewing.
afe
JB,
I remember reading something very similar to this on this very blog sometime last year. I remember the comments regarding the bubbles in the background. I don’t recall the tone of the presentation being this dire though. It’s possible that what we saw last year was the same thing with a few of the slides removed
I love the slide called “CORRECTION NECESSARY”.
This Powerpoint presentation is a bit shocking to say the least. It’s everything that’s been talked about on this forum in a concise format, except from Lereah himself.
Can somebody please use the Liar’s presentation to sue NAR?
I can’t wait to see him behind bars.
Great link Renting.. thanks!
JB, can you put a link to the presentation on njrereport’s right navigation bar? .. for all the newbies.
I remember that presentation making the rounds late last year (if I recollect correctly), and the first thing I did was save a PDF version of the PPT copy in case it ‘disappeared’ from the website.
Can somebody please use the Liar’s presentation to sue NAR?
I saved it as I fully expect it to disappear from the site. I imagine that Lereah will be testifying before congress\ a senate subcommittee at some point and I think it would be helpful for those questioning him to have this presentation along with public press releases from the same timeframe to highlight the differences in what management was hearing versus what the home buying public (i.e. commission paying) was hearing.
If at all possible, my image of realtors has reached a new low.
that PIMCO report provides some good perspective. we’re still at record low affordability precisely at the moment credit is contracting. buyers simply cannot step up to meet the prices sellers are asking
“you going to sit around in your rental for 5 years with house envy?”
Not at all, I’m going to envy not being the “owner” as he makes cash withdrawals each month to cover the shortfall between my rent and his mortgage payment:
http://www.websitetoolbox.com/tool/post/sdcia/vpost?id=1854186
Free steaks on the Weber grill, courtesy of the “owner.”
Renting,
Great find.
An illusion of the dot bomb.
Chicago,
While I dont agree with Richard; I have noticed a recent name-calling MO on your end with little substantive analysis.
chicagofinance Says:
May 1st, 2007 at 12:23 pm
Richard Says:
May 1st, 2007 at 12:10 pm
>>The correction has a long way to go…
you going to sit around in your rental for 5 years with house envy? enjoy that.
MAY I USE YOUR NICKNAME? DICK!
“house envy”.. ROFL.
When a FB rents their house for half what they’re paying in total costs (mtg, insurance, taxes, fees, etc) do they have “logic envy”?
rent + titles on car & bike = “logically smug” :p
Slides #14 and #15 from the Lereah presentation must keep Richard up at night.
See my post #35 with regards to name calling…
It was unnecessary.
err, make that “rents their house out”..
What do you make of slide 56?
Scenarios/Probability of Popping
Mort. Rate Home Sales Home Price
Change in ’07 Growth in ’07
6.9% -0.4% 3.8%
7.3% -6.0% 1.5%
7.8% -16% -2.5%
Lereah really believed that a 7.3% 30-year rate would still produce a 1.5% home price growth rate in 2007? REALLY?
What are the chances of this happening?
#24 Richard; I think its going to be a lot quicker than that. Pending home sales drop, in the Spring market? Not a good sign, to say the least.
Renters can wait around 5 years if they have to, can selles wait 5 year, I am sure some can, I supsect many cannot and will not.
Except of course in Westfield (Brigadoon)
Have healthier U.S. mortgage lenders hit bottom?
By Jonathan Stempel – Analysis
NEW YORK (Reuters) – The U.S. housing slowdown has battered mortgage lenders and put many out of business, yet some of the survivors say the worst may be over.
“You have less competition, (and) rational competition,” said Angelo Mozilo, chief executive of Countrywide Financial Corp., the largest mortgage lender, on a Thursday conference call.
More at: http://www.reuters.com/article/reutersEdge/idUSN2730304120070430?src=050107_0945_INVESTING_comment_n_analysis
Interesting time to start charging for this report…
The OTTEAU Report
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Access to THE OTTEAU REPORT will soon be limited to a subscription basis with the following options:
# Free Subscriptions: Registrants for our Spring & Fall Workshop Series will receive a one-year subscription to access THE OTTEAU REPORT at no additional charge. This is a $129 value included at no additional cost when you attend our Spring & Fall Workshop Series.
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Al Says:
May 1st, 2007 at 2:29 pm
See my post #35 with regards to name calling…
It was unnecessary.
DO I USE THE CLOT DEFENSE?
In lieu of name calling, let me make a suggestion.
There are lots of eyes on this blog – people who are constantly watching the MLS and craig’s list and FSBOs. So why don’t we have a competition in the following categories:
Who can come up with the best:
1.)”price reduced” house.
2.)laughable example of a ridiculously overpriced POS
3.)a really nice house with a good ad – without regard to price – just a pretty, well-maintained house
Then Chi and Richard can duke it out over who has the best examples in each category.
:)
Grim decides the winners …since it’s his blog.
Interesting time to start charging for this report…
He mentioned he was going to begin charging for the report when I spoke to him at the fall workshop.
jb
http://realestate.msn.com/buying/Article_mw.aspx?cp-documentid=4747242>1=10029
“5 ways to beat back homebuyer’s remorse
You’ve shopped around for a house, found a place you liked, signed all the paperwork, plunked down your money . . . and now you’re sorry. Can you get past those feelings of regret?
By Amy Hoak, MarketWatch
Most people have experienced buyer’s remorse in some form, whether it’s feeling guilty over the price paid for a pair of shoes or a jab of regret after splurging on some unneeded tech gizmo.
But when it comes to one of the most expensive purchases in a consumer’s life, a home, feelings of remorse can be a lot more intense, easily rattling otherwise confident homebuyers and causing them to second-guess what they liked about a house in the first place.
{more…}
Most people have experienced buyer’s remorse in some form, whether it’s feeling guilty over the price paid for a pair of shoes or a jab of regret after splurging on some unneeded tech gizmo.
But when it comes to one of the most expensive purchases in a consumer’s life, a home, feelings of remorse can be a lot more intense, easily rattling otherwise confident homebuyers and causing them to second-guess what they liked about a house in the first place.”
Just a nice article for recent home buyers.
5 ways to beat back homebuyer’s remorse
You’ve shopped around for a house, found a place you liked, signed all the paperwork, plunked down your money . . . and now you’re sorry. Can you get past those feelings of regret?
By Amy Hoak, MarketWatch
http://realestate.msn.com/buying/Article_mw.aspx?cp-documentid=4747242>1=10029
Nice article to ease the angst of recent homebuyers.
scribe – a little daytime entertainment would be nice, good suggestion
jb – I can’t blame the company for wanting $$ for data though at this point, I don’t feel like his report (which is not timely enough for a non-government research group) is helpful. I do like the town-by-town #s but I suspect I can get my Realtor to share specific data points with me without him breaking any confidentiality agreement.
This just came through from Morningstar. Has some interesting data on which mutual funds have a large position in stocks like Countrywide.
How the Subprime Mess Affects Your Portfolio
Which mutual funds have been hurt the most?
By David Kathman, CFA | 05-01-07 | 06:00 AM | E-mail Article | Print Article | Permissions/Reprints
So far this year, one of the big financial stories has been the meltdown of the subprime-mortgage market. Subprime mortgages–those made to borrowers with relatively weak credit–have become increasingly prevalent in recent years, helped by low interest rates and a buoyant housing market. But, starting in late 2006 and accelerating in the early months of this year, the number of subprime mortgages in default has spiked, as borrowers without much financial breathing room found themselves unable to make payments. This, in turn, has caused financial pain for a lot of companies involved in the subprime market and the housing market in general, from mortgage lenders to banks to homebuilders, with the potential for more problems down the road.
http://news.morningstar.com/article/article.asp?id=192479
Ok, here’s my entries. I’ve posted the first two before.
“Price reduced” – in the Estates section of Colonia, from $739K to $599K, good area, on an acre
http://homes.realtor.com/search/listingdetail.aspx?ctid=25543&mnp=31&typ=1&sid=7deecc41f37b497e816454c1ab25ff37&lid=1071016763&lsn=6&srcnt=44#Detail
Can’t find the POS I posted previously. Ad probably expired.
But here’s another yucky house:
http://www.njmls.com/cf/frame.cfm?url=http://www.middlesexcountymls.com/
Slight majority of Dow Jones voting power opposes deal: WSJ
Does anyone know if this NAR Powerpoint is legit? I mean, I’d hope that some REbear / LOD wasn’t as bored as to make it all up to prove a point but who knows…
Lincoln,
I am not saying you are doing this (you had a legit question) but we (re: bears; this blog) will probably get more postings like yours that have taints of paranoia when the reverse has been true for the past 6-7 years with this real estate boom. If you download the presentation, the url it downloads from is realtor.org…NAR’s home base.
afe
The Rules for Growing Rich, David Lereah, author: Making Money in the New Information Economy, June 2000, a book advising investment in technology equities published as the dot-com bubble collapsed in 2000–2001.
http://en.wikipedia.org/wiki/Image:Lereah_-_Rules_for_Growing_Rich.png
I usualy lurk, but I drive past this POS cape every time I visit my parents:
MLS ID# 709974
http://homes.realtor.com/search/listingdetail.aspx?zp=08816&typ=7&sid=aa99942e6a71459481b1061e4d759f2d&sdir=0&sby=2&pg=29&lid=1077911840&lsn=286&srcnt=470#Detail
No messy trees! (no shade trees, no landscaping) Original Owner! (and original tv antenna, apparently) I wonder how many times over the price has increased since it was built in the 1950’s…
I might be moving the site over to the new host tonite, just an FYI.
jb
Here’s a list of some of the presentations including the master liar’s at the 2006 NAR summit:
http://www.realtor.org/lsummitweb.nsf/pages/ViewPresentations2006
Lereah’s presentation definitely stands out!
Maintenance is partially completed.
Please let me know if you are having any problems.
jb
http://www.amazon.com/Rules-Growing-Rich-Information-Economy/dp/0812930568/
This book has three problems. The first is the premise that rich investors should be changing investments all the time in response to shifts in economic conditions. That is probably the way that fewer people get rich than any other. The second is that you can rely on economic information as it comes out to tell you how the economy is shifting. With revisions and changes in measurements, you usually can only confirm a shift when it is long over. The third weakness is a virtually unlimited faith in Internet related stocks that would have had you buying and holding leaders at the price peak in 2000, and subsequently losing over 80 plus percent of your money. Avoid this book as a investment guide for anything but commercial real estate.
And, in the third category, a house I like. I don’t even know where Branchburg is, just that it’s Clot’s neck of the woods. But this one floated by on craig’s:
http://www.forsalebyowner.com/listing/98CD1
you people are so in the minority on your viewpoints in regards to buying a house. according to you you were right in 2003 as much as today. if you bought in 2003 you’d be way up. instead you’re years behind and secretly feeling stupid that you should’ve bought then. silly rabbits…
Looking for some comments on site performance.
jb
>>un the numbers for buying a depreciating asset over the next 5 years and you’ll be scratching what’s left of the little hair on your head by then.
um, none of my 3 properties have depreciated. in fact i’m up big time. i wish i didn’t buy this way my net worth would be 30% less than today. what an idiot i am.
you people have yet to realize the only market that will get sizably hit during this ‘downturn’ is the subprime. anyone here subprime? the prime market seems to be doing just fine, at least in my neck of the woods. sure prices are coming off nosebleed highs from the recent past, but you only had a small minority take the bait. prices are holding up fairly well considering the recent run-up and stories of the sky is falling.
site performance is good jim.
Too bad the performace was good at 6:54PM.
Richard Says:
May 1st, 2007 at 6:48 pm
you people are so in the minority on your viewpoints in regards to buying a house. according to you you were right in 2003 as much as today. if you bought in 2003 you’d be way up. instead you’re years behind and secretly feeling stupid that you should’ve bought then. silly rabbits…
CLUELESS SIMPLETON
These numbers shows that we are in the bottom now and the market is ready to adjust upward. Now it is good time to buy.
um, none of my 3 properties have depreciated.
I was talking about 5 years hence, not the past. If you want to extrapolate the past 3 years to the next 5 years, please continue doing so since it keeps you happy.
Chi, Richard
Do you have contenders in my three categories?
Show me …your best “price reduced” …worst POS …prettiest house you like
These numbers shows that we are in the bottom now and the market is ready to adjust upward. Now it is good time to buy.
Who are you trying to convince?
I’ve said it a number of times before, but I guess I need to say it again.
This site is not the front line of the real estate war.
Very few reading this site are going to be “convinced” into changing their mind. Contrary to public opinion, I don’t believe the media has had a big impact on the market over the past two years.
Do you really believe we “talked the market” into one of the biggest downturns on record?
We’re all just observers here.
jb
Performance is great!
THANK YOU for all of your hard work on the site! The service you continually provide is *totally awesome!*
*lol* at Chi’s #91 – priceless
cf,
We’re now hosted in downtown Chitown.
jb
>>> you going to sit around in your rental for 5 years with house envy? enjoy that.
I prefer that greatly to the “money envy” I would have after paying 2x more than I do now to live in the same house.
“Who are you trying to convince?
I’ve said it a number of times before, but I guess I need to say it again.
This site is not the front line of the real estate war.
C’mon. You of all people should know a troll when you come across one. That said, whoever is playing “honest realtor” is providing solid parody – he/she is sounding just obtuse enough without being over-the-top.
I give it at least a 9.5/10 on the troll-o-meter. Bravo!
From the Boston Globe:
Lenders say many won’t be helped by foreclosure delay
Some on the brink of losing their homes will benefit from the foreclosure delays advocated by Gov. Deval Patrick, but many are so financially troubled that a delay won’t make a difference, the state’s top lenders association said Tuesday.
Despite their portrayal by some housing advocates as “predators,” subprime mortgage lenders want to help homeowners find better loans because they also lose money on foreclosures, said Kevin Cuff, executive director of the Massachusetts Mortgage Bankers Association.
But by the time many cases reach the foreclosure stage, it’s often too late, “whether we wait 60 days or not,” said Cuff, whose trade group represents about 300 lenders.
From MarketWatch:
JPMorgan to adopt Dodd’s subprime lending principles
JPMorgan Chase & Co. said Tuesday it would adopt principles introduced last month by Senate Banking Committee Chairman Christopher Dodd, D-Conn., that would set higher standards for the way companies make and service home mortgages.
The bank’s support could be seen as a victory for Dodd, who initially received a lukewarm industry response to his plan.
Dodd “has focused the country’s attention on the challenges faced by many hard-working families trying to hold on to the American dream,” David Lowman, chief executive of Chase Home Lending, said in a press release. “We at Chase will employ the principles as we work with Chairman Dodd and his committee as well as our regulators, borrowers, investors and community representatives to develop solutions.”
The principles include an agreement that lenders will seek to restructure a loan’s terms if a borrower can’t afford to make the monthly payments after an adjustable-rate mortgage resets upward. Also, lenders agree to contact a borrower before the rate resets to discuss whether a borrower will be able to afford the new rate. The principles also include an agreement to offer low-cost refinancing.
“um, none of my 3 properties have depreciated.”
dont go by the equity loan offers. You never find out until you (have to) sell..
Why did you stop buying..
“Too bad the performance was good at 6:54PM.”
LOL…
Given my luck, the site will be crippled by 10am.
jb
JB, Thanks for all your efforts!
Can I launch a DOS on the site… to test its performance? ;-)
James Bednar Says:
May 1st, 2007 at 8:28 pm
cf, We’re now hosted in downtown Chitown.
jb
Don’t tell me. The server is located here under Michigan Avenue.
No fries – chips
http://www.billygoattavern.com/home.html
“if you bought in 2003 you’d be way up. instead you’re years behind and secretly feeling stupid that you should’ve bought then. silly rabbits…”
Who the hell on this site is arguing RE 2003? Simply a statement by a pinhead. How about those that were long in 2003,2004 and most of 2005? Then deciding to monetize and exchange with the thoughtless blockheads? Worse than that, a half-wit that capitulates in late 2006. There are those that are insightful, others are moronic. That’s human nature. However, touting one’s foolishness is either delusional or simply an ignoramus, or both.
need some financial advice, please?
Best place to store a pile of cash short term (3-6 mos) – but more liquid than a CD?
Thanks in advance,
sl
“These numbers shows that we are in the bottom now and the market is ready to adjust upward. Now it is good time to buy.”
I’m confused. Since there was never a bubble how did we reach a bottom?
Bob/Chifi/Others
What happens when you exchange funds in a 401k account? Do you pay capital gains on the sale when you cash out your 401k?
thanks in advance.
sl,
https://flagship.vanguard.com/VGApp/hnw/FundsByType
http://www.money-rates.com/mmarket.htm
#109, I’d say go with a money market mutual fund for such a short-term. You can’t go wrong with Vanguard or TIAA-CREF (both currently yield around 5.1%).
bear,
Chi would be the person for this. That said, if you cash out, you do have tax consequences and a possible early withdrawal fee.
#111, you don’t pay capital gains when you exchange within a 401k.
When you eventully take withdrawals, they are taxed at your ordinary (higher) tax rates.
#112, dream, thanks! I will look into it.
#111, bear, do you mean exchange (swap money from one to different fund within your 401k) and not remove the money — and do you mean cashing out (as in before retirement?)
sl
Bob,
I should have said withdrawals, not cash out. Thanks.
dreamtheaterr,
Thank you. That’s what i was looking for.
sl (115),
I was planning to swap money between different funds. I meant withdrawals.
still_looking
Look at bankrate.com. There are many online savings accounts and electronic money market funds that pay more than 5% now.
Also, bankrate has its “safe and sound” rating system, with 5 stars being the best.
jb #96
“We’re all just observers here.”
happy mayday
JAFO
thanks — I’m searching right now at bankrate :-)
it’s funny…. I talking about home-buying with a co worker. He said, (this is around 2004) “it’s crazy right now… these prices…but just jump in. Don’t even think about it.”
Thank God for my devil’s-advocate father in law who put the kibbosh on just about every house we looked at. Every 3 mos we would look back and say, “WTF were we thinking???”
Now almost 15 months later we finally see what was happening…
sl
I *was* talking….
JB-
Haven’t had any problems with the site for a while now. Smooth as John Olerud’s swing.
From Forbes.com VIDEO OF Prof. G. Schilling !!!
Recession in ’07
(255 sec.) One of Wall Street’s biggest bears tells us why investors should look out below
http://www.forbes.com/video/?video=fvn/moneymasters/vj_mm122806&partner=yahootix
Is Wallstreet in Denial right now ?
#78 Afe,
“the url it downloads from is realtor.org…NAR’s home base.
I’d love to believe that this is legit too, but don’t count on the url alone to determine whether it is legit. Have you ever received a “phishing” email? Those appear to have legit URLs also–but they’re not—they’re scams.
Hey Gary (54)-
Lereah isn’t a Realtor, and I certainly don’t claim him as one of my own.
However, that .ppt does put him into the Blodget “club”. I previously only viewed him as an annoying shill; now I think he may have veered into the path of some nasty legal payback.
# 87: you people are so in the minority on your viewpoints in regards to buying a house. according to you you were right in 2003 as much as today. if you bought in 2003 you’d be way up. instead you’re years behind and secretly feeling stupid that you should’ve bought then. silly rabbits…
Um, Richard, I’m starting to think that you give a pretty good recitation of the classic line, “thank you, sir! May I have another?”
ChiFi, want to crack the whip (again)?
#92 Richard Says:
May 1st, 2007 at 6:48 pm
you people are so in the minority on your viewpoints in regards to buying a house. according to you you were right in 2003 as much as today. if you bought in 2003 you’d be way up. instead you’re years behind and secretly feeling stupid that you should’ve bought then. silly rabbits…
CLUELESS SIMPLETON
OMG! (oh my god!) I rest my case.
#125 RTB
Go to realtor.org
Type “2006 Leadership Summitt” in the search box
the second hit will be Lereah’s presentation
Someone at the NAR (the webmaster?) must have put this presentation in the wrong place! I’m sure they meant for this to go into the “members only” section.
This has all the makings of a Michael Moore documentary.
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