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EScroogeJr (< 20)

new altria?

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January 08, 2007 – Comments (2)

Subprime mortgage REITs are establishing new lows. NEW is traded at 81% of BV, LEND - at 86%. The reasons are obvious: that BV consists of subprime loans, which could default if housing prices get lower. If that happens, then there companies are obviously headed to Ch 11, which is how the market currently values their prospects.

Good reasoning.

There is only one flaw in this analysis. Housing prices are not going down. They are going up.

2 Comments – Post Your Own

#1) On January 08, 2007 at 8:08 PM, wcw2 (98.81) wrote:

Is that a prediction? Are you calling for continued increases in real house prices, or just for nominal ones as the value of housing gets inflated away?

Me, I can't look at for-sale-only vacancy rates and new-home sales versus population growth and predict anything but stagnation for residential housing. That said, I'd like to see your reasoning.

Why are real house prices going to go up more?

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#2) On January 10, 2007 at 1:36 AM, EScroogeJr (< 20) wrote:

Yes, this is my prediction. I don't see any chance of a significant price decrease.

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