Use access key #2 to skip to page content.

alstry (35.03)

You think 1929 was BAD?

Recs

14

May 13, 2008 – Comments (11)

At the worst of The Great Depression, the housing market was never as bad as it is today. 

THE CRAZY PART IS THAT WE ARE STILL IN THE EARLY PART OF THE DOWNTURN!!!!!!!

 

Nearly three in four local homes sold in April were foreclosures, as prices of existing homes dipped 2.6 percent for the month, according to a new report.

http://www.vvdailypress.com/news/homes_6383___article.html/percent_local.html

 

75% OF HOMESALES FORCLOSURES IN APRIL!!!!!!!!!!!!!!!!!!

 

How can a legitimate seller compete?  Can you imagine what May statistics will look like as the Spring Selling season winds down????

What's next, 90% of home sales foreclosures?  95%?????

I told you it would be exciting.....hang on for the ride of your life.

11 Comments – Post Your Own

#1) On May 13, 2008 at 7:09 PM, Evlampius (24.04) wrote:

Right,

Thats why I am waiting and not buying a home now...Many home sellers think that this might be over and they will not have to drop their prices down, boy they are wrong.

I would say another 15% drop in home prices for sure. As far as liquidity goes: I see houses for sale several on every street. No one wants to buy right now - why do people still think they can ask such high prices still?

Report this comment
#2) On May 13, 2008 at 7:31 PM, QualityPicks (54.81) wrote:

Yeap. Foreclosures are great. To start with, they sell at more realistic prices (i.e. lower prices). Then, because the homedebtor is kicked out of their house, he doesn't go and buy another house, which means demand for homes stays low.

I've heard many friends refer to prices of foreclosed homes as "yeah, that house similar to mine sold really cheap, but that price is not real because it is a foreclosure" They don't realize that the "unreal" price is the one in their heads.

Report this comment
#3) On May 13, 2008 at 7:36 PM, TDRH (99.76) wrote:

Alstry,  I agree we are in for a storm, though I am not sure how it will compare with the depression.   I thought this spring there would be a ton of homes for sale here in STL, but surprisingly there have not been that many for sale signs, and the homes appear to be moving.  

That said, housing is regional, and according to Floridabuilder, when he was thinking he might become a housing bull, the STL market is not that far out of historical ranges.   

Areas like Detroit, Las Vegas, Florida and California are going to be crushed, from the individual homeowner to the retail sector to the municipalities, it is going to be ugly.

Report this comment
#4) On May 13, 2008 at 7:51 PM, madnessmmrs (99.73) wrote:

Buyers here in California are jumping off the fences, finally. Unfortunately, even with great credit, most have issues coming up with the required 10% down. Some areas here in Northern California are seeing more closings than new homes on the market. Most of my currently listing are short sales, owners trying to sell their home in hopes of avoiding a foreclosure. There may be tax penalties involved, contact your CPA, but a short sale may cause a 50-75 point hit on your credit vs a 150-200 point hit for a foreclosure. Whats really sad is that these owners want to keep their homes and the banks are unwilling to work with them. This could prevent a huge number of REO's. Until the banks wise up things will continue to side south, just not as quickly.

Report this comment
#5) On May 13, 2008 at 7:57 PM, LORDZPAIN wrote:

Unless you live in Michigan, increases in population will correct the over supply in housing and the cycle will reverse and houses will start to over appreciate again. However in the meantime to simply get a loan now requires one to jump thru unnecessary hoops... The lending industry is a joke, for instance today discover card sent me a new card and I had to call it in to activate and the guy was kissing my butt telling me how im an excellent card member and how they are glad to have me since 2000 as a member ~ although ive actually had a discover card since 1988 but cancelled it in 1999 because some account manager pissed me off ~ and then he asks me if theres anything that he can do and i mention about them increasing my limit from 20,000 and he asks to what and I mention 50,000 and hes mentions how he could only increase my limit by 1,000 and that if I wanted more that i would have to fill out an application and I'm like forget it ~ dont bother, if its such a problem i'll just use my other cards.

He also than tries to sell me insurance just in case i should ever have difficulty in paying my bills ~ and i'm like I dont need that i'm independantly wealthy.  I tell ya if I wasnt getting back 5% on my gasoline purchases with them I just might have cancelled my card. You would think that they would have jumped at increasing someones available credit who has consistently paid his monthly account purchases in full for over 20 years, however see this is whats wrong with credit facilities.

 

Report this comment
#6) On May 13, 2008 at 8:22 PM, Magyc (61.83) wrote:

RE: MI Real Estate.....The one plus is, we willl always have water...might not have jobs, but we will have water.

Report this comment
#7) On May 13, 2008 at 9:09 PM, alstry (35.03) wrote:

THE WORST IS JUST BEGINNING:

The April total of foreclosure sales at auction -- 22,838 for the state -- represents a jump of 44% over March totals and the highest level ever in California, ForeclosureRadar reports.
...
It appears the pipeline of potential foreclosures is jampacked, too: the ForeclosureRadar reported 44,101 new "Notices of Default" filings in April, a new record for California. Notices of Default are the first step in the foreclosure process.

http://calculatedrisk.blogspot.com/2008/05/1000-foreclosures-per-day-in-california.html

Analyzing this stuff ain't hard....it just sucks to reveal the truth.

Report this comment
#8) On May 13, 2008 at 10:15 PM, dwot (97.03) wrote:

I saw CR as well...  I have to agree on the housing market, it is worse...

Report this comment
#9) On May 14, 2008 at 2:36 AM, klemenv (99.76) wrote:

Funny thing about timing when to purchaise home. One can actually lock price several months in advance using Case-Schiller futures contract.

For example, if one beleives, that May is the bottom (maybe one is watching CNBC), and see that particular Case-Schiller index is 150 for May and 140 for September, one can buy the fututres contracts.

If in September, index will drop to 130, one  will face loss in futures, but cheaper house.

If price of September index will rise to 150, one will face profit in futures, but more expensive house. 

But bottom line, one is better to lock September price at 140 than buy the house at spot price.

When futures price will be higher than spot index, it will be sign THAT FUTURES TRADES BELEIVE THAT PRICES WILL RISE.

Remember, futures traders are putting money, where their mouth is. 

Report this comment
#10) On May 14, 2008 at 4:08 AM, bobbyj0708 (< 20) wrote:

The housing bubble will be nearly over when the knife catchers of today find themselves being foreclosed on.

Any talk of a bottom or thoughts of buying are extremely premature.

Report this comment
#11) On May 14, 2008 at 9:13 AM, leohaas (35.73) wrote:

Sure, housing is bad, and will stay bad for the foreseeable future. I am also convinced that banks will still face humongous write-offs. And the rising prices for necessities are concerning me.

But other than that, the economy cannot be compared with the Great Depression. I don't see 30% unemployment, long lines at soup kitchens, banks falling like dominoes, 80% of the population living below the poverty line, and so on. Rather, we have a system in place to prevent all this. And like it or not, the system is working, maybe not to your personal advantage, but definitely to society's advantage. There will be no new Great Depression because we now have a FED, because we are off the Gold Standard, because your bank deposits are insured. You now, all those measures FDR took in 1933. They have prevented another depression for 75 years now!

LordZ, "You would think that they would have jumped at increasing someones available credit who has consistently paid his monthly account purchases in full for over 20 years". I hate to burst your bubble. If you pay off your credit card balance every month (good for you, I do the same), you are NOT a good customer for the credit card companies. They want you to carry balances, go over your limit, pay late, and so on, because that is how they make money!

Report this comment

Featured Broker Partners


Advertisement