The next housing shock ( banks Forge documents)

[hvactec]

[ame=http://www.youtube.com/watch?v=QwrO6jhtC5E]YouTube - The next housing shock[/ame]

 

[william the wie]

Your link does not work but this is old news. Confirmation of forged documents go back to 04 or 05 in most places where the housing bubble really took off.

 

[editec]

The next RE shock is an after-shock of the original one.

The market is moribund because banks have tightened up lending, and are curtailing giving out those variable rate NINJA loan that drove the prices so high for about ten years or so.

As soon as those viaible rate kicked up to their much higher interest rates, and the buyers could not longer pay their monthly nuts, the market went south.

But given that the market was mainlining amphetamines in the form of vairable rate NINJA loans, that's to be expected.

Based on the median US family's income (roughly $50 K before taxes) the median home price in this nation ought to be about $100,000.

Still some way to go before we get there.

 

[william the wie]

The next RE shock is an after-shock of the original one.

The market is moribund because banks have tightened up lending, and are curtailing giving out those variable rate NINJA loan that drove the prices so high for about ten years or so.

As soon as those viaible rate kicked up to their much higher interest rates, and the buyers could not longer pay their monthly nuts, the market went south.

But given that the market was mainlining amphetamines in the form of vairable rate NINJA loans, that's to be expected.

Based on the median US family's income (roughly $50 K before taxes) the median home price in this nation ought to be about $100,000.

Still some way to go before we get there.

I think you are overoptimistic on several fronts.

The median income income is lower than that.

After this big of a boom, one reason New Orleans has not recovered from Katrina is that real estate was down all over the gulf due to overbuilding prior to the hurricane, the bottom is way down there. 1X annual income or less is the probable bottom. While no one sector of housing is wildly overbuilt nationally between condos, trailer parks, RV parks, extended stay hotels and so forth total housing stock is way over the more or less normal supply of 111% of local population in 90+% of markets. Short of the big one hitting and forcing the evacuation of say California or the mid-Mississippi I see no possibility of 2X income housing prices becoming the long range norm again.

Real incomes are dropping due to non-core inflation, food and fuel, squeezing housing budgets.

Construction costs are going down and have been doing so for at least 40 years. If existing homes have to compete with lower cost and higher quality new construction then they will have to drop in price a lot.

This is extremely messy and will get much worse.

 

[waltky]

Housing crisis creates generation of renters...

Troubled home market creates generation of renters
5/24/2011 WASHINGTON — For many Americans a home now feels too costly, too risky or unlikely to appreciate

A growing number of Americans can't afford a home or don't want to own one, a trend that's spawning a generation of renters and a rise in apartment construction. Many of the new renters are former owners who lost homes to foreclosure or bankruptcy. For others who could afford one, a home now feels too costly, too risky or unlikely to appreciate enough to make it a worthwhile investment. The proportion of U.S. households that own homes is at its lowest point since 1998. When the housing bubble burst four years ago, 31.6 percent of households were renters. Now, it's at 33.6 percent and rising. Since the housing meltdown, nearly 3 million households have become renters. At least 3 million more are expected by 2015, according to census data analyzed by Harvard's Joint Center for Housing Studies and The Associated Press. All told, nearly 38 million households are renters.

Among the signs of a rising rental market:

— The pace of apartment construction has surged 115 percent from its October 2009 low. It's still well below a healthy level. But permits for apartments, a gauge of future construction, hit a two-year peak in March. By contrast, permits for single-family home are on pace for their lowest annual level on records dating to 1960.

— The number of completed apartments averaged about 250,000 a year before the boom. They fell to 54,000 last year and will probably number around the same this year. But then the number will likely double to about 100,000 in 2012 and hit 250,000 by 2013 or 2014, according to the CoStar Group, a research firm. The lag is due to the time it takes for an apartment building to be completed: an average of 14 months.

— Demand is driving up rents. The median price of advertised rents rose 4.1 percent between the end of 2009 and the end of 2010, census data shows. Few expect the higher prices to stem the flood of renters, though. One reason: Younger adults don't value homeownership as earlier generations did and many prefer to rent, studies show.

— Rental housing is giving builders more work just as construction of single-family homes has dried up. Still, that economic lift won't make up for all the single-family houses not being built. Apartments account for only about one-fourth of homes. And renters are outspent roughly 2-to-1 by homeowners, who pay for items from lawn care to remodeling and help drive the economy.

More Housing crisis creates generation of renters - Business - Personal finance - Real estate - msnbc.com

 

[waltky]

Uncle Ferd waitin' till dey givin' houses away...

US Housing Prices Fall
May 31, 2011 - A wave of foreclosures and a glut of unsold homes pushed U.S. housing prices down in March.

Tuesday's report from the closely-watched Case-Shiller index of property values in 20 U.S. cities was 3.6 percent below the same month a year earlier. High unemployment means many people lack the income needed to buy a home, while others may be worried they may not keep their jobs and do not want to take on major new debts.

Banks have also tightened lending standards, meaning fewer people can qualify for mortgage loans to buy homes. A separate study by private research group, the Institute for Supply Management, showed business activity growing more slowly in May in the U.S. Midwest.

The downbeat reports and high gasoline prices are among the reasons U.S. consumers grew more pessimistic in May as U.S. consumer confidence fell to a six-month low. Economists watch consumer confidence for clues about the consumer spending that drives most U.S. economic activity.

US Housing Prices Fall | USA | English

See also:

'Double dip' in home prices is official, and prices could drop more
May 31, 2011 - Home prices fell sharply during the first quarter of 2011, according to the S&P/Case-Shiller index. The 'double dip' means they dropped below their Great Recession low point, reached in early 2009.

A widely watched index of home prices has fallen to a level below its recession low point, an official sign that the US housing market is in a so-called "double dip" downturn. Home prices fell sharply during the first quarter of the year, according to Standard & Poor's Case-Shiller index of US home prices. That leaves home prices below the bottom they reached early in 2009, as the United States was mired in a financial crisis and deep recession. The news, released by S&P on Tuesday, confirms that the housing market is beset by ongoing challenges, even as the broader economy has stabilized and shown modest job growth this year.

The key problems:

Credit is tight for would-be buyers. Even though interest rates are low, banks are being unduly stringent in approving loans, say some real estate experts.

Uncertainty runs high. It's hard for potential homebuyers to make a major financial commitment if they feel uncertain about job security or about whether home prices will keep falling.

The supply of homes for sale is huge. The continuing tide of foreclosures puts downward pressure on prices, by keeping a glut of homes on the market at distress-sale prices. The problem feeds on itself, since many homeowners default in part because they see the value of their properties declining – leaving them with less incentive to make the effort to stay current on their mortgage payments and more incentive to let lenders take over the properties.

The foreclosure wave may have already peaked, but the numbers of loans in serious delinquency remain at historically high levels. "Weak demand, foreclosures, and a glut of homes for sale should translate into at least another 5 percent drop in the Case-Shiller composite indices," economist Patrick Newport of the forecasting firm IHS Global Insight wrote in an analysis Tuesday. He said a key reason that further price declines are "etched in stone" is that so many homeowners have seen their home values fall well below the balances due on their loans.

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