"Well you know I wish I had better news, but the numbers this week were just horrific," said CNN correspondent Gerri Willis.
The numbers she referred to were home prices and new-home sales, which were down. After briefly mentioning the increase in existing-home sales (which make up a larger share of the housing market), Willis dismissed it.
With the help of CNN's Allen Wastler, the duo played up fears of recession on the March 3 program.
Wastler and Willis wrapped up the housing segment playing on viewers’ fears of a recession after an up-and-down week on Wall Street. Willis said the question wasn’t simply what happens in the housing market, but in the overall economy.
“The conversation about recession this week isn’t just bad for the stock markets; it’s also bad for housing,” Willis said. “When people lose their jobs, we know what happens.” You can read the Business & Media Institute article here.
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Are you suggesting the housin
March 5, 2007 - 18:07 ET by j. frank wilsonAre you suggesting the housing news is great?
Wait til spring frankie.
March 5, 2007 - 18:10 ET by bigtimerWait til spring frankie.
What's the percentage of vint
March 5, 2007 - 18:17 ET by j. frank wilsonWhat's the percentage of vintage 2006 SFR mortgages that have gone sideways? Many without the "borrower" ever making a payment?
What's the current inventory of homes for sale - a 9 months' supply? More?
Of course there is a housing bubble. The real questions are:
1. Has it already burst?
2. If it has, can it do it again?
3. At what multiple of annual income do housing prices (not values - prices) level off? We've already gone from partner working to two. Somewhere in the 4x to maybe the 5x range, in my opinion, is about the limit. After than, how can folks sell their home if there aren't buyers out there who can afford it?
What happens over the next few years when ARM borrowers see their payments increase 50%, 75%, or 100%?
And here's the one I love. Negative amortization ARM's that recast at 115% LTV. And the recast triggers the prepayment penalty! Talk about a reverse ATM machine...
Well, j. frank....Only over-r
March 5, 2007 - 18:24 ET by BlondeWell, j. frank....
Only over-reachers buy more house than they can afford. Or speculators.
So I could hardly care.
The only reason there's a "perception" of a bubble is because there was such an unreasonable run-up in housing over the last three years.
Do I care that my "paper" value is down by $50 grand? Hell no.
What is happening now is that the market is attempting to reach equilibrium.
Equilibrium...you know...that free market state where supply equals demand.
And demand equals supply.So y
March 5, 2007 - 19:15 ET by j. frank wilsonAnd demand equals supply.
So you've manged to restate the proposition without changing anything. And you obviously fail to understand that some things are bought and some things are sold. And some folks are sold something different than what they were told it was.
"Only over-reachers buy more house than they can afford." What a wonderful point of view.
If your price is down by $50K that's probably the margin of error when you purchased it (+/- 10%). Unless you own a $150K house the market isn't that precise.
But I do disagree with about the "perception" of a bubble. Housing prices rise dramatically, stall, fall and a lot of people get hurt for a variety of reasons - including being put into homes they shouldn't have been. That's a real bubble. And real people are getting hurt.
Not that you would care, of course.
Finally - I am a firm believer in the free market. I'm not a believer in fraud. Either by lenders or borrowers or brokers or appraisers or title companies. And I believe banks have an affirmative obligation to not loan money to someone who doesn't have a reasonable expectation of paying them back. Maybe that's just me, but that's the way I roll.
j frank,Why don't you get a m
March 5, 2007 - 19:32 ET by Blondej frank,
Why don't you get a masters in Economics...then we'll talk.
I don't "fail to understand".
Caveat emptor.
Tell me how it's my problem that people bought into crappy mortgages.
And speculators speculated? And got burned?
And no, it's not a bubble at all. It's perception. Nothing more.
And the debacle in Iraq - is
March 5, 2007 - 19:52 ET by j. frank wilsonAnd the debacle in Iraq - is that simply a perception, as well? Guess you've taken "The Secret" to heart. Well, you won't be living in a house that has "only" slid $50K in price for long, will you?
Nice try j. frank. Change up
March 5, 2007 - 19:58 ET by BlondeNice try j. frank. Change up the subject.
And yes, frank.....I'll be living here for as long as I choose.
Silly liberal.
You can't debate. I don't know why you even bother to try.
I'd appreciate it here if someone who knows about debating names what the hell j. frank's tactic here was....I never took debate in school.
I just find him to be another illogical liberal troll.
Favorite logical website
March 5, 2007 - 21:15 ET by rdw1961If you like this sort of thing, look at www.fallacyfiles.org for a great listing of logic definitions.
I would think this is 'argumentum ad mesericordium' which is just fun to say. Kind of a red herring argument. I can't find who originally said this, but something like 'if you can change the subject of a debate, then you have won.'
So, blonde and rdw1961, try this logical economic argument.
March 5, 2007 - 21:35 ET by acaiguanaSo, blonde and rdw1961, try this logical economic argument.
Everyone has a job except me.
Why don't you have a job.
Because nobody has offered me one.
ACA
...
Quoted from: 'Acaiguana Notes from the Bomb Shelter' (soon to be a movie at theaters near you)
Sorry, ACA....I was, um, on t
March 5, 2007 - 22:45 ET by BlondeSorry, ACA....
I was, um, on the phone.
Let me see if I can clear this up....
I could hardly care less whether or not you have a job...
I have one....so what about you?
Does that make me heartless? Yes?
Hope so.
I'm an evil capitalist.
Oh well.
What a cheater you can be.... ACA
March 5, 2007 - 22:54 ET by acaiguanaWhat a cheater you can be.... ACA
My, I'm sitting in my office and there is no line offering me a 'job'.
Um...
ACA
...
Quoted from: 'Acaiguana Notes from the Bomb Shelter' (soon to be a movie at theaters near you)
Sorry, ACA.I'm going places..
March 5, 2007 - 22:59 ET by BlondeSorry, ACA.
I'm going places...you know.
Yeh, blonde, I'm just a (how do I say this) 'sloth" ACA
March 5, 2007 - 23:08 ET by acaiguanaYeh, blonde, I'm just a (how do I say this) 'sloth" ACA
Naturally waiting to be 'discovered'.
<grin>
ACA
...
Quoted from: 'Acaiguana Notes from the Bomb Shelter' (soon to be a movie at theaters near you)
Here's a free debate tip - tr
March 5, 2007 - 23:19 ET by j. frank wilsonHere's a free debate tip - try bringing up some facts. You assert the housing bubble is simply "perception" (whatever the heck that means). You offer no facts of any kind to back it up. When challenged you re-assert it.
I didn't try to change the subject. I made an anology. Sorry it went over your head.
We know the 2006 sub-prime mortgages are experiencing between 8% and 10% default rate - what the models tell us should be happening over a 2 to 3 year period. We know the next level to experience unexpected weakness is "Alt-A" paper.
The housing price bubble was inflated by too many buyers chasing too few homes. Now the pool of buyers has contracted. And the REO's will add to the pool.
What's the current sales inventory - 11 months across the country?
Where are your facts? You don't have any...Just a tired assertion...
Gee, j. frank.You DID change
March 5, 2007 - 23:28 ET by BlondeGee, j. frank.
You DID change the subject (or try....nice one).
Yes...the "housing bubble" is merely a perception....care to try again? What kind of facts should I bring to this knife fight? Perception means just that....what one "thinks" it means....Sheesh, frank.
I could hardly care less about idiots who signed away their lives over and above their means to pay...I suppose that makes me a heartless conservative.
So what? The "pool" of buyers, now, j. frank, are "qualified". So what, exactly, is your big fat MOAN about it?
There is an inventory, across the entire United States of America...and there is also a QUALIFIED pool of buyers.
So what exactly are you moaning about?
People buying homes beyond their means is not my problem, j. frank.
WTF are you bitching about, again?
You really are clueless, aren
March 5, 2007 - 23:35 ET by j. frank wilsonYou really are clueless, aren't you?
Fact deprived, to be sure. Clueless beyond a doubt.
And if you have a Masters in Econ, your parents should get a refund.
Not a believer in fraud
March 5, 2007 - 23:16 ET by acumenI don't mind you changing the subject.
"And the debacle in Iraq - is that simply a perception, as well?"
Not a perception - More like a fraudulent statement to any rational mind.
The situation you refer to as a debacle in Iraq is seen as an opportunity by others. Hence the many investors opening up shop in Iraq. Sure, Baghdad and the surrounding area can be considered an unstable environment. However, northern Iraq is booming with southern Iraq coming along nicely as demonstrated by the recently announced troop reductions. That is the real story.
Don't you consider it ingenuous to claim that a whole country is a debacle when only a relatively small area of that country is in fact unstable? I do.
Using your logic we could consider Louisiana a debacle based on the still recovering and troubled New Orleans.
For someone that declares themselves "not a believer in fraud", you obviously have no problem engaging in fraud. I'm not trying to be ugly. I've just observed that rather than tell the whole story, you seem to cherry-pick information that is beneficial to making your case, while omitting pertinent information that is damaging. That my friend is fraud.
glass half full
March 5, 2007 - 22:49 ET by acumen4. If there is a such a thing as a housing bubble, such an occruance is severely localized. Fact - In my state, for the most part where population is increasing, home values are increasing as well. In other areas of the country where large segments of the population are leaving, home values are decreasing.
5. Interest rates have remained fairly stable. Most borrowers that had/have ARM's are locking in at +/- 6% fixed. Same with negative amortization loans. There are no legally allowable penalties for refinancing a mortgage other than typical closing costs in some instances or no closing costs with a larger APR in others.
Unlike former housing crashes that were based on fraudulent inflation of value, current home values fluxuate depending on location, consistent with consumer demand - primarily not due to inflated values. This has a positive effect in some locations of the country and a negative effect in others. On a local level, smart homeowners sold at the stability neigborhood cycle anticipating neighborhood decline and purchased a home in a developing neighborhood cycle.
In short, if housing values in some locations are decreasing it is due to low demand based on external economical influences, rarely because of inflated values of the homes. i.e. - Ford layed off 25,000 employees. External factors are hardly the same thing as a housing bubble.
Your post is a remarkable far
March 5, 2007 - 23:28 ET by j. frank wilsonYour post is a remarkable farago of misinformation.
Prepayment penalties on ARM's are completely legal and enforced by lenders. Federal regulation preempts state law. As long as the mortgage is assumable - and lenders can make sure only qualified persons can assume - the prepayments will be collected.
"Most" ARM borrowers are not refinancing. Many borrowers can't because they are upside down - due to declining prices and neg. am. provisions.
The housing bubble isn't localized - unless you mean limited to the planet earth. It is a situation in a number of countries - not just the USofA.
Interest rates haven't been driving home prices upwards. The difference in monthly payment across rates generally doesn't keep anyone from buying a home. Loose underwriting guidelines, automated "underwriting," and piggy-backs have a great deal to do with it. PMI for all it's faults wasn't a bad thing because the buyer still had to have some cash equity. 100% LTV financing took care of that - but caused new problems.
Sellers splitting inflated sales prices with buyers is more common that you obviously know about. Additionally, in this bubble the issue of inflated buyer income is more of an issue than inflated appraisal values. "Stated" income and assets accounts for that.
I sincerely hope you are not trying to make a living financing SFR's - let alone commercial properties.
Interest rates haven't been d
March 5, 2007 - 23:39 ET by BlondeInterest rates haven't been driving home prices?
Gee, frank, get a grip!
Had the interest rates been, um, like under your dear President's (that would be Jimmah Cartah)...there would have been no run up in the price of real estate at all.
Why don't you just give it up?
You can't live with it...and you can't live without it.
We've had the best economy to be lived through in the last twenty five years, but you, as a liberal retard, can't acknowledge it.
So why don't you just retreat...little buddy.
So I can be happy about a $50,000 "paper" loss. If I'm not pissed about it, j.f., why should you be?
After all, it didn't hit you in the knees, did it?
"Retard?" Is that
March 6, 2007 - 12:13 ET by j. frank wilson"Retard?" Is that the best you can do? Did you have to take the lollipop out of your mouth to type it?
By the way - who is a "retard?" Someone doing the best he or she can with the brains the Good Lord gave them?
Pathetic.
The monthly payment on a $250,000 30/30 mortgage at 6% interest is $1,491.42. At 7% - $1,653.61. Less than $175 a month pretax - just under $100 after tax assuming one is in a 40% federal (and state if one can deduct it) bracket.
Available loan programs, minimal downpayment requirements, loose loan underwriting and a general mania (no coincidence America fell in love with poker and real estate "investing" at about the same time) have more to do with it than interest rates. And - as noted before - the housing bubble is international - not simply limited to our country.
Gee, j. frank. No one forced
March 6, 2007 - 20:09 ET by BlondeGee, j. frank.
No one forced anyone to sign on that line, did they?
Housing "bubble"? Hardly.
A deceleration of an insane rate of appreciation is more like it. Where I live, in 2005, home values increased in excess of 38%. That's a reasonable rate of return, yes? Of course it won't last. And might even abate, a bit. But for the seller who is priced right, no problem. Unrealistic sellers....well, they'll just have to wait. Supply and demand.
BTW, nice try with your shot about my degree, j. frank. Totally stupid, but a clever little trollish try.
J. Frank Moonbat
March 6, 2007 - 12:19 ET by Free StinkerGee, frank, get a grip!
Blonde - are you kidding?
Even if he bought a dog and named it "Clue", he still wouldn't have one!
The MSM was predicting, hopin
March 5, 2007 - 18:22 ET by Chris NormanThe MSM was predicting, hoping, and praying the "housing bubble" would burst for two years before sales finally slowed and prices went down. This "success" has led them into "predicting" their hoped-for recession and if the Democrats are really lucky - a depression!
The dogs bark, but the caravan moves on.
- Arabian Proverb
And your opinions are based o
March 5, 2007 - 19:18 ET by j. frank wilsonAnd your opinions are based on? I believe it was The Economist that first predicted in some detail the world-wide housing bubble. So far, that newspaper has been pretty much spot on. And I have seen no evidence it could care less about Democrats or Republicans being elected.
What in the heck does a predi
March 6, 2007 - 15:25 ET by Chris NormanWhat in the heck does a prediction by The Economist have to do with negating my observation - except that it gave you a chance to drop the reference? You are a pretentious and pompous little man...
The dogs bark, but the caravan moves on.
- Arabian Proverb
If you sincerely believe the
March 6, 2007 - 16:02 ET by j. frank wilsonIf you sincerely believe the "liberal MSM" myth - a cottage industry that has brought millions into the Republican coffers - you're wasting your time reading the papers. You've already made up your mind and facts aren't going to change anything.
I brought up The Economist because (1) That newspaper correctly predicted the international housing bubble; (2) It is a publication that doesn't have a dog in our domestic political fight.
Sorry such a simple observation was over your head.
First Stop, Economic Malaise - All Aboard
March 5, 2007 - 19:25 ET by acumenAmerica was on an economic roll before the Dems took control of Congress in January.
If we are to believe CNN, economic malaise will be the first stop along the Democrats "new direction" for America.
Better buckle up. Looks like it's going to be a bumpy ride.
lucky me...
March 5, 2007 - 23:13 ET by dmntd1Lucky for me, I have a job in which I take advantage of those that are going to get along poorly while on this bumpy ride.
Does that make me heartless? Well, I prefer to think of myself as a Capitalist.
Please make sure your train of thought carries freight.
Decisions, decisions
March 5, 2007 - 23:36 ET by acumenI see, you are either a Democrat politician or a mortician. If the former, I'll go with heartless. If the latter, I'll go with capitalist. The important thing is that you prefer to think of yourself. The family must be so proud.....
Neither, I'm in collections..
March 5, 2007 - 23:40 ET by dmntd1Neither, I'm in collections.... sooooo those deadbeats? I eventually catch up to them, and they eventually pay!
Please make sure your train of thought carries freight.
It only took 30 days for the
March 5, 2007 - 23:30 ET by j. frank wilsonIt only took 30 days for the Democratic House and Senate to undo 6 years of Republican success? There's a proposition that makes a lot of sense.