Housing Bubble Correction

[FRED]

Re: Housing Bubble Correction

I heard a rumour they were going to start advertising it as a ski destination...



Hey, if Dubai can do it, why not Vegas...:rolleyes:

In Dubai they burned oil to make snow -- indoors. :cool:

[GRG55]

Re: Housing Bubble Correction

...What will they do with all this housing? How will they attract people to Nevada?

I heard a rumour they were going to start advertising it as a ski destination...



Hey, if Dubai can do it, why not Vegas...:rolleyes:

[FRED]

Re: Housing Bubble Correction

I'm traveling to Las Vegas in January for the International Builders Show. The sardonic irony of having this show, in Las Vegas in late 2008, will be lost on almost everyone in attendance. I was able to get a flight for $73 each way and a room at the Tropicana for $45 a night. Not only was the room inexpensive there was no restriction on the number of nights I had to book. I went to my first Las Vegas trade show 18 years ago and a similar room was $150 a night with a five night minimum. I'm prediciting a lot of hope and fear but not a lot of new contracts.

You may be correct with regard to the ghost town comment. I was thinking 'a shell of it's former self', but the shear breadth and pomposity of the buildout over the last 20 years may preclude survival of the shell.

I've no comment on the uber-moral movement as the only thing I'm sure about is that I don't have a clue what's inside most people's heads. But, the average American is going to be looking for someone or something to blame over the next decade or so. Why not gambling, it makes as much or as little sense as anything else.

I have some well presented US Census information on the distribution and size of the religious, the extremely-religious and wacky, Jesus came in a space ship religious. It certainly does nothing to discredit the possibility that super morality could again become law. I'll post this information in another thread as I have time over the long weekend.

Good luck with your trip to Vegas. We look forward to your Report from the Front.

[santafe2]

Re: Housing Bubble Correction

Unfortunately, our prognosis is that Las Vegas becomes a ghost town. First it gets hit with the depression, then an anti-gambling moral movement. State lotteries will be abolished, too.

I'm traveling to Las Vegas in January for the International Builders Show. The sardonic irony of having this show, in Las Vegas in late 2008, will be lost on almost everyone in attendance. I was able to get a flight for $73 each way and a room at the Tropicana for $45 a night. Not only was the room inexpensive there was no restriction on the number of nights I had to book. I went to my first Las Vegas trade show 18 years ago and a similar room was $150 a night with a five night minimum. I'm prediciting a lot of hope and fear but not a lot of new contracts.

You may be correct with regard to the ghost town comment. I was thinking 'a shell of it's former self', but the shear breadth and pomposity of the buildout over the last 20 years may preclude survival of the shell.

I've no comment on the uber-moral movement as the only thing I'm sure about is that I don't have a clue what's inside most people's heads. But, the average American is going to be looking for someone or something to blame over the next decade or so. Why not gambling, it makes as much or as little sense as anything else.

I have some well presented US Census information on the distribution and size of the religious, the extremely-religious and wacky, Jesus came in a space ship religious. It certainly does nothing to discredit the possibility that super morality could again become law. I'll post this information in another thread as I have time over the long weekend.

[Slimprofits]

Re: Housing Bubble Correction

Unfortunately, our prognosis is that Las Vegas becomes a ghost town. First it gets hit with the depression, then an anti-gambling moral movement. State lotteries will be abolished, too.

The state lotteries I can understand, being banned that is. And the writing is on the wall for many casinos to file bankruptcy over the next few years, but Vegas a ghost town? My curiousity is high on this one.

[FRED]

Re: Housing Bubble Correction

Although "improving" over last month these stats are now more than twice as bad as jk posted in 2006. There were 259,085 houses moving into foreclosure or one in 488 homes in November 2008, again according to RealtyTrac.

http://www.realtytrac.com/ContentMan...43&accnt=64847

My favorite death watch is Nevada. Last month, 1:76 homes moved into foreclosure. And this was an improvement from October when 1:74 homes moved into foreclosure. That's a 6-7 year run rate and every home in Nevada will have gone into foreclosure. It's not likely to get that bad, but that's the current rate.

The population of Nevada has increased more than 30% since the 2000 census, more than any other state. Many of these people were in the building trades and clearly, Nevada has enough housing. Will the population shrink by the 2010 census? What will they do with all this housing? How will they attract people to Nevada?

Unfortunately, our prognosis is that Las Vegas becomes a ghost town. First it gets hit with the depression, then an anti-gambling moral movement. State lotteries will be abolished, too.

[santafe2]

Re: Housing Bubble Correction

NATIONAL FORECLOSURES INCREASE 24 PERCENT IN AUGUST
By RealtyTrac Staff

Foreclosures Up Nearly 53 Percent from August 2005, 38 Percent Year-to-Date

IRVINE, Calif. – Sept. 13, 2006 – RealtyTrac™ (http://www.realtytrac.com/), the leading online marketplace for foreclosure properties, today released its August 2006 U.S. Foreclosure Market Report, which shows 115,292 properties nationwide entered some stage of foreclosure during the month, a 24 percent increase from the previous month and an increase of nearly 53 percent from August 2005. The report also shows a national foreclosure rate of one new foreclosure filing for every 1,003 U.S. households, the second highest monthly foreclosure rate reported year to date. [emphasis added]

Although "improving" over last month these stats are now more than twice as bad as jk posted in 2006. There were 259,085 houses moving into foreclosure or one in 488 homes in November 2008, again according to RealtyTrac.

http://www.realtytrac.com/ContentMan...43&accnt=64847

My favorite death watch is Nevada. Last month, 1:76 homes moved into foreclosure. And this was an improvement from October when 1:74 homes moved into foreclosure. That's a 6-7 year run rate and every home in Nevada will have gone into foreclosure. It's not likely to get that bad, but that's the current rate.

The population of Nevada has increased more than 30% since the 2000 census, more than any other state. Many of these people were in the building trades and clearly, Nevada has enough housing. Will the population shrink by the 2010 census? What will they do with all this housing? How will they attract people to Nevada?

[Slimprofits]

Re: Housing Bubble Correction

By the way, how does 61% over the course of 22 months sound for a haircut?

This is the current graph from Zillow.com that represents a recently sold 4 bed, 3 bath, 2,400 sq. foot single family home (built in 1990), surrounded by wide-open greenbelt, in one of the best climates that can be found in the entire United States, in the hills, but not far from the coast in Mendocino County, California. The dollar signs represent the most recent sales on record in Jan./Feb. 2007 and Nov./Dec. 2008:



...the "Zestimate" is $328,500 - so much for their metrics.

[Slimprofits]

Re: Housing Bubble Correction

Here's a piece pf research from the San Francisco Fed that references the McCarthy research:

McCarthy, J., and R. Peach. 2004. “Are Home Prices the Next ‘Bubble’?” FRBNY Economic Policy Review.

http://www.newyorkfed.org/research/e...g/mccarthy.pdf

But the link there doesn't work either. These guys were cranking out this bullshit in volume in those days.

Fred, it is there, maybe they moved it. Look at my post previous to yours.

Are Home Prices the Next 'Bubble'?

[LargoWinch]

Re: Housing Bubble Correction

Thanks Ed. much appreciated.

I feel like reading something containing some humour since the news can get quite gloomy these days.

[FRED]

Re: Housing Bubble Correction

I am re-reading all the old threads from EJ, Ed. and al.

I noticed that regarding the following comment from EJ on the housing bubble in ... 2002! that it appears that the Fed deleted its research. Quote from the article:

" The Fed wrote a recent piece on how housing isn't a bubble,"

Unless it has been reposted by the Fed, I think this is quite convenient...

Here's a piece pf research from the San Francisco Fed that references the McCarthy research:

McCarthy, J., and R. Peach. 2004. “Are Home Prices the Next ‘Bubble’?” FRBNY Economic Policy Review.

http://www.newyorkfed.org/research/e...g/mccarthy.pdf

But the link there doesn't work either. These guys were cranking out this bullshit in volume in those days.

[Slimprofits]

Re: Housing Bubble Correction

Largowinch: (mccarthy.pdf)

Jonathan McCarthy's archive

Is it one of these two papers?

Is There a 'Bubble' in the Housing Market Now?
With Richard W. Peach
Is Your Bubble about to Burst? John A. Tatom (ed.), Networks Financial Institute: Indianpolis, IN. September 2006, pp. 18-37

Are Home Prices the Next 'Bubble'?
With Richard W. Peach
FRBNY Economic Policy Review Volume 10, Number 3 (December 2004), 1-17

Now for some reason the report from 2004 isn't linked on McCarthy's NYFed archive page, but a google search for the title revealed it immediately: Are Home Prices the Next 'Bubble'?

[LargoWinch]

Re: Housing Bubble Correction

I am re-reading all the old threads from EJ, Ed. and al.

I noticed that regarding the following comment from EJ on the housing bubble in ... 2002! that it appears that the Fed deleted its research. Quote from the article:

" The Fed wrote a recent piece on how housing isn't a bubble,"

Unless it has been reposted by the Fed, I think this is quite convenient...

[Jim Nickerson]

Re: Housing Bubble Correction

Barron's Alan Abelson's column for 1/1/07 quotes Doug Kass, a hedge fund manager whose fund does nothing but short stocks.

Apparently Kass was short homebuilders, but not at the moment.

...because he feels he had too much company. Short interest in the stocks as a percentage of the average day's volume has mounted steadily, and short positions in many of the home builders' stocks have spiked, he reports, in some cases to as much as 15% of the float (which, for the happily uninformed, is the number of shares available for trading).
But he's still very much of a mind that the worst is still to come in housing. One interesting light he sheds on the supposed modest increase in new home sales, for example, is that the Census Bureau does not adjust for cancellations in its compilation of house sales, which in a soft market like this one not only overstates sales, but understates inventory.
Usually, cancellations run only about 15% of orders for publicly owned home builders. However, cancellations have soared this year. And Doug thoughtfully sent along the third-quarter rate for each of the leading home builders. Here they are: Centex (ticker: CTX), 37%; DR Horton (DHI), 40%; KB Home (KBH), 53%; Lennar (LEN), 31%; Pulte Homes (PHM), 36%; Beazer (BZH), 57%; Hovnanian (HOV), 35%; MDC Holdings (MDC), 49%; and Standard Pacific (SPF), 50%.
Obviously, just as a house is not necessarily a home, an order for a house is not necessarily a sale.

[Jim Nickerson]

Re: Housing Bubble Correction

Results of the Housing Decline, November 28, 2006 by Mike Shedlock
Illinois, U.S.A.


http://www.whiskeyandgunpowder.com/A.../20061128.html

Quoting Mike Morgan. "The crash of the housing industry is only now getting started, as it will spread virally to all of the boats it floated during the rising tide. Housing has touched every single segment of our economy, and it will darken all of those segments as the industry collapses to the worst levels we've seen since the Depression. The NAR and other groups producing numbers have been great cheerleaders, but when you're pumping out misleading numbers, I don't care how beautiful or loud the cheerleaders are, the situation is a no-win Catch-22 for the homebuilders no matter how one looks at it."

Another quote from the article.

"In a conference call titled 'How Bad Is Subprime Collateral?' Tom Zimmerman, head of ABS research for UBS, and David Liu, head of mortgage credit, discussed how much higher loan delinquencies and foreclosures are for 2006 subprime loans compared with similar subprime loans from earlier years -- the result of deteriorating underwriting quality from lenders combined with a slower housing market.

"Still, despite the adverse conditions, 'I guess we are a bit surprised at how fast this has unraveled,' said Zimmerman. While it's 'not a secret that subprime collateral has performed pretty disastrously so far,' he said, 'I must say we were a bit surprised by the magnitude with which' the loans 'deteriorated this year.'

"The rate of subprime loan delinquencies of 60 days or more -- meaning borrowers are that far behind in their payments -- has climbed to about 8%, up from about 4.5% a year ago.

"These 60-day-plus delinquencies jumped up fairly sharply in the past few months, to 3.63% for the 2006 loans in October, up from 2.95% in September and 1.62% in July, according to UBS research."