DebateGate
General Category => 3DHS => Topic started by: Christians4LessGvt on March 01, 2010, 11:52:48 AM
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Ready for a Double-Dip in Housing?
March 1, 2010
The Housing Slump Renews - Sales of new homes plunged 11.2% in January to a record low 309,000 units on an annualized basis. Sales of existing homes fell 7.2% to a seasonally adjusted annual rate of 5.05 million units, the weakest reading since June 2009.
I think that prospective buyers who had hoped to take advantage of the first time $8,000 tax credit, and move-up buyers seeking the $6,500 tax credit are concerned that they cannot get to Contract by the end of April if they are applying for a mortgage now. Even if they do, they have to close by the end of June. If not, they may lose their down payment and not get the tax credit? If it all goes well, it still takes six months to get the tax check from the IRS.
Commodity Speculation is Hurting the Homebuilders
Because Bernanke insists on keeping the federal funds rate at zero percent, speculation in copper and lumber futures is causing problems for homebuilders and hence the U.S. economy. How can a builder compete with cheaper depressed short sales and foreclosures in existing homes with higher costs of building materials?
Since the end of 2008 to the high in January 2010 copper prices are up 182%. Since January 2009 and February 2010 Lumber Futures are up 112%.
Bernanke says there are no signs of inflation, so he continues to ignore reality, and that zero rate policy could actually cause the Double-Dip, or worse.
Fannie Mae Takes a Hit - Fannie Mae (FNM) will get another $15.3 billion of taxpayer money bringing its total bailout to $75 billion. The total for Fannie and Freddie Mac (FRE) is now $126 billion, and the total line to the U.S. Treasury is now up to $415.3 billion and counting through 2012.
FDIC Troubling Statistics - The FDIC Quarterly Banking Profile suggests that "The Great Credit Crunch" that began with the peak in the housing stocks in mid-2005 will continue right through the new decade. Community banks peaked in December 2006 and the regional banks peaked in February 2007. Stress continues to build in the banking system as the number of bank failures rise.
The number of banks on the FDIC List of Problem Banks is up 824% since the end of 2007 to 702.
The assets among the problem banks is up 171% to $402.8 billion
The warnings began when Quarterly Net Income in the banking system crashed in the 4th quarter of 2007, which was the final warning that recession loomed.
Nonfarm, non-residential real estate loans have not yet begun to deteriorate as there appears to be a balance for loans of owner-occupied properties collateralized by business revenue (sales of goods and services) and business expenses (payroll, supplies and debt services). This is a fragile balance and a reason for the lack of job creation.
If you assume Derivatives was a cause of "The Great Credit Crunch" consider this: Since the end of 2007 the Notional Amount of Derivative Contracts produced by our nation's banks is up $48.8 trillion, up 29.6% to $213.6 trillion. I thought we were supposed to reduce derivative exposures?
Bank Failure Friday
The FDIC closed two community banks on Friday with one publicly-traded Rainier Pacific Bank (RPFG), which is on the ValuEngine List of Problem Banks.
The 22 bank failures so far in 2010 have cost the Deposit Insurance Fund $4.4 billion, bringing the DIF Deficit to $25.3 billion. The FDIC has $46 billion in prepaid DIF fees for 2010 through 2012 that are earmarked for the DIF when scheduled.
http://seekingalpha.com/article/191175-ready-for-a-double-dip-in-housing?source=email (http://seekingalpha.com/article/191175-ready-for-a-double-dip-in-housing?source=email)
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I don't think that cheaper houses are a bad thing for everyone. Certainly not for those who wish to buy a house. The people who lose when prices go down (Realtors, builders, people in the construction trades) are really noisy when they are damaged. The homebuyers are not organized and do not tend to be very vocal publically.
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The people who lose when prices go down (Realtors, builders, people in the construction trades) are really noisy when they are damaged.
You forgot to mention the other group that is hurt when prices go down - current home owners that are looking to sell.
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And an economy can't replace 37 years of government sponsored abortion, which reduced net demand by 55 million consumers, with QE. The cumlative result of early termination of one in three pregnancies year after year is eventual and persistent economic depression. Look first at Japan, then Europe and now US. Yeah they tried to run 30 million mexicans in to replace the dead babies...hell it didnt work. This is only going to get worse as time passes. Watch.
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can`t really feel too much sympathy with a 1.2 million dollar house that should really sell for 500k.
alot of these cost increase is voluntary
meaning thier got remodeled solely for the bigger ticket price.
in fact I`m willing to bet alot of these remodeled homes are not even in code so the new buyer will pay more out of pocket.
I say this because everbody in my area is telling me to remodel, but nobody talks about getting thier homes within code.
getting you house in code is not a given.
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If you use a licensed contractor for the remodel, it *should* be in code. If it's not, it's the responsibility of the contractor to get it that way.
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well
this is gonna sound racist
alot of people here use irish contractors who never brother with permits.
it`s cheaper than going the legal route.
people tend to prefer the illegal route.
that`s why I`m betting alot of these remodeled homes don`t pass inspection.
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How do those contractors stay in business? I'm sure the building inspectors must suspect all these contractors that never order any building permits or schedule inspections. How do the contractors maintain their licenses and bonding?
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can`t really feel too much sympathy with a 1.2 million dollar house that should really sell for 500k.
kimba as a hobby i look at open houses on sunday
yesterday i looked at house that was valued by the county tax role in 2009 for $895K
the "asking" price $599K
with no jumbo loans for the upper market is making that market a disaster
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true
but 895k is alot of money.
people really need to say publicly "that`s alot of money"
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$899K to $599K in one year is whats alot of money
somebody is gonna get hosed
the bank
plus local taxing authorities are in for huge, huge drops in property tax revenues
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The assumption that the house was ever actually worth $895 is simply arbitrary. Many of the overpriced houses were bought by flippers who were trying the game the system. Flippers add nothing to the value of the house, the country, or anything else, and the fact is that no one needs them. So if they get diddled, it simply teaches them a lesson and removes a lot of them from the market, which I would call good riddance.
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The assumption that the house was ever actually worth $895 is simply arbitrary.
Not any more than any house value in the United States
Many of the overpriced houses
It was not over-priced in 2006
There are no jumbo loans. (over $500K)
Thats the primary reason why the price dropped this much.
were bought by flippers who were trying the game the system.
So if I work my ass off...save money instead of taking trips to Cancun
Save for rainy days like what we now face
and now that real estate is low buy distressed properties
fix them up...wait awhile....and sell them for a profit...
Why the need to demonize?
BTW....This house was/is owned and was lived in by the original owner...not a builder or flipper...who got transferred to Conn.
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The social utility of a flipper.
Haveing a flipper or two around means that sellers are harder for buyers to cheat.
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How do those contractors stay in business? I'm sure the building inspectors must suspect all these contractors that never order any building permits or schedule inspections. How do the contractors maintain their licenses and bonding?
some are not licensed.
remember the inspectors are city employees meaning by the governments perceptions.
smaller staff and higher work qoutas equal more money in general funds.
the inspectors will never catch the contractors.
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Most non permitted building activity and code violations in my city are reported by the neighboring homeowners. And if true and permits are required the violators pay double fees.
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kimba....
a home builder had a design center next door to my office....
the home builder went bankrupt and the design center sits vacant
quietly the feds shut down/takeover several banks almost every friday night
it's no accident it's on friday nights
if they they didn't do this....there could be a massive run on our banks
there is a big shell game going on
there will be a day of reckoning
i know a guy that owns a large pool building company
3 years ago he had 12 crews and was backlogged
he now has 3 crews and may drop down to two crews soon
yes counties are being hit hard on falling property taxes & falling building permits requests
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it's no accident it's on friday nights
Of course not; that gives the IT guys (like me) 2 days at least to move all the data over from the failing bank to the one taking over the accounts. This way, Monday morning the customers have their brand spankin' new accounts all ready to go. All the direct deposit / direct withdrawal stuff is pointed over to the new accounts as well.
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This way, Monday morning the customers have their brand spankin' new accounts all ready to go.
Exactly!
Dont worry folks.....everything is ok. ::)
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Haveing a flipper or two around means that sellers are harder for buyers to cheat.
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I really question that. At the end of the housing bubble, nearly all sales were to flippers, and most of them were recruited by creeps who told them of the great wealth they were going to make for doing essentially nothing. And said flippers got stuck holding the bag, with no one to buy their overpriced houses, no money to fix up said houses, no one who could pay enough rent to cover their payments. THEN they lost the houses and they sat empty. It served the stupid flippers right.
Flippers who do not fix up the property are not only useless, they simply serve to raise the price of houses.
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it also abit more to it also
when a house is flipped the new owner will have a greater expense.
greater ultiliies cost,maybe even higher taxes
I forgot the tv show which a bunch of professional home improvers remodel peoples homes.
what not mentioned is some of those people had to sell those homes because it got too costly to keep.
the show "pimp my ride" had the same problem.
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when a house is flipped the new owner will have a greater expense.
well the new owner was not forced to buy it
the new owner freely chooses to buy it
the new owner could have studied the market
fixed the house or another house up themself
instead of buying a house they like
then bitching about the real estate investor
they bought it from making money
i feel the same about ticket scalpers
they perform a service the market wants
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I really question that. At the end of the housing bubble, nearly all sales were to flippers,
I really question THAT. Can you document that statement?
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besides carpentry
what skills should I pickup to maintain a home or remodel a home?
or am I overkilling with carpentry?
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I really question that. At the end of the housing bubble, nearly all sales were to flippers,
I really question THAT. Can you document that statement?
Don't hold your breath. I'm guessing this will be filed in the "obviously" category
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kimba....
patience is a skill you will sorely need when dealing with contractors
most of them are flakes....
many times they're late...dont show up...don't call to tell you either...do shoddy work
have piss poor attitudes....prefer the shortcut if it's easier for them
normally you have to go through 1-3 in each craft to find a good one
always take before/after pictures
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what skills should I pickup to maintain a home or remodel a home?
In addition to basic carpentry, basic plumbing and basic electrical.
Your library should have some real good books in 643.
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truthfully
patience is needed to most if not all aspect in life.
but like in star trek "too much of anything is not good also"
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patience is a skill you will sorely need when dealing with contractors
Having basic knowledge of the subject helps as well. Keeps them from ripping you off. I wanted some work done which included moving a wall once, and the guy went on about how much extra time (and therefore money) it was going to cost to do it because it was a load bearing wall. I took him down to the basement and pointed out where the wall was from underneath and how it was impossible that it was a load bearing wall. Needless to say, he didn't get the work.
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The houses on my block that were sold were sold several times, and ended up with flippers. Of course, no one admits they are a flipper in public records.
Ticket scalpers are also scum. I won't do business with them OR Ticketbastard. It's like saying that the market demands three card monte players, because there are suckers who still fall for them.
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In other words, nothing more than your mere speculation on the claim "At the end of the housing bubble, nearly all sales were to flippers"
Gotcha
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Ticket scalpers are also scum. I won't do business with them OR Ticketbastard. It's like
saying that the market demands three card monte players, because there are suckers
who still fall for them. [/b]
And can you explain why they are "scum" any more than you are or anyone
else in the free market that has a product they sell where there is a willing
buyer and a willing seller?
Scalpers make dreams happen for people....willing people that choose to use them
People that have virtually no chance of getting front row seats
Can use a scalper service and treat their bride on their anniversary.
Oh I am sure if the "market value" (face value) of your house or car was X amount
but if someone really, really, really, really just had to have it and offered you 5
times the X anmount you'd say "no thats not fair...I couldnt sell it to you for all that money".
I want excellent seats for events I attend.
I work 60 hours a week and have no interest or time for standing in lines or other ways to get excellent seating.
So as a willing buyer I pay ticket brokers or individuals on e-bay/Craigslist
to figure out a way to get the best seats in the house....then we come
together as a willing buyer and a willing seller to make a transaction.
Thats how the free market works.
You can call me a "sucker" if you want, whatever floats your boat.
But at this point in my life I want to be in the some of the best seats in the house.
I work hard and that is one of my enjoyments.
Obviously it's not as important to you.
Fine, but I do not understand the need to demonize as "scum" people that have different likes/dislikes from you.
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Stub Hub (http://www.stubhub.com/) !! 8)
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I like StubHub....their service charges are high...
but they have a great selection....very quick shipping
I would say I use them the most because of selection, details, & reputation
i just bought tickets & parking pass to a Motorcross event from them
never been to a motorcross....should be interesting
oh to be 17 again and fly thru the air like those kids do
(http://i7.photobucket.com/albums/y273/ItsZep/5f5f85f6.jpg)
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See, Capitalism in one of its fine forms. One can pay the higher charges, but they get greater selection. I love that part. We got tickets to fan appreciation day for the last Angels' game, but knowing it's going to be a midday game, in the Sept sun, meant I had to make sure to get tickets in the Terrace View section, which is always shaded. Without such selection, its a crap shoot, even just to get tickets
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I actually think Ticketmaster and other ticket companies should auction off the best seats.
That would be the real free market and deterimine the tickets value.
I think Ticketmaster is doing some of that with it's "TicketsNow" division.
Why should Ticketmaster sell a front row seat for the same price as
a 15th row seat?
Obviously the value is different for those seats.
Ticketmaster by selling seats of far different values for the same price allow
scalpers to exist as "middle men"....when really if the market value for a 3rd
row Rolling Stones concert is really $500....why should Ticketmaster let it go for $175?
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ticket masters provide a service alot like travel agencies.
by thier very nature they increase the cost of said items
but the presence of the internet should wipe them out.
people should be able to get tickets directly from the source at better prices but somhow some business prefer to only sell them from ticketmasters with the added service fees.
ex. alot of concerts do this
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ticket masters provide a service alot like travel agencies.
people should be able to get tickets directly from the source
Yeah i wouldnt be opposed to having more options
however dont forget people can book plane tickets & hotel rooms directly from the source
but yet they many times reserve through 3rd parties like Expedia and Orbitz
so "direct from source" doesnt always mean cheaper
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that`s true
it doesn`t make abit of sense why getting it from the source isn`t cheaper
even merchandise is cheaper elsewhere
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Again, I think flippers and scalpers and Ticketbastard are scum, and their customers are suckers.
I'd rather watch someone repair an engine or refinish furniture or do ANYTHING useful to watch a bunch of middle aged clowns play with a ball.
I'll buy a CD over a concert ticket any day.
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well
it depends on the concert
I really hate it that some groups are over an hour late and it`s acceptable.
ex. guns and roses
that just mean to me people with jobs should not bother going to concerts.
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watch a bunch of middle aged clowns play with a ball.
Yeah...I much prefer the college game! ;)
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