What is the book for the bk- I pick
Feb08 for Meritage....cashflow crisis and bank loans covenant blowout.
Anybody want to start a page where we can pick the BK filing dates?
BZH TOL, you name it, it may not make it, depending on how fast it can shrink and still pay the debt load...
Reminds me of when Cheney promised that no airlines would go broke as a result of 9/11...
We have been told for months now that the cancellation rates have been showing steady improvement, and today we see that Meritage homes has a rate of 36%. It looks like Goldilocks has been eaten by a large and still growing bear. The fact that 77 lenders have stopped doing business and credit standards are tightening seems to be having an affect on the market whether the public is aware of the reasons or not.
""Three years ago we were sitting at a conference like this and saying it was almost frightening how little diligence investors were doing at that time," she said. "
No, I'd say what is frightening, is the amount of utter garbage her company and others brought in and sold-
Found this over on Big Picture. Didn't see anyone cite to it yet, so.. WSJ is stating that the MLS listings for all areas spiked up 5% in April, drawing questions on the growing size of for sale inventory. BP Commentator Ritholtz stated that this inventory increase is a recipe for big price drops.
WSJ -
"The number of homes listed for sale in 18 major U.S. metropolitan areas at the end of May was up 5.1% from April, according to figures compiled by ZipRealty Inc., a national real-estate brokerage firm based in Emeryville, Calif. The data cover all listings of single-family homes, condos and town houses on local multiple-listing services in those areas.
The sizable increase is notable because, on a national basis, inventories of listed homes have typically been little changed in May during the past two decades, according to Credit Suisse Group. May is one of the peak home-selling months because families with children often aim to move during the summer vacation.
Some of the biggest inventory increases last month came in the metro areas of Seattle, up 12% from April; San Francisco, 11%; Los Angeles, 10%; and Washington, D.C., 9%.
Inventories also are up sharply from a year earlier. For the 15 cities for which year-earlier comparisons were available, combined inventory was up 29% from May 2006."
"In a speech at the annual meeting of the American Securitization Forum, a trade organization representing the securities industry, Bair asked investors for flexibility in restructuring troubled loans and to take responsibility for the risky mortgages that they invest in."
""What has become clear to me is that, when we look at the way investors and analysts treat securities transactions, if there hasn't been a free and clear sale, they are unwinding the accounting and putting assets and liabilities back on the books," Seidman said. "I've come to the conclusion that ... we're going in the wrong direction -- trying to maintain a standard that's taking assets off the books when investors view it as economically still associated with the seller."
The bad news we're hearing is starting to remind me of the period in February when all the subprimes blew up. Like now, CR was particularly on fire then too.
I'm with Allen, time to start looking for BK's. Too bad I work for a home/condo builder.
If you want to have an idea about what is happening to inventory and asking prices, take a look at the weekly updates on housingtracker.net or a similar site. Lately the weekly changes in 50 some markets have shown mostly green inventory increases and mostly red price declines, even though weekly data should be quite variable.
The data are typically listed for the week, month, 3 months, 6 months and 12 months. For example, Salt Lake City has been one of the stronger markets, up a few percent in asking price for the year but down a few percent for the last three months. However, inventory is up almost 90% for the year and 9% for last month. These kinds of data for markets across the country provide useful information on what's happening locally and nationally.
I think the article got cut off, risk captial...it's probably (I'm kidding) supposed to have been:
"Three years ago we were sitting at a conference like this and saying it was almost frightening how little diligence investors were doing at that time," she said, giving everyone a round of high fives after the bonus checks were distributed.
The MIT study came out over a year ago: "This time, however, there are two wild cards in the deck. Any economic slowdown could generate a much larger increase in foreclosures than in the past, and quite possibly a liquidity crisis that would generate an investor bailout from housing. With these two added factors a correction could turn into a deep slump.
Meritage is one of the safer builders. They have a much smaller land position and do half of their business in Texas which, unlike the rest of the country, is still doing well due to all the energy demand. Times will be tough for MTH but they are in no risk of bankruptcy.
Ron, that MIT study for which you provided the link was the catch of the week. There were legitimate arguments rebutting the "housing bubble/bust" story that even I hadn't thought of. Thanks.
DaveJ-
I respectfully disagree. MTH has a truck load of debt and the future cash flows probably won't service it. At the rate things are progressing, they'll be lucky to survive through 2007.
What is the book for the bk- I pick
Feb08 for Meritage....cashflow crisis and bank loans covenant blowout.
Anybody want to start a page where we can pick the BK filing dates?
BZH TOL, you name it, it may not make it, depending on how fast it can shrink and still pay the debt load...
Reminds me of when Cheney promised that no airlines would go broke as a result of 9/11...
Some day this war's gonna end...
We have been told for months now that the cancellation rates have been showing steady improvement, and today we see that Meritage homes has a rate of 36%. It looks like Goldilocks has been eaten by a large and still growing bear. The fact that 77 lenders have stopped doing business and credit standards are tightening seems to be having an affect on the market whether the public is aware of the reasons or not.
""Three years ago we were sitting at a conference like this and saying it was almost frightening how little diligence investors were doing at that time," she said. "
No, I'd say what is frightening, is the amount of utter garbage her company and others brought in and sold-
Business & Financial News, Breaking US & International News | Reuters.com
YS Wayne,
Cancellations across the industry have been improving. Meritage is just one data point going against the general grain.
Found this over on Big Picture. Didn't see anyone cite to it yet, so.. WSJ is stating that the MLS listings for all areas spiked up 5% in April, drawing questions on the growing size of for sale inventory. BP Commentator Ritholtz stated that this inventory increase is a recipe for big price drops.
The Big Picture
WSJ -
"The number of homes listed for sale in 18 major U.S. metropolitan areas at the end of May was up 5.1% from April, according to figures compiled by ZipRealty Inc., a national real-estate brokerage firm based in Emeryville, Calif. The data cover all listings of single-family homes, condos and town houses on local multiple-listing services in those areas.
The sizable increase is notable because, on a national basis, inventories of listed homes have typically been little changed in May during the past two decades, according to Credit Suisse Group. May is one of the peak home-selling months because families with children often aim to move during the summer vacation.
Some of the biggest inventory increases last month came in the metro areas of Seattle, up 12% from April; San Francisco, 11%; Los Angeles, 10%; and Washington, D.C., 9%.
Inventories also are up sharply from a year earlier. For the 15 cities for which year-earlier comparisons were available, combined inventory was up 29% from May 2006."
Couple of "Oh dear's!!!"-
"In a speech at the annual meeting of the American Securitization Forum, a trade organization representing the securities industry, Bair asked investors for flexibility in restructuring troubled loans and to take responsibility for the risky mortgages that they invest in."
404 Error, No such article | Chron.com - Houston Chronicle
""What has become clear to me is that, when we look at the way investors and analysts treat securities transactions, if there hasn't been a free and clear sale, they are unwinding the accounting and putting assets and liabilities back on the books," Seidman said. "I've come to the conclusion that ... we're going in the wrong direction -- trying to maintain a standard that's taking assets off the books when investors view it as economically still associated with the seller."
Business & Financial News, Breaking US & International News | Reuters.com
The bad news we're hearing is starting to remind me of the period in February when all the subprimes blew up. Like now, CR was particularly on fire then too.
I'm with Allen, time to start looking for BK's. Too bad I work for a home/condo builder.
If you want to have an idea about what is happening to inventory and asking prices, take a look at the weekly updates on housingtracker.net or a similar site. Lately the weekly changes in 50 some markets have shown mostly green inventory increases and mostly red price declines, even though weekly data should be quite variable.
The data are typically listed for the week, month, 3 months, 6 months and 12 months. For example, Salt Lake City has been one of the stronger markets, up a few percent in asking price for the year but down a few percent for the last three months. However, inventory is up almost 90% for the year and 9% for last month. These kinds of data for markets across the country provide useful information on what's happening locally and nationally.
I think the article got cut off, risk captial...it's probably (I'm kidding) supposed to have been:
"Three years ago we were sitting at a conference like this and saying it was almost frightening how little diligence investors were doing at that time," she said, giving everyone a round of high fives after the bonus checks were distributed.
good read:
http://web.mit.edu/cre/students/faculty/pdf/HousingBubble.pdf
CR, et al:
Came across this at my bankers:
http://www.nationalcity.com/content/corporate/EconomicInsight/documents/fmo0607.pdf
They seem to read the subprime contagion as contained.
Your reading of their analysis?
.
CR et Tanta, encore svp...
https://www.twr.com/default.aspx?_title=AboutRealEstate&_id=1417
...behind a firewall.
An interesting case for a sequence of events, whic in toto could result in a "spillover" of sub-prime to aommercial lending.
As always, your comments on the analysis are appreciated.
.
apologies pour ma épellation faible!
rising rates are only going to exacerbate this trend...this is not going to end well at all. How's that for an understatement.
The MIT study came out over a year ago: "This time, however, there are two wild cards in the deck. Any economic slowdown could generate a much larger increase in foreclosures than in the past, and quite possibly a liquidity crisis that would generate an investor bailout from housing. With these two added factors a correction could turn into a deep slump.
Meritage is one of the safer builders. They have a much smaller land position and do half of their business in Texas which, unlike the rest of the country, is still doing well due to all the energy demand. Times will be tough for MTH but they are in no risk of bankruptcy.
RP,
my thoughts exactly. (:
Ron, that MIT study for which you provided the link was the catch of the week.
There were legitimate arguments rebutting the "housing bubble/bust" story that even I hadn't thought of.
Thanks.
Sebastia
DaveJ-
I respectfully disagree. MTH has a truck load of debt and the future cash flows probably won't service it. At the rate things are progressing, they'll be lucky to survive through 2007.