CR:
could you add a CAR sales "cliff diving" graph? (not sure if that data is even available)
On CNBC just now they interviewed a Toyota and Chevy Dealership. Both said car sales were EXTREMELY weak.
They both noted that it's mainly due to CREDIT
-homeowners can't tap a HELOC
-highest amount of people trying to trade in cars with significant negative equity
-people not qualifying despite a NEW product: the 9 year auto loan (gasp)!
"Ceaseless talk of a recession continues to dampen the mood of consumers in general, whether or not a recession actually occurs. For home buyers, we believe this drumbeat, coupled with concerns over mortgages, the direction of home prices, and foreclosures, has kept pent-up demand on the sidelines," said Robert Toll, chairman and chief executive, in a statement.
CR, you are clearly part of the problem, not part of the solution. Either get it right or we'll have to send the thought police around to straighten you out.
"Ceaseless talk of a recession continues to dampen the mood of consumers in general, whether or not a recession actually occurs. For home buyers, we believe this drumbeat, coupled with concerns over mortgages, the direction of home prices, and foreclosures, has kept pent-up demand on the sidelines,"
wow, that quote doesn't even make sense
1) all this negative news means there is no pent up demand!
2) the loose lending of 2001-2006 stole buyers from the future. Even if there were no negative news, there is very little "pent up demand" anywhere, excepting maybe a very few areas.
I can't believe how many COLLEGE students own homes, how many boomers own TWO homes, and the list goes on.
2) the loose lending of 2001-2006 stole buyers from the future. Even if there were no negative news, there is very little "pent up demand" anywhere, excepting maybe a very few areas.
hte future is invinite as we know so why shoudlnt the amount of byers???
--
But, as you can see from the graph they have lot more to dive.
What people forget is that there was a much bigger building bubble in SFH than in multi-family. This means that the bottom will be lower than the previous bottoms.
Great chart, and scary. My question is this: with no major dip in sales since '91, and such a tremendous peak -- will sales trough-out in the 400-600K range as they might have in the '80s or '90s, or go much lower? So much inventory to burn through.
I have often maintained that in the period following 9/11 that the vast majority of all mortgages were refinanced and thus, the resulting mix of mortgages that were packaged during this period of low rate mortgages have no track record. The record number of loans that were written, thus have no realistic pre-payment of default correlation that is realistic. The entire period of loans was based on easy credit and no doc loans issues in a period of no regulation, thus the historic default parameters from 40 years ago, are meaningless in todays environment. The loans our parents had, were often traditional, conventional mortgages linked to default history related to their generation and not to the current attention deficit - synthetic derivative and un-regulated current generation, which obviously is in the process of defining their default ranges for future models!
Those presently future buyers will now be farther into the future as they work off the FCL, ChargeOffs, Collection Accounts and BKs so they can be credit-worthy again.
"I can't believe how many COLLEGE students own homes, how many boomers own TWO homes, and the list goes on."
Pretty common in our college town where many of the students are from well-off Angeleno families. Sometimes the parents buy the house for the kid to live in, sometimes the kid "buys" the house with $$ from the parent. It's all about real estate being a great speculative investment.
Since we are a college/resort town with a great many second home/vacation home residences, I'll be curious to see how many of these get jettisonned in the coming years, and whether that tamps down demand in our otherwise housing-short community. I do recall, back in some earlier recession, that vacation homes could be had for a song up at Tahoe.
Overheard at the office: Someone's asking if anyone knows anyone who wants to buy their friend's apartment, and the first reply: "No one can get a loan."
I hate extrapolating big picture from tiny anecdote as much as the next guy, but I do think this "no one can get a loan" business could figure in ever so much more mightily in our economic picture compared to these tweaks of fannie and freddie, and picayune bailout proposals.
Just can't see how any of these plans can resurrect the happy go lucky market of eager buyers.
Somebody help me. Where did all the buyers for these new homes come from? Resale home sales can go up if everyone moves more often, but new home sales must come from new family formation. It isn't like immigration suddenly went way up, and anecdotes of the thirty year old kids still at home abound. Are there masses of empty apartment blocks? Skyrocketing divorce rates? Everybody went out and got a second home? What drove the boom?
Are the home builders even saying out loud the cancellation rates anymore? Last time I recall numbers attached to the phrase "cancellation rates" was Sept-Oct when Lennar and Hovnanian and Toll were saying 35-40%. Is it better, worse? I'd have assumed it would be better as all the speculative contracts were flushed out but no one is talking. On the same note I'd be curious how Hovs Sale of the Century went with regard to actual closings rather than contracts as first reported.
I remember around 10 years ago - before the bubble, proper - thousands upon thousands of townhomes were being built in suburban Virginia. My friends and I wondered where all of these freekin' people were coming from. It only got worse during the boom.
Dont be afraid if you have nothing you have nothing to loose....
Yoringe |
I guess you are right. Most holders of $$'s really are fools and compared to finance sophisticates, a paltry $25K in US bucks really is pretty much "nothing" anyway.
Thanks for your help. America helping America. Is this what this black guys running for prez was talking about?
phew, I can sleep now...with a little less alcohol.
The traditional model, like the laws of physics, still applies.
We're going down to the point where the average home price in a given zip code (or neighborhood) is down to 3x the average gross family income for the same zip code. (Houses/homes will not be anything like what we're witnessing now).
"Resale home sales can go up if everyone moves more often, but new home sales must come from new family formation"
a few thoughts on this
1) a lot of houses are empty (think depopulated areas of industrial belt). So those people moved to a DIFFERENT house somewhere
2) many people bought second homes (most ever if I recall). Thus, a new home without new family formation
3) less people/house. I believe there are fewer and fewer people in homes these days. In the distant past, you had grandma living with you as example. Now people buy grandma a house near them but not with them.
4) there has been some population growth
5) foreign buyers. There is a surge of foreign buyers in some markets (like Florida).
but you're right, overall we've way overbuilt. drive down through downtown San Diego or Miami and see the dark condo towers.
There are three sources: move up: ie
empty nesters into townhomes
couples with young kids into nicer houses
newlyweds up to a house
apartment dweller into each of their condos
college grads or divorcees into the apartment
not to mention the great migration tot he southeast and west from the midwest and northeast...like that (I think)
It is cliff diving, but look how it mountain climbed through 05-06! Since it climbed on false prosperity, it's going to have to come down. What goes up, must come down.
For home buyers, we believe this drumbeat, coupled with concerns over mortgages, the direction of home prices, and foreclosures, has kept pent-up demand on the sidelines," said Robert Toll
Yeah, that and one teensy weensy little problem: lack of cash.
I'm not sure how he came up with 60%, and assuming you mean November 07, that number is ridiculous.
But you could make an argument looking at gold and crude, that the value of the dollar versus these two goods is down about 10% sice Nov 07. So maybe he said 6%? Or maybe he is just another TV hack trying to sell a book?
Either way, it is definitely true that the purchasing power of your savings is slowly but surely being wiped out. And that is not a good feeling.
From peak to present that first chart is pretty much a straight-lined steep downward slope -- i.e., no indications of any moderation whatsoever. Given the existing housing fundamentals and throw in a quickly deteriorating economy and it seems like we have a lot of cliff left to dive.
Hey, you think that Toll includes his daughter in that pent-up demand? I mean, after she bailed on buying the condo in Florida she's probably looking to buy two homes in Georgia.
Durable Goods and New Home sales sucked. Fannie Mae sucked. Plus all of the economic releases yesterday sucked... and the market breaks UP, on a technical break of a Triangle formation.
Check out these simply insane facts, figures and charts.
OT--Can anyone explain to me why the today's ATA (American Trucking Association) Truck Tonnage Index report was up a solid 2.4% in February and was up in January as well if we are going into a recession? Thanks!
Interesting. The local HOA of a friend put in their monthly newsletter that "everyone needs to have an eye on the abandoned and empty houses in the communitiy so vandalism does not spread."
This is a decent Herndon, VA dev. where I am sure when the homeowners read that a chill went down their spine.
OT--Can anyone explain to me why the today's ATA (American Trucking Association) Truck Tonnage Index report was up a solid 2.4% in February and was up in January as well if we are going into a recession? Thanks!
These fool banks oppose cram downs, do they still think they will collect on these loans from BK buyers, do they think they will sell the REO for what is owed, they are delusional. Or do they just want to kewep the loss from thier books. Zombie banks.
Can anyone explain why today's Truck Tonnage Index report was up a solid 2.4% in February?
Midnight Moving trucks?
That's January's number, of course. ATA Chief Economist Bob Costello: "The economy is either in a mild recession or on the brink of one, and we are hearing anecdotal reports that freight volumes slowed in February," he said. "I anticipate that truck tonnage will recover before the general economy, but I am withholding judgment on whether truck tonnage is in a recovery mode until I analyze another month or two of data."
Can anyone explain to me why the today's ATA (American Trucking Association) Truck Tonnage Index report was up a solid 2.4% in February and was up in January as well if we are going into a recession? Thanks!
Ans: Treasury Department Bureau of Printing and Engraving national and international shipments are up sharply. [rimshot]
"OT--Can anyone explain to me why the today's ATA (American Trucking Association) Truck Tonnage Index report was up a solid 2.4% in February and was up in January as well if we are going into a recession? Thanks!"
Do teardowns count as new housing builds? There was a ton of that hear in eastern MA where a lot of the pricier towns are built-out (unless they decrease min. lot size...which would mean the riff-raff might enter their school systes. Can't have that, ya know).
Very common for giant McMansions to be put on tiny lots in place of 1950's ranches. Is this a "new home" sale or an existing home sale since it replaced an old one?
"The power of accurate observation is commonly called cynicism by those who have not got it." GB Shaw.
CR:
could you add a CAR sales "cliff diving" graph? (not sure if that data is even available)
On CNBC just now they interviewed a Toyota and Chevy Dealership. Both said car sales were EXTREMELY weak.
They both noted that it's mainly due to CREDIT
-homeowners can't tap a HELOC
-highest amount of people trying to trade in cars with significant negative equity
-people not qualifying despite a NEW product: the 9 year auto loan (gasp)!
"Ceaseless talk of a recession continues to dampen the mood of consumers in general, whether or not a recession actually occurs. For home buyers, we believe this drumbeat, coupled with concerns over mortgages, the direction of home prices, and foreclosures, has kept pent-up demand on the sidelines," said Robert Toll, chairman and chief executive, in a statement.
CR, you are clearly part of the problem, not part of the solution. Either get it right or we'll have to send the thought police around to straighten you out.
oops: by CAR, I meant automobile, not californian assoc. of realtors!
Could you superimpose images of the cars going over the cliff, too?
And as long as we're on the subject of cliff diving, check this little plunge out:
INO Equities Stocks Indexes - U.S $ INDEX (NYBOT:DX) Price Chart and Quote
buy on bad news....
any Money left ???
rtalcott writes:
"The power of accurate observation is commonly called cynicism by those who have not got it." GB Shaw.
thanks very good one...
"Ceaseless talk of a recession continues to dampen the mood of consumers in general, whether or not a recession actually occurs. For home buyers, we believe this drumbeat, coupled with concerns over mortgages, the direction of home prices, and foreclosures, has kept pent-up demand on the sidelines,"
wow, that quote doesn't even make sense
1) all this negative news means there is no pent up demand!
2) the loose lending of 2001-2006 stole buyers from the future. Even if there were no negative news, there is very little "pent up demand" anywhere, excepting maybe a very few areas.
I can't believe how many COLLEGE students own homes, how many boomers own TWO homes, and the list goes on.
btw if you cliff dive make sure the water isnt too shallow
)
Fed Funds rate at 0% in early 2009. Then when it doesn't solve the problems, the real fun begins.
Yearning to Learn, they don't own them, they are on loan from the bank.
Yearning to Learn
2) the loose lending of 2001-2006 stole buyers from the future. Even if there were no negative news, there is very little "pent up demand" anywhere, excepting maybe a very few areas.
hte future is invinite as we know so why shoudlnt the amount of byers???
you slowly get there
)
--
But, as you can see from the graph they have lot more to dive.
What people forget is that there was a much bigger building bubble in SFH than in multi-family. This means that the bottom will be lower than the previous bottoms.
Jas
Great chart, and scary. My question is this: with no major dip in sales since '91, and such a tremendous peak -- will sales trough-out in the 400-600K range as they might have in the '80s or '90s, or go much lower? So much inventory to burn through.
I have often maintained that in the period following 9/11 that the vast majority of all mortgages were refinanced and thus, the resulting mix of mortgages that were packaged during this period of low rate mortgages have no track record. The record number of loans that were written, thus have no realistic pre-payment of default correlation that is realistic. The entire period of loans was based on easy credit and no doc loans issues in a period of no regulation, thus the historic default parameters from 40 years ago, are meaningless in todays environment. The loans our parents had, were often traditional, conventional mortgages linked to default history related to their generation and not to the current attention deficit - synthetic derivative and un-regulated current generation, which obviously is in the process of defining their default ranges for future models!
Conclusion:
Reality is clearly outdated and need to catch up with projections...
stole buyers from the future
Those presently future buyers will now be farther into the future as they work off the FCL, ChargeOffs, Collection Accounts and BKs so they can be credit-worthy again.
I saw Cramer on Big Idea W/Donny(please don't judge me) shilling his book.
He said the American $$ savers have lost 60% of their money since November, due to inflation.
I can not get my head around that. I am a member of the great unwashed - one of you learned ones: tell me is that true?
Enjoy it:
Bloomberg News
They must be wrapping this stuff in SEP fields.
http://en.wikipedia.org/wiki/Somebody_Else's_Problem_field
Cheers,
Best news so far this year:
- NY Times
A bigot is a bigot regardless the size of the words or the smoothness of the delivery.
again listen just 4 min to finacial wizard "Tricky Dick" Nixon :
YouTube - Nixon Ends Bretton Woods International Monetary System
my bet: they will declare a new currency soon and start anew....
Noble Price in Economics for Lipstick Ben will follow....
CR,
about a year ago I surmised that we'd get down to or below the 400K range. You seemed to think it wouldn't go that low.
What are you thoughts on this?
"I can't believe how many COLLEGE students own homes, how many boomers own TWO homes, and the list goes on."
Pretty common in our college town where many of the students are from well-off Angeleno families. Sometimes the parents buy the house for the kid to live in, sometimes the kid "buys" the house with $$ from the parent. It's all about real estate being a great speculative investment.
Since we are a college/resort town with a great many second home/vacation home residences, I'll be curious to see how many of these get jettisonned in the coming years, and whether that tamps down demand in our otherwise housing-short community. I do recall, back in some earlier recession, that vacation homes could be had for a song up at Tahoe.
TheProblemWithCaring writ
Dont be afraid if you have nothing you have nothing to loose....
POTUS said yesterday that we are not in a recession.
He was right about Iraq. I have no doubt he is right now.
Maybe the next graph could have an airplane on flames, at the leading end and the graph line be smoke.
That would be so kewl.
Cheers,
Overheard at the office: Someone's asking if anyone knows anyone who wants to buy their friend's apartment, and the first reply: "No one can get a loan."
I hate extrapolating big picture from tiny anecdote as much as the next guy, but I do think this "no one can get a loan" business could figure in ever so much more mightily in our economic picture compared to these tweaks of fannie and freddie, and picayune bailout proposals.
Just can't see how any of these plans can resurrect the happy go lucky market of eager buyers.
What about the dip in early 95? Why didn't that cause problems? Or did it.
Thanks
Somebody help me. Where did all the buyers for these new homes come from? Resale home sales can go up if everyone moves more often, but new home sales must come from new family formation. It isn't like immigration suddenly went way up, and anecdotes of the thirty year old kids still at home abound. Are there masses of empty apartment blocks? Skyrocketing divorce rates? Everybody went out and got a second home? What drove the boom?
Ralph Cramdown :
nice thought.. what if they just build without actual byers ( because lack of it) and then resold the mortgage???
wouldnt be beyoond possible for these fraudsters... just a thought...
So how low will it go? 400K? 300K?
“The selling season, which we believe starts in mid-January,
Belief, hope - neither are a plan.
Average Joe, Don't fight the trend (just kidding). I don't think sales will fall that low, but 400K is clearly possible.
Best Wishes.
Are the home builders even saying out loud the cancellation rates anymore? Last time I recall numbers attached to the phrase "cancellation rates" was Sept-Oct when Lennar and Hovnanian and Toll were saying 35-40%. Is it better, worse? I'd have assumed it would be better as all the speculative contracts were flushed out but no one is talking. On the same note I'd be curious how Hovs Sale of the Century went with regard to actual closings rather than contracts as first reported.
Ralph Cramdown :
I remember around 10 years ago - before the bubble, proper - thousands upon thousands of townhomes were being built in suburban Virginia. My friends and I wondered where all of these freekin' people were coming from. It only got worse during the boom.
Your guess is as good as mine.
Dont be afraid if you have nothing you have nothing to loose....
Yoringe |
I guess you are right. Most holders of $$'s really are fools and compared to finance sophisticates, a paltry $25K in US bucks really is pretty much "nothing" anyway.
Thanks for your help. America helping America. Is this what this black guys running for prez was talking about?
phew, I can sleep now...with a little less alcohol.
"POTUS said yesterday that we are not in a recession."
"recession" has been excised from the Newspeak dictionary...dispatch 10 additional agents to Thoughtcrime enforcement.
How low will it go?
The traditional model, like the laws of physics, still applies.
We're going down to the point where the average home price in a given zip code (or neighborhood) is down to 3x the average gross family income for the same zip code. (Houses/homes will not be anything like what we're witnessing now).
You do the math.
TheProblemWithCaring
iam actual from germany living in spain but even we feel the pinch and fallout here...
but i am willing to adopt a american or 2
)
Thanks CR,
I think any major BK's could really spike it down to well below 400K.
In my opinion, the health of the new home builders depends on it. The more time below 400k they spend the better their long term prospects.
rtalcott | Homepage | 02.27.08 - 2:35 pm | #
"The power of accurate observation is commonly called cynicism by those who have not got it." GB Shaw.
One of my favorite authors. "The Unsocial Socialist"
Can any optomistic joes on this board tell me why the last blue line on CR's first chart doesn't belong there?
"Resale home sales can go up if everyone moves more often, but new home sales must come from new family formation"
a few thoughts on this
1) a lot of houses are empty (think depopulated areas of industrial belt). So those people moved to a DIFFERENT house somewhere
2) many people bought second homes (most ever if I recall). Thus, a new home without new family formation
3) less people/house. I believe there are fewer and fewer people in homes these days. In the distant past, you had grandma living with you as example. Now people buy grandma a house near them but not with them.
4) there has been some population growth
5) foreign buyers. There is a surge of foreign buyers in some markets (like Florida).
but you're right, overall we've way overbuilt. drive down through downtown San Diego or Miami and see the dark condo towers.
Ralph Cramdown
There are three sources: move up: ie
empty nesters into townhomes
couples with young kids into nicer houses
newlyweds up to a house
apartment dweller into each of their condos
college grads or divorcees into the apartment
not to mention the great migration tot he southeast and west from the midwest and northeast...like that (I think)
It is cliff diving, but look how it mountain climbed through 05-06! Since it climbed on false prosperity, it's going to have to come down. What goes up, must come down.
For home buyers, we believe this drumbeat, coupled with concerns over mortgages, the direction of home prices, and foreclosures, has kept pent-up demand on the sidelines," said Robert Toll
Yeah, that and one teensy weensy little problem: lack of cash.
oh sorry...third one...baby boomers inheriting cash and buying second homes ratehr than putting it in the market
TheProblemWithCaring:
I'm not sure how he came up with 60%, and assuming you mean November 07, that number is ridiculous.
But you could make an argument looking at gold and crude, that the value of the dollar versus these two goods is down about 10% sice Nov 07. So maybe he said 6%? Or maybe he is just another TV hack trying to sell a book?
Either way, it is definitely true that the purchasing power of your savings is slowly but surely being wiped out. And that is not a good feeling.
Either way, it is definitely true that the purchasing power of your savings is slowly but surely being wiped out. And that is not a good feeling.
Unless you're like the majority of Americans with absolutely no savings. Then there's a certain sense of smugness.
--
How low will it go?
The answer depends upon:
Jas
From peak to present that first chart is pretty much a straight-lined steep downward slope -- i.e., no indications of any moderation whatsoever. Given the existing housing fundamentals and throw in a quickly deteriorating economy and it seems like we have a lot of cliff left to dive.
Can any optomistic joes on this board tell me why the last blue line on CR's first chart doesn't belong there?
winjr
Can you look at the data? Where's my recession, dud?
O-Joe
Hey, you think that Toll includes his daughter in that pent-up demand? I mean, after she bailed on buying the condo in Florida she's probably looking to buy two homes in Georgia.
7th one:
in a boom you Build first and then find a Buyer??
Durable Goods and New Home sales sucked. Fannie Mae sucked. Plus all of the economic releases yesterday sucked... and the market breaks UP, on a technical break of a Triangle formation.
Check out these simply insane facts, figures and charts.
OT--Can anyone explain to me why the today's ATA (American Trucking Association) Truck Tonnage Index report was up a solid 2.4% in February and was up in January as well if we are going into a recession? Thanks!
Interesting. The local HOA of a friend put in their monthly newsletter that "everyone needs to have an eye on the abandoned and empty houses in the communitiy so vandalism does not spread."
This is a decent Herndon, VA dev. where I am sure when the homeowners read that a chill went down their spine.
OT--Can anyone explain to me why the today's ATA (American Trucking Association) Truck Tonnage Index report was up a solid 2.4% in February and was up in January as well if we are going into a recession? Thanks!
Exports?
OTOH, look on the bright side: the dive is more than half over! Unless, of course, the sales numbers can somehow become negative...
These fool banks oppose cram downs, do they still think they will collect on these loans from BK buyers, do they think they will sell the REO for what is owed, they are delusional. Or do they just want to kewep the loss from thier books. Zombie banks.
Can anyone explain why today's Truck Tonnage Index report was up a solid 2.4% in February?
Midnight Moving trucks?
That's January's number, of course. ATA Chief Economist Bob Costello: "The economy is either in a mild recession or on the brink of one, and we are hearing anecdotal reports that freight volumes slowed in February," he said. "I anticipate that truck tonnage will recover before the general economy, but I am withholding judgment on whether truck tonnage is in a recovery mode until I analyze another month or two of data."
Can anyone explain to me why the today's ATA (American Trucking Association) Truck Tonnage Index report was up a solid 2.4% in February and was up in January as well if we are going into a recession? Thanks!
Ans: Treasury Department Bureau of Printing and Engraving national and international shipments are up sharply. [rimshot]
At least total builders inventory is down over 10% from a year ago, # months is up as monthly sales is down.
We saw some big jump in open escrows in Januard, but Feb feels like its cooling off. Looking at MBA indicators, probably right.
Ben B - need more juice!
"OT--Can anyone explain to me why the today's ATA (American Trucking Association) Truck Tonnage Index report was up a solid 2.4% in February and was up in January as well if we are going into a recession? Thanks!"
Moving vans?
Do teardowns count as new housing builds? There was a ton of that hear in eastern MA where a lot of the pricier towns are built-out (unless they decrease min. lot size...which would mean the riff-raff might enter their school systes. Can't have that, ya know).
Very common for giant McMansions to be put on tiny lots in place of 1950's ranches. Is this a "new home" sale or an existing home sale since it replaced an old one?
Cliffdiving into Bongwater.
Can any optomistic joes on this board tell me why the last blue line on CR's first chart doesn't belong there?
Please don't call me an "O-Joe", but I do think CR should have made that last blue bar like...turquoise or something.
The first chart uses seasonally adjusted numbers. Doesn't that assume that seasonal adjustment criteria have remained constant since 1970?
Can anyone explain why today's Truck Tonnage Index report was up a solid 2.4% in February?
Home builders returning raw materials they no longer need?
Can anyone explain why today's Truck Tonnage Index report was up a solid 2.4% in February?
http://www.truckline.com/NR/exeres/826D5632-1A60-4E0A-90AF-D7CC8E151D54.htm
"-ATA recently revised the seasonally adjusted index back five years. The new seasonal factors resulted in slightly lower truck tonnage volumes for 2007 than previously reported."
Next question, how did they revise these numbers?
"Can you look at the data? Where's my recession, dud?
O-Joe
Optimistic Joe | 02.27.08 - 3:41 pm"
I'm not a dud.
Re truck tonnage.
Moving corn for the ethanol scam, and probably then moving the ethanol to where they can mix it in and ruin our gasoline.
As for oversupply, how about the $100 house?
Not a typo.
It is $100, not $100K.
- real estate - REALTOR.com®
Put your hands up for Detroit....