Americans are losing their jobs, losing their homes,...
Oh? So they admit to lying about construction employment?
I just want everyone to keep in mind that a buyer credit does not help the buyer but those stuck with product at prices that are not market. Like... uhhh. home builders. Eliminate the middle man cut the check to Bob Toll while singing "Who's your daddy?"
The only reason peeps were moving up, was because of fraud and having overvalued apprasals. The American Dream was connected to fraud from people that wanted to move up out of apartments, to CEOs that wanted more pay...it was all fraud all along the line, and none of them were honest in that desire to move up!
Norwegian oil and gas producer StatoilHydro (STL.OL: Quote, Profile, Research) said on Monday it has shut down 150,000 barrels of oil per day in production due to a fire at the Oseberg A platform this weekend
Paraphrasing: The outlook is grim. Congress needs to act "urgently". Americans are losing their jobs, losing their homes, losing their home equity. We need help!!!
NAHB wants a tax credit for homebuyers. - CR
I guess they think the mortgage interest deduction on 100% LTV isn't 'incentive enough'.
Re: Americans are losing their jobs, losing their homes,.
Greenspan helped feed and sustain the housing bubble and he kept untold amounts of construction workers employed by over-building in the bubble he and The Fed and The President pumped! The fraud of this era is linked to the illusion of growth, and now we all pay big time!
Caroline Baum up now. "We've just been through the biggest housing bubble, housing bust in history. Housing is already tax advantaged. Why do we want to stimulate artificial demand when prices are still too high?"
Interesting. Sales Activity low of 17 in June. Isn't it true that 50 percent or more of home sales occur in the March - July timeline? This is spectacularly bad.
If most sales have ALREADY occured this year, we can expect the current Sales Activity 'low' of 13 in December 2007, to set a new all-time low in December 2008.
Right on Caroline Baum!! Take the speculation out of wall street and the government sails! Put these crooks in prison and sweep away the filth that destroyed America!
Why not a tax credit for autos, so we can save the job of the SUVs makers? Why not a tax credit for plane tickets, so we can save all those airline industry jobs? Why do the home builders feel they can demand a special place at the trough?
Interesting Times writes:
CR - what was the response to Caroline's question ?
I suspect they're thinking of going back to the old press release format next month, or at least doing away with the Q&A portion of the conference call.
Or maybe they could hire the guy that used to screen the callers for the Novastar CCs? NFI doesn't really need him any more...
hopeinsd writes:
Why not a tax credit for autos, so we can save the job of the SUVs makers? Why not a tax credit for plane tickets, so we can save all those airline industry jobs? Why do the home builders feel they can demand a special place at the trough?
How about a negative federal sales tax, on everything?
--
Rather than asking for help from the Congress...
Stop building, you morons!
Builders come from born-and-bred American dopes.
Congress and Fed officials come from born-and-bred American dopes.
The source of all of America's problems are... born-and-bred American dopes.
Therefore, there is no hope for a better America. Breeding dopes has consequences. And now we must face the consequences. It would get uglier and uglier and uglier.
These homebuilders lack imagination - they need to hire farm state lobbyists... they'd get this thing fixed pronto.
In short they don't need congress to pay them to build, they need congress to pay them to maintain & look after the nations housing conservation reserve (the unsold developments) - protecting America's housing inventory for future generations of Americans!
I'm all for lower taxes. Not just in RE, but across the board. The sooner we get the government off our backs, the sooner the economy will recover.
Of course, when you overtax all asset classes except for one (e.g. housing) and then turn on the credit spigot, it's easy to guess where the bubble will form. The only viable solution now is less taxes and regulation across the board.
--
"How about Bob Troll, and all the other CEOS give back the billions in compensation"
Crispy, Anon,
He and his brethren in Network of Crooks own the USG. He doesn't have to give anything back. He only can expect to get more. Born-and-bred American dopes have no voice in govt policies. And Crooks do! They employ economists!!
In short they don't need congress to pay them to build, they need congress to pay them to maintain & look after the nations housing conservation reserve (the unsold developments) - protecting America's housing inventory for future generations of Americans!
What we need is congress to subsidize the development of a new genetically engineered house-devouring super-termite.
Yalt writes:
So who are the 5% of homebuilders who think the current environment is favorable? Favorable compared to what? Next year?
Yalt | 06.16.08 - 1:49 pm | #
The ones overlooking the flooded streets of Des Moines & Cedar Rapids maybe...
Seriously though, locally I've argued we need to tear down old housing. The truth is we needed new development, the problem is that we don't have the population growth to support the additional housing. IMO it's time to get out the wrecking ball.
Page 9 of the local paper today featured a FULL page ad from Lend America. American flag in the background the ad copy reads in 40 pt font
"GINNIE MAE: THE ONLY MORTGAGE BACKED SECURITY THAT ENJOYS THE BACKING OF THE UNITED STATES GOVERNMENT & LEND AMERICA'S GOT IT.
Lend America Has Received Approval To Issue Ginnie Mae Mortgage Backed Securities. This will enable more borrowers to qualify for safe, affordable FHA-insured loans, which is critically important in today's everchanging market."
And not even a thank you note to the American tax pay errrr.....bagholder.
Copy closes with "At Lend America Credit Scores Don't Count... People Do."
I threw up a little in my mouth when I read it this morning...
Healthy Communities Initiative". The gov't will buy these homes for 1.25 on the dollar and finance them through Dodd and his friends at Countrywide. Then we will rent them through Boston properties to Americas poor fund managers and unemployed bankers at below market rates. Everyone Wins!!!!
The problem with that is that Ginnie and FHA and VA will not accept "as is" and in most instances "as is" is not going to cut it from what i am seeing. So what could move, ain't....
"Drew writes:
Bob: "There is no solution to this that does not involve pain. The more honest solutions involve pain for everyone."
Er, Bob, haven't us savers already suffered enough?
I mean, I refused to play specuvestor. I think it's time for my cheap housing and free ponies!"
If you can hold onto your cash and inflation doesn't eat it up, you can have your cheap house. But you might have to pay a high down or high interest; and those cute exclusions on capital gains when selling a home (I didn't realize how loose they were) will have to go. And I hope you can keep your day job so you don't have to live off those carefully-saved shekels.
You can be as righteous as you think can be, but pain is still the Great Teacher, and class is now in session.
crispy&cole writes:
SUMMER and SPRING selling were a bust. Fall and winter will be ugly!
That is the real news.
Its already time to write off the summer selling season. J6P won't fully wake up to that until the Fall (again, I think late Fall).
The question is, what happens to retail sales with the implied lack of jobs for Teenagers this summer? Mom and Dad are strapped and junior lacks cash... Oh, junior will find money for beer and condoms,; but movies, restaurants, and anything else needing his/her cash will be looking for more retail love. I'm wondering if I should buy options on Disney...
Got Popcorn?
Neil
ps
Record number of movies coming out this summer. I'd bet more on video games.
Seriously though, locally I've argued we need to tear down old housing. -ac
Starting with mine. An old charming pain in the ass is what it is.
With all that flooding out west, may NAHB should just switch to making houseboats? - Drew
Seriously, I'm looking at houseboat plans right now & trying to convince the wife an apartment near work & houseboat on the river nearby for get away makes LOTS OF SENSE.
Tear down these homes and export the scrap copper and metal reaping trillions of dollars for suburban communities hit hard by the downturn. At least someone should before it is all stolen anyway.
In the area I live (SF Bay Area), adding basements to existing homes have suddenly become vogue. Almost every block in my neighborhood has a house or two that is/are adding basements.
That' like adding seismic nightmares, if you ask me. But, peeps gotta do what peeps gotta do.
They will keep the area builders employed for a while.
"And I hope you can keep your day job so you don't have to live off those carefully-saved shekels." - Bob
Too late! Already lost it! Fortunately for my family, we are obsessive cash hoarders, so I didn't spend the last 3 years of my income, and it's all sitting in various banks. What's killing me is the criminal lack of yield on savings.
They will keep the area builders employed for a while.
Also keep Rents and home prices low.
I am sure that many of those units are not approved and probably illegal in-law units. Illegal in-laws are very popular in metro areas because they are much cheaper that comparable units. Cities hate em because they don't collect taxes
"So who are the 5% of homebuilders who think the current environment is favorable? Favorable compared to what? Next year?"
Yalt | 06.16.08 - 1:49 pm | #
Yalt,
There are a few smaller,local, buliders that are pretty busy. They are in the 90-100k range for 2k sq/ft,3/2/2,ready to move in. They can do this due to owning lots bought at 1.5-3k before the run up.
They only start with 30% down and if the buyer defaults they chop the price to move it right away...
"I am sure that many of those units are not approved and probably illegal in-law units. Illegal in-laws are very popular in metro areas because they are much cheaper that comparable units. Cities hate em because they don't collect taxes"
In Santa Cruz they took inlaw units public by streamlining the approval process for legal granny units, even making available a selection of pre-approved architectural plans.
The only drawback is that the units are legal only as long as the owner lives in the main unit. Some RE "investors" are now finding out to their dismay that they can't rent out the main house and the granny unit. The city requires them to move, in, "disable" the granny (cut off power and plumbing,) or tear it down. Gee, I hope that was disclosed...
Why do we need homebuilders in their present form? Why cant they cut back to bare bones staff, mothball their management systems, and wait for business to improve in several years. Im sure that for a decent wage, homebuilding crews will appear when they are needed.
We already have too many unemployed steelworkers, clerks, airline pilots, autoworkers, etc. Whats so special about homebuilders?. Are we at risk of being invaded by the bin Laden engineering and construction companies? If workers need help, let's help with job retraining and unemployment insurance.
Once again I find it curious that we should help home building companies but not workers whose jobs were outsourced overseas. Anyway, many homebuilding contractors and their workers are already laid off. The idea that a business is too important to fail and must be subsidized, is as out of date as the slogan an honest days work for an honest days wages.
Maybe the new mantra is, While my work is too important to the security of America to fail, yours is no longer needed.
I've heard of bacteria that eat plastic, and I believe that termites don't actually digest cellulose (wood and drywall) without the assistance of another bacterium in their guts.
SO... plastic/concrete eating bacterium + termites = possible solution!
I think we both may be right - enzymes produced by the termite AND bacterium. I'm to lazy to do REAL research, but here's what Wikipedia says:
"In all termite families except the Termitidae, there are flagellate protists in the gut that assist in cellulose digestion. However, in the Termitidae, which account for approximately 60% of all termite species, the flagellates have been lost and this digestive role is taken up, in part, by a consortium of prokaryotic organisms. This simple story, which has been in Entomology textbooks for decades, is complicated by the finding that all studied termites can produce their own cellulase enzymes, and therefore can digest wood in the absence of their symbiotic microbes. Our knowledge of the relationships between the microbial and termite parts of their digestion is still rudimentary.
Oh, that' just grand! That's the funniest thing I have heard this week and the week has just started.
Which kool aid was the guy drinking? I need to get a glass of that.
The increase in the standard deduction amount, coupled with the reduction in interest rates, has made the mortgage interest deduction less useful than in years past.
I didn't itemize this year because we have so little interest, and Ilocano Avenger plans on paying off our note in 8 years, so we're sitting pretty for the moment.........
There is no solution to this that does not involve pain. The more honest solutions involve pain for _everyone._
There is one way-out-on-the-edge solution that might help the situation a bit...
Give one REO to each service man/woman that has spent 24+ months on the ground in Afghan or Iraq. Modify the basis cost of the home such that it goes from zero basis (fully taxable on resale) to full basis (little tax on resale) over a period of time (IOW, encourage them to live in it).
"Termites only eat WOOD, though. It would have to be engineered to eat granite and stainless. And plastic."
This is where all that cool nanotechnology comes in. You won't be able to see the individual house-munching nanotermites; the house will just gradually settle into the soil as they work their way up the walls. You have to be careful to not get any on your shoes, though.
"You won't be able to see the individual house-munching nanotermites; the house will just gradually settle into the soil as they work their way up the walls. You have to be careful to not get any on your shoes, though."
As long as you have their union on-side, anyway.
"Look buddy, I don't go to the bathroom around here without a work order." - Nanite, MST3K
SRS shorts most of the large commercial REITs. Malls, public storage, hotels, apartments, etc.
It hasn't been the worst year in history for commercial real estate. However, the next year might as commercial traditionally lags rez and consumer spending dries up. Would you want to be a large REIT invested in malls or hotels right about now? I would not.
I didn't say I would buy REITs, I just said I wouldn't buy SRS. There was a piece on SRS on Minyanville; the 2x leverage causes underperformance in whipsaw markets like this one. It's too long to summarize here, but I can look for the link.
You may be disappointed in your quest for 20%. People buy REITs for the divvys and tend to hold them through ups and downs because they pay 2x treasury yields. But good luck to you; I'll pass on that one.
I don't understand how you guys on here complain about the evil effects of leverage on the financial system and then buy leveraged ETFs. I'm not a fan of index shorting anyway. Lions don't charge into the whole herd of wildebeests; they identify the weakest members of the herd.
I don't think i've ever complained about the evils of leverage. In fact I've said if someone would allow me to lever up 100-1 i'd be very inclined to do so.
Not all of us can be lions. I just need my 20% a year and I'll be a happy wildebeest.
The thing about using index shorts, you're never going to wake up to a rumor that Buffett is bailing out the Shanghai Composite.
Whereas the pattern in the markets since at least last winter is that when it gets oversold, you have to cover, then hold your nose and go long the things that did worst in the downleg.
I just need to be smarter than the majority of wildebeests. Since i live in America. that isn't hard.
Last year I had my parents get out of the market. They were in index funds and about to retire. One of their friends, who paid a professional investment advisor to manage his money, ridiculed them. I expected as much. I asked them to asked him how old his advisor was. And if he still worked for a living. I recommended they point out i was under forty and retired. So far my sell call has saved my parents about ten percent. His investment advisor has lost him money. I'm still retired.
We all knew Bear Stearns was screwed. I wouldn't have wanted to play in those waters. not when Gandolf can come in with his magic wand.
I know which way real estate is going in this country. If you don't think SRS will go up by 20% in the next year, IMHO, you are a dim bulb. I will take this opportunity to say, "thanks for the cash".
I may be a dim bulb, as you put it, but it seems you have some splainin to do as to why your fabulous SRS has performed like such a dog. The article I posted explains it nicely, but you are certainly free to ignore it.
By the way, I've beat the S&P 500 by a fair amount since I started investing actively in 2001 (every year except 2005 when I missed by 1%) and retired before 50.
2 thoughts: (1) While there is a relationship between the market and the economy, it is very far from a 1:1 correlation. The 2001 recession was barely felt outside technology, yet the market took a huge dump. It's quite possible that you could have a fairly bad economy here without a large move down in the market. In fact, a year into the credit crisis and daily screaming panic headlines, the S&P 500 is only off 10% from its all-time high, and couldn't even hit bear market territory at its worst. My guess is a sideways market from here through the end of the year.
(2) Focusing only on the direction of the overall market is self-defeating anyway. If you're going to bother investing actively, you should try to beat the market. Otherwise, why bother? If you look, you can find stocks that will do well in lousy markets or poorly in good markets. If you think you can beat the market with SRS, go for it. My suspicion, based on its performance over the past year, is you may be wrong. But if you get your 20%, good for you.
I've sold SRS and SKF twice this year. Both times at a nice return.
SRS is low now because people are foolishly investing in REITs that are too far into commercial real estate. Like i said, patience. I believe the REITs in IYR will go down by at least 10% in the next year. I don't think that is a very risky proposition. Look out once we get to November.
As I'm sure you know, these markets are ridiculous. Who the hell knows what will happen in the next six months other than that residential real estate will continue to tank. I'm willing to make a large bet that commerical real estate will also tank. I don't really care if SRS doesn't track IYR's decline exactly. With the leverage, the returns are good enough for me.
If you look at the average decline in the markets during a recession we haven't come close to that. Of course, this time could be different.
It sure makes it interesting. Certainly plenty to learn these days.
was wrong but first
We need the specuvestors back!!!
Please, save us from ourselves!
Stay the Course!
--
They have not posted the index on the website. It must be really bad.
Jas
HMI down to 18, record low
Present sales at 17, record low
Buyer traffic fell a point in June to 17, all time low was 13 in December 2007
wahhhhhhh....It's my money and I need it NOW!!
Ciao
MS
And whose fault might all this be?
Congress needs to act "urgently". Americans are losing their jobs, losing their homes, losing their home equity. We need help!!!
By doing what?
Printing even more money?
Getting Americans even more addicted to cheap debt, bailouts, and handouts?
More of what got us here is going to get us out?
SUMMER and SPRING selling were a bust. Fall and winter will be ugly!
Regional HMI
Northeast fell from 18 to 12
Seiders expects home sales to erode further
Americans are losing their jobs, losing their homes,...
Oh? So they admit to lying about construction employment?
I just want everyone to keep in mind that a buyer credit does not help the buyer but those stuck with product at prices that are not market. Like... uhhh. home builders. Eliminate the middle man cut the check to Bob Toll while singing "Who's your daddy?"
BTW does anyone remember the auto industry begging for rate cuts back when oil was under 70 bucks and you could still sell an SUV in America?
That turned out great, didn't it?
They have not posted the index on the website. It must be really bad.
Jas
CR is just tweaking the drop shadow on the graph.
Cut him some slack.
"Build it, and they will laugh."
--from Field of Dreams
Hehehe,
Tax Break for Home Buyers!!
Oh, that' just grand! That's the funniest thing I have heard this week and the week has just started.
Which kool aid was the guy drinking? I need to get a glass of that.
--
OK, it is posted. LOW at 18 matches the previous low in December 2007. Anything below 20 = horrible.
Jas
Re: "peeps can't move up"
The only reason peeps were moving up, was because of fraud and having overvalued apprasals. The American Dream was connected to fraud from people that wanted to move up out of apartments, to CEOs that wanted more pay...it was all fraud all along the line, and none of them were honest in that desire to move up!
Norwegian oil and gas producer StatoilHydro (STL.OL: Quote, Profile, Research) said on Monday it has shut down 150,000 barrels of oil per day in production due to a fire at the Oseberg A platform this weekend
Paraphrasing: The outlook is grim. Congress needs to act "urgently". Americans are losing their jobs, losing their homes, losing their home equity. We need help!!!
NAHB wants a tax credit for homebuyers. - CR
I guess they think the mortgage interest deduction on 100% LTV isn't 'incentive enough'.
How about Bob Troll, and all the other CEOS give back the billions in compensation first? Then we can talk about a tax cut!
Good work CR --- keep it up! You are on the top of your game.
Signed,
Your adoring fans.
The Wile E. Coyote moment has arrived. We are accelerating towards the bottom. A comfy chair strategically placed woul help.
Cheers,
This survey was before the major run-up in interest rates. Interest rates is another threat to the housing market.
oh oh.
Re: Americans are losing their jobs, losing their homes,.
Greenspan helped feed and sustain the housing bubble and he kept untold amounts of construction workers employed by over-building in the bubble he and The Fed and The President pumped! The fraud of this era is linked to the illusion of growth, and now we all pay big time!
Caroline Baum up now. "We've just been through the biggest housing bubble, housing bust in history. Housing is already tax advantaged. Why do we want to stimulate artificial demand when prices are still too high?"
ROFLOL.
Re: "ow about Bob Troll, and all the other CEOS give back the billions in compensation"
How about they give it back and then go to prison for 10 years!
"Build it, and they will laugh."
Local headline today reads:
"Apartment Construction Continues as Vacancies Rise"
Interesting. Sales Activity low of 17 in June. Isn't it true that 50 percent or more of home sales occur in the March - July timeline? This is spectacularly bad.
If most sales have ALREADY occured this year, we can expect the current Sales Activity 'low' of 13 in December 2007, to set a new all-time low in December 2008.
I see single digits. Anyone else?
The Piper is here. He said something about being paid.
Is it that time already?
Right on Caroline Baum!! Take the speculation out of wall street and the government sails! Put these crooks in prison and sweep away the filth that destroyed America!
CR - what was the response to Caroine's question ?
Why not a tax credit for autos, so we can save the job of the SUVs makers? Why not a tax credit for plane tickets, so we can save all those airline industry jobs? Why do the home builders feel they can demand a special place at the trough?
Seiders still has sales at bottom at the middle of this year. He now says risk is to the downside - because of this report and higher interest rates.
Note: Seiders is a pretty straight shooter (unlike the NAR). Risk (for sales) are piling up on downside. Price erosion through 2009.
CR,
"Why do we want to stimulate artificial demand when prices are still too high?"
House Building exec: "So I get my bonus, of course! Any other 'silly' questions!?"
Cheers,
Interesting Times, oh, housing is too critical to not to something. Also prices have fallen pretty far - something like that.
Best Wishes.
Misean, exactly. You can tell these guys are getting killed.
Best Wishes.
CR,
Cheers,
Interesting Times writes:
CR - what was the response to Caroline's question ?
I suspect they're thinking of going back to the old press release format next month, or at least doing away with the Q&A portion of the conference call.
Or maybe they could hire the guy that used to screen the callers for the Novastar CCs? NFI doesn't really need him any more...
Yalt,
LOL
Cheers,
Stocks got a nice lift from this latest bit of nasty news.
At least anti-fundamentals are still in play in the markets.
Something in the world makes sense.
hopeinsd writes:
Why not a tax credit for autos, so we can save the job of the SUVs makers? Why not a tax credit for plane tickets, so we can save all those airline industry jobs? Why do the home builders feel they can demand a special place at the trough?
How about a negative federal sales tax, on everything?
"Eliminate the middle man cut the check to Bob Toll while singing "Who's your daddy?""
Oh the irony of this remark. Got an email from Toll Brothers just the other day -
"You're Invited to a Fabulous Father's Day Brunch!"
"Purchase a home this weekend, Friday, June 13, to Sunday, June 15, 2008 and receive a spectacular outdoor kitchen just for Dad!"
"Visit both communities this weekend and we'll give you a gas card for making the drive to each community!"
"Immediate move-ins with front yard landscape! Prices starting as low as $995,000."
--
Rather than asking for help from the Congress...
Stop building, you morons!
Builders come from born-and-bred American dopes.
Congress and Fed officials come from born-and-bred American dopes.
The source of all of America's problems are... born-and-bred American dopes.
Therefore, there is no hope for a better America. Breeding dopes has consequences. And now we must face the consequences. It would get uglier and uglier and uglier.
Jas
Conference call is over.
It's short (less than 30 minutes) so anyone that wants to listen to the replay might find Seiders comments interesting (I did).
Best to all.
This survey was before the major run-up in interest rates. Interest rates is another threat to the housing market.
Check out the 1-year graph for the Fannie Mae coupon (I think that's what this is):
MTGEFNCL
These homebuilders lack imagination - they need to hire farm state lobbyists... they'd get this thing fixed pronto.
In short they don't need congress to pay them to build, they need congress to pay them to maintain & look after the nations housing conservation reserve (the unsold developments) - protecting America's housing inventory for future generations of Americans!
Did they outline specifics for the buyer tax credit?
I agree that the idea is PREPOSTEROUS but I think that deep deep down, this is EXACTLY what Congress will do ASAP.
I've toyed with the idea of buying lately. I think I'll hold off at least until I see what our elected representatives/candymen drop on us!
I'm all for lower taxes. Not just in RE, but across the board. The sooner we get the government off our backs, the sooner the economy will recover.
Of course, when you overtax all asset classes except for one (e.g. housing) and then turn on the credit spigot, it's easy to guess where the bubble will form. The only viable solution now is less taxes and regulation across the board.
Jas,
"It would get uglier and uglier and uglier."
No WILL. Attention to detail sir. Adds credibility.
Yes, I know...Super Colander Tin Foil Hat thing.
I'm not worthy...etc.
Cheers,
market seems to like this pouty talk
--
"How about Bob Troll, and all the other CEOS give back the billions in compensation"
Crispy, Anon,
He and his brethren in Network of Crooks own the USG. He doesn't have to give anything back. He only can expect to get more. Born-and-bred American dopes have no voice in govt policies. And Crooks do! They employ economists!!
Jas
"Risk (for sales) are piling up on downside."
Actually the risks piled up long ago. They are only now being admitted by some.
In short they don't need congress to pay them to build, they need congress to pay them to maintain & look after the nations housing conservation reserve (the unsold developments) - protecting America's housing inventory for future generations of Americans!
What we need is congress to subsidize the development of a new genetically engineered house-devouring super-termite.
There is no solution to this that does not involve pain. The more honest solutions involve pain for everyone.
We gyrate so to avoid pain, and yet the only lessons and truths we learn well and lastingly do involve pain, or its imminent threat.
What we need is congress to subsidize the development of a new genetically engineered house-devouring super-termite.
ac | 06.16.08 - 1:46 pm | #
One that even eats vinyl siding...
Good one ac.
There is no solution to this that does not involve pain. The more honest solutions involve pain for _everyone._
Well, I sure as hell ain't votin' fer you Bob.
So who are the 5% of homebuilders who think the current environment is favorable? Favorable compared to what? Next year?
--
"Attention to detail sir. Adds credibility."
Misean,
Details are provided by CR and Tanta among others. I don't need to repeat them. I only focus on conclusions from the details.
Jas
"What we need is congress to subsidize the development of a new genetically engineered house-devouring super-termite."
"One that even eats vinyl siding..."
And marble counter tops!
Bob: "There is no solution to this that does not involve pain. The more honest solutions involve pain for everyone."
Er, Bob, haven't us savers already suffered enough?
I mean, I refused to play specuvestor. I think it's time for my cheap housing and free ponies!
Yalt writes:
So who are the 5% of homebuilders who think the current environment is favorable? Favorable compared to what? Next year?
Yalt | 06.16.08 - 1:49 pm | #
The ones overlooking the flooded streets of Des Moines & Cedar Rapids maybe...
Bob Dobbs,
You want the electorate to incur pai? In an election year? Pashaw!
We shall have our cake and eat it too!
Cheers,
Anonymous writes:
market seems to like this pouty talk
Homebuilder confidence was lower than expected, as expected, but was not as bad as was it was unexpected to be, I suppose.
ac: What we need is congress to subsidize the development of a new genetically engineered house-devouring super-termite.
ROFL! I almost aspirated my wheat-grass shake!
With all that flooding out west, may NAHB should just switch to making houseboats?
One that even eats vinyl siding...
Good one ac.
Seriously though, locally I've argued we need to tear down old housing. The truth is we needed new development, the problem is that we don't have the population growth to support the additional housing. IMO it's time to get out the wrecking ball.
Page 9 of the local paper today featured a FULL page ad from Lend America. American flag in the background the ad copy reads in 40 pt font
"GINNIE MAE: THE ONLY MORTGAGE BACKED SECURITY THAT ENJOYS THE BACKING OF THE UNITED STATES GOVERNMENT & LEND AMERICA'S GOT IT.
Lend America Has Received Approval To Issue Ginnie Mae Mortgage Backed Securities. This will enable more borrowers to qualify for safe, affordable FHA-insured loans, which is critically important in today's everchanging market."
And not even a thank you note to the American tax pay errrr.....bagholder.
Copy closes with "At Lend America Credit Scores Don't Count... People Do."
I threw up a little in my mouth when I read it this morning...
Jas,
Reread your post. You used "would"...I used "will".
Quibble I suppose.
Cheers,
Healthy Communities Initiative". The gov't will buy these homes for 1.25 on the dollar and finance them through Dodd and his friends at Countrywide. Then we will rent them through Boston properties to Americas poor fund managers and unemployed bankers at below market rates. Everyone Wins!!!!
In my neighborhood they ought to take the wrecking ball to the new housing; the older stock is of much better quality.
Mike,
The problem with that is that Ginnie and FHA and VA will not accept "as is" and in most instances "as is" is not going to cut it from what i am seeing. So what could move, ain't....
"Drew writes:
Bob: "There is no solution to this that does not involve pain. The more honest solutions involve pain for everyone."
Er, Bob, haven't us savers already suffered enough?
I mean, I refused to play specuvestor. I think it's time for my cheap housing and free ponies!"
If you can hold onto your cash and inflation doesn't eat it up, you can have your cheap house. But you might have to pay a high down or high interest; and those cute exclusions on capital gains when selling a home (I didn't realize how loose they were) will have to go. And I hope you can keep your day job so you don't have to live off those carefully-saved shekels.
You can be as righteous as you think can be, but pain is still the Great Teacher, and class is now in session.
crispy&cole writes:
SUMMER and SPRING selling were a bust. Fall and winter will be ugly!
That is the real news.
Its already time to write off the summer selling season. J6P won't fully wake up to that until the Fall (again, I think late Fall).
The question is, what happens to retail sales with the implied lack of jobs for Teenagers this summer? Mom and Dad are strapped and junior lacks cash... Oh, junior will find money for beer and condoms,; but movies, restaurants, and anything else needing his/her cash will be looking for more retail love. I'm wondering if I should buy options on Disney...
Got Popcorn?
Neil
ps
Record number of movies coming out this summer. I'd bet more on video games.
Seriously though, locally I've argued we need to tear down old housing. -ac
Starting with mine. An old charming pain in the ass is what it is.
With all that flooding out west, may NAHB should just switch to making houseboats? - Drew
Seriously, I'm looking at houseboat plans right now & trying to convince the wife an apartment near work & houseboat on the river nearby for get away makes LOTS OF SENSE.
I'm gonna have to work on my salesmanship...
Tear down these homes and export the scrap copper and metal reaping trillions of dollars for suburban communities hit hard by the downturn. At least someone should before it is all stolen anyway.
GINNIE MAE: THE ONLY MORTGAGE BACKED SECURITY THAT ENJOYS THE BACKING OF THE UNITED STATES GOVERNMENT & LEND AMERICA'S GOT IT.
I still think United States' best way out of this mess is to load everybody up with "implicitly guaranteed" Fannie Mae debt and then default on it.
Personally, I wouldn't hold anything for income except the Ginnie Mae's.
"They will pay for beer and condoms."
I remember during the last recession the college took away the free condoms. Sighted budget cuts. Oh well abortions were still free...Love my gov't
ew thread alert
Eliminate rent control pushing millions into the competitive home market.
In the area I live (SF Bay Area), adding basements to existing homes have suddenly become vogue. Almost every block in my neighborhood has a house or two that is/are adding basements.
That' like adding seismic nightmares, if you ask me. But, peeps gotta do what peeps gotta do.
They will keep the area builders employed for a while.
"Drew writes:
With all that flooding out west, may NAHB should just switch to making houseboats?"
The Dutch are already there, with floating homes that rise and fall with the floodwaters without drifting away.
Dutch Architects Plan for a Floating Future : NPR
"And I hope you can keep your day job so you don't have to live off those carefully-saved shekels." - Bob
Too late! Already lost it! Fortunately for my family, we are obsessive cash hoarders, so I didn't spend the last 3 years of my income, and it's all sitting in various banks. What's killing me is the criminal lack of yield on savings.
Gotta love the Dutch and their houseboats.
They will keep the area builders employed for a while.
Also keep Rents and home prices low.
I am sure that many of those units are not approved and probably illegal in-law units. Illegal in-laws are very popular in metro areas because they are much cheaper that comparable units. Cities hate em because they don't collect taxes
"So who are the 5% of homebuilders who think the current environment is favorable? Favorable compared to what? Next year?"
Yalt | 06.16.08 - 1:49 pm | #
Yalt,
There are a few smaller,local, buliders that are pretty busy. They are in the 90-100k range for 2k sq/ft,3/2/2,ready to move in. They can do this due to owning lots bought at 1.5-3k before the run up.
They only start with 30% down and if the buyer defaults they chop the price to move it right away...
Chris
"I am sure that many of those units are not approved and probably illegal in-law units. Illegal in-laws are very popular in metro areas because they are much cheaper that comparable units. Cities hate em because they don't collect taxes"
In Santa Cruz they took inlaw units public by streamlining the approval process for legal granny units, even making available a selection of pre-approved architectural plans.
The only drawback is that the units are legal only as long as the owner lives in the main unit. Some RE "investors" are now finding out to their dismay that they can't rent out the main house and the granny unit. The city requires them to move, in, "disable" the granny (cut off power and plumbing,) or tear it down. Gee, I hope that was disclosed...
Should be the mother of all homebuilder rallies with crappy news like that.
Usually housing bottoms look like a "V"; this one will probably look more like an "L".
Is it possible that this decline will look like "I" ?
Why do we need homebuilders in their present form? Why cant they cut back to bare bones staff, mothball their management systems, and wait for business to improve in several years. Im sure that for a decent wage, homebuilding crews will appear when they are needed.
We already have too many unemployed steelworkers, clerks, airline pilots, autoworkers, etc. Whats so special about homebuilders?. Are we at risk of being invaded by the bin Laden engineering and construction companies? If workers need help, let's help with job retraining and unemployment insurance.
Once again I find it curious that we should help home building companies but not workers whose jobs were outsourced overseas. Anyway, many homebuilding contractors and their workers are already laid off. The idea that a business is too important to fail and must be subsidized, is as out of date as the slogan an honest days work for an honest days wages.
Maybe the new mantra is, While my work is too important to the security of America to fail, yours is no longer needed.
"What we need is congress to subsidize the development of a new genetically engineered house-devouring super-termite."
"One that even eats vinyl siding..."
And marble counter tops!
They're called low rent tenants,....I thought we covered that a couple of days ago.
"What we need is congress to subsidize the development of a new genetically engineered house-devouring super-termite."
Termites only eat WOOD, though. It would have to be engineered to eat granite and stainless. And plastic.
Are we at risk of being invaded by the bin Laden engineering and construction companies?
Man I almost died. this was hilarious++++++++
I have read a news report of termites in China that can eat through concrete.
That should do, no?
cement v concrete what's the difference?
I've heard of bacteria that eat plastic, and I believe that termites don't actually digest cellulose (wood and drywall) without the assistance of another bacterium in their guts.
SO... plastic/concrete eating bacterium + termites = possible solution!
Or more brush fires, either way...
Drew Its enzymes not bacteria I have heard.
I dunno about fires, Drew, the one from the Great Dismal Swamp is smelling pretty barfy here in Richmond.
"We already have too many unemployed steelworkers, clerks, airline pilots, autoworkers, etc. Whats so special about homebuilders?"
Agree, the "homebuilders" should just go back to where they came from -- Mexico.
I think we both may be right - enzymes produced by the termite AND bacterium. I'm to lazy to do REAL research, but here's what Wikipedia says:
"In all termite families except the Termitidae, there are flagellate protists in the gut that assist in cellulose digestion. However, in the Termitidae, which account for approximately 60% of all termite species, the flagellates have been lost and this digestive role is taken up, in part, by a consortium of prokaryotic organisms. This simple story, which has been in Entomology textbooks for decades, is complicated by the finding that all studied termites can produce their own cellulase enzymes, and therefore can digest wood in the absence of their symbiotic microbes. Our knowledge of the relationships between the microbial and termite parts of their digestion is still rudimentary.
cement v concrete what's the difference?
Cement is a component of Concrete. I paid a lot of money to learn that in civil engineering school.
"Apartment Construction Continues as Vacancies Rise"
Keep those headlines coming. It makes those of us holding SRS happy.
The increase in the standard deduction amount, coupled with the reduction in interest rates, has made the mortgage interest deduction less useful than in years past.
I didn't itemize this year because we have so little interest, and Ilocano Avenger plans on paying off our note in 8 years, so we're sitting pretty for the moment.........
There is no solution to this that does not involve pain. The more honest solutions involve pain for _everyone._
There is one way-out-on-the-edge solution that might help the situation a bit...
Give one REO to each service man/woman that has spent 24+ months on the ground in Afghan or Iraq. Modify the basis cost of the home such that it goes from zero basis (fully taxable on resale) to full basis (little tax on resale) over a period of time (IOW, encourage them to live in it).
Just a thought tho.
"Termites only eat WOOD, though. It would have to be engineered to eat granite and stainless. And plastic."
This is where all that cool nanotechnology comes in. You won't be able to see the individual house-munching nanotermites; the house will just gradually settle into the soil as they work their way up the walls. You have to be careful to not get any on your shoes, though.
Sure hell didn't see John Chambers out in front of Congress in 2002 crying for a router tax credit.
Practically everyone outside the industry was all schadenfreude over lost tech jobs during the Nazcrash.
I think I'll return the same level of indifference to the builders and bankers.
"You won't be able to see the individual house-munching nanotermites; the house will just gradually settle into the soil as they work their way up the walls. You have to be careful to not get any on your shoes, though."
As long as you have their union on-side, anyway.
"Look buddy, I don't go to the bathroom around here without a work order." - Nanite, MST3K
"It makes those of us holding SRS happy."
I wouldn't be happy holding SRS. The worst year in the history of real estate and it's barely up y-o-y. It's doo-doo.
SRS shorts most of the large commercial REITs. Malls, public storage, hotels, apartments, etc.
It hasn't been the worst year in history for commercial real estate. However, the next year might as commercial traditionally lags rez and consumer spending dries up. Would you want to be a large REIT invested in malls or hotels right about now? I would not.
Patience.
I didn't say I would buy REITs, I just said I wouldn't buy SRS. There was a piece on SRS on Minyanville; the 2x leverage causes underperformance in whipsaw markets like this one. It's too long to summarize here, but I can look for the link.
Please do.
I'm just looking for a simple 20% annual return, nothing fancy. I'm pretty confident that buying it at today's prices will get me that.
Here's the link
IYR and SRS: When Opposites Attack-Minyanville
You may be disappointed in your quest for 20%. People buy REITs for the divvys and tend to hold them through ups and downs because they pay 2x treasury yields. But good luck to you; I'll pass on that one.
I like the liquid index stuff, the SDS, DXD, QID products.
But I've come to the conclusion that most of the other double-longs and double-shorts are thermonuclear trading instruments only.
There's wicked slippage between the index components and the instrument.
Also usually a nasty little end-of-day adjustment too.
I don't understand how you guys on here complain about the evil effects of leverage on the financial system and then buy leveraged ETFs. I'm not a fan of index shorting anyway. Lions don't charge into the whole herd of wildebeests; they identify the weakest members of the herd.
Yummm, Christopher and Barney. What ya got cooking in there? Smells like free lunch.
thanks for the article.
I'll report back in a year.
I don't think i've ever complained about the evils of leverage. In fact I've said if someone would allow me to lever up 100-1 i'd be very inclined to do so.
Not all of us can be lions. I just need my 20% a year and I'll be a happy wildebeest.
"In fact I've said if someone would allow me to lever up 100-1 i'd be very inclined to do so."
Your name isn't Bear or Stearns is it? Or Lehman?
Stay away from the watering hole....
Mike in Long Island
I am from NY as well. Have you seen that much RE price erosion yet? Nothing here like CA or FL...yet?
The thing about using index shorts, you're never going to wake up to a rumor that Buffett is bailing out the Shanghai Composite.
Whereas the pattern in the markets since at least last winter is that when it gets oversold, you have to cover, then hold your nose and go long the things that did worst in the downleg.
The slowest wildebeest shall be first.
exzactly
I just need to be smarter than the majority of wildebeests. Since i live in America. that isn't hard.
Last year I had my parents get out of the market. They were in index funds and about to retire. One of their friends, who paid a professional investment advisor to manage his money, ridiculed them. I expected as much. I asked them to asked him how old his advisor was. And if he still worked for a living. I recommended they point out i was under forty and retired. So far my sell call has saved my parents about ten percent. His investment advisor has lost him money. I'm still retired.
We all knew Bear Stearns was screwed. I wouldn't have wanted to play in those waters. not when Gandolf can come in with his magic wand.
I know which way real estate is going in this country. If you don't think SRS will go up by 20% in the next year, IMHO, you are a dim bulb. I will take this opportunity to say, "thanks for the cash".
But you might have to pay a high down or high interest
Hey Bob, a lot of us want high down payment requirements and high interest rates.
You figure out why.
I may be a dim bulb, as you put it, but it seems you have some splainin to do as to why your fabulous SRS has performed like such a dog. The article I posted explains it nicely, but you are certainly free to ignore it.
By the way, I've beat the S&P 500 by a fair amount since I started investing actively in 2001 (every year except 2005 when I missed by 1%) and retired before 50.
2 thoughts: (1) While there is a relationship between the market and the economy, it is very far from a 1:1 correlation. The 2001 recession was barely felt outside technology, yet the market took a huge dump. It's quite possible that you could have a fairly bad economy here without a large move down in the market. In fact, a year into the credit crisis and daily screaming panic headlines, the S&P 500 is only off 10% from its all-time high, and couldn't even hit bear market territory at its worst. My guess is a sideways market from here through the end of the year.
(2) Focusing only on the direction of the overall market is self-defeating anyway. If you're going to bother investing actively, you should try to beat the market. Otherwise, why bother? If you look, you can find stocks that will do well in lousy markets or poorly in good markets. If you think you can beat the market with SRS, go for it. My suspicion, based on its performance over the past year, is you may be wrong. But if you get your 20%, good for you.
I've sold SRS and SKF twice this year. Both times at a nice return.
SRS is low now because people are foolishly investing in REITs that are too far into commercial real estate. Like i said, patience. I believe the REITs in IYR will go down by at least 10% in the next year. I don't think that is a very risky proposition. Look out once we get to November.
As I'm sure you know, these markets are ridiculous. Who the hell knows what will happen in the next six months other than that residential real estate will continue to tank. I'm willing to make a large bet that commerical real estate will also tank. I don't really care if SRS doesn't track IYR's decline exactly. With the leverage, the returns are good enough for me.
If you look at the average decline in the markets during a recession we haven't come close to that. Of course, this time could be different.
It sure makes it interesting. Certainly plenty to learn these days.