The size of the wave of foreclosures is really doing the trick for forcing "mark to market" - it seems like even the REO buffering mechanism will be overrun. CR - you really seem spot on most of the time, but I had the feeling you were originally expecting a stickier, slower decline - one where inflation was the most significant factor in the real price decline. Now it looks like the nominal drops, even with inflation raging (perhaps because inflation is raging and destroying paychecks), will make up a significant portion of the decrease.
Nothing to worry about. Once Freddie and Fannie are under gov't control, the goverment will subsidize interest rates so everyone can get a 2% fixed and the housing boom will start back up.
I think the decline has been sticky and slow, when you consider the first bubbles started popping three years ago, and when you look beyond areas ravaged by foreclosures.
Prices in areas largely free of REOs are indeed dropping, but at the speed of Chinese water torture.
I demand debt forgiveness. If the companies that get bailed out do not have to pay back the taxpayers, then we should not have to pay back our mortgages.
It's no more crazy than a new grad realizing the job prospects of a Scandinavian Art History degree and getting his students loans forgiven. If he was a bank, the college would just reimburse him.
The banks made a crappy gamble. So we give em a do-over.
Where is our effing do-over?
I want to see some pot banging in the streets! I want chanting, marching, and giant paper mache puppets of our leaders made to look like Satan! But it seems like the US has no democratic spirit left whatsoever. So protesters are laughed at, scorned, or ignored.
Way to go, America.
Don't worry, "it" can't happen here.
In June, more CMBS classes were downgraded by the rating agencies than were upgraded, marking the first time thats happened since 2003. The three major rating agencies - Standard & Poors, Moodys Investors Service and Fitch Ratings - downgraded
a total of 95 bond classes from CMBS deals, while upgrading 55, according to analysis by Bank of Americas CMBS strategy group. If you add re-securitizations, the number of downgrades climbs to 133. In contrast, upgrades outnumbered downgrades by 80 to 66 in May. Lehman Brothers CMBS analysts this week pronounced the era where
CMBS upgrades regularly outpace downgrades over. Upgrades had long outpaced downgrades
largely because of the structure of CMBS. As payments are made on loans in CMBS deals, they are applied to the deals most senior bond classes, eventually reducing their balances. As that happens, the subordination or credit-support levels for lower-rated bond classes improve, resulting in upgrades.
"Owners who've walked away from their mortgages and renters whose landlords have done likewise have additional $$$ to spend at the malls now."
4822 | 07.25.08 - 10:18 am | #
There is a lot more of this than people realize. Over 50% of our renters are from foreclosed homes. Smallest savings is 350.00/mo to a top of roughly 2k. All have decent jobs with little threat of layoffs.
Yes,we have the ability to drop rents to kick the shit out of everbody...
cd:
I hear the same sort of talk about Newport Coast, Corona Del Mar, Coto, etc. as I do about Manhattan and SF. Somehow their values skyrocketed during the boom, but will be unaffected by the decline.
I still haven't heard a good explanation as to how these areas taste the fruits when the masses go manic, but are "immune" when the panic begins.
If they're right, and those areas don't hurt in all of this, they should rename their gated enclaves the Bastille Estates and prepare to receive visits from unhappy cake eaters.
Just back from Brooklyn. . . Foist!
Cliffo, ya killin' me.
I think this is a bottom.... I'm calling it!
.....................
Go Baby, Go Baby...
The size of the wave of foreclosures is really doing the trick for forcing "mark to market" - it seems like even the REO buffering mechanism will be overrun. CR - you really seem spot on most of the time, but I had the feeling you were originally expecting a stickier, slower decline - one where inflation was the most significant factor in the real price decline. Now it looks like the nominal drops, even with inflation raging (perhaps because inflation is raging and destroying paychecks), will make up a significant portion of the decrease.
Any update in your expectation?
Best,
Nothing to worry about. Once Freddie and Fannie are under gov't control, the goverment will subsidize interest rates so everyone can get a 2% fixed and the housing boom will start back up.
Consumer sentiment index is way up. Wonder how they cooked those numbers...
Gavshire,
Do you have a link?
TIA
.........
consumer sent link: Consumer sentiment rises in July, UMich survey says - MarketWatch
Applecore...
Baltimore...
Who's your friend?
SPLAT
I think the decline has been sticky and slow, when you consider the first bubbles started popping three years ago, and when you look beyond areas ravaged by foreclosures.
Prices in areas largely free of REOs are indeed dropping, but at the speed of Chinese water torture.
I think this is a bottom.... I'm calling it!
.....................
nades | 07.25.08 - 9:59 am
3378
but you don't count unless your paid us2mm/annum w/Chief srategist label.
/sarcasm
Consumer sentiment index is way up. Wonder how they cooked those numbers...
Owners who've walked away from their mortgages and renters whose landlords have done likewise have additional $$$ to spend at the malls now.
Let me see new home sales numbers this morning. Then I'll decide whether consumer sentiment number is meaningful.
Consumer sentiment link:
Consumer sentiment rises in July, UMich survey says - MarketWatch
I demand debt forgiveness. If the companies that get bailed out do not have to pay back the taxpayers, then we should not have to pay back our mortgages.
It's no more crazy than a new grad realizing the job prospects of a Scandinavian Art History degree and getting his students loans forgiven. If he was a bank, the college would just reimburse him.
The banks made a crappy gamble. So we give em a do-over.
Where is our effing do-over?
I want to see some pot banging in the streets! I want chanting, marching, and giant paper mache puppets of our leaders made to look like Satan! But it seems like the US has no democratic spirit left whatsoever. So protesters are laughed at, scorned, or ignored.
Way to go, America.
Don't worry, "it" can't happen here.
Bad commercial real estate news from the bonds:
In June, more CMBS classes were downgraded by the rating agencies than were upgraded, marking the first time thats happened since 2003. The three major rating agencies - Standard & Poors, Moodys Investors Service and Fitch Ratings - downgraded
a total of 95 bond classes from CMBS deals, while upgrading 55, according to analysis by Bank of Americas CMBS strategy group. If you add re-securitizations, the number of downgrades climbs to 133. In contrast, upgrades outnumbered downgrades by 80 to 66 in May. Lehman Brothers CMBS analysts this week pronounced the era where
CMBS upgrades regularly outpace downgrades over. Upgrades had long outpaced downgrades
largely because of the structure of CMBS. As payments are made on loans in CMBS deals, they are applied to the deals most senior bond classes, eventually reducing their balances. As that happens, the subordination or credit-support levels for lower-rated bond classes improve, resulting in upgrades.
CSC,
I'm with you there, heck I'll bring the bag to keep us happy while getting the bird and spit on..
I have tried to reach our beloved senators boxer and feinstein but they always reply with canned emails and bullsh$t statements..
I'm actually thinking of going down to thier sf area offices and using my foghorn voice backed with some nice signs of how we are F$$ked
All my friends down your way say it won't happen near the beach...I say ok....
if i understand realtytrack methodology correct, one late payment registers as "foreclosure" related event...one great way to inflate a number
GM,
No, it would have to be 3..
"Owners who've walked away from their mortgages and renters whose landlords have done likewise have additional $$$ to spend at the malls now."
4822 | 07.25.08 - 10:18 am | #
There is a lot more of this than people realize. Over 50% of our renters are from foreclosed homes. Smallest savings is 350.00/mo to a top of roughly 2k. All have decent jobs with little threat of layoffs.
Yes,we have the ability to drop rents to kick the shit out of everbody...
Chris
cd:
I hear the same sort of talk about Newport Coast, Corona Del Mar, Coto, etc. as I do about Manhattan and SF. Somehow their values skyrocketed during the boom, but will be unaffected by the decline.
I still haven't heard a good explanation as to how these areas taste the fruits when the masses go manic, but are "immune" when the panic begins.
If they're right, and those areas don't hurt in all of this, they should rename their gated enclaves the Bastille Estates and prepare to receive visits from unhappy cake eaters.
but you don't count unless your paid us2mm/annum w/Chief srategist label.
/sarcasm
BottomCallTabulatorMatrix
LOL ! ! !
JP & Gavshire thanks..
.........
nobody seems to notice
nobody seems to care...
Sentiment- up, way up?
"The June reading was the lowest since 1980 and the third-lowest reading in the 56-year history of the survey"
It's up just a couple points, but still very low.
I am interested in what happens next month when the YOY comparisons become less scary.