I don't think confidence is the appropriate term anymore. Maybe something like "Existing homebuilders foolishness remains although at lower levels."
Why don't they all close up shop and make windmills. It is pretty obvious that windmills (aka "The Guillotines of Death for Songbirds adn Raptors") is attempting to be the next bubble. Chase the bubble homebuilders. Building a big windmill can't be much different than building a home.
Sorry to be OT and apologies if this is redundant from some clever boots on an earlier thread, but thought others would find it as interesting as I that the Western Washington U.S. Attorney's office today said they'd been investigating what a local attorney calls "a merger of bad loan practices and possible fraud" at WAMU for months, with the help of FDIC, FBI, SEC and IRS. They kept a lid on leaks for fear publicity would cause a run on the bank. As our U.S. Attorney made his announcement yesterday, FDIC was copying hard drives all over the place at WAMU HQ a block away from me. Woo hoo! Nation & World | Feds secretly investigated WaMu slide for months | Seattle Times Newspaper
"This report provides clear evidence that an additional economic stimulus package is needed, including a substantial incentive to spur home buying."
Clearly we need incentives. A most excellent idea, Mr. Seiders. Here, I'll breakout my checkbook right now and pay somebody $30k to buy a house. It will be a much more effective and streamlined method than giving me a tax bill later.
Anonymous. Bubble in treasuries. Yes. But you're a bit late to the game, although it might stay for a while.
I follow narrow money. So I have no choice but to act on the latest statistics. Hedge my shorts and go long in some possible bubbles. And yes, cash is a great bubble too. Let's ride it.
Bob Toll had Satanson at a party three years ago. Satanson drank way too much, like he always does, and got caught with him pants around his ankles in the closet. Bob has it all on tape and Satanson knows this, so he gives them liquidity gifts when they need it. Or, that is what I was told by a friend of the sister of a housecleaner from Toledo.
Yearning to Learn writes:
and yet almost no housebuilders are going bankrupt.
why not?
Illegal labor prices out at 50% of what was the going rate.This kept legal labor rates in check for the last 5-8 years. I've been in the res. construction business for 15 years and I couldn't increase my labor rates at all during the boom. House prices skyrocketed as labor prices went down or plummeted.
Lisa Marquis Jackson at John Burns Real Estate Consulting notes in a recent report this latest headache for builder the loss of seller-funded downpayment assistance that allowed buyers to take 100% financing. She notes that buyers will now have to come up with at least 3.5% down, which your blogger thinks might not be the worst thing in the world. (Report IS HERE!)
Nonetheless, Jackson compiled this lists of big, publicly traded builders that details just how large a role this kind of financing played in recent sales:
Beazer: 20% of customers in 6 months ending June 30
Centex: 25% of closings in quarter ending June 30
DR Horton: 29% of closings in quarter ending June 30
Hovnanian: 16% of loans for 9 months ending July 31
Lennar: 45% of loans Lennar originated in quarter ending August 31
M/I Homes: 18% of closings in quarter ending June 30
Meritage: 14-15% of closings in quarter ending June 30
Pulte: 10% of closings in quarter ending June 30
Ryland: 18-20% of backlog in 6 months ending June 30
and Orange Countys own Standard Pacific: 12% of deliveries in 6 months ending June 30
Jackson notes: While some builders may have seen a recent uptick in sales attributable to promoting the fact that these programs will disappear, the long-term demand will certainly fall. Michael Rehaut at JP Morgan estimates that this could impact roughly 17% of new home sales.
I'm still surprised that more haven't been taken to the woodshed however. Many of them were burning cash with stock repurchase programs etc... so I'm surprised they've been able to stay liquid this long.
Sold off TWM/RWM on Friday and rebought yesterday and will ride them a bit further.
Still looking at re-entry point for long purchases of good dividend stocks. Was originally going to re-enter about 9K but have scaled back and will probably wait until mid 7K.
"Why do people think gov't can stop fall in house prices?"
Because they can't force people to buy or banks to lend. I guess they could pass a law making it illegal for home values to drop past a certain amount, or everyone has to have a mortgage.
This is such a negative panic story, designed to suck the lifeblood from born and bred dope brains. You are all like little school girls running from the shadows of your flopping pigtails! As many will recall, things are very much on the opposite side of the fence and all you have to do is open your closed eyeballs:
Lawrence Yun, NAR chief economist said, "What we're seeing is the momentum of people taking advantage of low home prices, with pending home sales up strongly in California, Nevada, Arizona, Florida, Rhode Island, and the Washington, D.C., region," he said(2). "It's unclear how much contract activity may be impacted by the credit disruptions on Wall Street, but we're hopeful most of the increase will translate into closed existing-home sales."
Kunstler was just seen driving a new Hummer and looking at McMansions in the Inland Empire area. I was getting gas when he pulled up for directions. He said there had never been a better time to buy big.
think the best way to stabilize housing is to imprison all the homebuilders, so they can't add to the oversupply by building more houses.
Elvis | 10.16.08 - 1:39 pm | #
They could probably do with the free room and board at the moment...
Kona, the key word would be pending.
I live in Florida and know several realtors, they can't get anyone approved for financing. So the deals just sit there.
Elvis writes:
I don't think confidence is the appropriate term anymore.
I completely agree. Confidence is a modifier of the truth, but not truth itself.
I'm ready willing and able to buy honest values. But, I won't buy the current market for the very reason you cited.
Given that this market was pumped up by fake money, Popeye suggests that the market was also pumped up by "false expectations of what more could be built on { oops, fake money }.
At the moment, the market is in the process of discounting the extent of those false expectations.
Yearning. I think the builders' BK's are coming shortly. I was in court this morning and heard of a couple builders (albiet not the big time buiders) who were consulting BK attys and anticipating filing within 30 days. The bigger boys can probably hold out a bit longer but it will only grow from there.
At the end of the day, all the little builders will be flushed out of the system, and only the big boys will survive.
Unforutnately, this will lead to even less variety in future housing. One of the reasons the exurbs are getting crushed is that its all damn McMansions. Hey jackass builders - they make other styles ya know!
Unforutnately, the few who were doing good work with unique housing designes will get flushed, McMansions will still reign (just as wide to give the appearance of wealth, except now 1/2 as deep). And I will be more turned off than ever by anything built after 1930.
Speaking of builders and their banks it was customary for banks to proudly put up a sign on a builders site announcing they had provided the financing for the development. I don't see those signs anymore. How about in your neck of the woods?
I can see why as you drive by the development and it just sits there unfinished with loads of unsold homes.
Why announce to your depositors they are on the hook for this failed subdivision.
In Oregon, Pacific Lifestyle Homes is going to file for bankruptcy (Ch. 11, I think) joining Legend & Renaissance Home builders who filed for Ch. 11 earlier this year (today's Oregonian). On the (OR)coast, at least one custom home builder has filed for BR (company name's been painted out on the sign of the office building).
An article earlier this week indicated that the PDX condo bubble has popped & some of the bigger condo developments are now "luxury apartments." Turns out Portland's not really different.
With his usual perfect timing & great intelligence, Bush has told the National Forest Service and the BLM to ramp up clearcutting aka deficit logging in western OR national forests to close to 1970's levels. According to Bush, we really need more lumber.
First timber cutting plan is out, it's horrible, & I hope that between administrative appeals, etc., & litigation no action is taken at least until after Bush leaves office.
azurite - "With his usual perfect timing & great intelligence, Bush has told the National Forest Service and the BLM to ramp up clearcutting aka deficit logging in western OR national forests to close to 1970's levels. According to Bush, we really need more lumber.
First timber cutting plan is out, it's horrible, & I hope that between administrative appeals, etc., & litigation no action is taken at least until after Bush leaves office."
I'm in Souther Oregon and heard about this 1 week or so ago. Can't agree more about the desire for delay. Bush is the absolute savior of "GREED IS GOOD" in the most powerful CEO position in the world, plain and simple. But we still hold the largest group of shares, we just need to stop voting by proxy and stand up and demand a change.
azurite,
Well, the Bush admin wanted to cut the offset payments to OR counties where logging on forest land had been restricted. But our Congressional reps put it back in the bailout bill. Besides, this cutting plan is DOA anyway; nothing will be done until the next administration. Due to public comment periods and litigation. It's just a fireworks show by the outgoing admin.
emo
Marlin. Dory.
My boff told me to be furst!
Clean sweep in today's real-side data. Universally dreadful.
"I'm traveling and I'll post a graph later. "
Get those hands back on the steering wheel!
segundo
This is bad news.... for Canada
Maybe they should try
Enzyte | The once-daily tablet for natural male enhancement!
I am buying, buying, buying because Todd Harrison says we've seen the low for 2008.
I don't think confidence is the appropriate term anymore. Maybe something like "Existing homebuilders foolishness remains although at lower levels."
Why don't they all close up shop and make windmills. It is pretty obvious that windmills (aka "The Guillotines of Death for Songbirds adn Raptors") is attempting to be the next bubble. Chase the bubble homebuilders. Building a big windmill can't be much different than building a home.
Still not zero. Should be there in February.
Next bubble is natural gas and gold. In the meantime, cash and short etf's.
Jas, care to explain your view of inflationists? Are you a deflationist?
"Comrade Peronista writes:
Next bubble is natural gas and gold. In the meantime, cash and short etf's."
What makes you think so?
"Chase the bubble homebuilders. Building a big windmill can't be much different than building a home.
Elvis"
And, furthermore, I bet there are subsidies, errr...incentives, so you can build them and make a handsome profit from taxpayers' pockets.
--
CR,
Housing Market Index al all-time low and beyond horrible.
Housing Inventory has bottomed?
Only in the wacky world of economists and soothsayers. Demand IS below production even at very low production rates.
Jas BR Jain knows Housing demand because he has the hard data on actual demand rather than fantasy estimates of economists.
Economists ARE the problem and not part of the solutions to America's economic problems. Greenspan and Bernanke head the parade.
I say, ship all the economists to Iraq and Afghanistan!
Jas
"Jas, care to explain your view of inflationists? Are you a deflationist?
Fascist Rupert"
No, Jaswant is a loneliest.
lucifer writes:
This is bad news.... for Canada
The magic number that makes the tar sands profitable is $70 a barrel ... or so they say.
Are there any stats on divorce rates and their relationship to house price collapses?
I have a few friends who have been sitting waiting for their houses to sell over 6 months now (Canada).
Wonder what it will do to their marriages.
Bob. The speculators will find something to ride. Cold winter is a good excuse. I'm hedging my shorts with gas and gold. Cash is king.
Comrade Peronista writes:
Next bubble is natural gas and gold. In the meantime, cash and short etf's.
--
Not so sure, maybe the next (and last) bubble is in the dollar and treasuries?
I find no evidence that any of the builders filled out their regular survey questions, based on ... Wall Street.
No more bubbles. Bernanke is watching for them, holding a pin.
--
HOUSING DEMAND IS CYCLICAL! Yeah, the population is growing, but people do double up, triple up, and among Hispanics I have seen quintuple up!
25,000,000 Vacant Housing Units in the US before the end of 2012.
RENTS WILL BEGIN COLLAPSING IN 2009 LEADING TO CPI DEFLATION, YOY.
Jas
No, Jaswant is a loneliest.
But on a clear night from his house, you can see Sarah Palin.
Sorry to be OT and apologies if this is redundant from some clever boots on an earlier thread, but thought others would find it as interesting as I that the Western Washington U.S. Attorney's office today said they'd been investigating what a local attorney calls "a merger of bad loan practices and possible fraud" at WAMU for months, with the help of FDIC, FBI, SEC and IRS. They kept a lid on leaks for fear publicity would cause a run on the bank. As our U.S. Attorney made his announcement yesterday, FDIC was copying hard drives all over the place at WAMU HQ a block away from me. Woo hoo!
Nation & World | Feds secretly investigated WaMu slide for months | Seattle Times Newspaper
CR, could you photoshop some blood into that graph along with the "probable recession" bar?
Ouch.
Bob Dobbs writes:
"Comrade Peronista writes:
Next bubble is natural gas and gold. In the meantime, cash and short etf's."
What makes you think so?
Bob Dobbs | Homepage | 10.16.08 - 1:24 pm
PickensPlan: The Plan
"This report provides clear evidence that an additional economic stimulus package is needed, including a substantial incentive to spur home buying."
Clearly we need incentives. A most excellent idea, Mr. Seiders. Here, I'll breakout my checkbook right now and pay somebody $30k to buy a house. It will be a much more effective and streamlined method than giving me a tax bill later.
was the FDIC and the SEC helping the US attny or WaMu?
Anonymous. Bubble in treasuries. Yes. But you're a bit late to the game, although it might stay for a while.
I follow narrow money. So I have no choice but to act on the latest statistics. Hedge my shorts and go long in some possible bubbles. And yes, cash is a great bubble too. Let's ride it.
"...and stabilizing housing is now the best chance we have to limit the severity of recession."
I think the best way to stabilize housing is to imprison all the homebuilders, so they can't add to the oversupply by building more houses.
"was the FDIC and the SEC helping the US attny or WaMu?
SEC's a football conference"
I thought it was the Big 12, not the SEC.
and yet almost no housebuilders are going bankrupt.
why not?
Yeah cause just what we need to to keep housing less affordable...
that will solve everything
YTL,
"and yet almost no housebuilders are going bankrupt.
why not?"
Maybe the same reason they aren't foreclosing on some people.
Nostrovia,
HB bk's should start now that the Down Payment Assistance is gone
My local area home builders must be illiterate.
They are building 3 homes in my subdivision and clearing another half-dozen lots.
Of course, this is in the heart of Oil Boom Country, East Texas.
$147 Oil -----> $70 Oil might put a brake on things.
why not?
Yearning to Learn
Bob Toll had Satanson at a party three years ago. Satanson drank way too much, like he always does, and got caught with him pants around his ankles in the closet. Bob has it all on tape and Satanson knows this, so he gives them liquidity gifts when they need it. Or, that is what I was told by a friend of the sister of a housecleaner from Toledo.
Yearning to Learn writes:
and yet almost no housebuilders are going bankrupt.
why not?
Yearning to Learn | 10.16.08 - 1:42 pm
Ramifications of Homebuilders Dumping Land for Tax Breaks -- Seeking Alpha
Yearning:
If any are building on contract only, as is the local Lennar unit, they may just weather this thing.
There is a legitimate market for new houses and a few people who can manage it if they want to.
Yearning to Learn writes:
and yet almost no housebuilders are going bankrupt.
why not?
Illegal labor prices out at 50% of what was the going rate.This kept legal labor rates in check for the last 5-8 years. I've been in the res. construction business for 15 years and I couldn't increase my labor rates at all during the boom. House prices skyrocketed as labor prices went down or plummeted.
Why do people think gov't can stop fall in house prices?
Lisa Marquis Jackson at John Burns Real Estate Consulting notes in a recent report this latest headache for builder the loss of seller-funded downpayment assistance that allowed buyers to take 100% financing. She notes that buyers will now have to come up with at least 3.5% down, which your blogger thinks might not be the worst thing in the world. (Report IS HERE!)
Nonetheless, Jackson compiled this lists of big, publicly traded builders that details just how large a role this kind of financing played in recent sales:
Beazer: 20% of customers in 6 months ending June 30
Centex: 25% of closings in quarter ending June 30
DR Horton: 29% of closings in quarter ending June 30
Hovnanian: 16% of loans for 9 months ending July 31
Lennar: 45% of loans Lennar originated in quarter ending August 31
M/I Homes: 18% of closings in quarter ending June 30
Meritage: 14-15% of closings in quarter ending June 30
Pulte: 10% of closings in quarter ending June 30
Ryland: 18-20% of backlog in 6 months ending June 30
and Orange Countys own Standard Pacific: 12% of deliveries in 6 months ending June 30
Jackson notes: While some builders may have seen a recent uptick in sales attributable to promoting the fact that these programs will disappear, the long-term demand will certainly fall. Michael Rehaut at JP Morgan estimates that this could impact roughly 17% of new home sales.
Builders losing key financing trick - Lansner on Real Estate : The Orange County Register
FDIC was copying hard drives all over the place at WAMU HQ a block away from me. Woo hoo!
The most interesting thing they'll find on Killinger's old PC is that he achieved an unbelievably high score on Minesweeper.
good reasoning all.
I'm still surprised that more haven't been taken to the woodshed however. Many of them were burning cash with stock repurchase programs etc... so I'm surprised they've been able to stay liquid this long.
As to where to be...
Sold off TWM/RWM on Friday and rebought yesterday and will ride them a bit further.
Still looking at re-entry point for long purchases of good dividend stocks. Was originally going to re-enter about 9K but have scaled back and will probably wait until mid 7K.
Shnaps:
LOL.
I say, ship all the economists to Iraq and Afghanistan!
Fascist!
Cash is King.
Until it isn't.
"Why do people think gov't can stop fall in house prices?"
Because they can't force people to buy or banks to lend. I guess they could pass a law making it illegal for home values to drop past a certain amount, or everyone has to have a mortgage.
Weimar meme.
Trend Search
Breaks trendline about the start of September.
This is such a negative panic story, designed to suck the lifeblood from born and bred dope brains. You are all like little school girls running from the shadows of your flopping pigtails! As many will recall, things are very much on the opposite side of the fence and all you have to do is open your closed eyeballs:
Lawrence Yun, NAR chief economist said, "What we're seeing is the momentum of people taking advantage of low home prices, with pending home sales up strongly in California, Nevada, Arizona, Florida, Rhode Island, and the Washington, D.C., region," he said(2). "It's unclear how much contract activity may be impacted by the credit disruptions on Wall Street, but we're hopeful most of the increase will translate into closed existing-home sales."
Kunstler was just seen driving a new Hummer and looking at McMansions in the Inland Empire area. I was getting gas when he pulled up for directions. He said there had never been a better time to buy big.
Kona,
Huh?
think the best way to stabilize housing is to imprison all the homebuilders, so they can't add to the oversupply by building more houses.
Elvis | 10.16.08 - 1:39 pm | #
They could probably do with the free room and board at the moment...
eric in vegas writes:
"Why do people think gov't can stop fall in house prices?"
What's the term Jas uses to describe average Americans?
Elvis,
Re: Huh?
I always look to Yun for balance, it's kinda like a spiritual thing.
ew thread
Kona, the key word would be pending.
I live in Florida and know several realtors, they can't get anyone approved for financing. So the deals just sit there.
Elvis writes:
I don't think confidence is the appropriate term anymore.
I completely agree. Confidence is a modifier of the truth, but not truth itself.
I'm ready willing and able to buy honest values. But, I won't buy the current market for the very reason you cited.
Given that this market was pumped up by fake money, Popeye suggests that the market was also pumped up by "false expectations of what more could be built on { oops, fake money }.
At the moment, the market is in the process of discounting the extent of those false expectations.
Actual discounts are yet to come.
Yearning. I think the builders' BK's are coming shortly. I was in court this morning and heard of a couple builders (albiet not the big time buiders) who were consulting BK attys and anticipating filing within 30 days. The bigger boys can probably hold out a bit longer but it will only grow from there.
Comrade K,
Yes, the weak will be separated from the chaff.
KO,
What state?
a new stent and i feel great
boooyaa gah hahahaha
KO,
What state?
Elvis
And did you get off on your prostitution and public menacing charges?
Maybe not a lot of builder bankruptcies because the bankers don't want to have to write off the loans they made to them.
Someone questioned whether I was a bear ?
Someone questioned whether I was a bear ?
popeye
You are a sailor first and a lover second. That is all I need to know.
What's the term Jas uses to describe average Americans?
"Canucks".
At the end of the day, all the little builders will be flushed out of the system, and only the big boys will survive.
Unforutnately, this will lead to even less variety in future housing. One of the reasons the exurbs are getting crushed is that its all damn McMansions. Hey jackass builders - they make other styles ya know!
Unforutnately, the few who were doing good work with unique housing designes will get flushed, McMansions will still reign (just as wide to give the appearance of wealth, except now 1/2 as deep). And I will be more turned off than ever by anything built after 1930.
Speaking of builders and their banks it was customary for banks to proudly put up a sign on a builders site announcing they had provided the financing for the development. I don't see those signs anymore. How about in your neck of the woods?
I can see why as you drive by the development and it just sits there unfinished with loads of unsold homes.
Why announce to your depositors they are on the hook for this failed subdivision.
Elvis,
Thanks. Sails into the trade winds.
"What's the term Jas uses to describe average Americans?
"Canucks".
Nah, those are the above-average Americans.
In Oregon, Pacific Lifestyle Homes is going to file for bankruptcy (Ch. 11, I think) joining Legend & Renaissance Home builders who filed for Ch. 11 earlier this year (today's Oregonian). On the (OR)coast, at least one custom home builder has filed for BR (company name's been painted out on the sign of the office building).
An article earlier this week indicated that the PDX condo bubble has popped & some of the bigger condo developments are now "luxury apartments." Turns out Portland's not really different.
With his usual perfect timing & great intelligence, Bush has told the National Forest Service and the BLM to ramp up clearcutting aka deficit logging in western OR national forests to close to 1970's levels. According to Bush, we really need more lumber.
First timber cutting plan is out, it's horrible, & I hope that between administrative appeals, etc., & litigation no action is taken at least until after Bush leaves office.
Market discovers Pappies corn-liquor stash, quaffs, and will now load and clean gun.
Shnaps writes:
FDIC was copying hard drives all over the place at WAMU HQ a block away from me. Woo hoo!
When I left FDIC in 2005 they still didn't have anybody but 1 or 2 guys who could read them and they had like way bad DC tudes.
azurite - "With his usual perfect timing & great intelligence, Bush has told the National Forest Service and the BLM to ramp up clearcutting aka deficit logging in western OR national forests to close to 1970's levels. According to Bush, we really need more lumber.
First timber cutting plan is out, it's horrible, & I hope that between administrative appeals, etc., & litigation no action is taken at least until after Bush leaves office."
I'm in Souther Oregon and heard about this 1 week or so ago. Can't agree more about the desire for delay. Bush is the absolute savior of "GREED IS GOOD" in the most powerful CEO position in the world, plain and simple. But we still hold the largest group of shares, we just need to stop voting by proxy and stand up and demand a change.
Food for thought.
azurite,
Well, the Bush admin wanted to cut the offset payments to OR counties where logging on forest land had been restricted. But our Congressional reps put it back in the bailout bill. Besides, this cutting plan is DOA anyway; nothing will be done until the next administration. Due to public comment periods and litigation. It's just a fireworks show by the outgoing admin.