Interesting report.
The refi number from Freddie amounts to $200B, a fraction of the national amount that Greenspan figured was $350B last year. I wonder how Fannie's ability to perform these financing operations was affected by its 30% capitalization requirements that only recently have been fulfilled. Do other agencies ( Freddie, Countrywide?) just pick this up or is there some bottleneck if you happen to be a Fannie customer? [The things I don't know...]
A couple of details from that report: the huge value increase in the appraisals making the refi attractive even though the mortgage rates are up (appraisals that have since moderated considerably), and projections for less refi in 2006.
the delta between listings and contracts is slowing if not reversing in washington dc. over the past week, each day the number of contracts and listings continue to close the gap that we'd seen in sept and oct.
sales are way down of course, but thats a lagging indicator.
i'll keep you informed as i see it develop, but basically i'm seeing the market clearing ratio calming down....
Are there any data available of the number of 'loan reworkings' that occur? I forget the term that dryfly used to describe it, but it is the banks attempt to make the loan work for the buyer prior to foreclosing. Is that the difference between 'notices' and actual forclosures? I am assuming that the bank is going to lose money? anyway, so they might as well try with the consumer first?
Thanks for that link bbb. The trouble with these Treasury reports is that the Carib may be masking foreign CB purchases and there is no way to check until these countries post their foreign reserve holdings and you discover (Ok brad setser then) that China's foreign reserves have climbed significantly higher than what the numbers from the Treasury suggest.
Why would China (and a few others) want to behave in this psuedonymous fashion? Maybe yields improve if the perception is that interest rates on tbills are entirely profit driven?
The continued presence of central banks in these purchases accounts for one of the planks supporting the flattening yield curve. Hedge funds can not be too happy about being squeezed between this diminishing spread.
this is just a microcosm of what our federal government does, borrow from the future to fund today's expense. homeowners think when the time comes they'll just sell their ever appreciating asset since RE prices never go down. unfortunately for most people they have only one plan, and it's an optimistic one.
Anecdotal evidence, I just received an email from my old realtor saying I should look at a piece of property that is being sold by a speculator. It is in the Bay Area and the person cant sell it (probably because he wants $750/sq foot or $49/sq foot per month) when you can rent comperable at $1.5 to 2/sq ft per month). I figure the realtor must be desperate because I told him when I sold my place last summer that the market cant maintain these prices. He of course argued with me saying demand is strong (when I sold I had 10 offers in the first week. Now you are lucky to get an offer in a month). He failed to figure out what was driving demand in a place where jobs are being lost and people are moving away. If rates stay at this level the party is defiantly over and prices will start to drop (significantly) by March.
BobbyJoe, such sleazy numbers I thought were confined to auto sales (where I see GM [in its death throes?] has recanted its previous stance on incentives and now tells us that they will be in revived again to resurrect sales). Like the auto price tag of $27,9000 is not nearly so attractive as $249/month.
So $49/month per sq ft is dolling it up a little on the thick side.
Good for you to have figured this out and, more importantly, when to get out.
Goethe wrote a short story 'Hans im gluck' (Lucky Hans) about the village idiot who trades away his fortune (eventually) for nothing.
But he is happy. There is this steep gradient between how dumb and isolated Hans is compared to his smarter fellows in the village. There are more like Hans it seems to me now and the gradient not so steep.
The profile in fact seems quite inverted with few lucky ones exploiting anonymously the less informed, privileged and talented --the numbskulls who just want to have fun.
At their peril.
CR -- any thoughts on tomorrow's NAR result ? My prediction -- large increases over last year in sales and prices, but a slight drop from last quarter.
Another anecdotal bit of evidence that all is not well in River City... I just had some preventive maint done on my biz car... gets heavy use so I do lotsa routine maint on a regular basis. While there I asked my mechanic how business was... He does towing for both cars & semi's, U Haul dealer & has about 6 maint bays for autos but is an independent, not a dealer...
He said business was 'wierd'... more towing then ever but far less maintenance work than in the past... at least a lot less dollar value from their maintenance biz...
I said it makes sense... folks don't have cash... so they wait until the car breaks down then have to have it towed in and do the minimum to get it running again. Culprit: high energy prices (both gasoline & NG), increasing interest rates, weak local job market and stagnant real estate values all equal cash crunch.
I told him I'd expect it to get worse too... once the winter gas bills start coming due.
erg, isn't the NAR report in a couple weeks? Tomorrow we get PPI and retail sales. I'm mostly interested in inventory numbers, but I think you are correct on prices.
Interesting report.
The refi number from Freddie amounts to $200B, a fraction of the national amount that Greenspan figured was $350B last year. I wonder how Fannie's ability to perform these financing operations was affected by its 30% capitalization requirements that only recently have been fulfilled. Do other agencies ( Freddie, Countrywide?) just pick this up or is there some bottleneck if you happen to be a Fannie customer? [The things I don't know...]
A couple of details from that report: the huge value increase in the appraisals making the refi attractive even though the mortgage rates are up (appraisals that have since moderated considerably), and projections for less refi in 2006.
more presure coming on the long end of the curve...
Bloomberg.com
PHEW! when this is over, i might just be really cooked.
Most expensive RE in US.
SQUARE INCH FOR $1,500: A tiny parcel of land in southwest Indiana is some of the priciest real estate on the planet.
Owen County officials are trying to sell a one-square-inch plot of land for $1,500. At that rate, an acre of land would cost nearly $7 billion.
No buyers ponied up for the postage-stamp-sized plot during a tax sale.
"It's too small to plant a flower on," says the county's Peter Dorsey.
Officials think the tiny piece of land west of Bloomington was deeded to someone in the 1960s, when people had to own property to use a nearby lake.
Hope they got to use more than one inch of beach.
link
from the front lines:
the delta between listings and contracts is slowing if not reversing in washington dc. over the past week, each day the number of contracts and listings continue to close the gap that we'd seen in sept and oct.
sales are way down of course, but thats a lagging indicator.
i'll keep you informed as i see it develop, but basically i'm seeing the market clearing ratio calming down....
dc1000 -- isn't that very normal at this time of the year when new listings rarely come on the market ?
Are there any data available of the number of 'loan reworkings' that occur? I forget the term that dryfly used to describe it, but it is the banks attempt to make the loan work for the buyer prior to foreclosing. Is that the difference between 'notices' and actual forclosures? I am assuming that the bank is going to lose money? anyway, so they might as well try with the consumer first?
I don't know...just thinking out loud.
-Fred
erg:
none of my numbers or observations are 'seasonally adjusted' i just tell it like i see it.
all activity tends to slow in this time period although last year there was a real pop after the national elections in november....
but if contracts hold and listings drop, the recent increase in supply will diminish....and as such the market shall tighten...
this will take months to play out (if not years) so my observations are probably as useless as watching each trade of a single security...
but i thought it was worth noting
Thanks for that link bbb. The trouble with these Treasury reports is that the Carib may be masking foreign CB purchases and there is no way to check until these countries post their foreign reserve holdings and you discover (Ok brad setser then) that China's foreign reserves have climbed significantly higher than what the numbers from the Treasury suggest.
Why would China (and a few others) want to behave in this psuedonymous fashion? Maybe yields improve if the perception is that interest rates on tbills are entirely profit driven?
The continued presence of central banks in these purchases accounts for one of the planks supporting the flattening yield curve. Hedge funds can not be too happy about being squeezed between this diminishing spread.
this is just a microcosm of what our federal government does, borrow from the future to fund today's expense. homeowners think when the time comes they'll just sell their ever appreciating asset since RE prices never go down. unfortunately for most people they have only one plan, and it's an optimistic one.
Anecdotal evidence, I just received an email from my old realtor saying I should look at a piece of property that is being sold by a speculator. It is in the Bay Area and the person cant sell it (probably because he wants $750/sq foot or $49/sq foot per month) when you can rent comperable at $1.5 to 2/sq ft per month). I figure the realtor must be desperate because I told him when I sold my place last summer that the market cant maintain these prices. He of course argued with me saying demand is strong (when I sold I had 10 offers in the first week. Now you are lucky to get an offer in a month). He failed to figure out what was driving demand in a place where jobs are being lost and people are moving away. If rates stay at this level the party is defiantly over and prices will start to drop (significantly) by March.
BobbyJoe, such sleazy numbers I thought were confined to auto sales (where I see GM [in its death throes?] has recanted its previous stance on incentives and now tells us that they will be in revived again to resurrect sales). Like the auto price tag of $27,9000 is not nearly so attractive as $249/month.
So $49/month per sq ft is dolling it up a little on the thick side.
Good for you to have figured this out and, more importantly, when to get out.
Goethe wrote a short story 'Hans im gluck' (Lucky Hans) about the village idiot who trades away his fortune (eventually) for nothing.
But he is happy. There is this steep gradient between how dumb and isolated Hans is compared to his smarter fellows in the village. There are more like Hans it seems to me now and the gradient not so steep.
The profile in fact seems quite inverted with few lucky ones exploiting anonymously the less informed, privileged and talented --the numbskulls who just want to have fun.
At their peril.
CR -- any thoughts on tomorrow's NAR result ? My prediction -- large increases over last year in sales and prices, but a slight drop from last quarter.
erg - I bet you are right.
Another anecdotal bit of evidence that all is not well in River City... I just had some preventive maint done on my biz car... gets heavy use so I do lotsa routine maint on a regular basis. While there I asked my mechanic how business was... He does towing for both cars & semi's, U Haul dealer & has about 6 maint bays for autos but is an independent, not a dealer...
He said business was 'wierd'... more towing then ever but far less maintenance work than in the past... at least a lot less dollar value from their maintenance biz...
I said it makes sense... folks don't have cash... so they wait until the car breaks down then have to have it towed in and do the minimum to get it running again. Culprit: high energy prices (both gasoline & NG), increasing interest rates, weak local job market and stagnant real estate values all equal cash crunch.
I told him I'd expect it to get worse too... once the winter gas bills start coming due.
erg, isn't the NAR report in a couple weeks? Tomorrow we get PPI and retail sales. I'm mostly interested in inventory numbers, but I think you are correct on prices.
Best Regards.
Anybody have an estimate on how much equity extraction has added to consumer pocketbooks in the last couple of years?
thanks in advance,
marku, here is a paper by Greenspan: Estimates of Home Mortgage Originations
(pdf)
See figure 2 for equity extraction.
And a speech by Greenspan on mortgage banking
.
Best Regards.
Perfect. thanks CR!
debt to income ratio debt to income ratio debt to income ratio. wealth creation and reduce debt wealth creation and reduce debt wealth creation and reduce debt.