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Classic NAR BS. 2.4% is flying in the face of traditional seasonality and is a disaster for the market come Q3.
Yun said the appraisal problem is serious. “Lenders are using appraisers who may not be familiar with a neighborhood, or who compare traditional homes with distressed and discounted sales,”
Because "normal" homes are not competing with distressed sales?
Very much OT, but an interesting piece by Gary North of the Mises Institute, on the deflation - inflation debate.
Pushing on a String by Gary North
hey NAR welcome to the new market realities
I see: Appraisals trending down are a problem. The appraisers are problematic. They have faulty ideas.
Bad appraisers! Conform and multiply, or be ostracized by Mr. Yun.
(no dolphins were harmed in harvesting this tune-a)
They call him Home Flipper, Flipper, faster than lightning,
No-one you see, is smarter than he,
And we know Home Flipper, lives in a world full of blunder,
Lying there-under, under the sea!
Everyone loaned the king of the A.R.M.y,
Knowing his kind and gambler is he,
Tricks he will do when neighbors appear,
And how they laugh when he's near!
They call him Home Flipper, Flipper, faster than lightning,
No-one you see, is smarter than he,
And we know Home Flipper, lives in a world full of blunder,
Lying there-under, under the sea!
So if 99% of sales are distressed, they still don't count as comps?
JD
LOL I bet you love Nick At Nite...
This should be good for elmo
This should be good for elmo
I forget: Is bad news still good these days? or is it bad?
“In the past month, stories of appraisal problems have been snowballing from across the country with many contracts falling through at the last moment."
.....no kidding! Appraisals are down because comps are way down - Duh.
Do these guys have "NEW" stamped on their foreheads?
Yun. What a tool. Appraisals are now a problem because they are not allowed to just rubberstamp the contract price anymore!
Of course existing home sales have risen. The govt. is paying people $8K to buy a home, plus interest rates were at a low.
Now if govt. goes thru with the proposal (has it passed yet?) to give anyone, not just 1st time buyers, $15K to buy a home, watch the sales go up more. If they can keep interest rates low.
$15K cash back is a pretty good incentive for those waiting on the fence to buy.
jp, now even good news is bad .Time for the exciting ski slope down imho
Cramer is saying....see I told ya so.....
Yun had best be careful lest those places where distress sales make up the majority start throwing out arms length transactions as being unrepresentative of the true market of REOs and short sales.
ford to receive 5.9 billion in federal loans breaking bloomberg
"There is danger of a delayed housing market recovery and a further rise in foreclosures if the appraisal problems are not quickly corrected.”
Quickly corrected....... The beat goes on. The markets get to discount distressed sales so why not us too. Pretty soon they'll be no appraisal required because of all this "distress"
on the topic prior to this: Does anyone really believe that whoever gets the Fed slot will return it to generating sound fiscal policy? No matter who they put in it will just be a shill for whatever policy suits the big banks (and owners of the fed).
Nothing will change,,,oh there's Ford sucking on the teet..knew they would at some point.
Ciao
MS
Oh yeah, NOW IT'S THE APPRAISER'S FAULT.
I heart NAR.
Have Tom Vu and Larry Yun ever been seen at the same time?
That Vu he used to do:
YouTube - Tom Vu's "Three Little Words"
blunder is plunder torn asunder.
beg your pardon. it's late.
Roundup all the usual suspects, I say. Somebody must be responsible for all this, right?
Can we really assume that the appraisal problem is that they're too low?
Appraisers don't just show up, they are sent. Who's sending them and why are they being sent to a particular area that they don't know? Upshot is that the appraisals could also wind up being too high.
Started wondering something about my area - central PA - last week. Public auctions are always big in my area but I've noted that the real estate section of the paper is now listing auctioneer ads showing each with about 10 - 15 homes in county for sale in coming weeks. It's becoming significant. The question pertains to the sales price statistics...local rag periodically has article from county realty group talking about average home prices. But do their figures only cover what they're involved with? If not, then we're going to see a flawed reporting system with the realty groups saying one thing but the reality skewed downwards by the auctions. Bifurcated...
Can't wait to see the chart for this, where the magnitude of the seasonality FAIL will be clear..the one CR does with the same month columns colored by different years...and even with the dishonest "increase" from a revised lower previous month
http://4.bp.blogspot.com/_FM71j6-VkNE/SkDYSijncVI/AAAAAAAADjE/LFYF5Esycm4/s1600-h/goldman+bonuses.jpg
Nuff said.
( compliments of Zero hedge )
Yun's quote on appraisals was incomplete, should have read:
"Lenders are using appraisers who may not be familiar with why a neighborhood is special, or who compare traditional homes with distressed and discounted sales that are not special"
What if the end of modern ponzi finance came from fiscal discipline being forced on the banks in a widespread democratic default.
The only real modern equivalent to another "tea party" would be for all Americans to cast their debts into the sea.
The average TV viewer knows by now that bankers have captured the government. What if people thought the way to save their government from the bankers was to not pay the bankers any more?
Imagine the hilarity of U.S. consumers simultaneously forsaking all their debts, making all the current power structures and foreign creditors into the final suckers.
What if the consumer won?
Complain all you want about the NAR's spin, but the fact is that existing home sales are up +9.2% from last month on an absolute basis, without seasonal adjustment. Also, both median and average sales prices were higher everywhere except in the West. Bears need to look for a new source for their fix of schadenfreud.
Sebastian
Bernake used for plunder,taxpayer torn asunder, summers steals his thunder,bernake accused of blunder and the bus he is thrown under.
sebastian my wright model b is showing green shoots everywhere
May is just setting up june to go splat.
May was the beneficiary of lower interest rates and 5 fridays.
The only real modern equivalent to another "tea party" would be for all Americans to cast their debts into the sea.
The only way that would work is if they stopped racking up new debt. Is that possible?
Nice to see you back, Sebastian.
Give me three months of such data and I'll be more comfortable. One point doesn't make a trend.
Complain all you want about the NAR's spin, but the fact is that existing home sales are up +9.2% from last month on an absolute basis, without seasonal adjustment. Also, both median and average sales prices were higher everywhere except in the West. Bears need to look for a new source for their fix of schadenfreud
SebastianShoots
I believe it was Thomas Selfridge that piloted the Wright Model B into the Green Shoots
Sebastion,
Sorry, that's one data point.
We'll talk when it's 6.
--bh
Scrooge McDuck (profile) wrote on Mon, 6/22/2009 - 4:56 pm
Over at Mish's, he posted his main disbelief regarding hyperinflation:
"Given there has never been a hyperinflation in history where home prices have crashed, I have one question: Where are the hyperinflationist's recommendations to buy houses? Where? Please don't be a wimp about it. Is any hyperinflationist recommending houses?"
My first thought was that...if I thought hyperinflation was coming, I certainly wouldn't be buying now...I'd wait until hyperinflation. And not now, not when rent's crashing, average home prices still above historical highs, the well-to-do areas home prices still propped up, and possibility of increasing property taxes. Even during hyperinflation, I'd be a bit leery....who knows what kind of tax schemes the governments would impose on home owners?
What do people think?
Jim Rogers has said that eventually property will be a good buy for inflation.
However, even if property rises during 100% inflation, money market funds (MM) probably will pay 101%, and a MM probably will not charge $100k property tax.
The real estate play is not about the land but the leverage, if you want to gamble with debt.
Mish jumbles factors that I tried to separate in my deflation article.
Mish basically says you can't have (hyper)-inflation with crashing house prices--but didn't Keynesians basically say that you can't have inflation with falling employment?--until we did (1970s stagflation).
The only way that would work is if they stopped racking up new debt. Is that possible?
I think that that's what is happening now. Major dropoff in consumer spending with a rise in the savings rate.
I wonder what the reason will be next month.
Major dropoff in consumer spending with a rise in the savings rate.
Wasn't there a discussion re: whether those figures were pretty much about discharging debt and lower credit limits imposed by cc companies, not about actual saving?
The bankers steal, they gamble, they pay bonuses today with money borrowed against future tax dollars earned by unborn grandchildren.
They renege on their debts and bad bets with impunity.
If everyone ends participation in the credit system, the credit system dies. If the suckers forsake the casino, the casino gets shuttered. Revenge by consumer debt renouncement would serve the banksters right for the Total ethical failure of US financial institutions and regulators.
Morse code, that's what I've been saying -- if you want to revolt, stop consuming. We're giving them our $$ thru our debt payments. I'll join with you on this one.
I have to edit to say that not paying debt will only result in it being paid thru taxpayer funded bailouts. The problem has to be nipped in the actual consumer bud.
Seb we both know that seasonality is big this time a year. Also average price will rise as the housing mix changes.
I really hope you were just trying to get a rise out of us....
If not I have nothing to say...
It's a complete flip-flop from the fall of communism, ain't it?
When communism fell, the people had nothing and were so sick of the regime, that collapse just came as a matter of course. Consumerism filled the void nicely for awhile.
When consumerism fails, the people will have everything and hope to keep the status quo no matter what. There is nothing to fill the void this time around, a classic collapse scenario.
Savings Rate:
Income - Federal taxes - Expenditures= Savings
Don't pay your more mortgage, your expenditures go down, your savings up.
Higher savings rate is correlated with less debt service (borrower default, ruthless or not).
--bh
Lately I've been tracking foreclosures as stated on realtytrac.com website.
This could get much worse with rates heading up.
5/16 1,874,881
5/24 1,914,971
6/1 1,940,773
6/11 1,905,356
6/22 1,944,419
Could you sugar coat this for me Seb?
JD did you know who Thomas was or did you have to look him up? Either way LOL....
homedad43 said: "Give me three months of such data and I'll be more comfortable. One point doesn't make a trend."
You're absolutely right, and just for the record I'm not seeing any "green shoots" in any of the data I'm following. However, my undoing came from denying data that didn't support my position and I'd just like to make sure that others don't fall into the same trap. The data is what it is.
Sebastian
I think Mish has painted himself into a corner. He was right early on, but needs to change his tune to fit the changing times...
Hyperinflation needs a tangible vehicle, be it debased coinage or debased currency. We will not see that beast, but a different kettle of fish heretofore unseen, so we have no idea what to look for, hidden away inside our enigma machines.
outsider,
""The only way that would work is if they stopped racking up new debt. Is that possible? "
Credit is getting shut down all over. I checked all my zero balance credit cards that hadn't been used in a few years, some that I held for over a decade and 60% were closed in January and February. I had financed a small business with them.
This kind of thing cuts off new debt. One reason I was given is that if I wasn't goig to use the credit they needed to allocate it to someone else.
eh....sounds like the appraisers are actually doing their jobs correctly!
I'm going to shop for a Tickle-Me-Elmo doll. Need one for this next leg down
Sebastian, are you really Timmah?
j.d ,looked up selfridge per nades, clever and succinct- +11
The appraisers just need to be reminded to use "significant judgment". Give them a little bonus money. They'll catch on.
europe falling to elmo blitz
I don't advocate defaulting on your debts, I'm saying widespread debt dumping rooted in insolvency can catalyze with political dissent into a neutron bomb that leaves no banker standing. The bad banks could conceivably be forced to fail by the people.
Appraisal problems.
If there is one state you do not want appraisal problems ,it is Ohio.
If you receive a flawed appraisal and there is appraiser misconduct, the State of Ohio makes a deal with the appraiser for
minium punishment. You get nothing from your appraisal complaint, but "we followed the law".
By my personal experience after 3 years I can tell you the Commerce Dept,Div of Real Estate and Professional Licensing
are the most unethical people you want to know when their Ohio Licensed appraiser caused you financial harm through a bogus appraisal.
The worst is that from the Governor to your elected officials ,they could care less. Ohio talks big,but like the federal government there is no enforcement of the laws such as they are. If you like getted screwed in real estate this is the state for you.
Michael LittleBig
banks no likey the seasonal numbers,, faz at HOD
nice rant --- - .. ... .... . .-. - --..
that might be the only way...
The Tom Vu vid was awesome. Thanks JD.
List in May and go away.
Not just home sales appraisals. A friend listed and sold his home in May out of Miami; his realtor had several homes go to contract; only his completed. All the others fell through on a re-appraisal problem.
The re-assesments for tax reasons are nearly done in most of the South Florida area and will be out Mid-August. From what I understand, they're going down again (unofficially), putting homes (finally) below 2003 levels (those that went up without Save Our Homes limits). But the mil rate is going up so taxes won't go down.