'“The unemployment rate is going to continue to rise," Greenspan told me, "but more slowly than it’s been.”
There's one caveat to this, however. Housing prices, he said, must remain stable.
So, when exactly have we achieved "stability." Are we still looking at the derivative, or have prices actually gone up?
"If you get another dip and a renewed decline in prices, we're going to run into an acceleration of a number of homes that are less than the debt,” he said. “If that happens -- and, clearly, looking at the structure of where debt and values, it would, if, for example, home prices fell by 10 percent or more -- that would create a major acceleration in foreclosures."'
Ah, such insight from the master bubble blower. How close are the bubble states, to max capacity on foreclosure processing?
According to Zillow's latest Homeowner Confidence Survey, 12 percent of homeowners said they would be "very likely" to put their home on the market in the next 12 months if they saw signs of a real estate market turnaround, 8 percent said "likely," while 12 percent said "somewhat likely."
For comparison: What % of homeowners does the current inventory represent?
This is off-topic, but if you can spare about 10 minutes to take a survey I would love to hear about how the global recession is (or is not) changing your personal or organizational IT plans.
This is part of a study I am conducting for my own blog (http://www.surkan.com) and I will be making the results freely available in the coming weeks. I am doing this as part of my own private research effort, and it isn't being done on the behalf of any corporations or clients. This subject (i.e. how the economy impacts IT trends) is something that has fascinated me for years while I was employed as a market researcher at Microsoft, and now that I am no longer with the firm I am free to really explore the subject.
I don’t have any fancy prizes, or incentives, to offer you for taking the survey (i.e. I don’t have any kind of research budget), but I can promise the reward that comes from helping your fellow man, and making the world a better place.
Ok, that’s a little over the top… But your contribution (through answering the survey questions) will go towards helping the tech industry understand how to better meet your needs in a changed world. If nothing else, the results of this study should prove to be an interesting read for anyone.
The rental market provides anecdotal evidence of a shadow inventory. In most markets, vacancy rates are shooting up. Given the decline in homeownership rates, this is clear evidence of would-be sellers renting out their houses and condos "until the market turns around." Ironically this makes renting more attractive which ultimately drags on the purchase market.
Just signed a lease for a new 2000 sq ft luxury townhome at $1200/mo with identical units listed for sale at $260-270k. Why buy when you can rent for so much less?
Obama is naive in ways that even his supporters didn't expect. His public comments in regard to Henry Gates and the police are indicative of that naivete. Did he not realize that when one cop is criticized, every cop in the country will stand behind him that cop, regardless of how wrong he might be?
Obama is equally, but much more disastrously, naive in the trust he places in his advisors--Summers and Geithner in particular, and in his own ability to forge a bipartisan consensus with the pack of hyenas called the Republican Party.
His wish to address Health Care is laudable, and long-term an imperative, but he is squandering political capital on pushing it instead of employing that political capital to clean up the financial/economic mess he was left with.
He has been assured by his advisors that his only viable option was to save the status quo, and that it could be accomplished.
But it can't. And as he finally discovers this over the next few months, it will also dawn on him, belatedly, that he has no credibility left to do what has to be done.
At best he's another Jimmy Carter. At worst he's the last President we'll have.
Because, as Jim Willie pointed out a year ago, as long as house prices continue falling, so does everything else. The last card to fall will be the dollar, and when that goes so does life as we know it.
"“The unemployment rate is going to continue to rise," Greenspan told me, "but more slowly than it’s been.”
There's one caveat to this, however. Housing prices, he said, must remain stable."
And this is the crux of the reflation efforts. All available forces are being brought to bear on house prices, to oppose the natural economic forces pushing prices down further. I think Summers and Bernanke and others see this as the key to general reflation and a return to 'normal', defined to be what was happening in 2005 or so. Some efforts were diverted in the last few months to reflating the stock market, but the main goal remains reflation of house prices.
"All available forces are being brought to bear on house prices, to oppose the natural economic forces pushing prices down further."
The meme that income is a function of housing, instead of the other way around bothers me to no end. That one's house is a source of income, rather than income affords you a house.
As for a large amount of REOs waiting in the wings to be unleashed on the market. I am simply not seeing it.
Foreclosures are a matter of public record and you can basically see the "float" of homes that were repossessed but not put on the market. There are some homes that this is the case, most are simply in the process getting them to market (eviction, trash out, bpo... i.e. the pre-list phase) there are a smaller number that have that question mark "Why hasn't that been put on the market yet".. but it I haven't seen its this huge number here in So Cal.
I'd love to be proven wrong.
FYI, for those that didn't see the post yesterday I posted the trustee sales for July for San Diego, Los Angeles, Ventura and Orange county over at Effective Demand
Going to be tough to keep them malls open when there customers don't have any money too. Also car dealers, boat builders etc. Boats being actually made in America
"His wish to address Health Care is laudable, and long-term an imperative, but he is squandering political capital on pushing it instead of employing that political capital to clean up the financial/economic mess he was left with."
He has been assured by his advisors that his only viable option was to save the status quo, and that it could be accomplished.
But it can't. And as he finally discovers this over the next few months, it will also dawn on him, belatedly, that he has no credibility left to do what has to be done.
"
So true, so true; even the health care changes are beginning to look like a donkey where a horse is needed!
According to Zillow's latest Homeowner Confidence Survey, 12 percent of homeowners said they would be "very likely" to put their home on the market in the next 12 months if they saw signs of a real estate market turnaround, 8 percent said "likely," while 12 percent said "somewhat likely."
40,000 units figured as forclosed not on the market. This is from fairly qualifed reports from ASU, realtors etc.
90,000 units in some state of forclosure 60+days past due.
Investors are buying up the very low end, $30,000 to $50,000 for rentals. Nothing in the $100,000. range or over. A small segment of population buying under $200,000. for first time buyers, these are short sales or REO for the most part. About 60% of all sales here are short or REO.
Yet another indicator of the developing systemic crisis, the futile attempts at controlling out-of-control events. These vermin are drowning in their own vomit.
Foreclosures are a matter of public record and you can basically see the "float" of homes that were repossessed but not put on the market. There are some homes that this is the case, most are simply in the process getting them to market (eviction, trash out, bpo... i.e. the pre-list phase) there are a smaller number that have that question mark "Why hasn't that been put on the market yet".. but it I haven't seen its this huge number here in So Cal.
Effective demand:
There are some problems with using only foreclosures when looking at this so-called "shadow" inventory. Among them
1) there were several foreclosure moratoriums in your state and in your area. Thus, there were many people who "should" have been foreclosed upon who instead are sitting in default but not foreclosure.
2) the banks are so far behind on foreclosures due to not having foreclosure staff. there simply isn't enough people to process the foreclosure
3) many people are trying to get a loan mod. some of these will try to stay in the house, but thus far >50% redefault if memory serves.
regardless:
NOD data from SoCal and the rest of CA is not reassuring
Nor is the 30, 60 and 90 day delinquency data coming from the banks.
not sure I'd get too complacent if you're only using foreclosure data. (perhaps you're using more than that)
"GEITHNER: That's something we're very focused on, again. We need recovery to be built on private demand, private spending. Businesses taking a chance again on the American economy."
This was exactly why the GD1 lasted as long as it did. What sensible person would risk their own money (as opposed to OPM) on an economy that is solely supported by government spending and gimmicks (CFC/ House tax credit) and super low interest rates.
When the economy looks like it is making a bottom without the benefit of these crutches private capital will come in but not until them. I wonder when these supposedly smart people will come to realize that these measures are the equivalent of neck brace- used judiciously it can well the neck muscles recover. However prolonged use results in an atrophying of the muscles and leaves you worse off than before.
Per earlier comment, we are in eastern WA state. But i've seen similar trends in the Seattle area. Vacancy rates are going up everywhere from the data I've seen, particularly in the more bubbly markets.
Here is my thinking on what BO is thinking about health care and the economy.
If we can get people off business provided health care, it will lower costs. Those savings can be used to lower prices, increase the bottom line, maybe boost retirement provisions or hire more employees. With health care a fair part of compensation for the average paid worker, lowering those cost will make a diferance.
Most employees have no idea what their health care cost the employer. The cost is not just the premiums, it is man hours to fill out paperwork, track, bid out, collect, payfor, report etc etc etc.
I think we need to add to the MLS listings also the number of properties that are being sold by owner only. I don't have any hard data but my gut feel is that this number has been increasing as a result of the internet and sites like Craig's list .
I absolutely agree that the number of homes in the foreclosure process is huge and growing.
My point is that the homes getting taken back by the bank and not on the market, from my cursory research (taking APN's and looking on the MLS to see if they have been listed, doing a sampling of those every month for REOs 4 months back) is pretty small.
Since the political pressure is so great on servicers until I actually see them foreclose on homes I simply dont believe they will. TPTB are saying they dont want foreclosures. The servicer are doing so much more than they are given credit for to reduces foreclosures.
@josap
"Most employees have no idea what their health care cost the employer. The cost is not just the premiums, it is man hours to fill out paperwork, track, bid out, collect, payfor, report etc etc etc."
The doctors are not happy either; @ Kaiser my primary doctor changed three times in three years! with every new one, it was the same story all over again, do this test over again...Curing a chronic problem like GI is so difficult in the present system. Also @ Kaiser, damn if a doctor visit would last more than 15 mins! They seemed to be all on something and on a leash.
"Since the political pressure is so great on servicers until I actually see them foreclose on homes I simply dont believe they will. TPTB are saying they dont want foreclosures. The servicer are doing so much more than they are given credit for to reduces foreclosures. "
debtfree I believe that Kaiser MDs have quotas that is they need to see a certain number of patients per shift. Kaiser makes money by denying care. Plain and simple.
I don't see many FSBO properties in Phx. What I am seeing a ton of is "for rent by owner".
They can't sell, they can't make the payments. They may have had to move for a job. Some people are renting a much cheaper house, then renting the old one. Thus trying to continue to make the payments on the old house by lowering their cost of living with a cheap rental.
Old house payment $1200.00
Rent cheap house 900.00
Rent income on old house 1100.00
less out the door every month 200.00
This works for people who did not drain every penny out of the housing ATM. It won't work for houses really really underwater. Also people don't think about rental repairs and are soon behind the eightball.
"The servicer are doing so much more than they are given credit for to reduces foreclosures."
A shadow moratorium? When does it end? When do MBS owners start finding a greater return from foreclosure than not? If mark to market returns does that change the equation?
btw, as you see from the trustee sale graphs on my site the trustee sale investors are having a field day. Since supply is constrained by the political pressure on the servicers the trustee sale investors are stepping in and making the money instead of the bank making it.
I also have been following one trustee (recontrust, BofA/CFC trustee).. they post a trailing 30 day list of REOs and all the NTS. Following the trailing 30 day list since June.. it has been falling statewide for CA. NTS have been increasing during this time.
The market has such low inventory at this time in banks could double foreclosures and not flood the market. You have 5% rates, a tax credit and hopium, Its a great market to liquidate supply into in So. Cal.
The fed is printing up $1.25 trillion to buy up MBS and 300 billion to buy up treasuries to keep long rates low... Why not take advantage of that to clear up the problem sooner rather than later? TPTB want to use the opportunity to modify as many loans as possible but instead of having one solution, why not have many solutions and lets the lenders make the choice that makes the greatest economic sense?
Hate to disagree with your comment that the bulk of price declines are behind us. That may be true for low end areas like Phoenix, but in higher priced locations like the SF Bay Area, the price declines are going to last the next decade, and I expect to see declines of at least another 30%.
In the South Bay (Cupertino/Sunnyvale/Santa Clara/Saratoga), in the 1M+ range, prices have declined barely 10% from the peak. The main drivers for wealth around here are stock option wealth, which is a thing of the past. The only thing really propping up the market is the relatively high % of dual income wage earners. Tech companies have not really done large layoffs yet. But with the rest of the economy is terrible shape, I don't know how tech companies can afford to hold onto their bloated workforces. I also don't see much evidence of pay cuts yet.
In the market, I routinely see homes that would list for 1.2-1.3M rent for 3K-3.3K. I just don't see how that math works out.
If "everyone wants to live here", those rents won't be that low. A million dollars is a lot of money (again) - it's just that home sellers here haven't gotten the message yet.
I would bet there are many high end locations like the SF Bay Area where this is true.
debt free. Kaiser is relatively cheap I hear. I hope you find good prices outside. Good luck.
Ba Lurker.
Million dollar Vallejo homes etc. Low rents or High price to rent ratios show that financing is still to easy or people are stretching too thin to make the mortgage IMO. I agree with you.
About 10 years ago my flip-off finger swelled to about double it's normal size, and I had Kaiser for health insurance, and over the course of 3 visits in one month, I was told by 3 different doctors that it was no big deal, although the swelling never went down. One doctor told me to take aspirin...
I decided to go to a different Kaiser location, the one on Cadillac in L.A., and the doctor there was somewhat incredulous that the know-nothing troika in the other location seemed unconcerned, and he scheduled me for surgery, and all went fine.
I had to 86 Kaiser out of my life, they really hope you'll get better on your own accord...
Price declines are over for the low end in Phx. The middle (350,000.00) is still coming down. The high end is just starting it's decent.
That is in the nice, center areas. The outer areas have fallen to what looks like rock bottom. In Queen Creek or Maricopa you can pick up a $320,000.00 McMansion for $80,000.00 today.
Queen Creek area is so bad that an housing area next door to the official city has legaly changed it mailing address to some other name to try to get the stink of their market. Can't remember the new name at the moment.
A shadow moratorium? When does it end? When do MBS owners start finding a greater return from foreclosure than not? If mark to market returns does that change the equation?
Definitely servicers are holding back foreclosing. You can see that in the ratio of NOD/NTS relative to REO. I'd love to know when it ends. The water is building behind the dam.
I heard tremendous things about June, all the servicers were supposed to open the spigots in June. And at the start of June it looked promising. But then the political pressure got ramped up again and as we see by Julys numbers the servicers stepped back.
I'm a member of Kaiser and they have been remarkably responsive to any problem that I have had. That includes some that required rapid action, the consequences of inaction could have been serious.
I think that generalizations, based on either your experiences or mine is not informative.
Okay if minimum wage is $8-10/hour and you work full time and there is two incomes that is 40k per year before taxes. Homes for these people in the 80k-120 range is within reach with a 30 year mortgage. So yeah that may be the bottom for those homes.
I don't see how the forclosure spigots get turned on.
It is political suicide for any elected official.
It forces banks to lower the asset value.
It would scare the hell out of J6P to hear any news of massive numbers of forclosures.
How many of these people would really be in the street? What percentage of the properties are in forclosure due to job loss?
It floods the market with more vacant properties.
It lowers the values further on ajoining properties.
They are going to bleed these slowly into the market. They are praying that they can walk the tight rope. And not fall off for many years to come.
"I'm a member of Kaiser and they have been remarkably responsive to any problem that I have had. That includes some that required rapid action, the consequences of inaction could have been serious.
I think that generalizations, based on either your experiences or mine is not informative."
40 Million people without access to routine health care is a big problem! What I do not understand is that BHO is trying to solve that problem for vote reasons or is he trying to address the runaway cost of the existing programs such as medicare and medicaid.
Goes to show that they are doing a terrible job of letting their message out. BHO's white house is getting the undelable (sp?) stamp of being a GS/Chase lapdog. People don't forget once a label sticks.
I had just finished a backpack trip of about 100 miles, and my feet swelled up a bit and my wife was concerned, so we hoofed it over to Kaiser, and the know-nothing doctor pronounced that I had diabetes after looking at me.
My wife asked how he knew that, and he had no answer, nor did I have diabetes as it turned out~
In this economy, with unemployment increasing, depending on two incomes to pay increasing debt is nuts. What people need to be figuring out is how to live on one income or two half incomes.
Obama is naive in ways that even his supporters didn't expect. His public comments in regard to Henry Gates and the police are indicative of that naivete. Did he not realize that when one cop is criticized, every cop in the country will stand behind him that cop, regardless of how wrong he might be?
so be afraid to criticize a cop, is that your point? Hey! they work for us, never forget that.
Do you think that even the NOD or NTS are being held back?
Yes, but I think they are being held back on those contacting their servicers early in the process and so most likely to find some other resolution (short sale, loan mod, deed in lieu). Many short sales don't have NOD filed...
My landlord has had a NOD filed over 90 days but not NTS. No telling what is going on there.
"They are going to bleed these slowly into the market."
How will they keep in front of defaults? Liz provided an anecdote last night, that due to backlogs in the foreclosure courts, it would take 15 years to work through the existing inventory. Imagine being able to live rent free that long. How long before a secondary market arises to arb that disconnect? Defaulted owners renting...
Good thing he didn't try to pump you up with insulin or put you glycemics
Josap
I am a bear and there are Min wage jobs still available. Everything above that not so much. Home prices above 400k will get taken down hard in this "recovery"
//How long before a secondary market arises to arb that disconnect? Defaulted owners renting... //
After the deep pocket investors clean up on the low end REO properties.
Then there will be a resurgence of firms that will offer to take over (with a short sale) your mortgage. They will then rent the house back to you with a lease option for 5 years at an inflated rent amount (part to be used for the future down payment). I have seen this used several times in the past. The old owner is never able to rebuy the home due to the contingencies in the option paperwork.
Transcript of taped conversation between President Richard Nixon and John D. Ehrlichman (1971) that led to the HMO act of 1973
Ehrlichman: “Edgar Kaiser is running his Permanente deal for profit. And the reason that he can … the reason he can do it … I had Edgar Kaiser come in … talk to me about this and I went into it in some depth. All the incentives are toward less medical care, because …”
President Nixon: [Unclear.]
Ehrlichman: “… the less care they give them, the more money they make.”
President Nixon: “Fine.” [Unclear.]
Ehrlichman: [Unclear] “… and the incentives run the right way.”
Aug. 2 (Bloomberg) -- The most severe recession in at least five decades may be ending and growth may resume at a rate faster than most economists foresee, former Federal Reserve Chairman Alan Greenspan said.
“We may very well have 2.5 percent in the current quarter,” Greenspan said in an interview today on ABC’s “This Week” program. “The reason is there has been such an extraordinarily high rate of inventory liquidation that the production levels are well under consumption.”
The U.S. economy contracted at a better-than-forecast 1 percent annual pace in the second quarter, the Commerce Department reported July 31. Stabilization of housing markets and consumer spending, a lessening of financial turmoil and increased government spending all suggest the longest recession since the 1930s may be close to ending.
“I’m short-term optimistic, but with many caveats,” the former Fed chairman said. Housing markets have “stabilized temporarily” though it is “possible” the economy might relapse if there is a further slide in home prices of more than about 5 percent.
"Housing markets have “stabilized temporarily” though it is “possible” the economy might relapse if there is a further slide in home prices of more than about 5 percent."
"Update: Hugh Hefner and his wife, Kimberley, have sold their personal residence, next to the Playboy mansion in Holmby Hills, for $18 million. It had been listed since early March at $27,995,000."
18 million to live next to the Playboy mansion... I wonder who the buyer was.
Someone posted this earlier today but I think it is interesting enough to post again.
SAN FRANCISCO (Reuters) - California's largest state employees' union voted on Saturday to approve a strike authorization measure to protest furloughs of state workers and pressure state officials to ratify its labor contract.
A spokesman for Service Employees International Union Local 1000 said a strike was not imminent but that the vote authorized union officers to initiate certain job actions, including a strike if necessary.
The SEIU represents about 95,000 state employees, including clerical workers and teachers.
Yesterday I added some Alameda County Trustee Deed data to yours. I also had compared the public records info available on the web with Dataquick's historical numbers that the SF Chronicle had published about a week ago.
They didn't compare well. Dataquick's numbers were typically 2/3 of the public records numbers. Maybe DQ has a sophisticated process that eliminates double counting due to multiple loans foreclosing on the same property or something like that, but there was a significant difference between the two sources.
If they did, I think it would force the governor to do mass layoffs. They all get to keep their jobs for lower pay, or some of them get to lose their jobs with the remaining getting pay restored. I don't see the math working any other way.
Although OT right now, homeowner associations have been a frequent topic here. The New York Times has what I think is a balanced analysis why unit owner disagreements happen and how they can best be solved. (I wish I had read this 5 years ago...):
On public records queries you will get a NTS (for example) for each person on the deed. So if its a NTS for John & Jane Doe.. you will have 1 for John Doe and one for Jane Doe. It could be the source of the additional counts. I heavily researched the Dataquick numbers in early 2006 and could find no fault with them. As far as I am concerned they are the gold standard.
Off-topic: what would stop one hedge fund manager from calling another and saying, "we're in trouble, redemptions are going to put us out of business unless we do something. what do you say we - buy - EVERYTHING." Then that manager calls another and he calls another and so on.
If you can't think of a reason why it wouldn't happen, then it has.
what would stop one hedge fund manager from calling another and saying, "we're in trouble, redemptions are going to put us out of business unless we do something. what do you say we - buy - EVERYTHING."
Because the guy he'd call would make a ton of money by shorting the positions of the hedge-fund-in-trouble and then publicizing that they are going to go under.
“I’m short-term optimistic, but with many caveats,” the former Fed chairman said. Housing markets have “stabilized temporarily” though it is “possible” the economy might relapse if there is a further slide in home prices of more than about 5 percent."
Way to say absolutely NOTHING! OF COURSE home prices will fall another 5%, every indepedent analyst who follows the market knows that. We had a tiny spring bounce and now it is time for the next leg down. So MaGoo is an optimist predicting further declines. Doublespeak as usual.
JP - a rival hedge fund could do that any day of the week. Probably wouldn't work unless there was some truth to the rumor that the targeted hedge fund actually was in trouble.
And to clarify the first post, the first hedge fund wasn't saying his fund was in trouble. The "WE" referred to all hedge funds. All hedge funds would be in trouble with 10% quarterly losses.
I bought a condo in 2001 in coastal San Diego for $280k. At the peak similar units were selling north of $500k. My wife and I are now renting a house and renting out our place for $1,750/month, which considering HOA/property tax/PITI, would be "break even" for a $325k sales price, max. Which probably puts the real value at $250k or less.
I feel sorry for my fellow condo owners, all but one who paid north of $400k for their units. Ouch.
The number of listings should not be used as a measure of inventory. The best measure is the Census Bureau's tabulation of total units, whether they are listed for sale or not. Right now, Census's data tell us that we have abnormally high vacancy. The shadow inventory is part of this, and simply illustrates that as the homes listed for sale get sold, more will come on to the market. The total housing stock and vacancy data, which CR summarized last week when they came out, is the best measure of the housing situation. And it looks lousy.
a neighbor just sold their house at 400x monthly rent,multiple offers,sold for more than asking in 3 days.A nice 3/2 on 2 acres near sebastopol.Buying a home is NOT a rational decision for 95% of buyers.
Everyone seems to forget that these mortgages were all sliced and diced and sold off. The courts have been reluctant to foreclose because the banks don't know who holds the paper. A lot of properties are in limbo as a result.
Re: The recession of 58, the year I graduated from college. I got an offer from Boeing but did not take it as I wanted to stay in the Bay Area. Thank god I turned them down or I would have been one of those Boeing workers who were asked, when leaving Seattle, to turn the lights out. Shopped my resume and took an offer from FMC, known as Foolish Machinery and Comical Corporation. Thank god I was in California and the War Department was spending like a drunken sailor.
Richard Nixon's war on Southern California/NASA drove me out of SoCal back North into the arms of NASA. Best decision l made about who to work for. I figured that I had been working, since high school, for some corporation whose teeth were afixed to a government teat so why take seconds when one could clamp on to a teat with your own mouth?
Best to you all.
nemo
(porkchops from last thread...)
hjALmar Greenspan is still quite a good figure obfuscator, capable of intricate spins and rotations...
OT- New use for strip mall parking lots and empty construction dumpsters.
Dumpster Diving | ReadyMade Magazine
'“The unemployment rate is going to continue to rise," Greenspan told me, "but more slowly than it’s been.”
There's one caveat to this, however. Housing prices, he said, must remain stable.
So, when exactly have we achieved "stability." Are we still looking at the derivative, or have prices actually gone up?
"If you get another dip and a renewed decline in prices, we're going to run into an acceleration of a number of homes that are less than the debt,” he said. “If that happens -- and, clearly, looking at the structure of where debt and values, it would, if, for example, home prices fell by 10 percent or more -- that would create a major acceleration in foreclosures."'
Ah, such insight from the master bubble blower. How close are the bubble states, to max capacity on foreclosure processing?
Greenspan: 'We've already seen the bottom' - George's Bottom Line
According to Zillow's latest Homeowner Confidence Survey, 12 percent of homeowners said they would be "very likely" to put their home on the market in the next 12 months if they saw signs of a real estate market turnaround, 8 percent said "likely," while 12 percent said "somewhat likely."
For comparison: What % of homeowners does the current inventory represent?
This is off-topic, but if you can spare about 10 minutes to take a survey I would love to hear about how the global recession is (or is not) changing your personal or organizational IT plans.
IT Recession Questionnaire
This is part of a study I am conducting for my own blog (http://www.surkan.com) and I will be making the results freely available in the coming weeks. I am doing this as part of my own private research effort, and it isn't being done on the behalf of any corporations or clients. This subject (i.e. how the economy impacts IT trends) is something that has fascinated me for years while I was employed as a market researcher at Microsoft, and now that I am no longer with the firm I am free to really explore the subject.
I don’t have any fancy prizes, or incentives, to offer you for taking the survey (i.e. I don’t have any kind of research budget), but I can promise the reward that comes from helping your fellow man, and making the world a better place.
Ok, that’s a little over the top… But your contribution (through answering the survey questions) will go towards helping the tech industry understand how to better meet your needs in a changed world. If nothing else, the results of this study should prove to be an interesting read for anyone.
Overhead supply everywhere. Stocks, RE, will keep a lid on prices and the fact that many people are underwater will force some people to sell anyways.
How about a chart of Case-Shiller median home prices vs median household incomes for the 20 cities.
The rental market provides anecdotal evidence of a shadow inventory. In most markets, vacancy rates are shooting up. Given the decline in homeownership rates, this is clear evidence of would-be sellers renting out their houses and condos "until the market turns around." Ironically this makes renting more attractive which ultimately drags on the purchase market.
Just signed a lease for a new 2000 sq ft luxury townhome at $1200/mo with identical units listed for sale at $260-270k. Why buy when you can rent for so much less?
whereabouts?
Punxatawney, where else?
6 more weeks of inventory?
Obama is naive in ways that even his supporters didn't expect. His public comments in regard to Henry Gates and the police are indicative of that naivete. Did he not realize that when one cop is criticized, every cop in the country will stand behind him that cop, regardless of how wrong he might be?
Obama is equally, but much more disastrously, naive in the trust he places in his advisors--Summers and Geithner in particular, and in his own ability to forge a bipartisan consensus with the pack of hyenas called the Republican Party.
His wish to address Health Care is laudable, and long-term an imperative, but he is squandering political capital on pushing it instead of employing that political capital to clean up the financial/economic mess he was left with.
He has been assured by his advisors that his only viable option was to save the status quo, and that it could be accomplished.
But it can't. And as he finally discovers this over the next few months, it will also dawn on him, belatedly, that he has no credibility left to do what has to be done.
At best he's another Jimmy Carter. At worst he's the last President we'll have.
Because, as Jim Willie pointed out a year ago, as long as house prices continue falling, so does everything else. The last card to fall will be the dollar, and when that goes so does life as we know it.
"“The unemployment rate is going to continue to rise," Greenspan told me, "but more slowly than it’s been.”
There's one caveat to this, however. Housing prices, he said, must remain stable."
And this is the crux of the reflation efforts. All available forces are being brought to bear on house prices, to oppose the natural economic forces pushing prices down further. I think Summers and Bernanke and others see this as the key to general reflation and a return to 'normal', defined to be what was happening in 2005 or so. Some efforts were diverted in the last few months to reflating the stock market, but the main goal remains reflation of house prices.
It's gonna look a little weird when $3 an hour jobs are good as it gets for the hoi ploy, and yet their homes are still worth $300k somehow?
"All available forces are being brought to bear on house prices, to oppose the natural economic forces pushing prices down further."
The meme that income is a function of housing, instead of the other way around bothers me to no end. That one's house is a source of income, rather than income affords you a house.
As for a large amount of REOs waiting in the wings to be unleashed on the market. I am simply not seeing it.
Foreclosures are a matter of public record and you can basically see the "float" of homes that were repossessed but not put on the market. There are some homes that this is the case, most are simply in the process getting them to market (eviction, trash out, bpo... i.e. the pre-list phase) there are a smaller number that have that question mark "Why hasn't that been put on the market yet".. but it I haven't seen its this huge number here in So Cal.
I'd love to be proven wrong.
FYI, for those that didn't see the post yesterday I posted the trustee sales for July for San Diego, Los Angeles, Ventura and Orange county over at Effective Demand
Going to be tough to keep them malls open when there customers don't have any money too. Also car dealers, boat builders etc. Boats being actually made in America
@ unirealist (profile)
"His wish to address Health Care is laudable, and long-term an imperative, but he is squandering political capital on pushing it instead of employing that political capital to clean up the financial/economic mess he was left with."
He has been assured by his advisors that his only viable option was to save the status quo, and that it could be accomplished.
But it can't. And as he finally discovers this over the next few months, it will also dawn on him, belatedly, that he has no credibility left to do what has to be done.
"
So true, so true; even the health care changes are beginning to look like a donkey where a horse is needed!
According to Zillow's latest Homeowner Confidence Survey, 12 percent of homeowners said they would be "very likely" to put their home on the market in the next 12 months if they saw signs of a real estate market turnaround, 8 percent said "likely," while 12 percent said "somewhat likely."
I wonder how this compares to historical data?
Phx Metro real estate stats.
47,000 units listed for sale on MLS (rounded)
40,000 units figured as forclosed not on the market. This is from fairly qualifed reports from ASU, realtors etc.
90,000 units in some state of forclosure 60+days past due.
Investors are buying up the very low end, $30,000 to $50,000 for rentals. Nothing in the $100,000. range or over. A small segment of population buying under $200,000. for first time buyers, these are short sales or REO for the most part. About 60% of all sales here are short or REO.
This is going to take a damn long time.
Yet another indicator of the developing systemic crisis, the futile attempts at controlling out-of-control events. These vermin are drowning in their own vomit.
Foreclosures are a matter of public record and you can basically see the "float" of homes that were repossessed but not put on the market.
I think there is also an issue of banks not foreclosing, which causes implications for the balance sheet.
Foreclosures are a matter of public record and you can basically see the "float" of homes that were repossessed but not put on the market. There are some homes that this is the case, most are simply in the process getting them to market (eviction, trash out, bpo... i.e. the pre-list phase) there are a smaller number that have that question mark "Why hasn't that been put on the market yet".. but it I haven't seen its this huge number here in So Cal.
Effective demand:
There are some problems with using only foreclosures when looking at this so-called "shadow" inventory. Among them
1) there were several foreclosure moratoriums in your state and in your area. Thus, there were many people who "should" have been foreclosed upon who instead are sitting in default but not foreclosure.
2) the banks are so far behind on foreclosures due to not having foreclosure staff. there simply isn't enough people to process the foreclosure
3) many people are trying to get a loan mod. some of these will try to stay in the house, but thus far >50% redefault if memory serves.
regardless:
NOD data from SoCal and the rest of CA is not reassuring
Nor is the 30, 60 and 90 day delinquency data coming from the banks.
not sure I'd get too complacent if you're only using foreclosure data. (perhaps you're using more than that)
"GEITHNER: That's something we're very focused on, again. We need recovery to be built on private demand, private spending. Businesses taking a chance again on the American economy."
This was exactly why the GD1 lasted as long as it did. What sensible person would risk their own money (as opposed to OPM) on an economy that is solely supported by government spending and gimmicks (CFC/ House tax credit) and super low interest rates.
When the economy looks like it is making a bottom without the benefit of these crutches private capital will come in but not until them. I wonder when these supposedly smart people will come to realize that these measures are the equivalent of neck brace- used judiciously it can well the neck muscles recover. However prolonged use results in an atrophying of the muscles and leaves you worse off than before.
Per earlier comment, we are in eastern WA state. But i've seen similar trends in the Seattle area. Vacancy rates are going up everywhere from the data I've seen, particularly in the more bubbly markets.
Thanks for naming a post after me, CR - wanna buy a house?
Here is my thinking on what BO is thinking about health care and the economy.
If we can get people off business provided health care, it will lower costs. Those savings can be used to lower prices, increase the bottom line, maybe boost retirement provisions or hire more employees. With health care a fair part of compensation for the average paid worker, lowering those cost will make a diferance.
Most employees have no idea what their health care cost the employer. The cost is not just the premiums, it is man hours to fill out paperwork, track, bid out, collect, payfor, report etc etc etc.
I think we need to add to the MLS listings also the number of properties that are being sold by owner only. I don't have any hard data but my gut feel is that this number has been increasing as a result of the internet and sites like Craig's list .
Interesting exchange on MTP:
Mr. Gregory: You're confident in Chairman Bernanke?
Dr. Summers: David, I'm very--totally focused on the work, on the work that I'm doing.
JP and YTL,
I absolutely agree that the number of homes in the foreclosure process is huge and growing.
My point is that the homes getting taken back by the bank and not on the market, from my cursory research (taking APN's and looking on the MLS to see if they have been listed, doing a sampling of those every month for REOs 4 months back) is pretty small.
Since the political pressure is so great on servicers until I actually see them foreclose on homes I simply dont believe they will. TPTB are saying they dont want foreclosures. The servicer are doing so much more than they are given credit for to reduces foreclosures.
@josap
"Most employees have no idea what their health care cost the employer. The cost is not just the premiums, it is man hours to fill out paperwork, track, bid out, collect, payfor, report etc etc etc."
The doctors are not happy either; @ Kaiser my primary doctor changed three times in three years! with every new one, it was the same story all over again, do this test over again...Curing a chronic problem like GI is so difficult in the present system. Also @ Kaiser, damn if a doctor visit would last more than 15 mins! They seemed to be all on something and on a leash.
"Since the political pressure is so great on servicers until I actually see them foreclose on homes I simply dont believe they will. TPTB are saying they dont want foreclosures. The servicer are doing so much more than they are given credit for to reduces foreclosures. "
Good Point.
debtfree I believe that Kaiser MDs have quotas that is they need to see a certain number of patients per shift. Kaiser makes money by denying care. Plain and simple.
I don't see many FSBO properties in Phx. What I am seeing a ton of is "for rent by owner".
They can't sell, they can't make the payments. They may have had to move for a job. Some people are renting a much cheaper house, then renting the old one. Thus trying to continue to make the payments on the old house by lowering their cost of living with a cheap rental.
Old house payment $1200.00
Rent cheap house 900.00
Rent income on old house 1100.00
less out the door every month 200.00
This works for people who did not drain every penny out of the housing ATM. It won't work for houses really really underwater. Also people don't think about rental repairs and are soon behind the eightball.
I am also seeing "For Rent or Sale" signs.
@Tim waiting for 2012
"Kaiser makes money by denying care. Plain and simple. "
I am beginning to believe that! I am shopping for another provider.
"The servicer are doing so much more than they are given credit for to reduces foreclosures."
A shadow moratorium? When does it end? When do MBS owners start finding a greater return from foreclosure than not? If mark to market returns does that change the equation?
btw, as you see from the trustee sale graphs on my site the trustee sale investors are having a field day. Since supply is constrained by the political pressure on the servicers the trustee sale investors are stepping in and making the money instead of the bank making it.
I also have been following one trustee (recontrust, BofA/CFC trustee).. they post a trailing 30 day list of REOs and all the NTS. Following the trailing 30 day list since June.. it has been falling statewide for CA. NTS have been increasing during this time.
The market has such low inventory at this time in banks could double foreclosures and not flood the market. You have 5% rates, a tax credit and hopium, Its a great market to liquidate supply into in So. Cal.
The fed is printing up $1.25 trillion to buy up MBS and 300 billion to buy up treasuries to keep long rates low... Why not take advantage of that to clear up the problem sooner rather than later? TPTB want to use the opportunity to modify as many loans as possible but instead of having one solution, why not have many solutions and lets the lenders make the choice that makes the greatest economic sense?
You call it shadow inventory, I call it dark pool of liquidity.
CR
Hate to disagree with your comment that the bulk of price declines are behind us. That may be true for low end areas like Phoenix, but in higher priced locations like the SF Bay Area, the price declines are going to last the next decade, and I expect to see declines of at least another 30%.
In the South Bay (Cupertino/Sunnyvale/Santa Clara/Saratoga), in the 1M+ range, prices have declined barely 10% from the peak. The main drivers for wealth around here are stock option wealth, which is a thing of the past. The only thing really propping up the market is the relatively high % of dual income wage earners. Tech companies have not really done large layoffs yet. But with the rest of the economy is terrible shape, I don't know how tech companies can afford to hold onto their bloated workforces. I also don't see much evidence of pay cuts yet.
In the market, I routinely see homes that would list for 1.2-1.3M rent for 3K-3.3K. I just don't see how that math works out.
If "everyone wants to live here", those rents won't be that low. A million dollars is a lot of money (again) - it's just that home sellers here haven't gotten the message yet.
I would bet there are many high end locations like the SF Bay Area where this is true.
I am also seeing "For Rent or Sale" signs.
I would love to know the % of these that results in sale. My guess is exactly 0.0%
debt free. Kaiser is relatively cheap I hear. I hope you find good prices outside. Good luck.
Ba Lurker.
Million dollar Vallejo homes etc. Low rents or High price to rent ratios show that financing is still to easy or people are stretching too thin to make the mortgage IMO. I agree with you.
About 10 years ago my flip-off finger swelled to about double it's normal size, and I had Kaiser for health insurance, and over the course of 3 visits in one month, I was told by 3 different doctors that it was no big deal, although the swelling never went down. One doctor told me to take aspirin...
I decided to go to a different Kaiser location, the one on Cadillac in L.A., and the doctor there was somewhat incredulous that the know-nothing troika in the other location seemed unconcerned, and he scheduled me for surgery, and all went fine.
I had to 86 Kaiser out of my life, they really hope you'll get better on your own accord...
Price declines are over for the low end in Phx. The middle (350,000.00) is still coming down. The high end is just starting it's decent.
That is in the nice, center areas. The outer areas have fallen to what looks like rock bottom. In Queen Creek or Maricopa you can pick up a $320,000.00 McMansion for $80,000.00 today.
Queen Creek area is so bad that an housing area next door to the official city has legaly changed it mailing address to some other name to try to get the stink of their market. Can't remember the new name at the moment.
A shadow moratorium? When does it end? When do MBS owners start finding a greater return from foreclosure than not? If mark to market returns does that change the equation?
Definitely servicers are holding back foreclosing. You can see that in the ratio of NOD/NTS relative to REO. I'd love to know when it ends. The water is building behind the dam.
I heard tremendous things about June, all the servicers were supposed to open the spigots in June. And at the start of June it looked promising. But then the political pressure got ramped up again and as we see by Julys numbers the servicers stepped back.
I'm a member of Kaiser and they have been remarkably responsive to any problem that I have had. That includes some that required rapid action, the consequences of inaction could have been serious.
I think that generalizations, based on either your experiences or mine is not informative.
Okay if minimum wage is $8-10/hour and you work full time and there is two incomes that is 40k per year before taxes. Homes for these people in the 80k-120 range is within reach with a 30 year mortgage. So yeah that may be the bottom for those homes.
You can see that in the ratio of NOD/NTS relative to REO.
Do you think that even the NOD or NTS are being held back?
You call it shadow inventory, I call it dark pool of liquidity.
More like a dark pool of illiquidity.
I don't see how the forclosure spigots get turned on.
It is political suicide for any elected official.
It forces banks to lower the asset value.
It would scare the hell out of J6P to hear any news of massive numbers of forclosures.
How many of these people would really be in the street? What percentage of the properties are in forclosure due to job loss?
It floods the market with more vacant properties.
It lowers the values further on ajoining properties.
They are going to bleed these slowly into the market. They are praying that they can walk the tight rope. And not fall off for many years to come.
Obama is naive in ways that even his supporters didn't expect.
Obama is immature and inexperienced. He is more clueless than Bush.
I believe O’s presidency will end more disastrously than Bush’s.
"I'm a member of Kaiser and they have been remarkably responsive to any problem that I have had. That includes some that required rapid action, the consequences of inaction could have been serious.
I think that generalizations, based on either your experiences or mine is not informative."
Thanks for sharing your experience anyways...
40 Million people without access to routine health care is a big problem! What I do not understand is that BHO is trying to solve that problem for vote reasons or is he trying to address the runaway cost of the existing programs such as medicare and medicaid.
Goes to show that they are doing a terrible job of letting their message out. BHO's white house is getting the undelable (sp?) stamp of being a GS/Chase lapdog. People don't forget once a label sticks.
Another Kaiser beauty...
I had just finished a backpack trip of about 100 miles, and my feet swelled up a bit and my wife was concerned, so we hoofed it over to Kaiser, and the know-nothing doctor pronounced that I had diabetes after looking at me.
My wife asked how he knew that, and he had no answer, nor did I have diabetes as it turned out~
Tim,
In this economy, with unemployment increasing, depending on two incomes to pay increasing debt is nuts. What people need to be figuring out is how to live on one income or two half incomes.
Speaking of shadow inventory. Last week I tried 3-days free of foreclosureradar.com. I down loaded some zipcodes that I was interested in San Diego.
Many houses with NOD or on Auction schedule or REO were not on MLS (ziprealty.com or redfin.com).
Obama is naive in ways that even his supporters didn't expect. His public comments in regard to Henry Gates and the police are indicative of that naivete. Did he not realize that when one cop is criticized, every cop in the country will stand behind him that cop, regardless of how wrong he might be?
I just took the Trustee sales as reported by Dataquick and divided the total number of sales reported by Dataquick to generate the following graphic:
Effective Demand: Trustee sales divided by Total sales per quarter for LA and Ventura County
Do you think that even the NOD or NTS are being held back?
Yes, but I think they are being held back on those contacting their servicers early in the process and so most likely to find some other resolution (short sale, loan mod, deed in lieu). Many short sales don't have NOD filed...
My landlord has had a NOD filed over 90 days but not NTS. No telling what is going on there.
"They are going to bleed these slowly into the market."
How will they keep in front of defaults? Liz provided an anecdote last night, that due to backlogs in the foreclosure courts, it would take 15 years to work through the existing inventory. Imagine being able to live rent free that long. How long before a secondary market arises to arb that disconnect? Defaulted owners renting...
JD
Good thing he didn't try to pump you up with insulin or put you glycemics
Josap
I am a bear and there are Min wage jobs still available. Everything above that not so much. Home prices above 400k will get taken down hard in this "recovery"
"I would bet there are many high end locations like the SF Bay Area where this is true."
West L.A... Same scenario. Lots of listings over a million $$. Only stuff selling is at or under jumbo conforming. FHA is the only game in town here.
//How long before a secondary market arises to arb that disconnect? Defaulted owners renting... //
After the deep pocket investors clean up on the low end REO properties.
Then there will be a resurgence of firms that will offer to take over (with a short sale) your mortgage. They will then rent the house back to you with a lease option for 5 years at an inflated rent amount (part to be used for the future down payment). I have seen this used several times in the past. The old owner is never able to rebuy the home due to the contingencies in the option paperwork.
picosec. Maybe this will help.
Transcript of taped conversation between President Richard Nixon and John D. Ehrlichman (1971) that led to the HMO act of 1973
Ehrlichman: “Edgar Kaiser is running his Permanente deal for profit. And the reason that he can … the reason he can do it … I had Edgar Kaiser come in … talk to me about this and I went into it in some depth. All the incentives are toward less medical care, because …”
President Nixon: [Unclear.]
Ehrlichman: “… the less care they give them, the more money they make.”
President Nixon: “Fine.” [Unclear.]
Ehrlichman: [Unclear] “… and the incentives run the right way.”
President Nixon: “Not bad.”
Aug. 2 (Bloomberg) -- The most severe recession in at least five decades may be ending and growth may resume at a rate faster than most economists foresee, former Federal Reserve Chairman Alan Greenspan said.
“We may very well have 2.5 percent in the current quarter,” Greenspan said in an interview today on ABC’s “This Week” program. “The reason is there has been such an extraordinarily high rate of inventory liquidation that the production levels are well under consumption.”
The U.S. economy contracted at a better-than-forecast 1 percent annual pace in the second quarter, the Commerce Department reported July 31. Stabilization of housing markets and consumer spending, a lessening of financial turmoil and increased government spending all suggest the longest recession since the 1930s may be close to ending.
“I’m short-term optimistic, but with many caveats,” the former Fed chairman said. Housing markets have “stabilized temporarily” though it is “possible” the economy might relapse if there is a further slide in home prices of more than about 5 percent.
Greenspan Says 2.5% Growth Possible in Third Quarter (Update2) - Bloomberg.com
Mr. Magoo just STFU!!!
"Housing markets have “stabilized temporarily” though it is “possible” the economy might relapse if there is a further slide in home prices of more than about 5 percent."
Gee 5% that could happen in a month or two Alan
"Update: Hugh Hefner and his wife, Kimberley, have sold their personal residence, next to the Playboy mansion in Holmby Hills, for $18 million. It had been listed since early March at $27,995,000."
18 million to live next to the Playboy mansion... I wonder who the buyer was.
Hugh Hefner sells his personal home next to the Playboy mansion -- latimes.com
Someone posted this earlier today but I think it is interesting enough to post again.
SAN FRANCISCO (Reuters) - California's largest state employees' union voted on Saturday to approve a strike authorization measure to protest furloughs of state workers and pressure state officials to ratify its labor contract.
A spokesman for Service Employees International Union Local 1000 said a strike was not imminent but that the vote authorized union officers to initiate certain job actions, including a strike if necessary.
The SEIU represents about 95,000 state employees, including clerical workers and teachers.
California public union OKs strike authorization
| Reuters
Effective Demand-
Yesterday I added some Alameda County Trustee Deed data to yours. I also had compared the public records info available on the web with Dataquick's historical numbers that the SF Chronicle had published about a week ago.
They didn't compare well. Dataquick's numbers were typically 2/3 of the public records numbers. Maybe DQ has a sophisticated process that eliminates double counting due to multiple loans foreclosing on the same property or something like that, but there was a significant difference between the two sources.
Will the state workers get strike pay?
Does the union have the money?
Are they betting on a threat working?
Are there any laws on the books about state employees striking?
I don't know enough about it to be able to tell if they are serious.
OT - a few threads ago, someone asked about the recession of 1958. Purely by chance, I came across this photo essay on that event; here's a link:
The Recession of 1958 - Photo Essays - TIME
Some really great black and white photos, and appearances by people who later became famous for other things.
You'll see some things that happened back then that just seem so quaint now. Really was a different world back then.
I don't believe the state workers will strike.
If they did, I think it would force the governor to do mass layoffs. They all get to keep their jobs for lower pay, or some of them get to lose their jobs with the remaining getting pay restored. I don't see the math working any other way.
Although OT right now, homeowner associations have been a frequent topic here. The New York Times has what I think is a balanced analysis why unit owner disagreements happen and how they can best be solved. (I wish I had read this 5 years ago...):
The Co-op Board Wars - NY Times
picosec,
On public records queries you will get a NTS (for example) for each person on the deed. So if its a NTS for John & Jane Doe.. you will have 1 for John Doe and one for Jane Doe. It could be the source of the additional counts. I heavily researched the Dataquick numbers in early 2006 and could find no fault with them. As far as I am concerned they are the gold standard.
Off-topic: what would stop one hedge fund manager from calling another and saying, "we're in trouble, redemptions are going to put us out of business unless we do something. what do you say we - buy - EVERYTHING." Then that manager calls another and he calls another and so on.
If you can't think of a reason why it wouldn't happen, then it has.
OT: TEOTWAWKI moment.
The Indians just beat the Tigers 11 to 1
and a little doom video
YouTube - Ruins of the city of Detroit(2009)
what would stop one hedge fund manager from calling another and saying, "we're in trouble, redemptions are going to put us out of business unless we do something. what do you say we - buy - EVERYTHING."
Because the guy he'd call would make a ton of money by shorting the positions of the hedge-fund-in-trouble and then publicizing that they are going to go under.
“I’m short-term optimistic, but with many caveats,” the former Fed chairman said. Housing markets have “stabilized temporarily” though it is “possible” the economy might relapse if there is a further slide in home prices of more than about 5 percent."
Way to say absolutely NOTHING! OF COURSE home prices will fall another 5%, every indepedent analyst who follows the market knows that. We had a tiny spring bounce and now it is time for the next leg down. So MaGoo is an optimist predicting further declines. Doublespeak as usual.
JP - a rival hedge fund could do that any day of the week. Probably wouldn't work unless there was some truth to the rumor that the targeted hedge fund actually was in trouble.
And to clarify the first post, the first hedge fund wasn't saying his fund was in trouble. The "WE" referred to all hedge funds. All hedge funds would be in trouble with 10% quarterly losses.
Housing prices can't fall by another 10%???
Hahahahahahahahahahahahahahaha.
They prolly dropped 1% since he said that.
I bought a condo in 2001 in coastal San Diego for $280k. At the peak similar units were selling north of $500k. My wife and I are now renting a house and renting out our place for $1,750/month, which considering HOA/property tax/PITI, would be "break even" for a $325k sales price, max. Which probably puts the real value at $250k or less.
I feel sorry for my fellow condo owners, all but one who paid north of $400k for their units. Ouch.
The number of listings should not be used as a measure of inventory. The best measure is the Census Bureau's tabulation of total units, whether they are listed for sale or not. Right now, Census's data tell us that we have abnormally high vacancy. The shadow inventory is part of this, and simply illustrates that as the homes listed for sale get sold, more will come on to the market. The total housing stock and vacancy data, which CR summarized last week when they came out, is the best measure of the housing situation. And it looks lousy.
a neighbor just sold their house at 400x monthly rent,multiple offers,sold for more than asking in 3 days.A nice 3/2 on 2 acres near sebastopol.Buying a home is NOT a rational decision for 95% of buyers.
Everyone seems to forget that these mortgages were all sliced and diced and sold off. The courts have been reluctant to foreclose because the banks don't know who holds the paper. A lot of properties are in limbo as a result.
Re: The recession of 58, the year I graduated from college. I got an offer from Boeing but did not take it as I wanted to stay in the Bay Area. Thank god I turned them down or I would have been one of those Boeing workers who were asked, when leaving Seattle, to turn the lights out. Shopped my resume and took an offer from FMC, known as Foolish Machinery and Comical Corporation. Thank god I was in California and the War Department was spending like a drunken sailor.
Richard Nixon's war on Southern California/NASA drove me out of SoCal back North into the arms of NASA. Best decision l made about who to work for. I figured that I had been working, since high school, for some corporation whose teeth were afixed to a government teat so why take seconds when one could clamp on to a teat with your own mouth?
Best to you all.
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