Meh. First-time homebuyer credit pulled forward demand.

Next.

Soon as I get a job, I'm buying a house.

House prices are up, sweet!! Tis the season for a over leveraged HELOC right?

Let's compare the scene in the early 1930's, to now...

1930's: No government financial props, no safety net whatsoever

2000's: All financials are propped up by the government, and people are relying upon the government safety net "Being There".

OT--mad max food--even costco anticipates demand for this, and that scares me.

Costco - Shelf Reliance THRIVE™ 1-year Supply Dehydrated & Freeze-Dried Food

Heard on local news radio this morning that the poverty rate for metro Atlanta increased 20% YOY. I imagine the same thing is happeniing in other cities across the country as jobs disappear.

The Case Shiller house price index is going up because fewer people at the lower end of the economic scale can afford a house. The upper end buyers are still out there, and are skewing the results.

@O H Chick: Nice to meet you!

But, the case-shiller index measures the change in price of the SAME house due to repeat sales, and has tiers for different segments of the market, so it's pretty much immune to getting skewed by changes in the sales mix.

Also, for what it's worth, where I live (east side of San Fran Bay Area) the situation is the opposite: tons of people are buying lower-end housing (those with jobs are taking advantage of non-bubble pricing to move "in" towards the core of the bay area, where the jobs tend to be) and very few are buying in the higher end (where jumbo mortgages are needed and not very available).

ok boys & girls,

what about the US carry trade? Deflation or inflation?

i need to know whether to take the cash out from the mattress and buy a house,AAA GM stock or a quality Japanese blow up doll.

And to think we laughed at "made in japan" toys years ago.

FWIW, Here's the Atlanta data for July:

Low Tier (price under $141697): Bottom in May was an index level of 92.34 (100=January 2000); current is 93.34. Slight bump upwards but <1%. Could be statistical noise?

Mid Tier: (price above $141687 but below 234279): bottom in May was an index level of 100.54, current is 105.2 Looks like some price pressure here.

High Tier: (above $234279): bottom in March at 108.58, and current (July) is 113.85.

So O H Chick's report seems fairly accurate: in the Atlanta area, the bottom end is still suffering, while the higher end has perked up. The mortgages (except for the very high end above $500,000 or so) are all in the national conforming range, so mortgage availability is presumably not an issue, but employment/creditworthiness will be. And the many Georgia bank closures probably provide a clue there...

Under capitalism, man exploits man. Under communism, it's just the opposite. -- John Kenneth Galbraith

MA enacts an unconstitutional vaccination law

Not only is this law unconstitutional, but there is no telling what this will do to gun owners who are going to be subject to this unconstitutional law.

URGENT - (S. 2028) Pandemic / Swine Flu / Vaccine ACTION THREAD! | MassLPA

Napolitano on the Massachusetts Mandatory Vaccine Law « LewRockwell.com Blog

Wake up folks they are going to poison you and your children....since when is a vaccination a Law! and why the rush?

perhaps kcoop has you on ignore

Wisdom Seeker,
If you sign back on later & see this, thanks for the Atlanta data !

A proof positive of social mobility delusion in America
http://www.equalitytrust.org.uk/images/social-mobility.gif
Now go out there and buy something....like a new house

In Florida there is no downhill.

There is also no uphill.

Unegalitarian States of America?

Jonathan (profile) wrote (in reply to...) on Tue, 9/29/2009 - 6:53 am
km4 wrote:
A proof positive of social mobility delusion in America
All those 'commie' countries clustered together is bad right?!?!?!

Just spit up some coffee

Here in the far northside of Chicago, (rogers park, andersonville ect) nothing is selling. I looked at several units this summer, most are still on the market, one sold and the rest are rented. The one that sold is still pend because it is a short sale. It is impossible to have price discovery at these levels of sales, two or more years of inventory and a trickle of sales.

In the USSR they used to say we pretend to work and they pretend to pay us. In the US consumer economy, we pretend to buy houses (uncle sam really owns them via the banks) and they pretend to sell them to us.

Question for the commentariat about a lenders ability to impose additional insurance coverage.

I recently received a notice from my lender/servicer Bank of AmerillWide that they would be making a payment out of escrow for flood insurance.

Hmmm. I already have flood insurance even though it was not required by the lender when the loan was originated.

I called up Bank o f AmerillWide and they said yes - based on an update to the flood plain maps they were in the process of securing flood insurance on my behalf.

I asked if it was common practice to change/impose insurance coverage without notice. She said, we sent a letter to you on 9/23 explaining the need for additional coverage and another letter will be sent on 10/23.

I said that's nice, I already have fully paid for flood insurance - don't remit the payment I will send you a copy of the flood policy.

So commentariat - is this business as usual? Can lenders/servicers decide your coverage is insufficient after they have funded/originated the mortgage and simply pay for increased coverage out of escrow?

Oh and the very first thing you are asked when you call the number 866-653-6183 is if you are calling about HOPE, the home retention program, a loan modification to please press *.

A friend of mine has a midrange Atlanta house that he can't sell.

He also has an Orlando house he can't sell which is rented out.

So, I hope Miami has a mere 2-7% to go down to bottom. Which
would have once been unthinkable.

My mom said that she read the casino ships out of Port Canaveral
are doing poorly.

lawyerliz wrote:

A friend of mine has a midrange Atlanta house that he can't sell.
He also has an Orlando house he can't sell which is rented out.

A friend of mine has a midrange Atlanta house that he can't afford to sell.
He also has an Orlando house he can't afford to sell which is rented out.

As Jim the Realtor is wont to remind; "T'aint nothin' price won't fix."

Chick, about the same unless you have more land. The only advantage with cows is they won't eat down to the root like horses. Your lawn is nicely trimmed with cows - and eaten down to the dirt with the horses.

Yes, especially as to flood.

some investor guy wrote:

So tell me again why almost anything I look at in Dallas that's over $500k and anything I look at in LA over $900k has plummeting prices?

Hear! Hear! Not so sure about LA, but Houston sounds very much like Dallas as most would probably expect.

I expect to see an 'illiquidity' ledge at the 'high end' here, but surely it will be a case of look out below if the government withdraw some of the support.

{Aside: Holy crap. Gordon Brown just announced pregnant 16-17 y/o to be put in 'supervised homes' instead of just being given council flats. Heh, maybe they should be sent to unoccupied housing stock in Florida and Gorgia. Seriously, that's an enormous deal.}

"Fannie Mae (FNM) said Tuesday that delinquencies in its mortgage portfolio continued to rise, putting further pressure on the mortgage financier.

It and smaller sibling Freddie Mac (FRE) were put into conservatorship a year ago by the federal government amid fears of mounting losses.

Fannie said July serious delinquencies, or those at least 90 days behind, rose to 4.17% from 3.94% in June and 1.45% a year earlier. Fannie's delinquencies have been worse than Freddie's.

The report also showed that Fannie's mortgage portfolio was flat in August at $779.42 billion, just $10 million above Freddie's. Fannie's book of business, which includes mortgage-backed securities and other guarantees, rose $10 billion to $3.23 trillion. Its annualized growth rate was 3.7% for August.

In addition, Fannie's net commitments to purchase mortgages tumbled 69% from July to $31.76 billion, the lowest figure since January.

Freddie shares, which have been active and volatile the past several months, were flat premarket at $1.60. "

CORRECT: Delinquencies Rise Further In Fannie's Portfolio - WSJ.com

BBerg:

The world’s largest economy shrank at a 1.2 percent annual rate from April to June, more than the originally reported 1 percent contraction, according to a Bloomberg News survey before the Commerce Department’s Sept. 30 report.

That's cutting it thin... Only 1.1% tomorrow beats "estimates" but still arbitrages the revisions.

" September 29, 2009

Moody’s Investors Service has downgraded Lithuania’s foreign- and local-currency ratings to “Baa1,” with a negative outlook, Bloomberg reported Sept. 29. This the second time in 2009 that Moody’s has cut Lithuania’s ratings."

On the swine flu vaccine...I think it will be mandatory for public school children around here soon. We had a third child (3 month and 11 year old in the last two weeks), 14, pass away Sunday. Parents are unnerved. Keep shutting down a school temporarily to disinfect, but I think the vaccine will be used as a cure all for nerves. Time will tell. I read that Austin put up tents outside one hospital and was seeing something like +300 suspected cases a day. Wonder how many of these are actually sick...I can definitely see the drain on medical resources already beginning...even without a high mortality rate. Let's hope this thing stays mild.

volker the viking (profile) wrote on Tue, 9/29/2009 - 9:49 am
BSR: put the mortars close to your CP, the crew served weapons at strategic angles and fill up some barrels with foo gas rigged to roll downhill on the major avenues of approach.
And get some banana clips.

Just get some claymores-

the mines not the sword, right Cinco?

My uber-bear rationalization:

Loose money, artificially restricted supply via foreclosure forbearance, first time buyer credit and finally "smart" "investors" making a (mistaken) inflation play.

I have to admit, I'm surprised at this data though.

Cheers,
prat

Juvenal Delinquent wrote:

Never a frown
With Gordon Brown
Never a frown
With Gordon Brown

What kind of twisted mind ... pretty funny though.

He's giving a great conference speech, but that's the trouble, not much that they say is ever transformed into actions that actually make life any better.

No doubt about it though, getting pregnant at 16 then getting a council flat, housing benefit and income support is a fairly popular career choice when there are no jobs.

I remember mp and myself discussing car-related maintenance stuff before.

For those of you inclined to work on your own vehicles, I heartily recommend ALLDATAdiy.com :: Leading Source of Diagnostic and Repair Information It's not all that expensive and is very comprehensive, although it does require an internet connection to access. However, a crappy old desktop in the shop serves the purpose well, and if you're worried about not having access you can always use something like Offline Explorer Professional to build your own offline version. Carefully, of course; if it looks like a harvesting spider you'll probably get kicked off the site and lose access.

There was never an easier parody, w/o hardly changing a word on the lyrics...

Howzabout this one?

YouTube - Dead Loss Angeles - The Stranglers (audio)

Merkelnomics Brian S. Wesbury and Robert Stein, 09.29.09, 12:00 AM EDT As the U.S. moves toward bigger government, Germany may be heading in the opposite direction.

Let's see. How do I put this politely and not come across as a permabear or downer cow?

The stock bubble collapsed. The commodity bubble collapsed. The housing bubble collapsed. Bank values collapsed. The private (in)equity bubble collapsed.

And yet, the credit bubble miraculously stayed inflated. Total debt has actually increased. Is it the magic of the "free" market? Or is it an invisible hand doling out federal reserve credit?

Can they keep the debt bubble inflated while demand is crashing, wages are falling, and household collateral is underwater?

We'll shall see.

I called BOA to look at refinancing - currently paying 5.25% APR, hoping to get down into the 4's. Planning to use the savings in interest to move my 15 year into a 10 year mortgage.

Anywoo, next thing I know the employee is trying to fit me into a "Making Homes Affordable" plan?! I'm more than a little confused (since I'm not having any trouble making my payments, just trouble paying interest instead of principle) and a whole bunch suspicious (I'm guessing the "Making Homes Affordable" is helping them 'cause it's not helping me).

What's the truth?!

On the swine flu vaccine...I think it will be mandatory for public school children around here soon. We had a third child (3 month and 11 year old in the last two weeks), 14, pass away Sunday. Parents are unnerved. Keep shutting down a school temporarily to disinfect, but I think the vaccine will be used as a cure all for nerves. Time will tell. I read that Austin put up tents outside one hospital and was seeing something like +300 suspected cases a day. Wonder how many of these are actually sick...I can definitely see the drain on medical resources already beginning...even without a high mortality rate. Let's hope this thing stays mild.

Oh ya post the info, what state city, town and so on. I'll be my own judge. And I wonder how many have the H1N1 virus....Flu is flu you got it as a youth you get it as an adult.

yagij (profile) wrote on Tue, 9/29/2009 - 10:37 am
As the U.S. moves toward bigger government, Germany may be heading in the opposite direction.
Let the record show that there are plenty of Americans that do... not... want... a "bigger government".
DO... NOT... WANT... Shock

Agreed, but what to do about it?

They have to continue the debt bubble. Debt is what this economy is based on. No debt, no economy.

They will continue to throw money at any plan that will keep most people in debt.

Terry (profile) wrote on Tue, 9/29/2009 - 10:34 am
Interesting take on homebuyers (and Congress) from Amity Shlaes: Blame Barney Frank If a Pool Isn’t in Your Future: Amity Shlaes - Bloomberg.com

Of course, BF fails to mention that without securitization, it would have been suicidal for these banks and thrifts to loan money to unqualified home buyers, in violation of Federal Law.

Assume the average house prices is $200K.

Assume selling prices are driven by the marginal buyer (i.e. like most markets).

Assume the seller captures 3/4 ($6K) of the economic rents of the FTHB tax credit (probably a fair assessment given the dynamics of the RE market).

The FTHB credit in an of itself increases house prices by 3%, all else equal.

You can argue with the numbers, but it is basic economics that a subsidy increases the price of a good to some degree.

As the U.S. moves toward bigger government, Germany may be heading in the opposite direction.

I've written my Congresscritters knowing it will probably be in vain. I'm taking an extra deduction or two to cut down on the taxes they take out every pay check. I buy silver (mostly to get a response out of J.D.). I'm not sure what I can do, and since all of my bloodlines go back to the American Revolution or further, I don't have any easy way to bail or "return" to my home country.
.
This place is my home country!

forex traders with 500:1 leverage might have something to do with the volatility.

Joke From 2015:

What do you do when you are suck in a 50:1 leveraged play? Up the ante to 500:1!!

Fannie Mae Serious Delinquency Rate increases Sharply

"I've written my Congresscritters knowing it will probably be in vain. I'm taking an extra deduction or two to cut down on the taxes they take out every pay check. I buy silver (mostly to get a response out of J.D.). I'm not sure what I can do, and since all of my bloodlines go back to the American Revolution or further, I don't have any easy way to bail or "return" to my home country."

yagij, you should read Ron Paul's End The Fed (in fact, every American should read it), he makes a pretty compelling case that with a central bank, it greatly facilitates the growth of government.

Even if you don't agree with him, it is thought provoking.

My personal opinion is the Fed is mostly responsible for the secular decline in our economy, not by it's direct actions, but because of what it enables.

We have a classic situation going on today - the Fed is not directly responsible for the creation of Fannie and Freddie, but through their (illegal) actions in buying up Fannie and Freddie's ENTIRE MBS production, they enable the government to avoid making the tough but necessary reforms to the way we finance housing in this country.

Several years into this crisis, and banks can still avoid taking credit risk on 90% of the mortgages they originate. This would NOT be possible without the Fed's interference in the MBS market.

You want your country back? Support the audit of the Fed, for a start. Flood your Senators with emails, call, etc supporting that initiative.

Here is what is going to be posted on Zacks, graphs refered to are the 1st and 3rd in CR's post:

The Case-Schiller indexes, the gold standard of housing price indexes showed widespread increases in July versus June. Housing prices do have an element of seasonality to them, so it is best to look at the seasonally adjusted numbers. Most of the press makes a mistake by using the unadjusted numbers, so this analysis might have some differences from the headlines you see elsewhere. However, on both a seasonally adjusted and on a unadjusted basis the story is much the same: at least for now, the bear market in home prices appears to be over. On a monthly basis, the composite 10 index (or C-10, which has a much longer history) rose to 154.69, a gain of 1.26% on the month and cutting the year over year decline to 12.79%. From the peak in May of 2006, the C-10 is down 31.62%. The broader Composite 20 index posted a monthly gain of 1.15% and is off 13.32% from a year ago and 30.60% from the May 2006 peak of the housing market. The gains were widespread with 17 of the 20 cities posting gains. While home prices are way off from the bubble peaks, over all they remain about twice as high as the stable 75 to 85 range they were stuck in for almost a decade between 1988 and 1998. In real terms then, home prices are coming back towards normal, they are not particularly cheap. The graph below (from Blogger: Page not found shows the history of the two composite indexes.

For the month, the biggest gains came from Minneapolis, perhaps in celebration of the state finally getting full representation in the U.S. Senate, rising 3.09%. On a year over year basis, prices in the Twin Cities are down 17.3% and are off 29.5% from May 2006. San Francisco took the silver with a gain of 2.90%, but it is down 17.9% from a year ago and 39.46% from the Peak. Chicago took the bronze with a 2.10% monthly gain. Home prices in the Windy City are down 14.23% from a year ago and are off 23.33% from the Peak.

Well this time in Las Vegas, the house didn’t win, although Vegas does win for losing. For the month home prices fell 1.85%, by far the largest monthly decline. Over the last year, those who gambled on housing there are down 31.4% and are off 53.30% from the peak. Detroit might have been able to break into the win column in football, but its losing streak in housing continues. Motown posted a 0.36% decline for the month and is off 24.69% for the year and 38.35% from the peak. Keep in mind that these indexes cover the whole metropolitan area, not just withing the city limits, so it is not just the prices of giveaway abandoned homes in the city center that are still declining. Seattle was the only other city to see a decline for the month, falling 0.26%. It is off 15.36% on a year over year basis, and 22.35% from the peak.

The second graph below (also from Blogger: Page not found has an interesting way of presenting the city by city data. It shows the decline from the peak (actually from the individual city peaks, the percent declines I mentioned above were from the national peak date) currently and through December of 2007 (blue bar) and December 2008 (yellow bar). Thus if the red bar is below the yellow bar, prices in that city are down year to date. It shows that there is no real clear pattern between if a city was a big early decliner and more recent price movements. Las Vegas and Detroit were both hit hard early in the housing bear market and continue to face difficulties. San Francisco and San Diego were also hit hard early, but have seen only minor declines year to date. Cleveland, was hit early, but has actually been seeing gains so far this year. Callas and Denver had relatively small early losses and are now also seeing year to date gains. Other early holdouts in the price declines like Seattle and Portland are showing some of the largest year to date declines.

The back to back increases in the C-S index are very significant in that they provide some hope that the number of people who are underwater in their houses is going to stop rising (except perhaps in Atlanta. But that is a different issue). Owing more on your house than it is worth is the single largest predictor of if a homeowner will stop paying the mortgage and eventually be foreclosed upon. Those foreclosures obviously hurt the bottom line of the whole mortgage complex, from the big banks like Bank of America/Countrywide (BAC) that made the loans, to the myriad of institutions that hold the paper that those mortgages were sliced and diced into, to the private mortgage insurers like MGIC (MTG) and PMI Group (PMI) to the GSE’s Fannie (FNM) and Freddie (FRE), and ultimately us the taxpayers who own 80% of each of them. I doubt that we will see a rebound in housing prices that will lift significant numbers of people who are currently underwater back into a position of having equity in their houses again. However, this recent stabilization will stop their numbers from swelling further. That is a major step forward and is good news.

I agree with you CR, I believe we will see further price declines in most areas. The only MSA that I'm pretty sure has already bottomed is Dallas. I would not be surpised to see further declines in all other areas. Most prices are still considerably above inflation adjusted prices in the 1990s. Once the Fed, FHA and Freddie/Fannie start pulling their artifical supports, the prices will trend lower on an inflation-adjusted basis.

Case-Shiller index change adjusted for CPI-U minus shelter from 1/1/1997

Las Vegas -10.40%
Phoenix -1.29%
Miami 27.71%
Detroit -32.12%
San Francisco 43.16%
San Diego 60.40%
Los Angeles 69.45%
Tampa 23.34%
Minneapolis 13.77%
Composite 52.56%
Washington 52.69%
Chicago 13.99%
Seattle 52.62%
New York 65.75%
Atlanta 0.70%
Boston 59.57%
Portland 26.33%
Cleveland -5.41%
Denver 31.32%
Charlotte 3.79%

From what I understand, Case Shiller is based entirely on resales. It occurs to me the numbers they have could and most likely include lowball foreclosure sales that have been upgraded and flipped. These sales would quite likely show a large increase in price and would quite likely not reflect the amount of repair and improvement put in to get the home in shape to sell. They would also include a rapid appreciation factor being there had likely been a short time between purchase and sale. This will be a 10 year mess, not a 36 month one. I spent close to 10 years in a real estate slide here in DFW. The valley probably ran from 1984 to 1992.