U.S. Mortgage Foreclosure Filings Rise 90% in May

[Purveyor]

Source: Bloomberg

June 12 (Bloomberg) -- U.S. foreclosure filings surged 90 percent in May from a year earlier as more homeowners fell behind on their monthly mortgage payments, RealtyTrac Inc. said.

There were 176,137 notices of default, scheduled auctions and bank repossessions last month, led by California, Florida and Ohio, the Irvine, California-based seller of foreclosure data said in a report today. The median price for a U.S. home slid 1.8 percent the first three months of 2007 as the housing slump entered its second year, according to the National Association of Realtors. The filings rose 19 percent from April.

A jump in foreclosures at a time of year that traditionally is the busiest for home sales means the slide in prices probably isn't over, said James Saccacio, chief executive officer of RealtyTrac. Typically, more than half of all home sales occur in the April to June period, according to Freddie Mac, the No. 2 mortgage buyer.

``Such strong activity in the midst of the typical spring buying season could foreshadow even higher foreclosure levels later in the year,'' Saccacio said in the report. That will add ``to the downward pressure on home prices in many areas.''


Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=av3bqU7edFDs&refer=home

---

Just..."damn"!

[spinbaby]

1. But the economy is great!

They keep telling us so.

[Joe Bacon]

38. Rush says the economy has NEVER been better!

Especially if you pop Oxycontins like M & Ms

[Xenotime]

65. The economy is in the tank..

Wall Street just keeps masturbating more "gains". I did really well in the 90's but not this decade.

[Brigid]

2. I'll bet I know why.

I wonder how many people who had their homes foreclosed on had their jobs outsourced, or their hours or pay reduced to nothing, making it impossible to keep up their house payments. Great economy, this. :banghead:

[AllexxisF1]

4. Well...

Here in Florida it had to do with people putting up all these spec houses hoping to rake in the cash when the boom happened. When it crashed they simply do not have the money to pay for two or more homes.

The foreclosers have more to do with greedy people and those who bought WAY beyond there means. The incredible tax hike an insurance raises didn't help either.

We went from unbelievable growth here on the Treasure Coast to house after house for sale in areas like Port St.Lucie etc.

[cobalt1999]

55. agree.

This was caused primarily by a high number of speculators (fueled by easy & insane financing) creating a hugh real estate bubble. Getting back to reality is going to be painful.

[Jacobin]

11. adjustable rate mortgages are causing problems too

[skepticscott]

13. Don't JUST blame the lenders

Sure, there are some lenders that have engaged in illegal practices, and the ones that have should have the law down on them (not holding my breath), but a lot of borrowers bear the blame for their own foreclosures. Lots of people got into houses that were WAY more expensive than they could afford or that they needed, just for status and ego. The fact that lenders gave them the mortgage isn't an excuse...the responsibility for their poor financial planning is their own. People also got into mortgages that were originally very cheap but that got expensive in ways they didn't understand (but should have before they ever signed a piece of paper), again because they wanted a house that they couldn't really afford, but figured they were entitled to anyway. And lets not forget the people who understood that they couldn't afford their mortgages long term, but got into them out of plain old-fashioned greed, figuring they'd just flip the place in a couple years and turn a big profit...oops.

[Spangle]

58. First time home owners are not aware

of the true cost of owning a home. The look to only their mortgage payment and think that is it and that they can afford THAT. Then comes the taxes, HOA fees, trash pick up, etc. The first year out, most likely escrow is screwed up and needs a higher payment to get it on track.

So first time home buyers end up with higher monthly home expenses that they were not expecting. Sellers don't warn them and shoot for the highest amount the buyer can afford. The buyer gets excited about the amount and don't ask the 'what if's" questions. That leaves NO extra money to be had for those 'extra' expenses.

Add that to the ARM, etc. that is going on.

[phantom power]

19. The particular timing has a lot to do with a major batch of ARMs readjusting....

beginning in May.

[athebea]

22. And what about those damn home equity loans...

... all the people who took out second mortgages on their houses in the delusion that prices would rise forever.

[tammywammy]

29. ARMs and sub-prime borrowers

:shrug:

And a lot of people bought more home than they could afford.

[Xenotime]

66. Please....

[greyghost]

3. How are the tools...

of the corporate owned MSM going to keep a lid on the obvious for much longer?

The recession/depression that is heading this way is going to rock the foundation of this country.

I'm beginning to think that it needs to be rocked.

[Brigid]

5. Amen and amen.

Can I get an "amen" from the congregation on that?

[Doctor_J]

36. Amen

I am not quite ready for WWIII, but something big needs to happen to get this country to change course.

[Doctor_J]

37. More news from the Ownership Society

Buy! Buy! Buy!

[Giant Robot]

61. More news from the Ownership Society

We own you now so get out there and start mowing our lawns!

[roamer65]

6. Looks like the bubble has yet to fully burst.

This could end up like the stock market crash of 1929. There was a delayed effect I have been told. The end of 1929 after the crash wasn't so bad, 1930 it steadily got worse, 1931 and 1932 was where it got horrible.

[cliss]

7. I think you're right.

Also, I believe the LONGER it's delayed, the worse it's going to be.

This market needed to correct itself long ago. That never happened. It just kept going, going, going, going up, up, up....

[greyghost]

9. Exactly...

There was also a build up to the crash. It started with farm foreclosures in the heartland and steadily built up. When they realized that the whole base of the economy was eroding the panic ensued.

[nodular]

76. You were told correctly.

I did a study of this in the library by looking at old newspapers one time. I can't even remember why I did it. You look back at the newspapers from 1929. Sure, the downturns are mentioned, but then people forget about them and there is other news. Even after Black Friday, people had no idea how bad it really was.

It really did take, as you say, years for the situation to develop.

[David__77]

8. In Sacramento, a condo is listing for $122,000 that sold for $205,000 in 9/2005.

Granted, it's a different unit but identical in the same complex. That's a 40.5% depreciation in less than two years, presuming that it doesn't get bid up before it sells, which is unlikely, in my opinion.

My point: The housing market is more than in a "slump," here at least. It's coming apart at the seams, price-wise and sales volume-wise.

[A HERETIC I AM]

33. But that same condo at $122K still isn't worth $65K

The only reason it got to $205,000 was because of supply and demand matched with wild speculation. It is the fallacy of linear thinking.

Consider this; (The following is a paraphrasing of an anecdote i heard a while back, so it isn't a quote and the numbers aren't precise, but you will get the drift)

In the year that Elvis died there were approximately 3 people making a living as Elvis impersonators. Ten years after his death there were 10,000. At that rate, by the year 2020, one in three Americans will be making their livelihood as Elvis impersonators. This is clearly unsustainable growth.

If you bought a house in 1980 for $65,000 and sold it 20 years later for $300,000, excluding all other expenses (Insurance, upkeep, taxes, etc) you would have realized roughly 10% annual return. If the person you sold it to turned around and sold that same house in 2002 for $500,000, he would have realized an annual rate of return of 30%. Just exactly how long can this trend continue? Can the person buying what is essentially a $65,000 house sell it for a million if he just holds it long enough? The answer plainly is no. Unless, of course, he is able to find the worlds biggest moron. Unfortunately, too many Americans, while maybe not the biggest morons in the world as a group, have struggled for that dubious honor with great vigor.

This entire housing market issue is a correction and they happen all the time in the marketplace. It isn't going to cause a depression and it isn't going to bring America to its knees. It will however wash all the people out of the housing market that had no business being there in the first place.

I don't mean to sound callous or mean spirited and i have some sympathy for those that stand to lose all they have and even more but god dammit, if the numbers don't add up they just don't add up. I have little to no sympathy for people that bought bigger than they could afford because they thought they could make a living being Elvis impersonators.

[David__77]

52. It's worth right about $65,000 actually.

I think the late 90's market was pretty uninflated historically speaking, and if we inflation adjust, we come close to that value. But it's still 100% to high, nearly. Between taxes, HOA, and a 30-year fixed mortgage, that's still $1,100 for a damn one-bedroom apartment essentially. Given the region's income level and density, etc., that's considerably too high. Further, the same can be rented for hundreds less.

[nodular]

77. Well put.

[bedazzled]

79. i've had folks look me in the eye and say that real estate never depreciates

to which i answer -- i remember a situation similar to what
you describe happening in new jersey. coincidentally(!)i think it
was in the king george I administration. a $50,000 condo selling for
$200,000, and the owner ending up owing far more than it was
worth. those who forget history are condemned to repeat
mistakes. same as gas prices -- i remember waiting for hours
to fill up my gas tank, or not being able to find a gas
station that had gas. therefore, i would never consider a car that
got less than 35 mpg.

[1932]

45. In California, can the bank go after you for the $83K lost equity

presuming you got a 110% mortgage and never ate into your principal?

[slackmaster]

80. If I understand your question, the answer is no

In a foreclosure resulting from a borrower failing to make payments, a lender's right of recovery is limited to taking ownership of the secured property.

[IndyOp]

10. Fantastic! The Reagan Revolution has worked exactly as the powers-that-be

hoped. The end of the middle class! Financially fearful people don't try to change the world -- they just hold onto what little security they have left and stay quiet.

[hunter]

60. I think we will get quite testy.

There will be days when the leaders who sold us out will have to head for their little hidey-holes, and they will seriously consider moving to friendlier nations where the peasants are not so dangerous.

[slackmaster]

81. The Reagan foreclosure cycle ended in the mid-90s

This is the one after that.

[TexasLawyer]

12. media coverage

another media scandal-- how few news organizations are covering this important story with significant bearing on the state of the U.S. economy.

http://news.google.com/news?tab=wn&hl=en&ie=UTF-8&ncl=1117211434

[L0oniX]

20. If Paris Hilton's home was being foreclosed on, that would make the news.

It's just way too stupid and too many stupid American people helps it stay that way.
:dunce:

[whistle]

14. This is being helped along by the Federal Government and in particular the policies

...put in place under the Bush administration and the republican controlled congress from 2000 to 2006. So far I've seen nothing by either the House Leader Nancy Pelosi or Harry Reid Leader of the Senate and democrats in congress to step in and prevent a potential economic meltdown from happening as well as to help save people from losing their homes and life savings.

This event has been projected, written about and addressed by some highly reputable economists for well over two years. The warnings were certainly ignored by the republicans and now it seems by most democrats as well. I guess this has been more by design than by economic circumstances.

[David__77]

17. What do you propose the Democrats do?

I do not think that they should do anything that would maintain the credit bubble. Any relief must be narrowly-tailored. Unfortunately, since large depreciation is necessary, people will be left with negative equity. Do you think the government should pay the difference? Or just help them refinance their existing debt? The latter I would be OK with under certain circumstances.

[Jelybe903]

23. Can we pass a law!

Can we please pass a law that mandates everyone in the country have "common sense" then we would not have to ask the government to bail us out of this one! Break...this is really just keeping up with the Jones' on steroids. The hype, the market, the sales people all just played to the audience. Maybe we should have outlawed the show! bail us out...rings of socialism to me.

[A HERETIC I AM]

34. No shit. Sorry, but you can't legislate against greed.

The only reason so many American find themselves in this situation is because of greed. 2 things drive markets; Fear and Greed. The housing bubble is a greed driven thing and now supply and demand laws have settled in.

Buy something you can't afford? Sorry, but tough shit.

BTW, I am 47 years old and have never bought a house PRIMARILY because it was instilled in me that responsible personal finance required at least 10% but better 20% for a down payment. It just so happened that i was never able to save that large enough of a chunk of change because when i got close the house prices had risen past my threshold.

So i rent and let my landlord try and raise my rent this year. I don't think so! There are now larger places available in this market for less than what i am paying now.

[Flatulo]

35. Here here!

I am 51, and have made a six-figure income for the last 15 years. Yet I live in a shitty little townhome that I paid $130K for. All my work friends live in McMansions that cost $500K plus.

Guess who has a chance in hell of retiring at 60 and not relying on Uncle Sam to carry me?

You would not believe the houses they have been building here for the last decade! They are over 5000 sq ft and cost a fortune to heat, never mind the taxes. And they all have only 2 or 3 people living in them. Unbelievably wasteful.

Sorry, I have ZERO sympathy for people with $4000 mortgages and $3500 monthly cash flow.

[InkAddict]

84. Don't get too cocky about being the last one standing....

You could lose you job, your retirement funds/pension, your puny condo, and the big one, your health, physical or mental...your choice could also come down to whether or not to leave Mommy her $40 a month to budget for that date with the podiatrist toe-clipping and her tithe to the church she can no longer attend because she's in some geriatric care home that appears as nice as it can be on what the aid program in your state pays out to those left in the dust of yesteryear, but isn't (because you couldn't convince Daddy that she'd ever need much)-- or you could be an only child, 500 miles away from Mom, who now needs to house, feed, and clothe her and her 10 medications that make her loopy and unable to communicate her needs and find a way to get her to her doctor visits every other day, even though you don't have that six-figure job any more.

[cobalt1999]

56. I agree. You can't legislate against greed or stupidity.

The only thing I wish would happen is more controls on easy financing. The availability of loans to almost anyone with a pulse created a lot more speculators that drove the bubble even higher.

When I first bought a home, getting a loan was quite an ordeal. Lots of credit checks, loan no more than 2.5 times your income, a detailed income history. During the boom, it seemed all the rules were suspended. That is where the government should step in. Set some minimums, keep the speculator count down and minimize future bubbles.

[fed-up]

15. recorded sales prices not accurate-many $5-10K rebates here, also investors listing overpriced

houses for sale (that will just linger on the market) with the hopes that naive shoppers will assume they are looking at fairly priced comps.

All kinds of nasty tricks are being used so that the true sales prices are not easily found out which would show how bad the market really is.

[fed-up]

16. if buying a foreclosure be sure to check former meth lab status-available from police/sheriff/public

health departments

Rules on disclosure vary from state to state, usually a foreclosure is sold "as is" and the seller/realtor can claim ignorance. Be sure to check with your local authorities and ask neighbors about drug activity in the neighborhood as even "good neighborhoods" have their share of meth labs.

I did not buy a foreclosure, but did buy a house that I just found out had a meth lab on the property (not in house). Still waiting for documentation from the county despite asking over a month ago.......

Testing and clean-up can run from $2,000-150,000!!! and don't forget soil, sewer, septic contamination....

[barb162]

18. Thank you; I never EVER would have thought of that.

[fudge stripe cookays]

25. Thanks for the tip!

Something I would never have considered!

[NYC]

43. I don't understand.

Why is clean up so expensive? I really have no idea. Thanks in advance.

[fed-up]

49. those hazmats suits are mighty expensive-costs $$$$$ to transport toxic waste to a proper

disposal area

One house in my town had to have all new heating/cooling duct work put in-clean-up cost $30K and that was w/out cleaning outside where the waste was dumped

some houses have to be stripped to the studs as the contamination soaks into the sheetrock and even washing 2-3 times w/bleach and a pressure washer does not remove contamination

some houses retested 3-14 years later are still testing positive-sometimes because initial test didn't include all rooms or because test missed "hot spot" near where chemicals were stored or cooked

some houses need new carpeting

if the soil is contaminated that can be very expensive, especially if a mega lab was on the property

I read one story where the sheriff's watched 500-600 gallons of toxic meth waste get dumped onto the soil where it then when into the irrigation canal (irrigation for FOOD crops)

one lady has a $5 MILLION dollar clean up bill because she rented out a farm shed to someone that used it as a mega lab-couldn't find the resolution of the case

[NYC]

69. So toxic fumes and toxic liquids

are the problem. I guess the fumes can permeate everything.

I hadn't known about that. I guess it is a true financial horror for the person who buys the house.

I suppose it could also be toxic to the person who buys the house. I never would have thought to ask such a question.

What happens to the people who make the meth? Do they wear gas masks?

Thanks for the information.

[slackmaster]

82. That should come up in disclosures and the inspection

Presence of hazardous materials (even in the past) has to be disclosed in all states. So do fires, and deaths on the property.

[Jelybe903]

21. Kool Aide Anyone?

hay guys this is not a real hard one...
It is the culmination of mortgage brokers (two years ago there were 2 full classified columns for new comers to this profession in the San Diego Union) the hiring frenzy in this field included anyone who could talk on a telephone! The result an on slot of prepubescent mortgage experts that bought into the "get rich hype" that probably couldn't even balance their own checkbook but wanted the "Beamer" status symbol. And these children were giving financial advise based on a sales pitch! A recipe for disaster?...and then some!

adjustable rate mortgages, 50 year mortgages, no down, interest only loans and my favorite the reverse amortization loan! (think about that last one if I could use the principle behind this one on my checkbook...I would never be broke) All led the horses to the trough but and the well was full of Kool Aide, it tastes good, looks pretty, but has no value.

No one can blame the homeowner that finally got a chance to "buy up" meaning they enough appreciation to sale and move into a newer larger Mc Mansion. No one can really blame the new comer to the market...after all it is the american dream and all the agents touted the "It's never going to stop going up attitude" And yet we can not blame them...don't know how many have already dropped out now that the game has gotten harder. Can't blame the contractors and developers that were selling faster then they could build, after all its all about the money!

Check out the real delemma...houses that people grew up in, inherited and may have lived in for years were and are a bulls eye target for mortgage brokers. Lines of credit based on equity are easy to get even without a means to repay them. So in our crazy market with sky rocketing appreciations can you blame the principles of these properties for buying into the idea of taking the equity out! In theory if it was used to improve the property, thats fine...its an investment...using it to buy a gas guzzling hotel on wheels like an Escalade etc...is stupid. You don't use property that appreciates to buy property the depreciates!

Sales is a game...and all the players need to know the rules...don't buy the slick keeping up with the Jones' pitch...this is a case where If it sounds to good to be true it really is!

[fed-up]

24. don't forget the $250,000 profit allowed every two years w/no capital gains tax-mid 90's? nt

[benld74]

26. That was just mortgages, what about student loans? credit cards?

[Selatius]

28. The student loan situation is coming to the end game because of tuition inflation outstripping wages

Eventually, the tuition bills are going to get too high for most people.

[Xenotime]

67. Already happening to our family...

It's just increasing the gap between the rich and the poor.

[InkAddict]

85. How can one even rebuild generational family life stripped away

of home and security by mergers, downsizing, and outsourcing. Imagine, the sole way to take care of student loan debt incurred by both student and parent is by Option#1, dropping dead(POOF, GONE), and that's the best way it could play out, except winning the Powerball Lottery on a good week.

Trying to hold onto a home in the face of serial corporate greed opportunities has stripped away our future. Our children's future is being stripped away as we speak. Our married child won't ever be able to afford children(all kinds of issues not the least of which is repaying student loans), and our unmarried one that thinks she'll be running the Montecito by virtue of her degree, if she manages to finish it (seems she'd have better odds if she were an unmarried mom--hope she's smarter than that), when the truth is she'll probably be lucky to maintain herself as a smiling front desk clerk or night auditor while paying off her loans until she's 50 and barren. Within two to four years, we'll both be able to draw down on the "nothing" that's left and be qualified, by reason of age and loss, to be low-wage slaves through our not so golden years.

I'm resigned to the fact that I'll likely turn over what little there will be for the "pleasure of life" as my daughers' pet caretaker (canine/feline grandchildren) and housekeeper until I can't push a vacumn cleaner around or climb the steps with a load of laundry anymore or can't remember what they are. Then Option #1, a falling leaf off a dying branch of the family tree) indeed seems reasonable!

[ClintonTyree]

27. The Bush economic miracle continues to impress......

NOT! :puke: Of course the people who made money on the housing boom (you know, Bush's "base") did VERY well and could give a shit about the little people who are been ruined chasing the illusive "American Dream". The "Gordon Gecko" syndrome I like to call it: "greed is good". :eyes: The people at the top are perpetually greedy and they sold the American public on the notion that they too could share in that greed and make it rich through buying and selling homes. But like any pyramid there's little room at the top and the already rich will not relinquish that position. Ever. SORRY SUCKERS!

Just like the stock market "adjustments" that cleaned out so many people's 401Ks, the "downsizing" that cost so many people their livelihoods and the corporate crooks that stole and cheated their own companies into the ground, the redistribution of wealth in America continues unabated. Every time the ever dwindling middle class thinks they're getting a leg up onto the next rung of the economic ladder the ruling class cuts the rung in half, and down they fall with no safety net in place. It's a con-game the rich have been running for centuries and it continues to work in their favor every time. And so it goes again. It's the little people who always pay. And pay. And pay.

[neuvocat]

31. One other thing along those lines...

is that the middle class, especially in this day and age, is getting sandbagged with children. One child is enough to keep a couple in the poor house, let alone any more than that. Without children, the bills are payable and there is a chance that a certain quality of life can be reached to make it enjoyable. With children, the money that could have been set aside to pay for a house or car or trips overseas is virtually non-existent.

[ckramer]

That's absolutely nonesense

Children are joy of life. Too bad you could not enjoy it.

[neuvocat]

51. Whose "joy of life"? Yours?

Children are "joy of life"? Really! Tell that to someone who has had to deal with putting up a child for adoption or having to go through with an abortion because they end up in circumstances exactly like what I had mentioned. Tell that to anyone in europe before you decide to check the birth rates over there. Maybe you can figure out why birth rates are so low if "children are joy of life". Tell someone whose child is incarcerated for rape, murder, drugs that "children are joy of life". Better yet, tell someone who lost her only child that "children are joy of life". Tell someone whose child is crippled by birth defects or cancer that "children are joy of life" when he or she knows that no one will be able to care for him or her after the parents are gone.

Hmmm...looks like you didn't think things through. I'll help you out some more.

The most important decision anyone can make is whether or not to have children at all. Those who put thought into that decision are going to be better parents if they end up having children. There is no doubt that there would be some pleasure in having children but clearly you are very self-centered. The joy you talk about would be felt primarily by you, at least for a little while at best.

Oh yes, you didn't think things through, did you? That possibility never occurred to you. Wonder why. It wouldn't be because you're being self-centered, would it? Yeah, it would.

Now after reading the article you would still insist on having that joy for yourself? Take a look around you, and I mean a very good look around you. Wages have not kept up with the pace of inflation, government services are still being slashed, the environment is increasingly unsteady, and terrorism is a growing threat thanks all to GW Bush, who couldn't care less about families that have to work in order to survive. And yet you want to bring children into this world on a shrinking budget? You would prefer to deal with foreclosure on your home and living on the streets because you wanted "joy of life"? Your children most likely won't be able to afford a decent home. They wouldn't have to deal with the situation if you hadn't been so concerned about "joy of life".

I still doubt that you put any thought into this, so I'll have to go on:


They will have to suffer through the legacy that Bush has left them. It is quite clear that you are entirely too selfish. When you had children of your own and now they have to deal with the consequences of your personal irresponsibility. Your children didn't ask to be brought into this world and you only did so for your "joy of life". You don't even have the decency to consider adopting a child apparently. At least I have. If you didn't try to judge me then you could have learned that about me.

But what am I saying? You of course didn't think things through, not even on a post on a website because your personal "joy of life" was just too important.

[Throd]

62. Are you available for childrens birthday parties?

As soon as I get home I will apologize to my daughter for my thoughtless irresponsibilty. I will also make my wife abort her six month old fetus to spare the child the apocalyptic hell which is apparently inevitable.

[FooFootheSnoo]

70. LOL.

[Selatius]

71. The premise is simple. Don't buy houses you can't afford.

If you have a family and you decided to take out a huge mortgage you can't possibly afford with your wage level when the opportunity to rent as an alternative was there the whole time, you're the one to blame when your children end up homeless because the bank seized their parent's home.

[InkAddict]

86. So, who is to blame when you have kid(s), take out a very

modest home loan, sacrifice those fabulous European vacations, nights out at the Club, tickets to Indy and season football seats to see to education and well-rounded healthy individuals by virtue of your participation and involvement in the educational process and the child's goals while maintaining the home appropriately in the community, and one gets sucked down the drain anyway.

[ClintonTyree]

54. Children are part of that, "American Dream".

Along with the house with the white picket fence, the 3.2 children, the family pet.....etc. It's all part of the bill of goods Americans have been sold to achieve their "piece of the American Dream.

I agree about children. I have one and she's driving me to the poor-house. But I love her and would gladly go without (and do) to make sure her life is better than the one I had at her age. I can't imagine people who have 5, 6 or more. I think I'd take the coward's path and jump off a bridge! ;)

[Connonym]

30. You know, it's not going to suck just for the borrowers

there will be a toll on lenders as well when they get stuck with a bunch of properties in a flooded market. They're going to take a big loss as well. To which I say neener neener. I'm trying to sell my house right now and currently there are 4x more listings than there were this time last year. My bank is filing for foreclosure tomorrow. The mortgage company has already had someone break in and disconnect the water and winterize the house plus had the gas and electricity shut off. Evidently that's legal even though no foreclosure has been signed yet. No, I'm not still living there so I guess they legally have the right to do so. As you can imagine, those things don't appeal to prospective buyers and have really turned off all the people who have been through my house. Except for the vultures who are circling with low ball offers of 60% of the asking price. I'm resigned to the foreclosure. The bank can deal with this mess now.

[skyounkin]

40. Sorry

to hear that Connonym, I am selling my house now- (wife and I are getting a divorce) and man, does it suck- our realator says we should lower our price......oh joy....

I don't think this housing burst has hit rock bottom yet.......it's just this feeling of dooooom I have.

Because no matter how bad it gets- it seems to get worse under *........

[Jelybe903]

42. Another S&L Fiasco

This is where the bail out will come in....sad but true...
No different then bailing out the savings and loans in the 80's _ No different then subsidizing companies that haven't priced their production to the bottom line...The Kings of Industry are but naives!

I was a stock broker in the 80s specializing in moving and investing large credit union CD'S. I saw the start of the savings and loan fiasco with Penn Square (the original cook the books player) They were moving Jumbo CD'S way beyond the 100K Fed Insurance limits- and when the rates and institutions failed...they did not get the money invested past the 100K limit back for their investors...That was the collapse of the Savings and Loan industry...Even though the investors did not get their money back...the S&L's got millions of bail out for property defaults...they moved on and started again...Who got screwed..

Mark my words the same will happen in the mortgage industry...but you can bet your ass the CEOs won't be forced to hit the streets.

[InkAddict]

87. Oh, boo hoo for the lenders....

and my F*&^g "Have" American (and foreign)citizens that underwrite them and their greed....they got what they were after from me, evidently. I don't care if that community of sleezebags blows away in the dust they've stomped up here and in the ME as it's likely it's too late for me to grow old gracefully. As they take a "Sherman's March" through America, they'll wake up one day to just what they've got left.

Oh, and speaking of children - get this! From the sponsor of the patriotic Ohio July 4 celebration, RED, WHITE, AND BOOM! now comes (drum roll please) Nationwide Children's Hospital, indeed. Check out the last paragraph for the new names of various other hospital departments. :puke: Not even a single philanthropist can make a large enough gift now, I guess...oh well...

http://www.dispatch.com/dispatch/content/health/stories/2007/06/22/childrens_logo.ART_ART_06-22-07_B1_2D737N6.html

[nodular]

32. Mark my words: the housing market has turned for our lifetime.

I used to know a guy who specialized in this sort of thing. I asked him why housing prices always go up while everything else fluctuates. He answered that housing prices fluctuate just like everything else---it's just that the cycle is incredibly slow.

He showed me a graph of how the pricing has changed over the past couple of centuries---I wish I had a copy of it or knew where to find it.

I honestly believe the "big turn" has happened, and after all these decades of rising prices (in inflation-adjusted terms) we are entering a long period of price decline (again, in inflation-adjusted terms). I really think it will be decades before inflation-adjusted housing prices rise again. The core reason is, houses are basically overpriced.

[ozone_man]

39. Finally someone who is not overly optimistic.

Ha! I think we'll be seeing 100% year over year increases of foreclosures over the next three to five years (exponential). I doubt will see the same prices for another 10 years anyway, maybe even 20.

[nodular]

74. I am equally happy to see a fellow realist.

Isn't it also interesting how resilient the economy has been in the face of this major housing downturn?

[NYC]

41. I think I found it:

"Looking at the Herengracht data is very instructive," he said, "because you can see 50-year intervals of growth, then it turns around. That's more realistic than the superstar-cities argument."

The Herengracht index begins with one of history's great building booms. In the 1620s, the Dutch Republic was in the first stage of its rise to global power. The Dutch had become the middlemen of commerce between European nations and had a monopoly on trade with Japan and the East Indies. The world's first major stock exchange came into being around this time in Amsterdam, and the Dutch developed or perfected the commodities and futures markets.

...In the five-year period between 1628 and 1633, as the economy soared, the real, inflation-adjusted prices of houses on the Herengracht doubled.

Then two things happened almost simultaneously: tulip mania and the plague. As their country became the center of international finance, the Dutch had taken to speculating on everything from tobacco and spices to tulip bulbs. After a one-month period of manic speculation in tulip bulbs in 1637, the bottom dropped out of the market. Meanwhile the plague had begun to sweep through the country in 1635; in Amsterdam alone more than 17,000 people - 14 percent of the population - died of the plague in 1636.

In the wake of these twin calamities, house prices dropped 36 percent...

http://www.iht.com/articles/2006/03/03/news/tulips.php

[nodular]

73. This is completely different from what I saw---but the same results.

The graph I saw was a general graph about housing prices in America over maybe a couple of centuries. But the pattern was the same! Thanks a lot.

[1932]

50. The book "Irrational Exuberance" has a graph for the last 120 or so years

which is as far back as the data goes. The author makes the point that, over that time, real estate appreciates at a remarkably consistent 1% per year, even in places like LA, where there was a tremendous increase in prices in the 80s. The author also makes the point that there isn't enough data on housing prices -- 120 years isn't long enough to draw concrete conclusions about long-term real estate prices.

The author is Robert Shiller, if I remember correctly.

[nodular]

75. Thanks. sounds like he is probably using the same data that was used

to make the graph my friend showed me. I've been saying "a couple centuries or so" but that was a long time ago, more than 10 years that I was talking to my friend. So I don't remember precisely how long it was---probably 120 years, like the book says.

Isn't it amazing, in a way? I'm in my 50s and all my life I,ve been told, "Real estate always goes up," and it pretty much always has. However, most people are in for a big surprise, I think.

[Puppyjive]

44. High appraisals are hurting real estate

OK, I need to get my 2 cents in. I think part of the problem with the real estate market is the appraisal business. I have heard lenders say that the appraisers like to appraise the house for the price the seller is asking. Everyone is happy. The loan goes through, the appraiser gets paid, the real estate agent gets paid, the house is sold and you get to move right in. This is what I believe drives up the cost of housing. How much are appraisers regulated? Not much where I live. My home cost $47,000.00 brand new. I paid $82,000.00 It is now worth about $130,000.00. Do I think it is worth $130,00.00 Hell no. The city sure likes the value increasing though. Something has gone terribly wrong in the housing market.

[1932]

47. The appraisers and lenders were all working together to make sure that

people were taking the biggest loans possible.

[girl gone mad]

46. Foreclosures were actually down in Texas.

We didn't have the huge price increases other states did, and historically our foreclosure rates have always been high. Still, I was a little surprised.

[David__77]

53. Texas isn't part of the the main trend.

I haven't studied why this is. But the pattern is almost red-state/blue-state... interesting.

[wiggs]

48. I've never seen so many for sale signs up in the socal neighborhood where

my office is. They say that prices are softening a little, but the time needed to sell is increasing.

[On the Road]

57. And Rates Just Went Up Again!

[Yavin4]

59. This Is All Very Simple

In the 80's and the 90's, the Information Tech sector replaced the mfg. sector as the private sector that generated the most middle class income jobs and careers. Even if you did not directly work in IT, all jobs and careers benefitted because IT was constantly hiring. As a result, IT drove salaries for most skilled workers. In the 2000s, the IT sector was killed by outsourcing. It's still around, but it's no longer the booming growth industry that it once was, and it's no longer driving salaries.

So, what replaced it? Cheap debt. With Greenspan lowering rates to 1% and foreign governments buying up our long term debt, borrowing money became incredibly easier and CHEAPER. And, when debt comes cheap, asset prices rise because now you have more qualified buyers. Hence, the housing boom.

However, today, debt is no longer cheap.

[spanone]

63. NINETY PERCENT!!!!! You'd think alarms would be going off everywhere?

[Xenotime]

68. You think the government would step in and lend a hand...

BUT NOOOOOOOOOOOOOOOOOOOOOOOOOO!

[ozone_man]

72. They already lent too much of a hand.

That's the problem, they've been printing so much money the past five yeears that the dollar has lost 35%. The Canadian dollar is making a run for parity with our dollar.

Rather than letting the recession run it's course back in 2003, they made a bubble much worse. Now it's going to be a bigger pop when it goes, when the debt bubble implodes.

[slackmaster]

83. Compared with long-term historic trends it's not quite so alarming

A near doubling in one year sounds bad, but it's not a long-term view.

[leftofthedial]

64. ROBUST economy!

:thumbsup:

[SpiralHawk]

78. "Don't worry, we will make money all the same" - republicon fat cats

"Oink oink oink - smirk, smirk, smirk" - republicon fat cats