Yes, the title is rather dramatic but we will see some major shifts in housing this year. The cracks are already forming and it is only a matter of time that things are forced to adjust. The Fed, bankers, lenders, realtors, and all those involved in the housing syndicate are not going to shake this thing up so it will have to be an outside force.
What do you think about the chart above? When do you think these things will play out in 2007?
I know everything may seem gloomy but why not take a trip to Paris? Discount Paris Hotels Might as well get out of here and have some fun. Make a reservation for the summer in Paris and escape with Discount Paris Hotels the housing debacle here in the states.
Of course the French are also having a housing bubble. Paris is one of the top without a Discount Paris Hotels bubble cities in the world but at least the wine will taste good.
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9 Comments:
I posted this first, on another housing blog on a post a comment. Are you gonna come clean and admit it?
Thanks if you are more honest than real estate deal washers and mortgage (make u) brokers,
Coconutz!
Anon:
You are more than welcome to post a link to the comment you are talking about. There are a few major factors that are coming up and many people are coming toward the same conclusion; there are many ways to slice the pie so to speak. You can review my previous posts and I have been discussing these major issues for months.
Thanks for reading. I’m sure we’ll be hearing very similar things in months to come.
ok sounds sincere, mybe it's a coincidnece and I can't rember where i recntly posted my 4 horsemn analogy. You point is well taken. Please call me Coconutz!
good post
looks like the negative bias from The Big Picture has spread to a few other places ....
hopefully you won't get nitwit commenters like BDG123 , Eclectic , Cherry and Bryon posting here .... bunch of knucklehead trolls
keep up the great work
Anon 6:15:
I wasn't aware of the negative bias at The Big Picture blog but everyone is welcome to their view of what will occur in 2007.
Thansk for reading and commenting.
Very nice overview. I'm interested in anyone's perspective on the percent of inventory that will go to foreclosure (REO), and how long they think they banks will hold onto those props. My thinking is that the banks will hold for 2007 and that early 2008 inventory will look much worse than 2007?
Anon 12:07:
I doubt anyone has any reliable stats on the percent of projected REOs that will occur. There was a recent study stating that 1 out 5 subrime mortgages, which account for 8 percent of all mortgage debt, will go into default in the next two years. This puts the number of homes going into some type of foreclosure over 1 million.
We've never had this type of global liquidity and housing appreciation so we can only use past models to determine what will occur in the market.
At the end of December 2006, the Census Bureau released a report.
The report said contracts on new home sales -- after falling for nine months straight -- had ticked up. Was that good news? Some key sources said yes. But look closer, because even the Census Bureau admits the way they tally those numbers doesn't work.
From the Census Bureau Web site: "As a result of our methodology, if conditions are worsening in the marketplace and cancellations are high, sales would be temporarily overestimated."
Suppose you put a contract on a house in November, then cancel in December. The sale never happens. But the contract still shows up in the Census Bureau report.
Says Mark Zandi, the chief economist over at Moody's/Economy.com, "Given the rise in cancellation rates... between 150,000- 200,000 home sales are being counted that did not actually occur."
Dr. HB,
I decided to make a Baltimore Housing bubble Blog. Would you mind linking? I've already linked to your site.
http://bubblemore.blogspot.com/index.html
Thanks,
Kevin
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