The ongoing crisis triggered by the subprime mortgage defaults continues to spiral into new directions, making it difficult for even experienced market watchers to comprehend the complete picture and its implication for the financial markets. Therefore this article attempts to explain the crisis and what it implies for future interest rate trends.
What are Subprime Mortgages?
These […]

Conventional wisdom holds that real estate declines are slow, orderly trends which unfold over many years. But could the housing market be as primed for a “Black Swan Event” as the stock market?
Let’s look at a chart of the last housing decline, circa 1990-1996, courtesy of Lee Williams and the California Housing Forecast. The light-blue […]

By: David_Morgan
One of the most widely read books on money and investing has to be Robert Kiyosaki’s Rich Dad, Poor Dad, which is a unique economic perspective developed by Kiyosaki’s exposure to two “dads,” his own highly educated father, and the multimillionaire eighth-grade dropout father of his closest friend.
Read Article [offsite]

You won’t ever hear that the LBO boom is over or that the depreciation in housing is reaching levels not seen since the Great Depression from the Fed, or any government official for that matter. Telling the truth might be seen as irresponsible, sending markets tumbling across the world. So, the Fed has been carefully […]

Martin Weiss writes: With last week delivering the worst stock market rout in nearly five years, millions of investors are in a state of paralysis.
They’re finally beginning to wake up to the enormity of the meltdown in the housing market.
They’re finally beginning see how it’s impacting their stocks.
But they don’t know what to do about […]

A LEADING Wall Street economist has warned of a possible global financial meltdown if the problems in the US sub-prime mortgage market claim more institutional scalps.
Moody’s Economy.com chief economist Mark Zandi said the pre-conditions for global shock were in place and “one or two more Bear Stearns events” could have a profound psychological impact on […]

Between January, 2005 and today, 16 million houses have been sold. Let’s figure that the new owner probably paid double of what is was worth. So a 100k to 300k house was purchased for 200k to 600k. Figure that the new market price averages out to 300k.
Multiply 16 million homes by 300k and you end […]

I’ve been on vacation and had a chance to travel around the West. In many of the places I visited, concerns about a real estate crisis are growing. People are starting to fear what this means for them personally. The interesting thing about coming home is the narrative in Seattle remains “we’re different.”
I continue to […]

WHO’D have guessed it? Housing is the reason global stockmarkets are suddenly looking sickly, housing is the curse of the credit system, and it just might be the key to this year’s federal election.
In the US, the core problem behind the credit crisis dragging at Wall Street — and by implication the rest of the […]

Hedge funds have helped create a counterfeit economy that some experts say could lead to another full-blown economic depression.
Read Article [offsite]

By: Dr_Housing_Bubble
We can learn a lot from the social sciences especially in analyzing the current housing bubble. Many may see very little connection between housing and social science but behavioral economics and marketing have much to do and say regarding our current environment. This is particularly relevant in analyzing the current housing market because we […]

“This is dumbfounding to me,” Rosser said. “It’s a building boom in the middle of a housing bust.”
Bloomberg predicts the oversupply of condos in Miami will force prices down as much as 30 percent this year. (despite condos (like Jorge Perez’) still being permitted.)
Mark Zandi says Florida’s economy will be in a recession by October.
By […]

California mortgage defaults rose to the highest level in a decade in the second quarter as falling home sales and higher interest rates battered the housing market.Homeowners received 53,943 default notices, more than double the 20,909 filed a year ago, DataQuick Information Systems, a La Jolla, California-based provider of real estate data, said today in […]

The number of Bay Area homes lost to foreclosure during the second quarter hit the highest level in almost two decades, and the region’s homeowners also received a record-high number of mortgage default notices, according to a report to be released today.
California also set a record in the April-to-June quarter for the number of foreclosures, […]

By: Paul_L_Kasriel
In the question-and-answer session following his semiannual monetary policy report to Congress last week, Fed Chairman Ben Bernanke pooh-poohed the notion that mortgage equity withdrawal (MEW) had played much of a role in funding household spending in recent years. Rather, Chairman Bernanke, like most academics, cited the “wealth effect” as responsible for stimulating household […]

When the housing bubble burst, the optimists were quick to call for a bottom — again and again.Later, when the fallout from that still unfolding meltdown helped trigger a category five hurricane in the subprime mortgage sector, the rose-colored glasses types kept saying the situation would remain “contained.”
Then, when the reverberations from that snowballing disaster […]

June home sales were disappointing, falling sharply in a year over year comparison. Home prices remained flat.
In a recent news release, the National Association of Realtors reported falling single-family home sales for the month of June.

June 07 Home Sales
June 06 Home Sales
% Decline

5.01 million
5.70 million
12.1 %

Total existing home sales-which include single-family, condominiums, town homes, […]

EVEN MORTGAGE lenders cannot get their arms around the dramatic changes in the industry over the past several months. The fall of the subprime mortgage market and the subsequent resetting of underwriting guidelines, increases in foreclosure filings, and consumer anxiety have been dramatic to both borrower and lender alike.
Read Article [offsite]

In the latest indication that the housing market remains in a correction phase, housing starts rose 2.3 percent in June to a seasonally adjusted annual rate of 1.467 million following downward revisions for the previous two months, the Commerce Department reported today. Building permits, which generally are a harbinger of future building activity, were down […]

Further signs of cooling in the UK housing market emerged today as key surveys revealed slowing mortgage lending and approvals in June, suggesting that the Bank of England’s recent series of interest rate hikes have started to bite.The rest of the year is widely predicted to continue the slowing trend, especially as the BoE is […]

Federal Reserve chairman Ben Bernanke has warned that the crisis in the US sub-prime lending market could cost up to $100bn. In a second day of testimony to Congress, Mr Bernanke said credit losses associated with sub-prime mortgage failures were “significant”.
Read Article [offsite]

Why look for complexity when there is simplicity?
In a recent piece by Robert Rodriguez of First Pacific Advisors, LLC, you will see facts - simple facts about how simple what happened is.
Here are some obvious ones:
“Since 1965, the median dollar volume of single-family homes sales as a percentage of nominal GDP has averaged 8.4% versus […]

I’m sure many of you already read the article about The Real Estate Prayer Luncheon in Florida where a group of hopeful agents prayed that the housing slump will end. I actually think this is a great idea to resurrect the housing market. So in light of this, I am going to pray that my […]

When Gordon Brown was Chancellor he was responsible for the production of several reports from various economists which were supposed to shake-up the market for home loans and modernise Britain’s planning laws.Sadly, the documents were in the main left untouched and the country has fallen further behind each year with the amount of affordable housing […]

ABN Amro has warned that the ever-rising costs of borrowing could spark a global scale housing slump. The investment bank says that families have burdened themselves with unsustainably large mortgages which could leave them vulnerable to spiking increases in bond yields and further increases in interest rates.Although Britain is particularly exposed owing to its speculative […]

Federal Reserve Chairman Ben Bernanke told Congress Wednesday that the economy has emerged from its anemic spell, but overall growth for the year will be lower than expected. Inflation remains the chief concern, he said.Delivering a midyear Fed economic report to Capitol Hill, Bernanke struck a somewhat cautious tone. He suggested that the economy appears […]

Bear Stearns Cos. told investors in one of its hedge funds that they won’t get any money back after creditors forced it to sell assets at depressed prices, according to a letter sent by the firm.While a second fund still contains “sufficient assets” to cover the $1.4 billion it owes the New York-based firm, there’s […]