For the past few months we have not really talked "that" much about housing; certainly not as much as we did early in the blog life. Reason being back then the pundits were vehemently arguing the housing issue is smallish, there had never been a national drop in housing prices , blah blah blah. So we wanted to get the reality it out there. Now they've been silenced on all those issues and what we are left with is the constant looking for silver linings in very bad data and "trying to anticipate when the bottom begins". But every so often we'll post some data, such as this. And housing is so intertwined with the banking system/credit situation it must be something you continue to monitor. But since the news won't be changing for a long time, I don't really bother to post 90% of the statistics since it would get repetitive. Summary: It is bad. It will continue to be bad. When it "recovers" it will be a long period of scraping along the bottom. Think tech stocks from the early part of the decade and how they "recovered" - long, drawn out process and many never came back. Or think Japan 1990s.Keep in mind as you read the below data that certain states have put a pseudo moratorium on foreclosures as a preventative measure, so the numbers would be even worse if not for that.
- The number of homeowners stung by the dramatic decline in the U.S. housing market jumped last month as foreclosure filings grew by more than 50 percent compared with the same month a year ago, according to data released Thursday.
- Nationwide, more than 272,000 homes received at least one foreclosure-related notice in July, up 55 percent from about 175,000 in the same month last year and up 8 percent from June, RealtyTrac Inc. said. That means one in every 464 U.S. households received a foreclosure filing last month.
- More than 77,000 properties were repossessed by lenders nationwide in July, the company said. (thats almost a 1 million annualized run rate)
- Nevada, California, Florida, Arizona, Ohio, Georgia and Michigan had the highest foreclosure rates. Foreclosure filings increased from a year earlier in all but eight states
- Many can't find buyers or owe more than their home is worth and can't refinance into an affordable loan. (Bingo)
- As foreclosures soar, banks and mortgage investors are also facing a pileup of foreclosed properties on their books and are cutting prices dramatically. (which will drive down prices for those in homes in the same areas - which will cause them to be underwater if they bought anytime in 2003-2007, and thus the daisy chain continues)
- RealtyTrac noted that it had more than 750,000 foreclosed homes in its database of properties for sale, equal to about 17 percent of the 4.5 million U.S. homes that were up for sale in June. (think about that - 1 in 5 homes in America for sale is a foreclosure - and even at those "bargain" prices we are not seeing any huge uptick in sales - one must ask why if the Kool Aid economy is doing so well)
- RealtyTrac noted that it had more than 750,000 foreclosed homes in its database of properties for sale, equal to about 17 percent of the 4.5 million U.S. homes that were up for sale in June. (buyers will include Goldman Sachs and Blackrock, trust me ;))
- Even with government help, nearly 2.8 million U.S. households will either face foreclosure, turn over their homes to their lender or sell the properties for less than their mortgage's value by the end of next year, predicts Moody's Economy.com.
5 comments:
When is commerical gonna follow (SRS)? Crazy. I usually avoid malls but when I go I see store closing and really HIGH prices that mostly teens are buying, prob with CC's.
Kinda referring back to your prior article about the illogical whipsaw activity in the markets... With all the negative news about real-estate, **please** explain why SRS is down day after day!!??!!
I was doing OK buying SRS and SKF on the bad news until one day when I got hammered for no real reason. Since then, I've begun to buy either on a 60 minute +DMI crossover of -DMI and exit on the other end. I was going to just set it up (for automatic trading - If you can't beat 'em, join 'em!) but I'm having a lot of problems with TDAmeritrade's StrategyDesk.. Not sure how, but I got bought and sold out of Costco yesterday about 10 times... Hmmmm ..
jegan ;-)
You guys are trying to find explanations where there are none. Reference the past 2 months.
Look at inflation reports. People shrug it off and say look to the future - inflation is in the past - the worst is behind us. Forward looking everything will be fine. This "thesis" can be applied to everything if you want to believe it,
Mall rates suck? So what - thats the PAST - look forward to the coming recovery - malls will be booming - so will office space. Hence buy REITs
Again, it PERCEPTION is reality guys. It does not matter what reality is in the stock market. Only the perception of. The market was at ALL time highs in Oct 2007 on the PERCEPTION everything was ok. THat was proven to be incorrect, but that did not mean those of us in SKF and SRS did not get killed (I sure did) back then.
We go through these periods of hope - until an avalanche of evidence crushes hope - the stocks rally. Because humans are a hopeful sort and they can always shrug off evidence and point to that illusory "6 months from now" everything will be ok - they did that all through April and May (remember "2nd half 2008" recovery) That was a hoax. We see that now, but that did not stop the market from bouncing for 2 months.
They will "create" a thesis to fit the buying pattern.
Money flow is all that matters in this market. Simple as that. Evidence and facts are not useful because they can be overridden by hope. Until evidence and facts are so overwhelming that Kool Aid punch bowl must be thrown away from a while. And thats when the market craters.
It's all about timing.
tradermark... You are correct. My personality likes to know why things happen. As a result, I have begun to ignore fundamentals and focus on market action. IF a stock looks like it's set to move, I buy it with a stop. Still... I like to have a reason why I think there is support for a purchase anyway..
By the way, you seem to be correct about CGMFX.. Yesterday, all the top 10 holdings posted a good 5% hike and the fund tanked... Not much, but some... Think it's time to email CGM and get some feeling for what tack they are taking.
jegan ;-)
People were asking me in October 07 where the "recession" was as the market ran to all time highs, and why I was so negative when the stock market was so clearly disagreeing with me.
People seem to have this theory that the market is all knowing and can predict the future and is discounting 6 months ahead. That might of been true 20 years ago but now its a new era. The market was horribly wrong in October 2007. Hence if you try to find "truth" in stock price action you will be miserably disappointed.
If logic was the key to success, the great investors would be dominated by statisticians and math majors. Maybe we are moving to that since algrorithims programmed by these guys now have so much sway but thats not been the type of person who has dominated the market for the past 50 years.
Also, please never take 1 day of action to mean anything. Stock prices are completely random. We had bad inflation, housing, and economic news today and we're up. Correlation? None. Kool Aid level? In the red zone.
I'm not trying to dissuade you from trying to figure things out but a lot of investors try to find connections where there are none. Especially in the shorter term. And the market is many times wrong ... i.e. Was Cisco worth 200x earnings in 2000? Not so much. But the market said it was.
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