Posted some charts from Bianco Research about home prices yesterday.
I though they were quite interesting and informative in my opinion.
tradersutra.blogspot.com/2009/07/pmi-group-on-housing.html
Those charts looked bad and stated more pain for home owners going forward, but I believe the single worst and most detrimental point as I have stated before is that in most markets the foreclosure price at auction is setting the current home values for that market. It doesn't matter what the true value of your home is, if there are foreclosures in your neighborhood, the value of your home is going to based off that price.
tradersutra.blogspot.com/2009/02/bank-nationalization-is-inevitableget.html
Going back to this point...there have been many calls from people who never got it right in the first place or who were oblivious to a housing problem even existing, now stating that they see housing prices firming up. Where do you see this? I am still looking.
Why are people like CNBC's Jim Cramer still relevant? Why does he still have a platform to spew his ludicrous thoughts?
www.youtube.com/watch?v=pEUy78JMie8&feature=PlayList&p=96265650D1B76034&playnext=1&playnext_from=PL&index=4
The Simple truth is this-
The U.S. housing market is facing more downward pressure as holders of subprime mortgage bonds flood the market with foreclosed homes at prices that are much lower than where many banks are willing to sell. A review of thousands of foreclosures in the Atlanta area alone shows that trusts managing pools of securitized mortgages sold six times as many properties as banks during the six months ended March 31. And homes dumped by subprime bondholders sold for thousands of dollars less on average than bank-owned properties.
This is a bad omen for residential real-estate prices and homeowners trying to sell or refinance, because the fire sales, many to cover soured subprime loans, put downward pressure on the value of nearby homes. All of this undermines federal efforts to stabilize the housing market and revive the broader economy.
While the banks are trying frantically to get loans off their books, the ones that they have not dumped on the Treasury and US Taxpayer, they face the problem of large shadow inventories of housing being dumped on the market, which would depress prices even further.
Foreclosure activity in Atlants which has only the 35Th worst foreclosure rate out of 203 metropolitan areas has nearly doubled over the last 9 months.
Of those foreclosures, securitization entities sold 2,963 homes during the same period for an average of 62% of the original loan amount. Banks unloaded just 442 of the homes they foreclosed upon, with an average selling price of 69% of the original loan amount. There still is much more inventory that mortgage-servicing firms are racing to sell for securitization trusts. Such entities tend to sell in bulk so that they can cut losses, finding it more cost-efficient to move homes through foreclosure and subsequent sale than to try to restructure the mortgage with the borrower. Securitization trusts also realize that potential buyers won't step in unless the price is attractive.
On a nationwide basis, foreclosures were started on a record high of nearly 1.4% of all first-lien mortgages in the first quarter.
The foreclosure activity is just ramping up at this stage, and once we get through this inventory of short sales and buy outs, we can then properly look at where we are. We are no where near this level as of yet.
I foresee another 6-8 months of brutal foreclosures that will slice an eventual 30% additional off of housing prices across the country.
If and only once foreclosure activity slows down, we should even consider that housing has stopped going down...don't even waste my time until then. We have not even gotten into the economy actually adding more jobs for people to pay for their mortgages.
Forget refinance activity, lower mortgage rates, PIPP, and other government nonsense.
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