Real Estate

Lets get down and dirty on how the real estate market works in China.

First, China has a system called Gong Ji Jin. This system is like a forced savings for housing. If you do not own a house this money keeps accumulating and you have no access to this money until you buy a house. It is divided into three different categories. A is about 44% of the [...]

Nevada number 1 in foreclosure filings as 1 in 94 properties received a notice.

“Had we not had a moratorium, it would have been even higher than we saw,” said Rick Sharga, vice president of marketing at RealtyTrac.com. “We’ll probably see an increase in the first quarter as well.”
http://www.cnbc.com/id/34846937
The number of listed foreclosures is actually declining here which means the banksters are holding back listing them in an attempt [...]

Happy New Year: 2010, The Year of The Unknowable!

The nice/bad thing about the new year, is that I always review the past years results. I get to see how “I” did, and then how my portfolios did. They are DIFFERENT! In other-words, did my actions add to or subtract from the overall results. First, I maybe the last long, buy and hold investor [...]

MHA: Making Homes Affordable.

There are only two ways to make homes affordable in America. 1) Get the government out of the prop-up business and let housing prices fall to where they become affordable. And that is a long fall still; 2) give all Americans a one-time payment of approximately $200,000 as a gift from Santa (or may from [...]

The NAR hype has already started in preparation for the Spring home buying season. If anyone is thinking of buying - BEWARE!!

Prices are going to take another leg down in 2010 in most areas and this latest batch of knife catchers who are rushing to buy - are just that - naive knife catchers.
What’s the truth? Unemployment remaing at 10% to 11% (government fake numbers) and 15% to 18% (true numbers). Stagnant incomes. Higher taxes on [...]

Several observations in China.

1). Home size in China include walls, balcony and doorway, 130 sqm is equivalent to about 1050 sq ft in the USA while the price is based on 130 sqm, not the 96 sqm.

2). When you buy property based on listing price, you can only buy “maopi fan”, bare bone apartment, there is no window, [...]

Many of the negative fundamentals will not be hidden for much longer, IMHO.

I read the one retail group was projecting Black Friday sales would be as much as 16% higher than last year. Boy, was that a bad prediction! I was amazed that the tally came in at only a 0.5% decrease compared to last year. I suspect that number was a preliminary estimated and will [...]

Ha-ha-ha! “Now is a great time to buy!”

Ron Paul laughed when he explained the stupidity of propping up out of control property prices, rather than let them find their own bottom naturally through the market. It is ridiculous for us to be paying tax dollars to those buying overpriced housing.
They want us to work for $10/ hour and buy homes fro $200,000. [...]

Huge Commercial Real Estate Crash is Coming!

All of the components of real estate value are going in the wrong direction simultaneously,” said Ross, one of nine money managers participating in a government program to remove toxic assets from bank balance sheets. “Occupancy rates are going down. Rent rates are going down and the capitalization rate — the return that investors are [...]

It is NOT capitalism…it’s corruption!

Government access and favoritism is NOT capitalism…it’s corruption! Government is suppose to be impartial and objective, doing what’s best for those they represent…the American people, not corporate America.
Politicians of the last 30 years are clearly MORE representative of ’special interest groups’ rather than the American people. Scandals and conflicts of interest are no longer kept [...]

FYI: Jobs will be driven by a higher new homes number. It ain’t happening:

Well folks, below is my analysis of the RATIO of new homes sales to the available workforce
Year …. Ratio …. Total …. Emp (1,000)
1963 …. 0.780 …. 560 …. 71,833
1964 …. 0.773 …. 565 …. 73,091
1965 …. 0.772 …. 575 …. 74,455
1966 …. 0.608 …. 461 …. 75,770
1967 …. 0.631 …. 488 …. 77,347
1968 …. [...]

Housing didn’t bottomed, it just stopped declining FOR NOW.

350k houses go on the market every month, there’s no way prices can hold. More losses in prices will result more writedowns. Capital might not be enough. In august new home prices dropped 9.5% in just 1 month!!!
http://www.census.gov/const/www/newressalesindex.html
Credit cards OK
Unemployment: don’t look unemployment number, look at just the employed! Last month was the 2nd worst [...]

Is real estate going to drop more?

OF COURSE IT IS.
Well lets think about this. Interest rates at an all time low means house prices and corporate real estate prices are at an all time high. Less interest means you can afford more house or more commercial property right?
Then we need to tighten up the lending standards because reckless lending got us [...]

NOTE: After reading #1 please read #6. They are very related and would push the unemployment numbers even higher.

1) “If laid-off workers who have settled for part-time work or have given up looking for new jobs are included, the unemployment rate rose to 17 percent, the highest on records dating from 1994.”
“The average hourly work week fell back to a record low of 33 in September. That figure is important because economists are [...]

More bank problems on the horizon!!

The bottoming out proces in house prices is only a delay.When the tax credits come to an end and the Fed stops buying mortgages, housing will be right back where it started. In fact, the market might actually be worse off since interest rates have nowhere to go but up and the tax credits have [...]

Don’t fall into the hole Fed dug, they need to fill the hole real soon.

Forgive my ignorance but if I am not mistaken didn’t the belief that the price of houses would never fall help get us into this mess in the first place? And where are people getting the money to pay for these houses when wages are still stagnant or have simply fallen?
Anyone who buys/bought into this [...]

Outrage: Federal Reserve is not just supporting the housing market, it is the housing market!!!

From CM:
“This is important information.  What I’ve found and present below is that the Federal Reserve is not just supporting the housing market, it is the housing market.
Just as important as a person’s desire to buy a home is their ability to gain access to mortgage funding.
The mortgage market is a gigantic beast with many [...]

The recession will continue to deepen through 2010.

The recession will continue to deepen through 2010, in spit of the rigged statistics which are restated constantly, and the lack of integrity in the reporting of unemployment. The CES Birth / Death model should not be used as a measure of anything. Also, we should break out the temporary census workers from the unemployment [...]

Panic: 60 Minutes (CBS) Wave 2 AltA’s and Option Arms (Video)

IT IS GETTING WORSE!!!!!

Watch CBS Videos Online
19 Million Vacant Homes
Feb. 3 (Bloomberg) — A record 19 million U.S. homes stood empty at the end of 2008 and homeownership fell to an eight-year low as banks seized homes faster than they could sell them.
The number of vacant homes climbed 6.7 percent in the fourth quarter from [...]

Loan Modification Failure Rate - 24% in 2 months.

As reported by the United States Office of Thrift Supervision, within six months after modification:
* 24% of the mortgages that had monthly payments reduced by 20 percent or more were 60 or more days past due versus
* 54% of mortgages with monthly payments if no loan mod.
See the June 30, 2009 quarterly report.
This report went [...]

Rally fails, depression imminent!

When job losses of 500K+ per week are “cheered” because they are less than the prior months “revised” figures
When the US “market” can “rally” 3,500 points completely uninhibited, in the face of “narrower losses” and plunging revenues. Isn’t a loss a loss?
When the “market” has “priced in” significant earnings growth, yet the “estimates” set by [...]

With a job recovery not even in the near term forecast, does not sound good for us on Main Street.

Sept. 23 (Bloomberg) — The crash in U.S. home prices will probably resume because about 7 million properties that are likely to be seized by lenders have yet to hit the market, Amherst Securities Group LP analysts said.
The “huge shadow inventory,” reflecting mortgages already being foreclosed upon or now delinquent and likely to be, compares [...]

The $8k tax credit pulled all the oxygen out of the room.

If existing home sales had been better than expected the markets would have rallied and the Dow would have been up triple digits and probably over 200 points for the day. Instead the existing home sales are worse than expected and the markets are fighting to stay down.
I believe that the “four consecutive months of [...]

Real estate is the BEST investment still and always, IF you hold for the long term, in case you buy at the top. Here is why:

1- We Human beings have 2 choice for living, either we Rent and we pay our Landlord or we Buy and we pay ourselves
2- You rent, you will loose 100% of your money 100% of time with 100% certainty
3- You buy, you may loose money in the short term but you will make money with [...]

Time to take the chips off the table.

For traders, start deploying your shorts at many a juicy target.
The valuations are through the roof.
“Valuations are (-) 50% from last year and markets up (+) 55% from March lows?”
From last year this time S&P and DOW are down around 20%.
They’re up nearly 60% from March lows on expectation of a V recovery back to [...]

“US Foreclosure Filings Top 300,000 for Sixth Straight Month”

FORECLOSURES CONTINUE AT HISTORICAL RECORD LEVELS
“US foreclosures near record, peak in late ‘10″ - Reuters - Lynn Adler
“NEW YORK (Reuters) - US mortgage foreclosure filings in August hovered near July’s record high despite broad efforts to keep borrowers in their homes and will probably rise for another year, according to a report released on Thursday.”
http://www.reuters.com/article/domesticNews/idUSTRE5890VR20090910
“US [...]

Residential housing is only one part of the equation.

As an example, most builders in my area have seen a flattening out in the residential, meaning there is a slightly interest, but commercial building is off the cliff dead. I am in the process of property hunting and I can tell you that there is a ton on the market. I looked at a [...]

The weird things I think about!

Buy & Hold….If you had invested $10,000 in the S&P on 1/1/1999, 10 years later you would have had $7,354.86 on 12/31/2008 – a loss of 26.5%.
They say….“But if you had missed just the 10 best days”. Well, if you had missed just the 10 best days between 1/1/1999 and 12/31/2008, your $10,000 would have [...]

Things I think about….or simple thoughts from a simple mind.

As of March 2007, there were 116,011,000 households in the United States. The poverty rate in 2007 was 12.5%. Assuming the 12.5% of the Households below poverty level pay little or no taxes, that leaves 101,509,625 to carry the weight. If we assume a growth rate 2.5% growth rate (approximately the real growth rate between [...]

As I once argued about why home sales (foreclosures) went up a couple of months ago, these purchases are mostly by investors.

Take that from REALTOR.com, the horse’s mouth:
Economists Say Recovery May be Slow
http://www.realtor.org/RMODaily.nsf/pages/News2009082502
Some economists are saying that they expect housing inventory and demand to meet sometime in 2010, but they don’t believe that necessarily means a rebound in the market.
“Even after we hit the low, we’ll be bouncing along that low for an extended period of [...]