The California housing market continues to face severe pressure from distressed properties. Currently the amount of inventory on the market is near 1 year and prices for the region have fallen a stunning 27 percent on a year over year basis. Each of the major counties are now down $100,000+ from their bubble peaks. About one-third of all sales are distressed properties which only adds pressure to the future trend of the market.
If you needed any more evidence that the loss party on Wall Street isn’t anywhere near an end, just look at the whopping $2.8 billion loss posted by Lehman. This is the first loss ever posted by the Wall Street investment giant:
The Washington Post has an excellent three part series that will be highlighting the epic in progress housing bubble. For those of you who are still uncertain how this entire jigsaw puzzle comes together, this resource will prove to be invaluable. You have to wonder how the entire economy has become so dependent on structured finance and archaic instruments that make no sense, even to some of those in the investment firms. Many estimates are predicting that we’ll be seeing about $1 trillion in writedowns so anyone predicting a bottom is completely calling the game way too early:
You would think that someone would double check their own data given the situation in the housing market before reporting a statewide gain. You would assume that an organization that is the de facto standard bearer for Realtors would make sure that data accuracy would be the pinnacle of their mission. This is not the case. Last month the N.A.R. came out saying that
With the current housing mess people think that banks would be chomping at the bit to approve short sales. That is when a lender approves for a sale which is less than the face mortgage balance. Banks and lenders do not operate under a charity model. They will only approve a short sale if they believe in the long run that they will be saving money. This equation doesn’t always work out to the benefit of the current seller. Also, banks are currently inundated with REOs which are taking over a lot of the time of those in the loss mitigation departments. Read More
You’d be surprised what is going on in the current housing market. Many people are now trying a new technique by bailing out on their current home in order to purchase a new home while their credit is good. If you do the math, it would make sense at least from the buyer/seller perspective. Say you bought a $600,000 home at the peak which is now only worth $300,000. You’ve been diligently making your payments so your credit is still good. You see a similar home selling for $300,000. You decide to buy the $300,000 home, and then try to sell you $600,000 home with little concern of whether it sells or not. Your credit will be ruined but at least you’ll have a new place and for most people, good credit is all about being able to buy a home. This of course is illegal but that hasn’t stopped people this decade: Read More
Ed McMahon is a household name with most American families. His jovial attitude and his Publisher Clearing House awards are etched on the minds of many Americans. The idea of him knocking on your door and presenting you with an oversized check is at the core of the American dream jackpot. One would associate wealth when it comes to Ed McMahon. In another demonstration that the housing market is touching every niche of the U.S. housing market the Wall Street Journal reports that Ed McMahon may be facing foreclosure to no other than Countrywide Financial: