Owner: New York City Housing Bubble - 'The BIG Picture' URL:http://nychousingbubble.blogspot.com Join Date: Fri, 13 Apr 2007 22:00:12 -0500 Rating:0 Site Description: A North Williamsburg Brooklyn Bubble? Fuggetaboutit! Here you'll find NYC info, but first and foremost The BIG Picture on macro-economic, financial, and geopolitical issues that will affect the market in the immediate future. Site statistics:Click here
NY Post: Bubble Sightings Reported In NYC 2007-04-14 00:37:00 SUB-PRIME LOAN BUBBLE IN CITY by David Seifman, City Hall Bureau ChiefNew York Post 4/12/07 snip:A startling 50 percent of homeowners in five of the city's poorest neighborhoods are holding sub-prime mortgage loans, it was reported yesterday. NYU's Furman Center for Real Estate and Urban Policy said the percentage of home-purchase loans in the sub-prime category here more than tripled from 6.5 percent in 2002 to 22.9 percent in 2005......"If [home-value] appreciation flattens out, you're going to see a lot of homeowners going into distress," warned Furman research fellow Solomon Greene. When there's a downturn in the housing market, overburdened borrowers could find themselves unable to pay the mortgages and unable to sell their homes for what they paid, which would lead to foreclosures. In many cases, sub-prime loans offer low two-year teaser rates that increase dramatically in the third year. They're also tougher to refinance. "These homeowners could be stuck in very expensive l Read more:Bubble
, Sightings
Word of Advice During a Housing Slump: RENT 2007-04-12 00:43:00 A Word of Advice During a HousingSlump
: RENT by David LeonhrdtNew York Times 4/11/07 snip:[NYT Interactive Media - Compare the costs of renting and buying equivalent homes]A promotional spot for the National Association of Realtors came on the radio the other day. The spot, introduced as something called “Newsmakers,” was supposed to sound like a news report, with the association’s president offering real estate advice. “This is the best time to buy,” Pat Vredevoogd Combs, the president, said cheerfully. “There’s a lot of inventory in the marketplace. Interest rates are low. It’s a wonderful tax deduction.” That’s how it has worked out for much of the last 15 years. But in a stark reversal, it’s now clear that people who chose renting over buying in the last two years made the right move. In much of the country, including large parts of the Northeast, California, Florida and the Southwest, recent home buyers have faced higher monthly costs than renters and have
Upper End Mortgages Getting Whacked 2007-04-09 01:52:00 Not much to post over this weekend due to the holiday. Here are a few to consider as we move into a new week of non-suprises in the 'real market'. New posts will begin Monday, evenings as usual.Regarding the hype recently given to a so-called increase in Manhattan RE prices, readers should revist the following article, the truth is hidden in the last paragraph...Manhattan Apartment Prices Increase at Slower Pace - Bloomberg 4/3/07...Overall, the median price of studio and one-bedroom apartments fell 2.3 percent to $390,000 and $635,000, respectively, while the price of two-bedroom units fell 2.8 percent to $1.3 million and three bedrooms declined 1.2 percent to $3.1 million, Miller Samuel said...American Home Mortgage (AHM) by Jim KingslandKingsland Report 4/5/07Monday is going to be a rough day for longs in American Home Mortgage Investment (AHM). This company has made a large cut in its earnings forecast saying, "conditions in the secondary-mortgage and mortgage-securities markets Read more:Upper
Don’t believe the hype that the subprime problem won’t spread 2007-04-06 17:56:00 Subprime Problem Not an Isolated EventComstock Partners 4/5/07 snip: Don’t believe
the hype that the subprime problem won’t spread to the rest of the economy. Tighter mortgage standards have only begun to be implemented and will have a significant impact. On the demand side fewer people will get financing and fewer will be in the market for new homes. Mortgage lenders will scrutinize applications much more carefully and require down payments and full documentation of assets and income. As a result fewer people will apply and of those that do, some will be turned down. In addition primary lenders know that they will have more difficulty selling off their loans as potential purchasers get more risk averse. A recent New York Times article showed that even in the New York City area mortgages have become harder to get—and this is still one of the strongest markets in the nation. All of this means that demand for new homes, already down 30% from a year ago, is almost certain to drop fu
Bust Deepens = Contagion Spreads 2007-04-05 01:25:00 Payment Woes Worsen On Riskiest Mortgages by James R. HagertyWall Street Journal 4/4/07snip:The number of borrowers in the U.S. falling behind on the riskier types of home mortgages continues to grow, according to new data from First American Loan Performance, a research firm in San Francisco.The rapid rise in overdue payments and defaults has forced dozens of lenders out of business or into bankruptcy protection in recent months and darkened the outlook for the U.S. housing market.The First American data show that in January payments were at least 60 days late on 14.3% of "subprime" loans that had been packaged into securities, up from 13.4% in December and 8.4% in January 2006. Subprime loans are those made to borrowers with weak credit records or large debts in relation to their incomes. For Alt-A loans -- a category between prime and subprime that includes many loans that don't require full documentation of the borrower's income or assets -- the late-payment figure rose to 2.6% i Read more:Contagion
, Deepens
Pending Home Sales Up? NYC RE Prices Up ? 2007-04-04 02:14:00 Under closer scrutiny, those headlines don't look so wonderful. First, the real deal on the Pending Home Sales
Index 0.7% increase, and the hidden line at the very end of Bloomberg's article indicating the overall NYC price declines. Hmmm.Five Things You Need to Know by Kevin Depew - Minyanville 4/3/071 of 5. Pending Home Sales: Pending home sales rose 0.7% in February, more than expected, despite bad weather, the National Association of Realtors said.- Year-over-year pending home sales are down 8.5%.- NAR "Chief Economist" David Lereah, author of 2005's "Why the Real Estate Boom Will Not Bust - And How You Can Profit from It: How to Build Wealth in Today's Expanding Real Estate Market", the more recent "All Real Estate Is Local: What You Need to Know to Profit in Real Estate - in a Buyer's and a Seller's Market" and June 2000's "The Rules for Growing Rich: Making Money in the New Information Economy," said, "the data suggests an underlying stabilization is tak Read more:Prices
VOTE: Bail Out Subprime Lenders & Borrowers ? 2007-04-01 23:14:00 Click the image to play this CNN video clip over at BNN.(hat tip to Paladin)'Comedian Kathleen Madigan argues that lenders should not be bailed out by the government. The subprime slime may not have fully spilled over into the economy as of yet but it certainly has infected popular media.'NYCbubble readers, what are your thoughts and what is your vote - YES or NO. Enter your thoughts and vote in the comments below... New York City Housing Bubble - The Big Picture Read more:Borrowers
, Lenders
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You Thought NYC is Immune to a Bust? 2007-03-31 15:12:00 We appear to have a 'failure to communicate'. Here is, the beginning of 'contagion' in the city, beyond the current increase in foreclosures, inventory pressures, and price decline forecast. Credit Crunch, no matter what your income bracket or credit history may be.The Battle for a Mortgage by Christine HaughneyNew York Times 4/1/07 AS homeowners across the country have dealt with the declining values of their houses and their ballooning mortgage payments, most New Yorkers seem to believe that the market here doesn’t play by the same rules.But in recent weeks, a growing number of New Yorkers, often with six-figure salaries and reasonably good credit, have begun to find that mortgages are harder to get as lenders try to stem losses from loans to the weakest, or subprime, borrowers.“The impact is going to be much greater as banks demand that people have clean credit to get the best mortgages,”......In many cases, economists say, borrowers are going to be treated l Read more:Immune
Ready For 30% - 50% Home Price Plunge Yet To Come ? 2007-03-30 00:24:00 Housing drop may deepen, Forecasters say prices could plunge 30% to 50% more by Craig WolfPoughkeepsie Journal 3/27/07Economists at a forecasting center in Westchester County say the nation's housing market is far from being done with its downturn. Too-high home values, heavy consumer debt and harder-to-get loans will combine to push prices down, predicts the Jerome Levy Forecasting Center in Mt. Kisco. How much? There's 30% to 50% left to go, they say, in a prediction that would have a huge effect on homeowners if it proves true, something not everyone is ready to buy... "We think that loan problems are going to push lenders to be tighter and tighter," Feltes said. That means marginal buyers will be pushed out of the market, and having fewer buyers tends to depress prices. Full Article Here...And, if that is not enough doom for ya, try this one...US housing slump may trigger financial crisis, warns Morgan Stanley by Ambrose Evans-PritchardTelegraph UK 3/28/07America's housing slump
The Bottom Is A Moving Target 2007-03-29 00:52:00 These numbers will continue a downward trend as inventory and foreclosures increase, credit tightens, the contagion spreads through the economy, and consumer spending wanes because the majority are up to their eyeballs in debt with negative cashflow in a service economy.The Bottom
Moves by David E. Altig, Fed Reserve of ClevelandMacroblog - 3/27/07Here, according to CME housing futures based on S&P/Case-Shiller home prices indexes, is the outlook for prices in the "big ten" markets:Click Images To Enlarge ------More...NY Daily News - Set up for a fall; record foreclosures in NYC poorest nabesCalculated Risk - Bernanke on HousingCalculated Risk - Bernanke's ForecastBig Picture - Barry Ritholtz: Bernanke TestimorySt. Louis Fed Reserve - Bank Credit of All Commercial Banks (Chart = Credit Contraction) USA Today - Single-fam home prices plummet in Jan, worst drop in 13yrsNYT - New Century Weighs BankruptsyCharlotte Observer - Feds Launch Criminal Investigation of "Potential Fraud" by Read more:Moving
, Target
Robert Shiller: This Is Just The Beginning Of Declines 2007-03-28 00:40:00 Case Shiller
Housing Composite Flips Negative by Barry RiholtzBig Picture 3/27/07For first time in over a decade, the Case Shiller Housing Composite flipped negative; I'm sure this is utterly meaningless, and is nothing to worry about whatsoever: (sarcasm added, see the chart posted below)"January data released today by Standard & Poor’s for its S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices in the United States, shows home price composites plummeting into negative terrain.“The annual declines in the composites are a good indicator of the dire state of the U.S. residential real estate market,” says Robert
J. Shiller, Chief Economist at MacroMarkets LLC. “ The 10-City and 20-city Composites are both showing negative annual returns, a striking difference from the 15.1% and 14.7% returns they reported this time last year. The dismal growth in the 10-City composite is now at rates not seen since January 1994.”Unless the actual data matters to yo
Foreclosures UP - New-Home Sales DOWN 2007-03-27 00:25:00 NYCbubble readers... why are we not surprised by this news? If you are and/or new to this blog, you might consider getting your head out of the sand and adjust your investment portfolios.US Foreclosure Filings Rise 12 Percent in February by Bob IvryBloomberg 3/26/07Foreclosure filings last month jumped 12 percent compared with a year ago as owners struggled with declining home values and higher adjustable mortgage rates... That's the second-highest since RealtyTrac began collecting data in January 2005... The worst housing slump in more than a decade is pushing down home prices and hampering the ability of owners to refinance mortgages......"The rise in foreclosures over the past year probably only marks the beginning of the problem," Jan Hatzius, a Goldman, Sachs & Co. economist, wrote in a March 23 report. "The main reason to expect further deterioration is that house prices are likely to fall significantly in 2007, with further declines possible in subsequent years." Foreclosures
i Read more:Sales
Saturday Night Video Round-up 2007-03-24 22:01:00 Click Image to Play a Video...Bloomberg: Nouriel RoubiniCNBC: ARM TsunamiBloomberg: Tightening StandardsRoubini, professor at New York University's Stern School of Business, talks about the possibility of a US economic recession in 2Q07, changes to the Feds policy bias and recent turmoil in subprime.Barry Glassman, financial planner with Cassaday suggests that the meat of the 3yr ARM adjustment starts next month followed by the beginning of 5yr ARM adjustments this summer and lasts for another 4yrs.A discussion of how tougher mortgage requirements may cause significant decreases in mortgage volume, and its effect beyond the subprime market.CNBC: Meltdown StudyBloomberg: Skyhigh ManhattanNBR: Zandi at Moody'sSteve Liesman goes over details of a new study by First American Corp. that suggests the mortgage meltdown will last for another 6-7yrs with 1.1million foreclosures. 70G foreclosures for every 1% decline in home prices.Jonathan Miller of Miller-Samuel talks about Real Estate Pric Read more:Night
, Saturday
, Saturday Night
Bubble Tales - They ALL Burst 2007-03-23 19:11:00 Two Spillovers by Stephen RoachMorgan-Stanley 3/23/07The bursting of two bubbles seven years apart – dot-com and housing – holds the key to the macro outlook. While different in many respects, these sharp swings in asset markets share one thing in common – the initial belief that any spillovers would be limited and that the rest of the economy and financial markets would remain unscathed. Just as that view turned out to be wrong in the early 2000s, I fear a similar outcome today.There are two ways to look at spillovers -- contagion within an asset class and repercussions from one sector to another in the real economy. Both are obviously important. Seven years ago, the asset-market excesses were most acute in the so-called pure Internet plays – a collection of over 350 companies that had a combined equity market capitalization of over $1.1 trillion in late 1999, or 6% of the total value of US equities. When the dot-com bubble burst in early 2000, most were confident that the rem Read more:Bubble
, Burst
, Tales
WSJ - Mortgage Meltdown May Produce Unprecedented Nationwide Decline In Home Prices 2007-03-21 23:44:00 Hmm, the WSJ seems to have had an epiphany of sorts. And don't miss the Reuters article where Ex-Treasury Chief Larry Summers warns of Global market risk due to geopolitical tensions. What a day, huh? The Fed flip flops, Bloomberg gives Roubini a 17min solo video spot, Iran threatens to go full scale nuclear and flips Russia the bird, the USD keeps spiraling downward, and mainstream financial papers catch a whiff of the housing bust reality. All this doom and gloom would melt even the most wicked of witches. Gold as a hedge sure does look good, +21% ytd.MortgageMeltdown
by Andy LaperriereWall Street Journal Commentary 3/21/07snips:Stock markets world-wide have sold off the past few weeks over concerns the collapse of the subprime mortgage industry could prolong and deepen the housing slump and threaten the health of the U.S. economy. Federal Reserve officials and most economists believe the problems in the subprime mortgage market will remain relatively contained, but there is c Read more:Decline
, Home Prices
, Nationwide
, Prices
Sunday Morning Video Round-up 2007-03-18 16:34:00 Click Image to Play a Video...CNBC Squawk Box: Peter SchiffBloomberg Market Pulse: James GrantKudlow & Company: Shiller & SiegelSchiff, president of Euro Pacific Capital, says 'recession is an absolute certainty', and discusses the current mortgage market debacle and its economic fallout. Grant, Editor of Grant's Interest Rate Observer says troubled part of Mortgage Market is 'Immense', and explains in plain english exactly whats going on.Bull-Bear segment with Yale Professor Robert Shiller as the Bear and Professor Jeremy Siegel as the Bull.Bloomberg: Economy: Allen SinaiBloomberg: Economy: Dennis GartmanPBS Newshour: Zandi & RosnerSinai, president of Decision Economics Inc., says recession risk leaves Fed 'stuck' on rates, talks about inflation risk and the state of the U.S. and global economies.Gartman, economist and editor of the Gartman Letter, expects 'sustained bear' market for Stocks, and talks about strategy for investing in commodities.Economists Mark Zandi and Jos Read more:Morning
, Sunday
, Sunday Morning
'The myth of a credit crunch limited to subprime is faltering by the hour' 2007-03-06 01:18:00 US and Global Financial Turmoil: Ten Observations on the Coming Financial and Economic Hard Landing by Nouriel RoubiniRGE Monitor 3/6/071) Will the US economy experience a hard landing or a soft landing in 2007? Most likely a hard landing recession or, at best, a growth recession2) The housing recession is getting much worse not better. Housing is not bottoming out. Starts and home sales are in free fall. Price action will be sharply downward. 3) Contagion from housing to other sectors of the economy: auto recession, manufacturing recession, real investment recession as all four components of investment are now plunging; sharp slowdwon of the service sector; soon contagion to a consumer who is at its tipping point.4) Subprime problem (meltdown/carnage) is not limited
to subprime sector. It is a widespread problem for all parts of the mortgage market. Garbage lending practices used for subprime (zer or low down payments, low/no documentation on incomes and assets, interest rate only, Read more:credit
Are 'Bubble Watchers' Idiots? 2007-04-17 02:22:00 Are We Idiots
? Deloitte Research chief economist doth protest too much by Eric JanszeniTulip 4/16/07It was inevitable. As the housing bubble collapses and the credibility of housing bubble boosters melts like a popsicle in the Texas summer sun, those of us who have been critical of them will become objects of their derision. Still, it's surprising to be called out in this way–with name calling–and by none less than Deloitte Research's chief economist and a director of Consumer Business Research, and on such a weak pretext. Dr. Steidtmann is mentioned in passing in a single 267 word post–one of 8,890 on our forums–on August 27, 2006 as a candidate for a potential new housing bubble Pundit Watch list, in the spirit of iTulip's stock market Bubble
Pundit Watch from the stock market bubble era. Back then we featured Goldman Sach's Abby Joseph Cohen, then a certified "investment guru," and TV personality James J. Cramer, then shilling tech stocks in his inimitable way. We noted Read more:Watchers
Toxic Yuppiville - Williamsburg / Greenpoint 2007-04-16 02:46:00 Yup (no pun intended) folks, a Real Estate Bubble built directly on top of a kill zone. A 17-30mil gallon oil 'plume' (actually a spill, as in twice the size of the Exxon Valdez dilemma) right under our noses. Oh, and mercury, benzene, plutonium, raw sewage, garbage processing, super-fund sites etc... Still excited about spending all that doe to live in the BURG? Ah, the trust fund paid for the apt so I'll be safe. Hmm.Get The Facts On The Oil Spill - http://www.greenpointvexxon.com/Toxic Site Map of NYC: Check Box at top right 'Toxic Sites' and zoom in - http://www.propertyshark.com/mason/Maps/TOXMAP for 11211 - http://toxmap.nlm.nih.gov/toxmap/combo/triIdentify.do Hat tip to WWVBS.TVRescuing You From Television's Deathlike GripTOXIC BROOKLYN - (main page)PART IPART IIPART IIIPart IVPART VPART VI tbdPART VII tbdWPIX Television New YorkFact Finders Enviromental Disaster - Greenpoint/Brooklyn New York City Housing Bubble - The Big Picture
NYC Metro Average Monthly Inventory & Pricing Data 2007-04-15 19:00:00 HousingTracker - New York City, New York - 1pm 4/15/07The New York-White Plains-Wayne Metropolitan Division of the New York-Northern New Jersey-Long Island Metropolitan Statistical Area approximation has 30,261 total listings of which 18,658 are either Single Family or Condo homes. The area includes the major cities of Bronx, Brooklyn, Flushing, Jamaica, Jersey City, Mount Vernon, New York, Paterson, Staten Island, White Plains and many others. See also housing affordability for NYC.Weekly Data at Housing TrackerWeekly inventory and median asking prices for Single Family and Condo homes (together) are displayed. 25th and 75th percentile prices for the last ten weeks are shown in the table. Manhattan Apartment Prices Increase at Slower Pace - Bloomberg 4/3/07...Overall, the median price of studio and one-bedroom apartments fell 2.3 percent to $390,000 and $635,000, respectively, while the price of two-bedroom units fell 2.8 percent to $1.3 million and three bedrooms declined 1.2 percent Read more:Average
, Inventory
, Monthly
, Pricing
Study The Un-Spun Data - Only A Fool Would Buy Now 2007-04-18 00:40:00 With Foreclosures Up, REOs Now Starting to Flood Market by HousingWire - 4/16/07 snip:More than a quarter-million pre-foreclosures and notices of pending foreclosure auctions were filed nationwide in the first quarter of the year, according to data released today by ForeclosureS.com, a real estate advisory service. 253,803 notices of foreclosure were filed in the first quarter of 2007, up 22.5 percent from the 207,128 filings in the fourth quarter of 2006.As large as those numbers are, they don’t include tens of thousands more now-vacant properties that actually were lost to foreclosure during that same period. Those REO, or bank-owned real estate filings, totaled 110,791 in the first quarter alone — one of the largest influxes of REO recorded in a single quarter in recent history.GSEs Announce New Subprime Take-Outs by Calculated Risk - 4/17/07 snip:CNN Reports... "Mortgage finance companies Fannie Mae and Freddie Mac have new programs to help troubled subprime borrowers avoid for Read more:Study
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