Owner: Paper Money URL:http://paper-money.blogspot.com/ Join Date: Fri, 25 Aug 2006 06:02:09 -0500 Rating:1 Site Description: A Blog Dedicated to Tracking the Decline of the Greatest Asset Bubble in World History.
Why are extraordinary real estate bubbles occurring all around the world? Is the U.S. housing market on the verge of total collapse? Are you affected? Site statistics:Click here
Tales from the Bubble! 2006-10-19 23:23:00
There's nothing like a personal anecdote to cut right to the heart of a matter.
True, they are subjective but still, who can forget all the fantastic tales of open house bidding wars, transient neighbors making windfall profits or flippers trading pre-construction homes and condos like penny stocks?
Stories like those, have now become urban legends, and to a certain extent, have attained a status that will popularly memorialize the mania of the Great Millennium Housing Bubble
in our minds forever.
As we all know, the up-cycle of the mania is now long gone, and with its departure goes all the wild, pre-burst stories, now being decisively succeeded by an ever increasing stream of down-side dialog.
In the spirit of symmetry, that is, taking the "bad with the good" even if it is hard to take at times, I have added a new feature to PaperMoney called "Paper Tales
" which will provide a daily stream of un-edited "personal interest" stories and quotes ferreted out from various
Today's New Construction Report 2006-10-18 16:03:00
Continuing the consistent and ever worsening deterioration of the US housing market, today's "New Residential Construction
Report" provides additional evidence that residential real estate is experiencing a protracted decline.
Popularly reported as showing an "unexpected" 5.9% increase in housing starts from August's revised figure, the report, if viewed more thoroughly, displays many, far more significant declines.
Particularly interesting is that this months report show that virtually every indicator is now recording high double digit year over year declines, with the West region breaking over 40% in declines to housing permits.
Here are the statistics outlined in today's report:
Housing Permits
Nationally
Single family housing permits down 6.0% from August, down 32.1% as compared to September 2005
Regionally
For the Northeast, single family housing permits down 2% from August, down 31.9% as compared to September 2005.
For the West, single family housing permi Read more:Today
Home Builders In The Balance 2006-10-16 07:10:00
So much for home builders learning from their past mistakes; The losses due to write-downs and write-offs due to prior "off balance sheet" transactions such as land options and joint ventures might be the "tip of an iceberg" in deteriorating earnings for the nations home builders.
It's been mentioned publicly by several well known real estate optimists that home builders have learned valuable lessons from past housing downturns.
Gone were the days of aggressive residential developments and land purchases. This cycle, things would be different. This time, there would be no speculative binge.
That is what was said but what actually occurred during this historic run-up? Were builders actually able to control their urge to over-develop? If not, how badly have the home builders exceeded demand for housing and what impact might that miscalculation have on the future of the housing market?
Probably the single most notable expression of the speculative nature of home builders during Read more:Balance
, Builders
Beige Thursday 2006-10-12 22:37:00
Today the Federal Reserve Board released its almost monthly "Beige
Book" report for October, which presents an anecdotal summary of economic conditions in each of the twelve Federal Reserve Bank districts.
Somewhat surprisingly, this edition shows significant slowing, even increasingly slowing conditions for residential real estate and construction activity in NEARLY EVERY district.
Reading each districts report one after another, its becoming increasingly clear that this housing downturn is truley a "national" phenomena.
So it seems that Chairman Bernanke's assessment of "significant" slowing in the housing sector having the effect of trimming 1% off of GDP may be more accurate than the "Greenspan Bottom" theory.
The following are excerpts from each district report:
Boston
Across New England, the pace of residential sales continues to be slow compared to 2005. In Massachusetts, the average number of days on the market has increased by a full month since last year, to Read more:Thursday
National Housing Bubble? 2006-10-11 19:51:00
There has been a long standing belief (or at least a widely publicized talking point) by some economic bulls, particularly those in the real estate industry, that there can be no national housing bubble because there is no national housing market.
Trailing that supposition is usually the minor disclaimer that of course there are many regional markets that could very well be experiencing bubble like conditions.
Granted, the nations housing market is clearly an aggregate of several hundred regional markets many of which historically have never even exhibited cyclic price movements.
Yet, something about the argument seems to fall flat.
Could it be the way the "raging" real estate bulls such as David Lereah or Barry Habib use this simple line of reasoning all the while employing a host of national statistics to support their notion that the real estate market is "stabilizing" and will inevitably experience a "soft landing"?
How can you have it both ways?
If you discount the p Read more:Bubble
, Housing
, National
Internal Hovnanian Memo... 2006-10-06 21:55:00
This memo was released recently and has been circulated on the internet today. Apparently, its lagit and sheds quite a bit of light on the state of the homebuilder and the industry in general.
K. Hovnanian
memo to employees
Sent: Tuesday, October 03, 2006 10:02 AMTo: DL HOV AssociatesSubject: TO ALL HOVNANIAN ASSOCIATESImportance: High
PLEASE DISTRIBUTE TO THOSE ASSOCIATES WHO DO NOT HAVE ACCESS TO EMAIL.
MEMORANDUM TO: All AssociatesFROM: Ara K. HovnanianDATE: October 3, 2006
Fellow Associates,
A few months ago I wrote to you about the changing market conditions in our industry and our concerns about how long the downturn in homebuilding may last. Since that time, the market has slowed further still, representing one of the steepest declines in new home sales in our memory. Most of our markets have been affected, some severely. At this point, we are preparing for a long period of slower sales, at least through 2007 and perhaps beyond.
What does this mean for you and for our Com Read more:Internal
A Stable Decline 2006-10-03 06:27:00
Yesterday, the National Association of Realtors released its August "Pending Home Sales" report which showed that nationally, pending home sales had edged up 4.3% as compared to July. The National Association of Realtors developed the "Pending Home Sales" index as a leading indicator based on a random sampling of roughly 20% of the month's transactions for exiting home sales and indexed to the average level of contract activity set during 2001. In an effort to use any "positive" numbers as a means of reassuring hesitant buyers, David Lereah, NAR's Chief Economist states in a release titled "Pending Home Sales Index Shows Market Stabilizing", "Our sense is that home sales may have reached a low in August - the Pending Home Sales Index shows home sales should be fairly stable over the next two months, although a minor decline is possible" As usual, looking more closely at the results one might draw a less optimistic conclusion:
-
Nati Read more:Decline
, Stable
Bubble Times 2006-10-02 17:36:00
Want a single point of entry for daily housing and economic related news with an emphasis on the housing bubble that's updated every 10 minutes? I give you… The BubbleTimes
!
This page acts as a "filtered" news aggregator, filtering articles from over fifty news feed sources. Currently, Articles get categorized into either "U.S. National", "U.S. Metropolitan", "International" or "Blog" sections and are further "ranked" by the number of "clicks" each receive. Additionally, all posts from top housing bubble and economic Blogs are included, unfiltered, in the "Blogs" section providing a single space to browse the bubble blogesphere. Over time, I'll be adding MANY more sources as well as better targeting the filters in order to present the most relevant news items. Also, I'm hoping to improve the formatting to allow for the most pleasant reading experience. As usual, let me know if you have any comments or suggestions. Espec
Bubble News Network 2006-09-29 22:09:00
In an attempt to become the "Ted Turner" of the Housing Bubble
Blogesphere I give you BNN!
The Bubble News Network! Like the tagline says… BNN is the "Most Trusted Name in Bubble News". Seriously, I needed a place to put all the videos I've been accumulating recently so I created a simple broadcast page that will host a full schedule of streaming video clips.
You can surf to the page and simply start watching the current scheduled broadcast or browse the clips and select the one you would like to see first. In any case, the page continues to stream from wherever you started. I've noticed that the page looks a little better using IE but Firefox seems to work reasonably well too. Current there are 5 hours of clips but that list will surly be growing fast. Keep checking back as Ill be adding many clips from CNBC, CNN, FOX etc. I've recently added two clips of David Lereah and Robert Shiller on both CNN and The NBC Nightly News. As usual, be
Today's New Home Sales Report 2006-09-27 18:06:00 Today
, the U.S. Census Department released its monthly "New Residential Home Sales
" report for August causing a flurry of optimism in the traditional business media. It was speculated that the reports results, showing a 4.1% increase in sales as compared to July's number, might help to propel the DOW, opening just 35 points away from its all time high, into record territory. Typically, the bulls on Wall Street seem to be latching on to any positive news that might substantiate their hopes that the housing downturn is setting a bottom and will not present a dramatic impact to the economy but rather, a "soft landing". As usual, it's this overly optimistic and myopic vision that seems to prevent general discourse on the realities of the current housing decline. The fact is, July's national new home sales number was revised down 5%, yielding a more dramatic percentage change to the August number which will, in all likelihood, be revised down as well.
Addit Read more:New Home
, New Home Sales
The Report Heard Round The World 2006-10-27 18:48:00
It's obvious, at least to this blogger, that the bulls on Wall Street and in the housing industry have been trying desperately to downplay, or even ignore the impact that the bursting national housing bubble would have on the economy.
Their high hopes and expectations are contingent upon their belief that the downturn in housing will be moderate, contained and temporary leaving the general economy free to glide quietly to a "soft landing" as it comes off this historic run-up.
Additionally, they seem so committed to this belief that it appears that no amount of data is sufficient enough to convince them otherwise.
Well, as they say, that was then, this is now…
Today, the US Department of Commerce released its "Report on Gross Domestic Product" for the third quarter of 2006, hopefully, to the genuine dismay of the many bulls eager for a contained and mild impact of the now obvious housing bust.
Easily, the most notable disclosure present in today's report is the
17.4% de Read more:Heard
, World
Geenspan and Today's New Home Sales Report 2006-10-26 17:56:00 Today
, the U.S. Census Department released its monthly "New Residential Home Sales
" report for September causing a new round of optimism in the traditional business media.
It was speculated that the reports results, showing a 5.3% increase in new home sales as compared to Augusts revised number, might be a further indication that the recent, widely publicized, perspective suggesting that the nations housing market is setting a bottom may, in fact, be accurate.
This news comes only minutes after former Federal Reserve Chief Alan Greenspan stated that he sees "early signs of stabilization" in the nations housing market with a "flattening" of sales.
This sentiment builds on a statement made earlier this month when Greenspan suggested that for housing "the worst may well be over" citing some perceived stabilization of weekly mortgage applications.
It seems Greensspan's encouraging outlook set a tone for October, a month in which many in the real estate industry felt confident e Read more:New Home
, New Home Sales
Wind Knocked out of Windy City's Housing 2006-10-25 22:38:00
Like a veteran boxer going back for one last shot at the title only to find that he's well past his prime, the nations housing market is getting pummeled from all sides.
Beaten, bruised, and bloodied, this contender would have been "down for the count" long ago had it not been for the persistent prodding and pumping by his handlers who shriek for more from his corner.
For shame! For this fighter, now down on one knee, is in perfect position for his opponent to t-off that final blow that will land him face down on the canvas for a long nighty-night.
To that end, the Illinois Association of Realtors announced today that in September, area home sales and median prices took a significant nosedive.
Gone are the days of double digit appreciation fueled by speculative buying, loose lending and real estate insider's penchant for fiction, replaced now by a decline that's accelerating with every passing day.
As has been typical with this downturn, some in the real estate industry ar Read more:Housing
, Windy
Lereah: "A Little Lower Than Expected" 2006-11-01 17:41:00 Today, the National Association of Realtors released its September "Pending Home Sales" report which showed that nationally, pending home sales had declined -1.1% as compared to August.
The National Association of Realtors developed the "Pending Home Sales" index as a leading indicator based on a random sampling of roughly 20% of the month's transactions for exiting home sales and indexed to the Read more:Expected
, Lower
The "House" That NAR Built 2006-11-06 13:30:00
With the recent release of their "Buy Now" newspaper ads and forthcoming radio and television campaign, the National Association of Realtors has sunk to a new and shockingly devious low.
Apparently, NAR, not simply satisfied with the "leadership" they provided while pumping up the most exaggerated and outrageous housing bubble the United States has ever experienced, now seems fit to go even a step further by trying to lure any and all unsuspecting buyers into housings depreciating abyss in a desperate and shameless act of self preservation.
Have they no conscience? Is it not enough to produce a stream of daily "releases" filled with half truths and convincing spin? Does the country really need another "get rich quick while you can" real estate crusade stuffed down its throat, especially at a time when the housing market is so obviously and dramatically in decline?
Over the last ten years, Americans have knowingly (to a greater or lesser extent) made themselves some Read more:Built
, House
Greenspan Waffles! 2006-11-06 17:07:00 Unbelievable!
So I suppose all the hyper-optimistic bulls on Wall Street and particularly in the real estate industry were a little quick in interpreting the "maestros" words from October.
Today, it was reported that former Federal Reserve Chief Alan Greenspan
is revising the comments he made recently suggesting that the housing market had possibly bottomed.
Back in the first few weeks of Read more:Waffles
H & R "on the" Block 2006-11-07 17:34:00 In another extraordinary example of a national lender struggling to adapt to the current challenging economic environment, H&R Block announced today that they will attempt to consolidate their loan fulfillment operations by closing 12 of their branch locations and possibly even selling their entire "Option One" mortgage business.Option One, which is the nations fifth largest originator of sub-prime mortgages, has apparently been besieged this year with an unexpected increase delinquencies.Considering that Option One wrote no less than $40 billion in sub-prime loans only just last year, there is no doubt that whatever the outcome of the consolidation effort, it will equate to a more defensive and risk-averse posture resulting in a significant decrease in loan originations.This is yet another example of a significant structural change to the nations housing market as there will inherently be less mortgage money available to chase the current enormous and growing backlog of unsold hom
A Grim Toll 2006-11-07 20:22:00 Today Toll Brothers Inc., one of the nation's largest home builders, release their preliminary fourth quarter and year ending results showing a substantial fall off in luxury home building and buying activities.CEO Robert Toll had this to say:"FY 2006 has certainly been a very tough and challenging year. It is worth noting that, atypically, this housing market is weak in an environment of low interest rates and low unemployment. We believe weak buyer confidence is keeping many customers on the sidelines."We continue to look for signs that a recovery is imminent but can't yet say that one is in sight"The report revealed many significant declines in business activity as well as the company's efforts to navigate the ever weakening housing market.In the fourth quarter, the company further reduced its land holdings, dropping another 6500 land options, thus reducing the current inventory of lots owned or controlled by 18.8% to 74,000 from a peak of 91,200 lots in 2nd quarter 200
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