You can officially say "I told you so".

Surprisingly several counties did worse than Kern. Santa Barbara county did horrible.

TSM - LOL.

sfinboston52-

We are in a recession for sure. Hopefully it will only last a year or so. However, I agree housing has several years to go before it bottoms out.

No one would ever accuse me of hyperbole would they. :)

Adjusted for incentives and inflation we are down over 25%. On our way to a median of $160,000 which would be down 50% from the peak.

Here are a couple of links to news articles.

http://www.reuters.com/arti...

http://www.breitbart.com/ar...

http://money.cnn.com/2007/1...

Thanks!

Here are some of today's national stories:

Some housing bubble news from Wall Street and Washington. “Sales of existing homes plunged by a record amount in September as turmoil in mortgage markets added more problems to a housing industry in its worst slump in 16 years.”

“The National Association of Realtors reported Wednesday that sales of existing homes fell 8 percent in September, the largest decline to show up in records dating to 1999. The seasonally adjusted annual sales rate of 5.04 million existing homes was also the slowest pace on record.”

“The median price fell to $211,700 in September, down by 4.2 percent from the sales price a year ago. It marked the 13th time out of the past 14 months that the year-over-year sales price has decreased.”

“Lawrence Yun, NAR senior economist, said the decline is understandable. ‘Mortgage problems were peaking back in August when many of the September closings were being negotiated, and that slowed sales notably in higher priced areas that rely more on jumbo loans,’ he said.”

“Total housing inventory inched up 0.4 percent at the end of September to 4.40 million existing homes available for sale, which represents a 10.5-month supply at the current sales pace, up from a downwardly revised 9.6-month supply in August.”

“‘It appears raw inventories are stabilizing, but the housing supply is a bit inflated now because the sales pace does not reflect underlying market conditions – sales were dampened by the mortgage cancellations,’ Yun explained.”

“Single-family home sales are 19.8 percent below 5.46 million-unit pace in September 2006. Regionally, existing-home sales in the South are 18.7 percent below a year ago. In the Midwest, existing-home sales are 16.2 percent below September 2006. Existing-home sales in the West are 27.8 percent below a year ago.”

“In the Northeast, existing home sales are 13.5 percent lower than September 2006.”

From the Street.com. “Centex reported a $644 million loss for its second quarter as the plummeting housing market forced the homebuilder to record nearly $1 billion of land impairment charges. New sales orders fell 13% on a unit basis. The company also had an 8% decrease in average sales prices, as well as higher sales incentives.”

“‘Market conditions were extremely challenging during the quarter, reflecting the serious disruptions in the credit and mortgage markets that occurred during that period,’ said CEO Tim Eller. ‘In response, we meaningfully reduced prices in order to improve affordability for our home buyers.’”

The Dallas Morning News. “Centex said its home purchase cancellation rate is still running over 35 percent. Homebuilding revenue for the quarter was down more than 30 percent in the Southeast and 26 percent in the Northwest.”

The Nation’s Building News. “The pronounced weakness of housing demand has provoked major downswings in permit authorizations and housing starts since late-2005. Unfortunately, sales volume has fallen so fast that very little progress has been made in reducing inventories of unsold new homes, despite the fact that the government’s inventory numbers exclude homes left with builders due to sales cancellations.”

“The number of new homes for sale still is close to the record high reached around mid-2006 and the month’s supply moved up to a heavy 8.2 in August, as recorded by the government.”

“For-sale starts exceeded new-home sales by a huge margin during the 2005-to-2006 period, generating outsized increases in the for-sale inventory, and only recently have sales exceeded for-sale starts. Furthermore, completed homes have been accounting for a larger and larger portion of new homes for sale.”

“It’s increasingly obviously that sizeable price cuts are needed to sell completed new homes in many parts of the country. After all, prices more than doubled during the boom in some places and measures of housing affordability still remain quite low.”

“NAHB’s surveys of builders have been showing rising proportions of companies enacting price cuts as one type of sales incentive offered by builders during the past year. We’re also seeing more dramatic cuts by some companies during the past month.”

“Indeed, several public companies recently advertised discounts of up to $100,000 for special weekend sales, apparently with good success, and at least one public company has auctioned off homes with bids starting at half the list price.”

“The average price cut came to 8%, and 37% of those cutting prices had dropped them by more than 10%. But only half the builders said their price cuts had been effective in bolstering sales or limiting cancellations.”

“The housing contraction also is showing up in the employment numbers for the retail sector. In this regard, building materials and garden equipment stores lost 17,000 jobs in September and furniture and home furnishing stores lost another 2,000. Everything considered, the housing contraction now is costing the economy roughly 60,000 jobs per month and there’s certainly more to come.”

From Business Week. “Alan Greenspan said Tuesday that a bloated inventory of new homes has unsettled the U.S. economy. Homes financed by subprime loans comprised roughly 25 percent of housing starts, Greenspan said, so when the subprime market collapsed a whole segment of the sales market went with it.”

“The rapid decline in sales caught builders with a lot of their profits tied up in construction or vacant new homes, forcing them to hold ‘fire sales’ that had repercussions elsewhere in the economy. ‘Where the problem lies is in home prices — new home prices, very specifically,’ he said.”

From Kiplinger. “In Washington, D.C., agent John Sullivan says developers are ‘caving like crazy.’ He remembers one deal this past summer: ‘I might be exaggerating to say that I ‘negotiated’ a price cut,’ he says, ‘because as soon as we expressed interest in the condo, the sales rep offered to take $30,000 off the price.’ The builder also threw in a two-year lease on a second parking space.”

“Merrill Lynch stunned Wall Street for the second time this month Wednesday with the disclosure that it was forced into a $7.9 billion writedown of bad debt tied to risky mortgages and so-called structured paper.”

“The announcement marks a turning point in the credit crisis that has consumed investors in recent months and has observers wondering how much more pain will be felt by Merrill’s rivals in the brokerage industry. Revenue plunged 94% from a year ago.”

“‘In light of difficult credit markets and additional analysis by management during our quarter-end closing process, we re-examined our remaining CDO positions with more conservative assumptions,’ said Merrill chief Stanley O’Neal, whose firm pushed into the subprime lending market just last November. ‘We expect market conditions for sub-prime mortgage-related assets to continue to be uncertain and we are working to resolve the remaining impact from our positions.’”

From Bloomberg. “Ambac Financial Group Inc., the world’s second-largest bond insurer, reported its first quarterly loss after reducing the value of subprime mortgage-linked securities the company guarantees by $743 million.”

“Ambac guarantees payments on collateralized debt obligations, promising to pay CDO holders in the event of a default. The value of that insurance has tumbled in line with a slump in the price of CDOs backed by subprime mortgages.”

From Reuters. “National City Corp, a large U.S. Midwest bank, on Wednesday said third-quarter profit fell 80 percent, hurt by rising mortgage and home-equity losses. National City set aside $361 million for credit losses, up fivefold from a year earlier, as residential and home equity delinquencies, charge-offs and foreclosures increased.”

“‘Results were clearly affected by the unprecedented disruption and weakness in the mortgage and housing markets,’ CEO Peter Raskind said.”

“Results also reflected losses related to its former First Franklin Financial Corp subprime mortgage unit. National City sold the unit last year to Merrill Lynch & Co, but kept several billion dollars of loans.”

“Standard & Poor’s may cut the credit ratings of 207 Australian and New Zealand residential mortgage- backed securities as turmoil in the U.S. subprime market spreads to home-loan insurers.”

“It’s the first time in five years S&P has put securities backed by Australian and New Zealand mortgages on negative ‘creditwatch,’ said Kate Thomson, an analyst at S&P in Melbourne, said today.”

“Mortgage-backed bond sellers are already offering higher yields on securities to entice buyers back to a market that stalled in August after BNP Paribas SA, France’s largest bank, followed Bear Stearns Cos. in freezing withdrawals from hedge funds, triggering a liquidity crunch in the global credit markets.”

“Australian lenders including Calibre Financial Ltd. and FirstMac Ltd. last week sold mortgage-backed bonds at yields more than double the rate of previous sales, according to data compiled by Bloomberg.”

“Overdue payments on U.S. subprime mortgages rose to the highest level in five years in the second quarter, according to the Mortgage Bankers Association. The U.S. housing market will worsen before it improves, with home prices remaining under stress, S&P said last week.”

The Wall Street Journal. “Subprime mortgages aren’t the only challenge facing Countrywide Financial Corp., the nation’s biggest home-mortgage lender. Some loans classified as prime when they were originated are now going bad at a rapid pace.”

“These loans are known as option adjustable-rate mortgages, or option ARMs.”

“Countrywide first offered these loans in 2003 and quickly became a leader in this profitable and growing part of the mortgage market. Mortgage brokers liked the higher commissions and borrowers were drawn to low payments. As lending standards loosened, more of these loans included less-than-full documentation.”

“In addition, at Countrywide, ‘they were giving these loans to riskier and riskier borrowers,’ says UBS analyst Shumin Li.”

“Among option ARMs held in its own portfolio, 5.7% were at least 30 days past due as of June 30, the measure Countrywide uses. That’s up from 1.6% a year earlier. Countrywide held $27.8 billion of option ARMs as of June 30, accounting for about 41% of the loans held as investments by its savings bank. An additional $122 billion have been packaged into securities sold to investors, according to UBS.”

“From 2009 to 2011, monthly payments on some $229 billion of option ARMs will be adjusted to include market-rate interest and principal, according to Moody’s Economy.com. More than 80% of borrowers who are current on these loans make only the minimum payment, according to UBS.”

“CEO Angelo Mozilo told investors in September 2006 that he was ’shocked’ so many people were making the minimum payment. He called a sampling of borrowers to find out why. The ‘general answer…was that the value of my home is going up at a faster rate than the negative amortization,’ he said. ‘I realized I was talking to a group…that had never seen in their adult life real-estate values go down.’”

“Of the option ARMs it issued last year, 91% were ‘low-doc’ mortgages in which the borrower didn’t fully document income or assets, according to UBS, compared with an industry average of 88% that year. In 2004, 78% of Countrywide’s option ARMs carried less than full documentation.”

“Countrywide also allowed borrowers to put down as little as 5% of a home’s price and offered ‘piggyback mortgages.’”

“In one California branch office, employees could win prizes, such as a trip to Hawaii, for selling the most option ARMs, says Cindy Lau, who worked for the company for more than six years. Only a small portion of borrowers ‘understood the loan and knew what they were getting themselves into,’ Ms. Lau adds. She says she was fired in August for low production.”

The above links are from http://thehousingbubbleblog...

The #1 housing blog on the NET!!

I think anyone who can hold tight should.   But if you can't hold tight, things aren't going to get better for you in the near term.

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But I paid about $100,000 for that house, in 2005.

Calamity, I think you mean $145K.  "M" stands for million.

It's in San Francisco that a 1,200 sq. ft. home goes for $145M.  :-)

"What causes these crashes? Hordes of people trying to make a lot of money buying and selling homes?"

That's what runs up the prices, creating an artificial climax of demand that otherwise wouldn't be there.

(And to think, Bush's tax policies reward that kind of lazy greed.  If he had his way, you could make* money that way tax-free.)

* Note careful choice of words.  I wrote "make money," not "earn money."

Oh, yes, it helps to check profile.

One staffer "outed" -- one out-of-control jerk to go...  (Not you, Janie)

Glad your back Bakersfieldbubble.....love your stuff ..really,   been a fan of yours ......secretly.....

although there was no reason to put people in option arms.....most of the times.......there is some incidents it does work.

investors and retired owners ( before reverse mortgages took over) .....was a perfect scenerio.

please, realize that 2/3 rds of Countrywide's business is brokered to us or wholesale and since I've been at

Countrywide 90% of the option arms came in from the brokers.....we just bought them......and have to take the

heat from a lot of brokers who put these people in those shitty loans.......