Quote of the Week - August 15, 2007
Chuck Ponzi August 15th, 2007
This one is from the Minneapolis Star Tribune:
Deb Greene, president of the Minneapolis Area Association of Realtors, is optimistic that the mortgage market troubles aren’t deep enough to affect the broader housing market, particularly because there are still more borrowers who will qualify for mortgages than those who can’t.
“We’re in our recovery,” Greene said. “It’s a U-shaped recovery and I don’t think we’ve totally hit bottom yet, but we are on our way up.”
This makes me wonder if anyone reads their copy before submitting it, or if the editor even reads it.
A good question is… how can we be on our way up if it is a U-shaped recovery, and we haven’t hit bottom yet?
You have to grin at that sense of optimism, though - there’s no such thing as a downturn as long as the misty future holds an upside.
Slightly off the topic - I’m wondering why no one’s talking about the tax consequences of short sales. Seems like that’s the next shoe about to drop; not only are people going to loose a bundle on their RE, but they’re going to be taxed on the amount forgiven.
You’ll only get taxed if the bank bothers to send you a 1099 on the forgiven debt and I hear that, more often than not, the bank doesn’t bother.
Also, as I understand it (from an accountant) there is a tax code provision that takes into account your overall financial condition where debt forgiveness is concerned. If you can show that you’re indigent, the IRS doesn’t pile on debt forgiveness as an additional tax burden.
It’s hard to believe the IRS has any compassion but this was from a very reliable source.
Simple, their [RE] minds are fried from seeing their business go down the tubes.
Hmmm okay, now they believe in U shaped recoveries, but not upside down U market curves?
Like I like to say, it’s MY story and I’m stickin’ to it!
What do you expect from a realtard. Apparently the editor is a licensed realtard as well ; )
lol..must be cause his commissions are going down the tube.
Check this out from the LA times. We can compare murders with stupid home prices.
http://www.latimes.com/news/lo.....micidemap/
Blame the private banking ‘group’- the Fed-tards(Federal Reserve) for letting(or making?) this latest bubble burst meltdown happen. Check out Aaron Russo’s ‘From Freedom to Fascism’. The Fed is in the middle of this mess as they were in the Great Depression.
Hey… go easy on the lady. Afterall, she’s a Realtor(TM) and not some expert on letters or differences between up and down. Come on! It’s not like primary school is really a requirement for her profession!
You have to put this into context of the profession that advert’s “become a realtor for only 299$” in the paper.
Its not an accredited degree in real estate it a one shot licensing exam.
Another day another vortex of death forming on wall st. Sounds like some fed memebers and Paulson are saying stay out of the toilet bowl but other memebers keep wanting to jump in.
They seem to be chucking in 10B at a time.
Can’t tell you how I know, but WAMU is next to file BK. 2/3rds of their entire portfolio is neg-am/teaser loans with deferred interest that WAMU is counting as income on their books, which accrual accounting allows them to do. When “THEY” start issuing restated financial statements, things will REALLY get ugly : (
Off topic but relevent to overall situation:
Disturbing insights from CA. In speaking to client’s and prospects throughout the week a great many “investors” have 10-15 homes on I/O or neg-ams and are scrabling for financing that has disappeared. They want new financing but who lends on a money losing deal? This inventory will hit the market in a few months. Lots of SFR’s in Los Angeles and Riverside especially.
http://thegreatloanblog.blogspot.com/
Still waiting for fall-out from this crisis.. how long will it take to see the real estate prices fall and does anyone have estimates on how far down it will go?? I would assume that most of the deals will be on foreclosures since most long time homeowners will pull their signs before giving in to lower prices…
California,
Its going to take a while. A long while.
1) Credit is still lose and the FED is pushing more money into the system. Its probably misguided but that extension of credit will slow the rate of decline. That is banks will not have to unload their real estate as fast.
— this will take to the spring
2) Forclosures are exploding but it will take a long time for the banks to decide to lower prices and BOOK a loss.
— this could take 2 years
3) Most people don’t understand markets or track sales volume except in a general vauge way. So they follow the local pricing trends. Until the forced sales lead them down. People also hate the thought that something is losing value so till the evidence is there, asking prices stay high.
—- this will take at least 08 (09 in LA southbay, SF bay)
4) Banks will tighten credit and restrict the market more and more in the vicous part of the credit cycle. Increased defaults will lead to increased defaults provisions. Inflationary measures by the FED will lead to higher treasuries and hence higher actual rates. The number of buyers will contract severely.
— this is ongoing… should continue for seven years or so
Anyhow there should be a strong downward trend in spring 08/summer 08. The medians will be trending down everywhere. Strongest hands, established areas and desirable areas hold up longer as soom people bargin hunt a few percent off peak. Credit contraction and a dearth of new buyers will eventually kill these as well.
Then things should be flat to underpriced for a long while.