This note from one of IR’s links is stunning:

“Nov. 18 (Bloomberg)—The Federal Housing Administration, the agency that insures home purchases made with down payments as small as 3.5 percent, may create another lending crisis, Toll Brothers Inc. Chief Executive Officer Robert Toll said.

“Yesterday’s subprime is today’s FHA,” Toll said today at a New York conference for builders sponsored by UBS AG. “It’s a definite train wreck and the flag will go up in the next couple of months: Bail us out. Give us more money.” Toll Brothers is the largest U.S. luxury homes builder.”

It’s not stunning for what is being said, but by whom.  This is a builder, saying one of the major mortgage providers/guarantors used to buy his company’s homes is a “train wreck”. 

Maybe the FHA will become a bank too.

I received this link via email this morning. The blog entry contains links to the others referenced:

The NAR Predicts Sunshine and Lollipops

“I just returned from the National Association of Realtors convention in San Diego. NAR’s chief economist Lawrence Yun spoke to a room packed with REALTORS® and projected that real estate prices would climb about 4% in 2010, while the number of home sales will increase 15%.  He also predicts that foreclosures will peak during the first half of 2010 and that Realtor incomes will go up 20 percent next year.

I’m an optimist. Sometimes I even show Pollyanna tendencies, but I just can’t join the partying that is breaking out in real estate offices across the nation based on his predictions.

In newspapers and blogs, the mockery has already begun. Take this typical response to Yun’s predictions from The Wallet Pop blog: “The good news: National Association of Realtors chief economist Lawrence Yun is predicting that home prices will rise 4% in 2010. The bad news: Lawrence Yun has never been right about anything in his entire life, ever.”

A comment on Yun’s prediction on the FreeRepublic website by the Antiyuppie was simply “This guy (Yun) was hired because Baghdad Bob had already been snagged By Al-Jazeira. Really.”

The Wall Street Journal’s Market Watch reported Yun’s predictions and has received 200 comments. The most popular comment as voted on by readers was by Economutt, “Gee, I better run out and buy a house before they’re all gone. ”

How many times does an economist have to be wrong before people stop taking him seriously? Why do NAR economists as well as real estate association executives feel the need to serve as cheerleaders?

Wouldn’t a good dose of reality serve us, as well as the public, better?”

The mainsteam media present the NAR propaganda as news from vetted reliable sources—chief economist ....  It’s nothing more than a sales pitch clothed as news. 

The mainsteam media is not presenting the alternative views as news only as comments from bloggers and readers.

As I said for new FHA loans, transferring over priced toxic assess (liabilities) from the banks to taxpayers and jacking up the RE market prices.  Only 3.5% down with good credit and 10% down with bad credit.  The 3.5% down is essentially a win for free rent walk-aways.  The 10% down is likely a loss for walk-aways on prepaid rent, but can be looked as a stop loss limit for gambling.  Anybody crunch the numbers if the 10% down and walk-aways will be ahead after taxes and 18 months of non-payment?

As for a dose of reality, the average person can’t handle the truth.  As long as the banks get their percentage off the top of each transactions thing will continue on with repeated train wrecks and bailouts until the enough national governments become involvent. 

Hopefully the standard old method will not be the world leaders solution… war.  Rebuilding and starting the cycle over.

A million for that? It’s circa 1987. Needs lots of updating and a new roof. I guess they’ve saved their money and didn’t spend it on home improvements. That’s good I guess, but their price is as much as other houses which have been improved. Will that limit the buyers who don’t want to pay to update it?

Sue, You asked a million dollars for what?
It’s a land lease fee arrangement.  So does the land current leased for a fee at x dollars now, but what will be the new rate after the lease expires?  How will the new rate be set?  It will be really tough to move this house to a new location.

So one is essentially buying only the house?  This doesn’t look like even $140 per square foot construction. Let alone $300 plus per sq. foot.

Rents are going down more that the MLS are showing.  Existing tenants are getting reductions that aren’t recorded on the MLS and others with move-in insentives.

Even the realtors who chimed in on the sunshine and lollipops blog were discrediting the NAR’s perpetual rosey forecast.  The bad thing is that the average person actually gives credibility to these idiots…since they are PhD economists, they must know what they are talking about. 

Just look at previous head cheerleader David Lereah’s predictions to see what economic world these clowns live in.  I love his statement…I only got one thing wrong regarding housing prices.  Just like the maiden voyage of the Titanic was great if it wasn’t for that big pesky iceberg.  There should be credibiltiy given to these fools.

I meant to say NO CREDIBILITY given to these fools.

Don’t bring me down, Bruce.
Don’t bring me down, Bruce.

Thanks Woodbridge Rick for the clarification.  I find the lease fee a strange term for owning the land.

More green shoots at:

http://www.calculatedriskblog.com/2009/11/national-survey-data-on-home-buying.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+CalculatedRisk+(Calculated+Risk)

“Thomas Popik, Campbell Surveys Research Director, highlighted several key trends from the survey in October:

  # Investor Purchases of REO Are Declining
  # First-Time Homebuyers Largely Support the Market
  # First-Time Homebuyers Dependent on FHA Financing
  # If FHA Guidelines Get Tougher, Look for Large Impact
  # Short Sale Inventory and Transactions Are Booming
  # First-Time Homebuyer Traffic Is Starting to Ease ....

According to the survey investors bought 15% of homes in October. About 72% of these purchases were cash.

The cash buyers were mostly investors (frequently buying damaged REOs), and the FHA buyers were mostly first time homebuyers.

Current homeowners bought 38% of homes sold in October and used a mix of financing.

First-time homebuyers accounted for 47% of purchases and were mostly buying using FHA insured loans. “

Number of cash buyers going down.  Pool of cash buyer getting lower?

Are those Bose speakers set up in the worst possible acoustic layout in a room (in the corner?)....

Hell, my house with well designed (acoustically) rooms, with hmm.. let me see, Maggies in the living room, PSB Stratus in the den’s HT, Acoustic Energy AE1s in the office and master bedroom, PSBs in the back TV room and one kid’s room and classic ADS 810s in the other kid’s room.. Hell, my house must be worth like 3 million….  ;-D

Gotta tell you… the Maggies in the living room come close to our orchestra seats at the Segestrom Concert Hall.. only with a well recorded LP, of course.  Forget CDs.  ;-D

$300++ in Woodbridge…  Maybe I should sell and buy a McMansion in Vegas.  One kid will be in college next year and with the UC being so screwed up I might as well put him in a private college.  Of course, since I got equity (hell at $300++ per square foot I’m a Rockefeller) I could always afford a private schoole for the younger one.

BTW- one of my vendors just sold his condo in The South Bay without listing it.  The buyers were in a bidding war on another one.

Maybe a dead cat bounce, but hell… might as well take the money and run across the state line.

That house is a quarter mile or so from mine.

These were not high end houses when they were built, and this one looks all original.  It’s going to need some $$$ to be “million dollar house” material.

But the worst part about it is, as said above, the backyard back right up to a very busy Alton. 

Do like the 3 car garage, not hugely common in WBridge.

Priced to Sell? To whom?

I guess they’re target market is the wealthy immigrant who’s just dying to live in Irvine, no matter the cost. Otherwise I just can’t fathom who’d willing pay nearly $1MM for a completely unexceptional tract home on a postage stamp lot with a literally unusable “backyard”. If you have that kind of cash on hand and are willing to jump into this market, the world of housing is your oyster these days and IMHO, this place simply doesn’t qualify for consideration.

But here’s my bigger question ... WHO has this kind of either liquidity or desire to pay such a price for such a largely average house?  Sure it’s got the beds and baths and decent square footage but otherwise, completely unexceptional.  No location. No yard or lot size. No view (unless you count seeing your neighbors house from your bath tub). This has been one very weird downturn for me. I’m having trouble making heads or tails of any of the activity outside the obvious.

The activity is mostly speculative.  The masses think the bottom is in and are hell bent on catching the falling knife.  I have been listening to people in Phoenix say ‘I don’t see how much lower prices can go’ going on almost two years now.

Just wait and see when the media starts talking about ‘more than anticipated losses in the real estate market’ followed by another round of government giveaways.  Coming soon, stay tuned.

Great curb appeal! his is one sharp looking home.  I love theea of a 3 car garage!