Here is your open thread for Monday June 15th, 2009. You may post random links and off-topic discussions here. Also, if you have an idea or a topic you’d like to see covered in an article, please make it known.
Be sure to also check out the forums, and get your word in the user-driven discussions there!
Scotsman » Jun 15, 2009 at 10:04 am
California has blocked any new foreclosures for 90 days. Trying to slow the slide.
http://globaleconomicanalysis.blogspot.com/2009/06/california-foreclosure-moratoriums.html
Ganner » Jun 15, 2009 at 10:06 am
Morning All. I was forwarded a link to an interesting animated graph that shows the rate of job gains and losses around the country every month for the last five years. It really shows how much job growth there was up until 2007, when it levels and then plummets in 2008 highlighting this recession:
http://tipstrategies.com/archive/geography-of-jobs/
Scotsman » Jun 15, 2009 at 10:17 am
It looks like Boeing and the 787 Dreamliner have missed the Paris air show… again. Boeing has lost 58 orders so far this year as Airbus gains market share.
June 15 (Bloomberg) — The most talked-about plane at the Paris Air Show will be the one that missed the flight.
Boeing Co.’s 787 Dreamliner would be delivered “bang on schedule” in 2008, commercial-planes chief Scott Carson said in June 2007 at the industry’s last Paris gathering. Instead, a date hasn’t even been set for its maiden flight after production and development delays put the model back two years.
Investor confidence in Boeing, whose stock has lost half its value since the first delay in October 2007, won’t be restored until the 787 takes to the skies, said Bill Alderman of Alderman & Co. Capital, a broker specializing in aerospace
Sniglet » Jun 15, 2009 at 10:21 am
Does anyone know where there is data showing the percentage of US mortgages that are being handled by the GSEs (e.g. Fannie/Freddie), VHA, or insured by FHA? I am interested in seeing how much of the mortgage market is now being driven by the government, and how much that may have changed in the last 6 months (e.g. are there more private mortgages being made today than 6 months ago)?
Basically, I just want to know how much of the mortgage market the tax-payers are being asked to assume the risk for (whether it is with actual mortgages, like from GSEs or insurance from entities like FHA).
deejayoh » Jun 15, 2009 at 10:50 am
RE: Sniglet @ 4 – IIRC, there was some interesting stuff along those lines in here. slide 17. not monthly, but annual through last year shows the trend
http://www.scribd.com/doc/16193713/T2-Partners-Presentation-on-the-Mortgage-Crisis
Sniglet » Jun 15, 2009 at 11:22 am
Yes, this chart clearly shows that conforming loans became a big part of the over-all mortgage percentage in 2008 (in aggregate). However, I wonder what’s been happening in the last 6 to 8 months, specifically. Are we seeing the private sector (i.e. with no GSE, VA, or FHA backing) step up to issue more mortgages this summer than they were in December?
deejayoh » Jun 15, 2009 at 12:28 pm
RE: Sniglet @ 6 – well, that is missing only the last 5 months, which I would bet it is pretty much the same as 2008. Eyeballing it, it looks like the GSEs had 85% share in 2008 so realistically, there isn’t much more share to take. Maybe that percentage has increased slightly as volumes have increased as well – but the market is mostly “conforming” or at least the new definition of that, which might look a bit more like something that wasn’t previously conforming. The non-GSE market pretty much shut down at the end of 2007 so by a process of elimination the only players left in the game are the GSEs.
softwarengineer » Jun 15, 2009 at 12:59 pm
RE: Scotsman @ 3 –
THERE’S FAR MORE TO AEROSPACE’S FUTURE AT BOEING THAN WHETHER OR NOT THE 787 CAN FLY
For example:
The price of jet fuel.
The chronic rise in unemployment/underemployment with no end in sight.
Making a profit buying Boeing airplanes and selling RT tickets to LA for $118 each.
Getting 6′1″ people like me to fly coach, when they cut leg room in the seats to 32″.
I’m a strong supporter of Boeing’s future in the PNW, but let’s be pragmatic [not in DENIAL]….Boeing’s headquarters is in St Louis now [it's really a midwest company now] and the 787 is 90% outsourced anyway.
I don’t know about you other bloggers, but with the trouble Boeing’s had even getting the 787s, with mostly foreign manufacturing to fly; I’m waiting a few years before I even step on one. If they start crashing like crazy [it's like a plastic developmental plane held together with fasteners], at least I won’t be on it.
Nope, I’ll ride the old fashion aluminum skinned ones in the meantime, you bloggers can fly the developmental foreign composites….let me know how the ride was….and I do hope you’re like 5′5″ or shorter, if you’re riding horrifying cramped coach now-a-days. Ahhhhh….but for triple the ticket price you can ride 1st class; or do like I’m doing; take shorter air trips or ride in your own mid-sized automobile’s 1st class seat on a “staycation”…LOL
The 787 may be Boeing’s VISTA?
Ira Sacharoff » Jun 15, 2009 at 1:51 pm
.”Boeing’s headquarters is in St Louis now”
That’s Chicago, isn’t it?
Kary L. Krismer » Jun 15, 2009 at 2:00 pm
RE: Scotsman @ 1 – Our Governor proposed something similar, but it wouldn’t have been a moratorium. It would have required toll free lines and other things to make sure that the lender was trying to be cooperative in modifications and short sales. It didn’t get through the legislature.
Scotsman » Jun 15, 2009 at 2:48 pm
RE: Kary L. Krismer @ 10 –
That’s too funny in a dark way. I think it’ll be a while before all this is resolved, especially with that level of cooperation. The banks REALLY don’t want to have to book the loses right now- it would kill them. They’re still relying on the “stall and pray” strategy.
Scotsman » Jun 15, 2009 at 2:52 pm
Sounds like the Fed is getting tired of the “buy your own debt game” they’ve been playing with the treasury. While there are many potential explanations for this, the short story is more pressure to raise interest rates.
June 15 (Bloomberg) — The Federal Reserve isn’t capable of offsetting the “flood” of U.S. Treasury borrowing with its bond-purchase program, which is helping to revive credit markets, Dallas district-bank President Richard Fisher said.
“The program has had its impact,” Fisher said today in an interview with Bloomberg Television. “At the same time, you cannot counter this enormous flood” of borrowing “coming from the United States Treasury.”
The Fed’s efforts to stimulate the economy are complicated by rising Treasury yields, which push up the cost of mortgages even after policy makers have lowered short-term interest rates near zero. Fed district bank presidents including Janet Yellen of San Francisco, Dennis Lockhart of Atlanta and Thomas Hoenig of Kansas City are among those who say higher yields may reflect concerns about inflation and imbalances such as the budget deficit.
The Fed won’t “monetize” the fiscal deficit by effectively printing money to finance the shortfall, and there’s been no “pressure” from the Obama administration to do so, said the Dallas bank chief, who doesn’t vote on rates this year. Fisher, 60, also dismissed the concerns of some central bank watchers that its record purchases of assets will cause inflation to soar.
Kary L. Krismer » Jun 15, 2009 at 4:31 pm
RE: Scotsman @ 11 – Well the other thing about it is that judicial foreclosure isn’t really good for the owner, except that it allows them to stay in the house a long time.
But if a bank is multi-state, it might get them to act properly here, and delay more elsewhere. ;-)
softwarengineer » Jun 16, 2009 at 11:22 am
SEATTLE RE MARKET COLLAPSED TO 2008 Q4 LEVEL THIS SUMMER
Yes, you heard me right. That bogus 17% increase in new home construction was twisted logic statistics for a +61% increase in multi-family construction that was -49% last Apri and in a horrible slump irrespective.
The news in part [NOTE: SEATTLE IS MENTIONED]:
“….The big wrench in that tactic is mortgage rates. Zelman claims, “the market collapsed last week.” Yes, it’s now summer, but she says that in Northern California, Las Vegas, Seattle, Chicago, the numbers went back to fourth quarter lows. The spring offered incredible affordability, but the rise in interest rates and the impending end of the tax credit could choke that off in summer….”
The rest of the URL:
http://finance.yahoo.com/news/High-Housing-Starts-Dont-cnbc-15538039.html?sec=topStories&pos=2&asset=&ccode=
The stock investors may of been fooled by the +17% bogus new construction uptick too; but they figured it out too today.
Kary L. Krismer » Jun 16, 2009 at 11:27 am
There are currently at least 640 pending short sales (perhaps hundreds more due to the rule change being relatively new), but only 12 closed month to date.
I should start a real estate firm that only does short sales, and then ask for a government bailout. ;-)
(Numbers from NWMLS sources, but not published or compiled by the NWMLS.)
Kary L. Krismer » Jun 16, 2009 at 11:35 am
RE: softwarengineer @ 14 – That’s a pretty bogus article.
For one thing, I don’t think there are a lot of buyers of spec homes that get the first time home buyer credit.
For another, I have no idea what they’re talking about on the claim the market fell back to 4th quarter 2008 levels. If they’re talking price, that would be an improvement, not falling back. If they’re talking volume, it’s BS. There have been over 500 closings this month to date (King County SFR), and that number is heavily backloaded. It would be very surprising to be to under 1000 closings in June, as occurred in November and December. Oh, and total pendings still seem to be going up, both in quantity and price.
softwarengineer » Jun 16, 2009 at 11:47 am
RE: Kary L. Krismer @ 16 –
HI KARY:
I don’t write the news, but if you have a written news report like I did to back up your allegations….it makes it flat table to criticize my news article.
I trust your RE data to a point, but would appreciate an AP or Reuters explanation behind it. Especially since the media and your RE data seems to be overly positive anyway, from the get-go.
Whiteonrice » Jun 16, 2009 at 12:01 pm
Does anyone really think that house prices will NOT fall to 1995 levels? Its unbelievable that so many people have their heads in the sand – who would buy a house right now – even at 30% off of last years “price’?
Sales/closings could go through the roof this summer – who cares – just add’s up the amount of foreclosure pain we will feel for many years
Ira Sacharoff » Jun 16, 2009 at 12:09 pm
RE: Kary L. Krismer @ 16 –
Maybe I missed something, but I didn’t find anything in that article that stated that volume has fallen back to fourth quarter ‘08 levels. What I read was something to the effect of ” In the fourth quarter ‘08 we couldn’t find a pulse, now the patient’s in the ICU.”
But Kary’s numbers look right. We’ll likely have a June with somewhere between 1000-1200 closed sales for single family homes in King County. It’s nothing to shout ” hot dog!” about.
Here are June closed sales in this decade, stats from NWMLS, not guaranteed or verified:
June 2000= 2211
June 2001= 2300
June 2002= 2267
June 2003= 2803
June 2004= 3429
June 2005= 3300
June 2006= 3095
June 2007= 2669
June 2008 =1587
Kary L. Krismer » Jun 16, 2009 at 12:34 pm
RE: Ira Sacharoff @ 19 – It was unclear whether they were talking volume or price, so I addressed both. I think they were talking price, but prices were higher in the 4th quarter of 2008. Use either the lastest NWMLS numbers or C-S (which only goes through March) and it would be up! Maybe “falling back” only means back in time, and could signify an increase! ;-)
BTW, I think we could go above 1200 this month because the numbers are heavily backweighted, but I think there’s only about a .5% chance of beating 2008’s June volume.
Kary L. Krismer » Jun 16, 2009 at 12:43 pm
RE: softwarengineer @ 17 – I know you don’t write the news, I was just commenting on the report.
The part you quoted is just one person’s opinion–hardly solid data. The analysis of the 17% is basically the same thing. That type of thing is criticized all the time here when it’s say a real estate agent’s opinion in a report of monthly numbers. I criticize that myself.
The Tim » Jun 16, 2009 at 12:48 pm
By Ira Sacharoff @ 19:
You really think we’ll have less than May, which came in at 1,312?
softwarengineer » Jun 16, 2009 at 1:11 pm
RE: Kary L. Krismer @ 21 –
HERE’S A WAY TO MAKE IT SIMPLE FOR YOU
Say we had a horrible month in April and only sold 5 homes. Then in May we announce that we had a +20% improvement [6 homes]. What does it mean? It means both April and May were horrifying.
Now, if we said last year in May we sold 10 homes, then May’s 6 becomes a -40% drop, which the media would rarely print.
Month to month data is totally meaningless, almost all the time, but used by the media as a “ha ha, we’ve reached the bottom” logic, that when compared to YOY reality is really a joke.
The +17% of horrifying to horrifying is the same logic.
Everett_Tom » Jun 16, 2009 at 1:28 pm
RE: Kary L. Krismer @ 21 and softwarengineer @ 23 –
SE, I think you may have a few things foibled, while the article does mention Seattle, those are national numbers..
here’s the chart on calculated risk for new home starts. if you look carefully, there’s a little tiny dip at the ends, which I think matches up 4th quarter 2008 to now. But, as you can see it’s not much to get exited about if your compare the numbers to 1st Quarter 2006.
At least the commentary matches up to the 17% number the article quotes:
( emphasis added )
Scotsman » Jun 16, 2009 at 1:37 pm
RE: Whiteonrice @ 18 –
Easy, Tiger! Kary and the gang will get upset with too much talk like that. They prefer to believe the future is unwritten and unknowable, (cognitive dissonance at work, protecting our psyches) leaving open the option for a Pink Pony stampede at any moment. ;-)
Is that pounding hooves I hear? The sound of pending shorts “closing” in on us? Or is it paperwork hitting the bottom of the circular file? Time will tell.
Scotsman » Jun 16, 2009 at 2:08 pm
RE: The Tim @ 22 –
What happened to 1400-1500?
You realize this means Steve T. will be spot-on with his prediction of 800-6000?
Hey, some folks have it, some of us can only dream.
How will this affect inventory absorption and predictions for rising prices?
We’re gonna need another bailout, plain and simple. We may need to nationalize the real estate industry since the current crop of Realtors doesn’t seem to be able to do the job of selling all those houses. We’ll put a 26 year old MBA who’s never sold anything except twisted ideas to his girl friend in charge, just like the auto industry. Yup, that’s what we need, a real estate czar and some new government oversight. After all, the current crop of agents had their chance to show they could move that inventory.
softwarengineer » Jun 16, 2009 at 2:12 pm
RE: Scotsman @ 25 –
ACTUALLY, YOU CAN GET 1995 PRICES TODAY FROM AN OWNER ABOUT TO BE EVICTED
The trick is not caring what house you buy and finding the distressed owner(s) before the other vultures find them.
P.S., if you find a sweetheart 1995 deal don’t ever go to an attorney for advice……it’s a good way to lose the property to that attorney [I'm not kidding] LOL
The Tim » Jun 16, 2009 at 2:24 pm
RE: Scotsman @ 26 – Love the new avatar. Here’s another great one for you.
Ira Sacharoff » Jun 16, 2009 at 2:29 pm
RE: The Tim @ 22 –
Through yesterday, there were 559 closed in June. From June 1-8 there were 344, and from June 9th through yesterday there were 215.
To beat May’s numbers, we’ll need 768 for the remainder of the month. I’ll be wildly optimistic here and say maybe we get 1225 for June.
The Tim » Jun 16, 2009 at 2:33 pm
RE: Ira Sacharoff @ 29 – But, as Kary mentioned, don’t a disproportionate number of closings tend to push through in the last few days of the month? Over 1,300 seems do-able to me. Unless of course the rising interest rates really did manage to knock out a large number of buyers who had failed to lock in their financing…
Everett_Tom » Jun 16, 2009 at 2:34 pm
RE: The Tim @ 28 – I’d just like to say I FULLY support the use of Muppets as avatars…
The Tim » Jun 16, 2009 at 2:35 pm
RE: Everett_Tom @ 31 – Maybe Sam the Eagle should be the new default instead of my dog. :^)
Everett_Tom » Jun 16, 2009 at 2:37 pm
RE: The Tim @ 32 – Love it! Or maybe Fozzie?
Jillayne » Jun 16, 2009 at 2:58 pm
I second Everett_Tom’s motion. Beaker was my favorite Muppet. I also liked Animal.
Kary L. Krismer » Jun 16, 2009 at 3:17 pm
RE: The Tim @ 30 – Buyer’s not locking could affect it. There were a lot that didn’t, so it will just depend on how close they were pushing their limits.
patient » Jun 16, 2009 at 3:20 pm
Hmmm…so it looks like we will not reach 2000 closings in June? But Greg Perry said we would. No, now I remember he changed his mind with something to the tune that he is an excellent predictor and that if he is wrong it does not mean that he isn’t right or something like that.
The Tim » Jun 16, 2009 at 3:24 pm
RE: patient @ 36 – Hey just because there’s only been 559 closed sales through the 15th doesn’t mean there won’t be another 1,441 in the next 15 days. You gotta BELIEVE!
Kary L. Krismer » Jun 16, 2009 at 3:25 pm
RE: patient @ 36 – Yes, I think we all remember that, so I’m not sure why it needs to be said.
But you know, we could have maybe 2,500 closings in July or August if the banks simply made a decision tomorrow on every short sale they’ve been sitting on for over two months. That assumes that those having made offers on short sales haven’t made multiple offers, and are just waiting for one to approve.
patient » Jun 16, 2009 at 3:37 pm
RE: Kary L. Krismer @ 38 – That’s a lof of pretty unlikely assumptions Kary and I think only realtors riding pink ponies will honestly believe they will all come true.
Kary L. Krismer » Jun 16, 2009 at 3:42 pm
RE: patient @ 39 – I should have put a smiley on that–I wasn’t being serious about banks actually making decisions.
patient » Jun 16, 2009 at 3:42 pm
RE: Kary L. Krismer @ 38 – I think it’s needs to be said when it came from someone with the attitude that people on this site are “peons” who know nothing and should not even think of challenging the all knowing all mighty experienced realtor. Now, the numbers are not in yet so it’s a bit premature to say for sure that the peons seems to be the ones with the better grip on things.
Ira Sacharoff » Jun 16, 2009 at 3:43 pm
RE: The Tim @ 30 –
Sure. We saw a disproportionate number of closings in the last few days of last month. In the first half of May we saw 596 closings, and in the second half of May we saw 716. In the first half of June we’ve seen 559, so we’d need 754 to beat May’s total numbers.
Has The Tim been taken over by the real estate pod people?
I realize I’ve never been accused of being a wild eyed optimist, but I don’t think June’s closings will exceed May’s.
But Greg Perry isn’t wrong either. He said June would see 2000 closings. But I don’t think he stated in which year that would happen.
The Tim » Jun 16, 2009 at 3:44 pm
By patient @ 41:
FWIW, I don’t really think that’s a fair characterization of any of the agents that comment here.
patient » Jun 16, 2009 at 4:01 pm
RE: The Tim @ 43 – We only talked about one agent/realtor. My apologies that I grouped the other agents with us peons :)
Hugh Dominic » Jun 16, 2009 at 7:08 pm
RE: The Tim @ 28 -
That is one cool avatar….
Hugh Dominic » Jun 16, 2009 at 7:10 pm
RE: The Tim @ 32 -
One vote for yes…
Everett_Tom » Jun 16, 2009 at 9:42 pm
RE: Hugh Dominic @ 46 – I think makes 3 votes for yes… if Scotsman wants it, he’d better take it quick ! :)
RE: Jillayne @ 34 – Beaker is my favorite too.. In my last job my boss and I had a Beaker & Bunsen kind of relationship..he’d send me off on task that would end up exploding (I’m a Electrical Engineer by training, so that’s not a figure of speech.. thing did explode and catch fire…).. Animal is up there too, though to be honest it’s hard to go wrong with muppets.
There’s always Statler & Waldorf.
RobinsNest » Jun 16, 2009 at 10:24 pm
You guys finally got me, I’m coming out of lurkdom to laugh about Sam the Eagle and Beaker. Now I am just dying to see the Muppet eagle on Scotsman’s avatar.
Thanks to everyone on Seattle Bubble. Husband and I moved here with our twin 2 year olds back in August 2007, with some equity from sale of our DC home. This site kept us from buying a house, thank goodness. Now on our second SFH rental on MI at a 33% discount off the price of the first one. Continue to be an avid watcher and fan of Seattle Bubble. Hooray for The Tim! And all the regulars here. You guys are really fun to read, and still are helping keep my head on straight when that nesting instinct will not quit.
Scotsman » Jun 17, 2009 at 12:03 am
OK, I’m grabbing Sam. I like the flag addition, although my current bird has the grumpy look down pat, which seems appropriate. But Sam is pretty grumpy looking too.
If you really want him, Tim, let me know, I’ll switch back.