Adam Levitin at Credit Slips has a big beef with a lot of the critics of the idea of mortgage cramdowns as an alternative to foreclosure. For the most part, they don’t know what they are talking about. That charge may sound extreme. but Levitin makes a persuasive case. First, the only empirical work done […]
Read more...Just do the math. From the Las Vegas Review-Journal (via Calculated Risk and reader Dwight): David Crowe of the National Association of Home Builders said he was quite negative in his housing and economic outlook last year, but not negative enough…. The S&P/Case-Shiller Home Price Index fell 25.3 percent from March 2006 to October 2008. […]
Read more...The New York Times reports tonight on how banks are clamping down on credit to small homebuilders, with the result that many will go out of business. There were several things I found surprising about the piece: 1. That banks are getting stringent now. The housing market has been on a rapid decline since the […]
Read more...One of the problems with trying to gauge foreclosure activity is that the data is pretty poor. We discussed this problem last year in “Foreclosure Stats: Pick a Number, Any Number“: We’ve noted more than once that quite a few government statistics near and dear to analysts and investors, such as GDP, inflation, and employment […]
Read more...Although Manhattan real estate is an expected casualty of the financial carnage, it nevertheless serves as a useful, albeit lagging indicator of the depth of distress. Even though residential purchases have fallen over the last year, the price impact (so far) has been muted. That is in part due to the fact that 2007 was […]
Read more...A New York Times report on WaMu’s Grande Bouffe in the mortgage market is worth reading for the former employee quotes alone. For instance, use of controlled substances was acceptable as long as they were the productivity-enhancing sort: “I’d lie if I said every piece of documentation was properly signed and dated,” said Mr. Parsons, […]
Read more...Mortgage applications are up sharply as homeowners try to take advantage of low 30 year fixed rates. But tighter lending standards means that a fair number will be disappointed. Moreover, the surge in mortgage applications is for refinances rather than new home purchases. And while refis will indirectly help the economy by increasing consumer discretionary […]
Read more...Proponents of mortgage modifications contend that the cost of even a deep principal reduction still puts the lender ahead of foreclosure, and experience in past real estate downturns would bear that contention out. So why is this time different? Data from the Office of the Comptroller of the Currency show that 55% of mortgage mods […]
Read more...Well, what we all suspected has now been made official. From the New York Times: Mr. Paulson and other senior advisers to Mr. Bush say the administration has responded well to the turmoil, demonstrating flexibility under difficult circumstances. “There is not any playbook,” Mr. Paulson said. Why am I not surprised to see that what […]
Read more...The stock market is staging a very peppy rally on the hopes for the Obama infrastructure plan and the auto bailout, but key bits of news point to the stubbornness of some of the underlying economic stresses. We have long advocated mortgage modifications as a remedy that banks used fairly freely in the stone ages […]
Read more...As the US, as the biggest creditor and exporter in the late 1920s was hardest hit by the Great Depression, China now looks to be taking the global slowdown on the chin. And in a further sign of distress, the Baltic Dry Index, a measure of contracting prices for dry cargo shipping (and seen as […]
Read more...The high concept of this Wall Street Journal story is that because the stocks have fallen so badly, institutional investor may have to cut their real estate exposures to keep them from becoming a disproportionately large component of their portfolios. Note however that this may not be achieved via sales, but simply by not making […]
Read more...There are some cool charts, and a useful discussion of the continuing travails of Fannie Mae, at EconomPic Data. Let me give you the high points to induce you to read the rest of the post: Fannie Mae lost a reported $29 Billion in Q3. Over the past 7 quarters, they have now lost ALL […]
Read more...One borough’s loss in another’s gain. Despite the general deterioration in the New York City economy thanks to plunging financial services employment, the downtown Brooklyn real estate market is reportedly getting tighter as cost-conscious companies go shopping for cheaper digs. From the New York Times: Among office tenants, bargain hunting is back in style. After […]
Read more...Early 2007 was a frenzied period for commercial real estate (the February sale of Equity Office Properties Trust by Sam Zell to Blackstone was the market peak), but the 2008 drop, even by the standards of the sometimes-volatile New York City real estate market, is still dramatic. And of course, the credit crunch is immediate […]
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