Real Estate Inventories…
Single family homes up 33%
Condos up 87%
The sky isn’t falling, just the price of your house
Home Sales Slide for 5th straight month
Even the sunniest of optimists have to be a tad concerned over the direction of the U.S. housing market.
Especially after the National Association of Realtors announced that pending sales of existing homes slid for the fifth straight month.
The NAR reports that its index for pending sales was down 1.1% in January, to 116.3. The Association notes that the figure was 4.8% below January of 2005. That rate, the NAR adds, was lower than the average monthly decline of 3% that economists have seen in the last four months of 2005.
US Jan new home sales hit slowest pace in a year
Mon Feb 27, 2006 10:00 AM ET
WASHINGTON, Feb 27 (Reuters) - Sales of new U.S. homes fell 5 percent in January to their slowest pace in a year while the number of homes on the market climbed to a record high, according to a government report on Monday that signaled further cooling in the housing market.
Sales of new single-family homes declined to a 1.233 million unit annual pace from an upwardly revised 1.298 million unit pace in December, the Commerce Department said.
January’s sales pace was slower than expected. Economists had forecast new homes sales would ease to a 1.260 million unit rate from the originally reported 1.269 million unit pace in December
Just for persepctive, If the dow Jones fell 5%, it would lose over 600 points.
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Barron’s: Get Ready for ‘Shock’ Over Mortgages Breaking from NewsMax.com & MoneyNews.com Barron’s warns that “sticker shock” is hitting homeowners with adjustable mortgages as rates have risen. The rate increases may have grave effects for those with mortgages and the overall U.S. economy. Ominously, the respected financial weekly says that “Over the next two years, monthly payments on an estimated $600 billion of mortgages, to borrowers with checkered or no credit histories - the “sub-prime” market, may zoom as much as 50 percent higher as the two-year teaser rates on hybrid adjustable-rate loans expire.” Story Continues Below… |
| Barron’s calls this a “reset problem” that poses a significant risk to the country’s economic well-being. [Editor's Note: Sir John Templeton and Financial Intelligence Report first warned of this mortgage nightmare scenario - find out how to protect your investments - Go Here Now.]
Mortgages taken out by sub-prime borrowers include Hybrid ARMs, with low teaser rates in the early years, and IO Mortgages, which initially charge interest only. Nearly all the $1 trillion in outstanding sub-prime loans were taken out in the past two years, most with an introductory rate period of only a few years, so the “teaser rates” on many of these loans are due to expire shortly. Worse still is that due to the Fed’s hikes in short-term interest rates, adjustable mortgages will see a boost in interest rates when they reset, according to Barron’s. In the recent past, borrowers who couldn’t handle the increase in their monthly payment could sell their home to pay off the mortgage and even reap a profit, thanks to soaring housing prices. But home prices now appear to be leveling off and in some places even declining. And inventories of homes are dramatically rising - meaning it will be difficult for borrowers to sell off their properties like they could in recent years. And many borrowers have only a narrow gap between what they owe on their mortgage and the price their house could fetch if sold - or no gap at all. Doug Duncan, chief economist of the Mortgage Bankers Association in Washington, D.C., is optimistic: “I just don’t see any coming collapse in the sub-prime market as long as the U.S. economy and job growth stays strong and interest-rate increases remain subdued.” But according to one doomsday scenario outlined by Barron’s, we could see “a coming spiral in delinquencies, foreclosures and credit losses from tapped-out, sub-prime borrowers facing monthly payments they can’t meet.” Sir John Templeton first warned housing prices could crash 50%. Find out what he said and learn how to protect yourself and even profit from the coming storm - Go Here Now. |
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Editor’s Notes:
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Housing prices have never been higher. Is this the time to buy, or the time to sell??
Mortgage lending in the U.S. is expected to drop 18.7% (I would bet it will be twice that much) in 2006 as borrowing costs rise, cutting into the demand for housing and mortgage refinances the helped drive the real estate boom, a mortgage industry trading group said on Tuesday. The Mortgage Bankers Association, at it’s annual meeting, said it estimates mortgage lending will drop over a half trillion dollars compared to 2005. The expected drop in mortgage lending likely will coincide with fewer home sales and will slow down the pace at which home prices rise, the group said.
So now 4 years after the blogger warned those he cares about to protect their equity and prepare for the eventually of a real estate correction, 4 years after being laughed off the stage, 4 years after being told repeatedly “real estate can only go up”, 4 years after being told I was crazy…..the world’s financial genius’s agree with the blogger. a lot can change in 4 years 
A Housing Crash Will Soon Hit America Find out Sir John Templeton’s Advice and Prepare for the Coming Catastrophe
Recently, Sir John Templeton the worlds most successful investor, billionaire philanthropist, and the man Money Magazine called the greatest global stock picker of the century invited me to meet with him in The Bahamas where he lives. In our private meeting, he personally warned me that a U.S. real estate crash was imminent.
And hes not alone.
Fed chairman Alan Greenspan has warned of real estate froth. Former Fed Chairman Paul Volcker is warning that a crisis is likely in the U.S. economy.
Even Americas greatest stock investor Warren Buffett recently sold his California home and warned of dark clouds in the real estate market.
For over a year now, we at Financial Intelligence Report have been warning that soaring U.S. real estate prices were unsustainable and that a collapse could soon occur.
Now scores of major U.S. and international newspapers and magazines including the New York Times, Fortune, and The Economist are echoing those same sentiments on their page-one stories.
In fact, The Economist magazine bluntly declared that the current worldwide boom in residential real estate prices is the biggest bubble in history.
It is important to note that Templeton, Buffett, and Volcker all warned in the late 90s that the dot-com boom was dangerous and unsustainable.
Back then, none of the three were given much coverage in papers like the Wall Street Journal, nor did they get any significant airtime on channels like CNBC.
But their predictions turned out to be dead-on. And we fear they may be right again.
Is this the beginning of a major real estate crash? Have you taken steps to protect the value of your real estate and other investments?
Story from newsmax.com
