Does this explain your observations

[gdcox]

Really good stuff from Mr Mortgage today.’July Home Sale Surge, But Housing Market Continues to Worsen’Catch it whilst it is up
http://mrmortgage.ml-implode.com/.

Looking at his data and bearing in mind that the vast majority of mortgages are now government backed in some way, it is possible to posit a reasonable hypothesis that the market is stabilising at the level at which ‘good Reos’ (those in good condition) are selling now.

Since the % of Reos in sales has risen from 7% to 44% in a year and they sell at much lower prices, it is possible that the good Reos have now created a price floor and as other non Reo sales react the price indices keep falling……………even if the good Reo floor is holding.

If buyers can achieve a good rental surplus (properly calculated) at the current level on purchase of good Reos and given government support for mortgages, one can see how stabilisation at the good Reo price level could occur……….at least for a period. This would fit with the many observations made in the Piggy Forum.

Presumably , the temporary period would come to an end if Reos entering the market or unemployment surges .

Piggies’ opinion would be appreciated on this tentative hypothesis .

[EconProf]

I have an entirely different take on his data–looks extremely pessimistic to me. Especially telling is his “negative-feedback loop” wherein the decline will feed on itself in a downward spiral. A variety of factors will combine to bring about an acceleration of the decline in the next few months. No signs of hope there.

[EconProf]

I have an entirely different take on his data–looks extremely pessimistic to me. Especially telling is his “negative-feedback loop” wherein the decline will feed on itself in a downward spiral. A variety of factors will combine to bring about an acceleration of the decline in the next few months. No signs of hope there.

[EconProf]

I have an entirely different take on his data–looks extremely pessimistic to me. Especially telling is his “negative-feedback loop” wherein the decline will feed on itself in a downward spiral. A variety of factors will combine to bring about an acceleration of the decline in the next few months. No signs of hope there.

[EconProf]

I have an entirely different take on his data–looks extremely pessimistic to me. Especially telling is his “negative-feedback loop” wherein the decline will feed on itself in a downward spiral. A variety of factors will combine to bring about an acceleration of the decline in the next few months. No signs of hope there.

[EconProf]

I have an entirely different take on his data–looks extremely pessimistic to me. Especially telling is his “negative-feedback loop” wherein the decline will feed on itself in a downward spiral. A variety of factors will combine to bring about an acceleration of the decline in the next few months. No signs of hope there.

[peterb]

We’re in a classic deflationary cycle right now. very interesting to observe. Very difficult to stabilize, incredibly difficult to reverse. Best case scenario is that we stabilize. Worst case, we accelerate deflation. Unemployment is rising and credit is constricting. My bet is acceleration.
REO sales are 45% of the market and growing. Man, who would have guessed??!!!This is amazing stuff!

“If sales do not grow and foreclosure sales continue to grow as a percentage of total sales, we remain on track for an absolute housing downside overshoot and subsequent total meltdown.” -Best, Mr Mortgage

This guy know’s his stuff! We’re headed into the “slow season” for RE sales and REO’s are accelerating. What do you think is going to happen between now and December 31,2008???

[peterb]

We’re in a classic deflationary cycle right now. very interesting to observe. Very difficult to stabilize, incredibly difficult to reverse. Best case scenario is that we stabilize. Worst case, we accelerate deflation. Unemployment is rising and credit is constricting. My bet is acceleration.
REO sales are 45% of the market and growing. Man, who would have guessed??!!!This is amazing stuff!

“If sales do not grow and foreclosure sales continue to grow as a percentage of total sales, we remain on track for an absolute housing downside overshoot and subsequent total meltdown.” -Best, Mr Mortgage

This guy know’s his stuff! We’re headed into the “slow season” for RE sales and REO’s are accelerating. What do you think is going to happen between now and December 31,2008???

[peterb]

We’re in a classic deflationary cycle right now. very interesting to observe. Very difficult to stabilize, incredibly difficult to reverse. Best case scenario is that we stabilize. Worst case, we accelerate deflation. Unemployment is rising and credit is constricting. My bet is acceleration.
REO sales are 45% of the market and growing. Man, who would have guessed??!!!This is amazing stuff!

“If sales do not grow and foreclosure sales continue to grow as a percentage of total sales, we remain on track for an absolute housing downside overshoot and subsequent total meltdown.” -Best, Mr Mortgage

This guy know’s his stuff! We’re headed into the “slow season” for RE sales and REO’s are accelerating. What do you think is going to happen between now and December 31,2008???

[peterb]

We’re in a classic deflationary cycle right now. very interesting to observe. Very difficult to stabilize, incredibly difficult to reverse. Best case scenario is that we stabilize. Worst case, we accelerate deflation. Unemployment is rising and credit is constricting. My bet is acceleration.
REO sales are 45% of the market and growing. Man, who would have guessed??!!!This is amazing stuff!

“If sales do not grow and foreclosure sales continue to grow as a percentage of total sales, we remain on track for an absolute housing downside overshoot and subsequent total meltdown.” -Best, Mr Mortgage

This guy know’s his stuff! We’re headed into the “slow season” for RE sales and REO’s are accelerating. What do you think is going to happen between now and December 31,2008???

[peterb]

We’re in a classic deflationary cycle right now. very interesting to observe. Very difficult to stabilize, incredibly difficult to reverse. Best case scenario is that we stabilize. Worst case, we accelerate deflation. Unemployment is rising and credit is constricting. My bet is acceleration.
REO sales are 45% of the market and growing. Man, who would have guessed??!!!This is amazing stuff!

“If sales do not grow and foreclosure sales continue to grow as a percentage of total sales, we remain on track for an absolute housing downside overshoot and subsequent total meltdown.” -Best, Mr Mortgage

This guy know’s his stuff! We’re headed into the “slow season” for RE sales and REO’s are accelerating. What do you think is going to happen between now and December 31,2008???

[Huckleberry]

I completely agree. With the severe credit market tightening and mortgages very difficult to acquire, SoCal RE is in for some serious downside repricing.

Without exotic loan instruments to continue propping this beast up, there is NO WAY this market can stabilize until prices and incomes come back to normal ratios.

[Huckleberry]

I completely agree. With the severe credit market tightening and mortgages very difficult to acquire, SoCal RE is in for some serious downside repricing.

Without exotic loan instruments to continue propping this beast up, there is NO WAY this market can stabilize until prices and incomes come back to normal ratios.

[Huckleberry]

I completely agree. With the severe credit market tightening and mortgages very difficult to acquire, SoCal RE is in for some serious downside repricing.

Without exotic loan instruments to continue propping this beast up, there is NO WAY this market can stabilize until prices and incomes come back to normal ratios.

[Huckleberry]

I completely agree. With the severe credit market tightening and mortgages very difficult to acquire, SoCal RE is in for some serious downside repricing.

Without exotic loan instruments to continue propping this beast up, there is NO WAY this market can stabilize until prices and incomes come back to normal ratios.

[Author]

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