The Ongoing Case-Shiller Fallacy/Shadow Inventory

[Rt.66]

It’s a fact that none of us will dispute that housing values have fallen by $100s of thousands in SD.

Data sources are reporting that people in droves are discontinuing payment on those mortgages. Is this a shocking development? Should we be surprised and skeptical of data from different sources confirming this? This forum never fails to find someone willing to fight reality.

What sense does this debate make? This is what people do when they are $100ks underwater. Some here are arguing that the obvious and rational result is not happening and further that the sources supporting the obvious and rational result are wrong.

Everyday there are several articles documenting banks sitting on REOs, hiding inventory and doing all sorts of things you’d expect technically insolvent institutions to do when they would like to hide their insolvency.

Yet some debate that it’s actually happening or claim its happening but not to a disturbing degree. Rational thinking is that it makes sense that they are doing exactly what is being reported.

[peterb]

Close to 10% of all mortgages in CA are in “late payment” status. This must be a record. Optimistic unemployment is at 12.2%, which is also in record territory. Govt intervention is at a level no ones’ ever seen before. Foreclosure moratoriums, Mark-to-bubble pricing, etc…

Is this sustainable? I wonder how the lack of cash flow is effecting all the holders of these mortages that are no longer getting payments? Strategic default is also gaining momentum along with unemployment caused defaults.

There’s been downturns in CA real estate in the past, but none with this kind of environment before or intensity. Buying a house is a very expensive and long term commitment. I would think people would be looking for at least year-over-year improvement before making this level of investment.

[peterb]

Close to 10% of all mortgages in CA are in “late payment” status. This must be a record. Optimistic unemployment is at 12.2%, which is also in record territory. Govt intervention is at a level no ones’ ever seen before. Foreclosure moratoriums, Mark-to-bubble pricing, etc…

Is this sustainable? I wonder how the lack of cash flow is effecting all the holders of these mortages that are no longer getting payments? Strategic default is also gaining momentum along with unemployment caused defaults.

There’s been downturns in CA real estate in the past, but none with this kind of environment before or intensity. Buying a house is a very expensive and long term commitment. I would think people would be looking for at least year-over-year improvement before making this level of investment.

[peterb]

Close to 10% of all mortgages in CA are in “late payment” status. This must be a record. Optimistic unemployment is at 12.2%, which is also in record territory. Govt intervention is at a level no ones’ ever seen before. Foreclosure moratoriums, Mark-to-bubble pricing, etc…

Is this sustainable? I wonder how the lack of cash flow is effecting all the holders of these mortages that are no longer getting payments? Strategic default is also gaining momentum along with unemployment caused defaults.

There’s been downturns in CA real estate in the past, but none with this kind of environment before or intensity. Buying a house is a very expensive and long term commitment. I would think people would be looking for at least year-over-year improvement before making this level of investment.

[peterb]

Close to 10% of all mortgages in CA are in “late payment” status. This must be a record. Optimistic unemployment is at 12.2%, which is also in record territory. Govt intervention is at a level no ones’ ever seen before. Foreclosure moratoriums, Mark-to-bubble pricing, etc…

Is this sustainable? I wonder how the lack of cash flow is effecting all the holders of these mortages that are no longer getting payments? Strategic default is also gaining momentum along with unemployment caused defaults.

There’s been downturns in CA real estate in the past, but none with this kind of environment before or intensity. Buying a house is a very expensive and long term commitment. I would think people would be looking for at least year-over-year improvement before making this level of investment.

[peterb]

Close to 10% of all mortgages in CA are in “late payment” status. This must be a record. Optimistic unemployment is at 12.2%, which is also in record territory. Govt intervention is at a level no ones’ ever seen before. Foreclosure moratoriums, Mark-to-bubble pricing, etc…

Is this sustainable? I wonder how the lack of cash flow is effecting all the holders of these mortages that are no longer getting payments? Strategic default is also gaining momentum along with unemployment caused defaults.

There’s been downturns in CA real estate in the past, but none with this kind of environment before or intensity. Buying a house is a very expensive and long term commitment. I would think people would be looking for at least year-over-year improvement before making this level of investment.

[scaredyclassic]

the argument “well, you can’t argue with the market” or “i know because i see what’s happening int he streets” is not very persuasive, at least for me, since i remmeber having debates with people during bubble years that this wasinsane and being countered with the argument that was similar basically, hey, yoou can beleive what you want, but reality dictates otherwise,a dn if you open your eyes you’ll see that houses ARE worth x because people ar ebuying them as quick as they’re listed. well, reality isn’t necessarily just what is happening. But with such obscure data and so much static, it’s difficult to say that anyone in this debate has a manopoly on reality. it’s difficult to trust a realtor’s sense of what will ultimately happen based on what’s occuring on the street, just liek a solider would have no idea of the trajectory of a war, kinda. not that that analogy is aprticualy apt, but … i’d say the sistuation is so muchy at this point that even more than usual, the future is unknowable.

[scaredyclassic]

the argument “well, you can’t argue with the market” or “i know because i see what’s happening int he streets” is not very persuasive, at least for me, since i remmeber having debates with people during bubble years that this wasinsane and being countered with the argument that was similar basically, hey, yoou can beleive what you want, but reality dictates otherwise,a dn if you open your eyes you’ll see that houses ARE worth x because people ar ebuying them as quick as they’re listed. well, reality isn’t necessarily just what is happening. But with such obscure data and so much static, it’s difficult to say that anyone in this debate has a manopoly on reality. it’s difficult to trust a realtor’s sense of what will ultimately happen based on what’s occuring on the street, just liek a solider would have no idea of the trajectory of a war, kinda. not that that analogy is aprticualy apt, but … i’d say the sistuation is so muchy at this point that even more than usual, the future is unknowable.

[scaredyclassic]

the argument “well, you can’t argue with the market” or “i know because i see what’s happening int he streets” is not very persuasive, at least for me, since i remmeber having debates with people during bubble years that this wasinsane and being countered with the argument that was similar basically, hey, yoou can beleive what you want, but reality dictates otherwise,a dn if you open your eyes you’ll see that houses ARE worth x because people ar ebuying them as quick as they’re listed. well, reality isn’t necessarily just what is happening. But with such obscure data and so much static, it’s difficult to say that anyone in this debate has a manopoly on reality. it’s difficult to trust a realtor’s sense of what will ultimately happen based on what’s occuring on the street, just liek a solider would have no idea of the trajectory of a war, kinda. not that that analogy is aprticualy apt, but … i’d say the sistuation is so muchy at this point that even more than usual, the future is unknowable.

[scaredyclassic]

the argument “well, you can’t argue with the market” or “i know because i see what’s happening int he streets” is not very persuasive, at least for me, since i remmeber having debates with people during bubble years that this wasinsane and being countered with the argument that was similar basically, hey, yoou can beleive what you want, but reality dictates otherwise,a dn if you open your eyes you’ll see that houses ARE worth x because people ar ebuying them as quick as they’re listed. well, reality isn’t necessarily just what is happening. But with such obscure data and so much static, it’s difficult to say that anyone in this debate has a manopoly on reality. it’s difficult to trust a realtor’s sense of what will ultimately happen based on what’s occuring on the street, just liek a solider would have no idea of the trajectory of a war, kinda. not that that analogy is aprticualy apt, but … i’d say the sistuation is so muchy at this point that even more than usual, the future is unknowable.

[scaredyclassic]

the argument “well, you can’t argue with the market” or “i know because i see what’s happening int he streets” is not very persuasive, at least for me, since i remmeber having debates with people during bubble years that this wasinsane and being countered with the argument that was similar basically, hey, yoou can beleive what you want, but reality dictates otherwise,a dn if you open your eyes you’ll see that houses ARE worth x because people ar ebuying them as quick as they’re listed. well, reality isn’t necessarily just what is happening. But with such obscure data and so much static, it’s difficult to say that anyone in this debate has a manopoly on reality. it’s difficult to trust a realtor’s sense of what will ultimately happen based on what’s occuring on the street, just liek a solider would have no idea of the trajectory of a war, kinda. not that that analogy is aprticualy apt, but … i’d say the sistuation is so muchy at this point that even more than usual, the future is unknowable.

[sdrealtor]

I’ve been providing examples of clients not paying their mortgages for a couple years. That isnt news nor is it being disputed. What is being disputed is that there is some imminent collapse coming that is far worse than what has already happened. That is what you are saying. If the worst isnt past then the worst has to be ahead by definition. None of us will dispute that either.

Others including myself are saying the worst is past. That the market is being successfully manipulated and while there is no turn around in sight there is no disaster ahead either. No one is arguing that the obvious isnt happening. The powers that be are trying to spread the pain and let time minimize the fall coupled with modest inflation. Rational thinking says it wont work but the reality is that it has been working. It wont stop and they will find new creative ways to continue doing so. The powers that be are winning and you just cant admit that.

[sdrealtor]

I’ve been providing examples of clients not paying their mortgages for a couple years. That isnt news nor is it being disputed. What is being disputed is that there is some imminent collapse coming that is far worse than what has already happened. That is what you are saying. If the worst isnt past then the worst has to be ahead by definition. None of us will dispute that either.

Others including myself are saying the worst is past. That the market is being successfully manipulated and while there is no turn around in sight there is no disaster ahead either. No one is arguing that the obvious isnt happening. The powers that be are trying to spread the pain and let time minimize the fall coupled with modest inflation. Rational thinking says it wont work but the reality is that it has been working. It wont stop and they will find new creative ways to continue doing so. The powers that be are winning and you just cant admit that.

[sdrealtor]

I’ve been providing examples of clients not paying their mortgages for a couple years. That isnt news nor is it being disputed. What is being disputed is that there is some imminent collapse coming that is far worse than what has already happened. That is what you are saying. If the worst isnt past then the worst has to be ahead by definition. None of us will dispute that either.

Others including myself are saying the worst is past. That the market is being successfully manipulated and while there is no turn around in sight there is no disaster ahead either. No one is arguing that the obvious isnt happening. The powers that be are trying to spread the pain and let time minimize the fall coupled with modest inflation. Rational thinking says it wont work but the reality is that it has been working. It wont stop and they will find new creative ways to continue doing so. The powers that be are winning and you just cant admit that.

[sdrealtor]

I’ve been providing examples of clients not paying their mortgages for a couple years. That isnt news nor is it being disputed. What is being disputed is that there is some imminent collapse coming that is far worse than what has already happened. That is what you are saying. If the worst isnt past then the worst has to be ahead by definition. None of us will dispute that either.

Others including myself are saying the worst is past. That the market is being successfully manipulated and while there is no turn around in sight there is no disaster ahead either. No one is arguing that the obvious isnt happening. The powers that be are trying to spread the pain and let time minimize the fall coupled with modest inflation. Rational thinking says it wont work but the reality is that it has been working. It wont stop and they will find new creative ways to continue doing so. The powers that be are winning and you just cant admit that.

[Author]

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