[IONEGARM]

Any specifics, which bank (s), etc?

A) Most banks dont own the loans they underwrite.
B) The shareholders would crucify the bank, and this would lead to tightening underwriting standards (and/or less loans purchased in the secondary markets, which means higher interest rates).
C) Either way you get higher interest rates and tighter underwriting standards for purchases moving forward. Which means you will sales will drop even more.

This may save some homeowners and prop up prices somewhat, but the cost will be transactional with realtors bearing the brunt.

[IONEGARM]

The difference in payment is so small due to compounding, and the cost of the loan is extremely high.

I think there is a psychological barrier to a 50 yr mtg.

[IONEGARM]

Forgive the long time between replies (went to Vegas the day after I started the thread and promptly forgot about it) I posted the original post because I am looking through homebuilders glasses for the future.

In reply to zk excellent post, who I always meant to come back and give it the time it deserved.

While I do absolutely agree that psychology drives markets, the other part of the psychological makeup is the fundamental desire to own a home in America (which is different, than say the fundamental desire to own some stock) which counterbalances the market when homes get expensive people wont buy “extra” homes or may not stretch to buy, but people will still buy.

The desire for people not to “lose” money in buying a home is matched by the desire for the owners not to “lose” money when selling . The instant a realtor, or zillow.com, or themself, or whatever tells an owner they can get X for a home… any dollar less than X is a dollar lost in their minds.

I think the psychological factor gives a reason for a long protracted muddled descent, with prices slowly edging down while inflation is lifting incomes and eventually, many years or so down the line an equilibrium has been achieved.

[IONEGARM]

What I have seen was that no sales updates have happened in my local area for over a month (SFV area in LA). I think something is wrong.

[IONEGARM]

Short answer, Yes.

Long answer: I come to the board itself rarely, but when I do all I have seen is powaysellers posts. One person dominating a conversation (poorly) isn’t a conversation it is someone wanting to hear them speak. The posts I have read of powayseller all seemed more reporting than insightful thinking. I would argue that she should concentrate on quality rather than quantity.

Try limiting yourself to one or two posts a day, and really work on those posts and you might surprise yourself with the insight you come up with.

[IONEGARM]

To Sparkey:

You are credit tightening yourself. Others, as we have clearly seen, do not do so and are doing what is necessary (High DTI, High LTV, IO and Neg arms loans) to get into a home.

This may not compel you to buy, but for the ignorant masses that what X house and Y monthly payment (regardless of the terms from what we see in the bubble areas) they will still buy.

To FormerSanDiegan :

The number of speculators and second home buyers is significant, but is it enough to drive the market down or is it just as likely (if not more so) that we face a period of relative stagnation.

[IONEGARM]

What is funny about the article (and not surprising knowing most realtors) is his “Do as I say, not as I do” attitude.

He clearly doesn’t trust his realtors, they told him his house is too high to start, he lists it high anyways.

They continually tell him to lower his price, he refuses (for over a YEAR!!).

He goes on the record recognizing his mistakes and telling all the other sellers not to mimic his poor judgement, yet he hasn’t lowered his house price!

Here is his house on realtor.com: http://www.realtor.com/Prop/1052217777

All sellers are emulating the NAR President, he hasn’t come to terms with reality, why should they.

[IONEGARM]

If you want someone just for the paperwork think about one of those internet realtors that kickback 75% of the buyers commission (Buyside).

The reason I would use a realtor, a GOOD realtor, is they can have contacts and houses that may need to move quickly and match you up, those houses might never make it to the MLS.

[IONEGARM]

“I really don’t think there’s anything wrong with flipping houses for profit. ”

Well, when you get it en masse, like we’ve been seeing it essentially destroys the low end of the market. But then many of the flippers fail and everything normalizes.

[IONEGARM]

http://www.myebid.com/cgi-bin/auction/view?cmd=view&listingID=2113

This is the “Property Ladder” house from Saturday, it didnt sell like they suggested on the show (they said it received an offer off of CL for 255k)

[IONEGARM]

I went past this house when it was listed in June, it was put up on craigslist and I make it a point to check out all craftsman I can.

It is in a horrible location, Coldwater is a super busy street with lots of high density low rent housing nearby, lots of bar on windows and unkept houses. The guy did a terrific job, even if I dont care for the outside much, so many people flip so much worse. He took his time and did a good job. But I dont think it will make up for the horrible location.

[IONEGARM]

Weekly variations fluctuate wildy, graph out the Purchase Index last two years, and put in a four week moving average. Smooths things out and gives a much better picture. You’ll notice the 4 week avg matches the Purchase Index for this week almost exactly. Pretty steady downward trend.

[IONEGARM]

You definitely have to listen to the conference calls when they come up, usually each one has one or two nuggets that dont make any press release.

I loved how Ivy kept interrupting him and said “It would make me feel a lot better moving forward if the large homebuilders acknowledge the problem (or the possibility of a problem” (paraphrase)

The only thing she missed was asking about non-30 year fixed financing. Otherwise her call was a homerun.

Bob Toll will speculate wildly about “pent up demand”, but as soon as she speculates that their might not be pent up demand and asking his contingency for that, he says he doesnt like to speculate…

And you are right, most analysts do not ask the tough questions at all on a phone call.

Here is my stock list I watch for homebuilders, it is nowhere near complete, but allows me to hit the press releases and conference calls as they trickle out.

CTX DHI HOV KBH LEN PHM TOL MTH RYL BZH SPF ^TNX TOA WCI DHOM WLS MDC NVR BHS

[IONEGARM]

http://biz.yahoo.com/cc/5/72175.html

Check out Ivy Zelman of Credit Suisse hammering Bob Toll and company at the 10:03 mark of yesterdays Outlook call.

All the builders blame oversupply, she switched it around and asked about being oversold, just a lot of great quotes in there. Between affordability and oversold questions she had management on the run.

I cant believe Bob Toll had the balls to say it was possibly the bottom now.

[IONEGARM]

Pardee homes in Moorpark (Magnolia Lane), the low end house was going for 650k, Mello-Roos of 4500-6000 a year for 30 years, plus a 1400 city landscape tax a year for 30 years, plus HOA fees of 264.. add in property tax and that is about 17k a year for the honor of living in a pardee home before you even get to paying your mortgage payment.

Things arent moving that quick although plenty of people are looking. The sales people say they are about 2/3’s of available units sold (on the low end). I was noticing their website went from saying “from mid-600k” to “from the low 700k” and in less than a week turned to “from 600k”. Dont know what that means, but they were also offering various incentives if you used their financing company.

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