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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Hawkmoon who wrote (111036)	3/17/2008 1:48:50 PM
From: pheilman_	Respond to of 306849

If you are pointing out that there are fortunes to be made picking up the MBSs for low values to acquire the underlying houses, sure, go ahead. But the current owners have yet to accept the price to unload. Just like the home owners. My take on the long set of slides was that purchasers got 3x larger loans on homes and it was promptly monetized, driving up house prices 3x above the trendline. And I suspect that those prices will have some "momentum" on the downside. Look at the chart, the values tend to oscillate around the mean. So prices are not going down 50% from here, more like 60%. There is no equity to quibble about. Assuming rational borrowers, they all will walk. Since houses no longer have utility as an investment there is a bunch of valuation to be taken off the table.

To: Hawkmoon who wrote (111036)	3/17/2008 1:52:46 PM
From: Broken_Clock	Read Replies (1) \| Respond to of 306849

Hawk I think you are minimizing the following: Just as greed and fear drove the bubble higher, fear and declining values will drive the market lower. 9,000,000 homes with negative equity at this point. This point being the highest inventory in the history of the US RE market. As the wave of foreclosures accelerates, that 9mm figure will expand drastically. The mean avg # of sales nationwide is around 4,000,000 homes per year. We could bottom with 3 years inventory on the market and a severe recession/depression to boot. BTW, lenders are still doing anything they can to close loans. I know personally of a deal for a lot here in which the lender(WF) is loaning 80% on the lot and doing the 20% down payment via new equity line on the buyers condo. 100% + closing costs is alive and well.