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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Riskmgmt who wrote (72502)	3/30/2011 5:17:08 AM
From: TobagoJack	Read Replies (6) \| Respond to of 217944

just in in-tray, re real estate From: J Sent: Wed, March 30, 2011 4:41:53 PM Subject: Re: SF Real Estate must account for the "fallen off the list for now" - tokyo From: m Sent: Wed, March 30, 2011 12:44:17 PM Subject: RE: SF Real Estate I am in Mexico City. Nice place where real estate is rather inexpensive. Best condo in best location about USD 1 million. Country has come a long way and has prudent fiscal and monetary regime. From: G Sent: Wednesday, March 30, 2011 12:33 PM Subject: Re: SF Real Estate M You are 100% correct. Missed top 2 cities in world (especially if you are rich). And chang mia of course From: m Sent: Wed Mar 30 12:27:24 2011 Subject: RE: SF Real Estate G forgot to list Zurich, Geneva and I almost forgot....... Pattaya. From: G Sent: Wednesday, March 30, 2011 10:50 AM Subject: Re: SF Real Estate S I think the most important part of that story is location, location, location. Ie successful people actually want to live in sf. Let's be honest there are about 10 cities (max ) on planet that most people can agree to live in. And while a missoula montana or a boise idaho is stunning at certain times of year, the average american or immigrant is not thinking , I am going to start my new life in boise. So we are left with London San fran Vancouver Sydney Auckland (if you don't mind long haul flights) Hong kong (taxes and jobs help) New york (even with the negatives, it is a place to be) Almost on list Paris. (Let's face it , we all love it for a few weeks, but could we live there) CapeTown (sure it is beautiful, but one car jacking away from hell) Singapore (no one ever says singapore is nirvana or shangri-la, at best they say we get a bigger place and better air quality the hk) Long fallen off list (though beautiful) Tehran Beirut Buenos aires Rio No chance to ever make list, except in a real estate promoters dream DUBAI In fact most cities in middle east Most cities in china From: S Sent: Wed Mar 30 10:39:00 2011 Subject: SF Real Estate Here is a factual tidbit from the SF real estate market, and for all the paranoid bears who want to verify look on Zillow.com. I sold my house in June 2008, xxxx xxxxxxxxx St., SF, CA 94129 for 2.15M, I bought that place in 2005 for 1.7M, and yes it just sold for 2.3M last month. Now this place was purchased for 1.9M in 2000 from a tech guy at the top. We bought our place in Ross to move out of the fog zone and better schools for kids. From: R Sent: Tuesday, March 29, 2011 7:13 PM Subject: 10 Reasons update - March 29, 2011 Earlier this month, I sent out my list of 10 reasons why I believe the real estate market is far from recovery. (complete list at bottom) This is an update. 1. Paying for Past Sins. Per LPS: LPS Mortgage Monitor Report Shows Enormous Backlog of Foreclosures; Option ARM Foreclosure Rate Higher Than Subprime Foreclosures Ever Reached < lpsvcs.com > As of the end of February, foreclosure inventory levels stand at more than 30 times monthly foreclosure sales volume, indicating this backlog will continue for quite some time. Ultimately, these foreclosures will most likely reenter the market as REO properties, putting even more downward pressure on U.S. home values. The market is still in denial. There is no painless way to atone for past sins. You can stir the contents of a toilet bowl as long as you like but unless you flush it down, the effluent is not going anywhere. Let the foreclosures happen. 2. Demographics and 6. Pent Up Supply. From my cyber friend Calculated Risk: Lawler: Census 2010 and Excess Vacant Housing Units < calculatedriskblog.com > This is an excellent analysis by Tom Lawler. Census data showed that contrary to what housing bulls want to believe, we have a huge supply of excess units and slowing household formation to use up the supply. The gross vacancy rate for the 2010 census is now 11.38% vs 8.99% from the 2000 census. 3. Defunct Secondary Market. You can read about the Treasury's idea here < treasury.gov > . You can read a think tank's idea here < aei.org > . You can read about the 50 State Attorney Generals' idea here < cdn.americanbanker.com > . You can read about Paul Krugman's opinion in the NY Times here < nytimes.com > . They actually gave this fellow a Nobel Prize? Is that like the Special Olympics version of the Nobel Prize? You can read about the Federal Reserve and other agencies idea here < federalreserve.gov > . Warning, it is 233 pages. You can read the latest 8 bills from the Republicans here < housingwire.com > . or ..... You can just take my word for it. There is no chance that a logical secondary market is going to come out of this cesspool. If you do want to read something, this is a good summary < fdic.gov > of what should be done. Basically, this is the part of the Dodd Frank Bill that addresses risk retention. The banks must retain 5% skin in the game and very stringent guidelines for QRM (qualified residential mortgage). There is already anecdotal evidence that lenders are reluctant to fund any loans other than the currently conforming agency loans. The secondary market is going to get worse. 4. Affordability Fallacy. This is showing some signs of improvement. Case Shiller < standardandpoors.com > once again show house prices declining. This is free market at work. How low should prices decline to? I opine that it should drop to a point that it is no longer economically feasible for builders to add to the supply of REOs. The most recent Existing Home Sales < realtor.org > and New Home Sales < census.gov > confirmed that we are going down. Only mindless industry mouth pieces like Lawrence Yun of the NAR can promote the theme that the market is still recovering, just slower. I suppose "we are tanking" is forbidden by the trade association he represents. Lennar, in their earnings release today, confirmed there is no spring selling season. In summary, there is not a trace of evidence that the housing market is not already in the crash phase, survived only by government intervention. I am going to end this email with the most creation explanation by one of my housing analyst friends. He opined that the results were poor because during February, buyers were on the sidelines waiting to see if the Japanese earthquake in March would do much damage to the US economy. Now that threat is over, buyers should be out shopping again. I am surprised he wasn't invited to appear on CNBC with that profound remark. 1. Paying for Past Sins. 2. Demographics. 3. Defunct Secondary Market. 4. Affordability Fallacy. 5. Destroyed Household Balance Sheets. 6. Pent Up Supply. 7. No Wage Inflation. 8. Chaotic Government Regulations. 9. Rising Mortgage Rate. 10. Cost of Housing.