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

To: carranza2 who wrote (73659)	4/30/2011 12:29:37 AM
From: TobagoJack	1 Recommendation Read Replies (1) \| Respond to of 217801

just in in-tray From: R Sent: Sat, April 30, 2011 9:33:17 AM Subject: 10 Reasons Update - April 29 Last 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. 6.Pent Up Supply. I listened to five builders' earnings conference call this week - RYL, MTH, DHI, SPF and PHM. PHM was the best. I have a video of the conference. youtube.com Each of the builders share the common belief that they are much better positioned than their competitors. They all believe that the second half would be more profitable, even though they all described the market as challenging. Reality is net orders for these 5 builders are all down. PHM changed the way they count orders to create an easier comparison by 450 units. New orders: DHI - down to 4,943 from 6,438 YOY. MTH - down to 840 from 1064 YOY. PHM - up to 4345 from 4320 last year, down if 450 added to last year's count. RYL - down to 966 from 1167 YOY. SPF - down to 652 from 759 YOY. In the aggregate, orders declined 14.6% for this group of builders. They all mentioned distressed properties as the biggest competitor. How bad is it? Take a look at these maps and judge for yourself. businessinsider.com Calculated Risk has some great charts here, using LPS data. calculatedriskblog.com RYL summed it up the best - "Its a fight for every sale today" Homes are still sold, not bought. Financing is tough. Competition from existing homes fierce. In spite of reality, builders are still opening new communities, somehow convinced that the second half of the year would be better. 8.Chaotic Government Regulations. Pertaining to the builders, some should be out of business by now had they not been gifted the tax loss roll back. That was criminal and not under investigation. The tax credit sounded like a good idea but when it stopped, sales tanked and sales price dropped. More alarming are these State laws that may one day come to pass. housingwire.com Here is another alarming development. If this keeps up, rent control is next. nasdaq.com The report by the Harvard Joint Center for Housing Studies found that 10.1 million households, or 25% of U.S. renters, spent more than half of their income on rent and utilities as of 2009. Another 26% spends between 30% and 50% of their income on rent and utility costs, the study said. Housing experts generally consider 30% an affordable burden. 10.Cost of Housing. A friend lives in Kane County, Illinois. The assessed value of his house went from $925k to $860k YOY. His property tax, on the other hand, was raised from $19k to $19.5k. Fortunately for Californians, we are protected by one of smartest propositions ever, PROP 13. Without that limit, our property tax rate is probably at 300% of assessed value by now to cover our deficits. 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.