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Solution to the Housing Problem
Let housing find its clearing price
James Saft
The U.S. government should just get out of the way and allow the crash in U.S. housing; the market is too big, has too far to fall and Americans’ finances are too strained.
President Barack Obama’s measures, unveiled on Wednesday, are part of a $275 billion plan to try and stabilize the housing market and prevent foreclosures. It aims to encourage lenders and their agents to cut repayments for homeowners in difficulties to lower, more affordable levels as well as other steps.
“You probably have about two to three million homes that we overbuilt, a lot…
Global Investing Roundups
Consumer Confidence Climbs; Home Prices Record Plunge; Troubled Banks on the Rise; Oil Falls 7%; Slim’s Bank Buys Citi Stock; D.R. Horton Shares Vault
- The Conference Board said yesterday (Tuesday) that its Consumer Confidence Index now stands at 44.9, up from a revised 38.8 in October. Last month’s reading was the lowest since the research group started tracking the index in 1967.
- Home prices plunged in the third quarter, according to the S&P Case-Shiller Home Price index, which posted a 16.6% drop for the three-month period. That outpaces the second quarter’s record 15.1% decline.
- The number of problem U.S. banks and thrifts soared…
It’s Time to Get Real About Real Estate
Once again, real estate market watchers have pounced on a shred of seemingly positive news to proclaim that the long sought “bottom” is in sight. The routine is becoming extremely stale, but somehow the media never seems to tire of it. This time the “good” news was that the percentage declines in national home prices (according to Case Shiller) in July were not as large as they were in June.
Although the report contained many other negative data points, including increased inventories and a spike in foreclosure sales, it was the slowing declines that got the spotlight. Talk about grasping at straws.…
2Sep2008 | Money Morning | Comments Off | ContinuedWhat’s the real value of real estate?
On July 8th, in an article titled, “The Housing Crisis: Denial is the first stage†(which was posted the following day, and you can still find it in our archives), I discussed the problems with the current housing market and why the situation seemed grim. The conclusion of the article included the following excerpt:
“…I will issue a blanket statement urging people not to look for bottoms in bank stocks, housing stocks, and yes, even Fannie Mae and Freddie Mac. These stocks have gotten crushed, but I’m not convinced that they can’t get stepped on further…â€
Everyone is wrong from time to…
22Aug2008 | Oxbury Research | Comments Off | ContinuedHome Prices and Consumer Confidence Traverse Record Lows
Another fresh round of economic data was released yesterday (Tuesday) with the prognosis looking dire for the U.S. economy.
Home prices as measured by the S&P/Case Shiller composite index of 20 metro areas fell 1.4% in April from March and slumped by a record 15.3% over the year. The group’s composite index of 10 metro areas dropped 1.6% in April, making for a record 16.3% annual drop.
According to the S&P, 13 of the top 20 metro areas are still posting record annual declines with price losses in the double digits for half of the areas.
“The potential is a vicious cycle which…
25Jun2008 | Money Morning | Comments Off | Continued
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