Home foreclosures set record in first quarter

[Virgil]

http://news.yahoo.com/s/ap/20080605/...e_foreclosures
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By JEANNINE AVERSA, AP Economics Writer 10 minutes ago

WASHINGTON - Home foreclosures and late payments set records over the first three months of the year and are expected to keep rising, stark signs of the housing crisis' mounting damage to homeowners and the economy.

The latest snapshot of the mortgage market, released Thursday, showed that the proportion of mortgages that fell into foreclosure soared to 0.99 percent in the January-through-March period. That surpassed the previous high of 0.83 percent over the last three months in 2007.

The report by the Mortgage Bankers Association also found that more homeowners slipped behind on their monthly payments.

The delinquency rate jumped to 6.35 percent in the first quarter, compared with 5.82 percent for the three months earlier. Payments are considered delinquent if they are 30 or more days past due.

Both the rate of new foreclosures and late payments were the highest on record going back to 1979.

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[Free Press]

I just watched a half-hour NBC Squawkbox segment on the US housing market and as the bottom banner kept repeating the "US housing prices drop 15.3%" headline, the six real estate specialists kept repeating one after another how attractive the market was and how they were ready to buy in this very healthy market. The only bad news was Miami, which could expect to drop for another 6 months.

Real estate expert 1: The NYC real estate market is very good. And no, the massive layoffs and reduced bonuses in the financial sector would not really have any effect because New York always comes back. Always. Look at 911. If NYC can come back after that, then it can come back after anything.

Squawk: Do you mean this is like 911?

Realestate expert 1:: (whoops) Oh no, no, no, but you know, NY will find something to replace the financial industry. (whoops again)

Squawk: like what?

Expert: I don't know, but something. New York's a nice place. People like to live there. It'll come back. We're gonna buy property there.

Squawk: So prices are going up?

Expert : (very reluctantly) Well no, they've dropped 10% and we expect them to drop another 10% but really, believe me, the NYC market is very very healthy.

Squawk: But stuff is expensive there and you can't get mortgages.

Expert in the residential sector: Oh no, this isn't a problem at all. you just need a 25% down payment instead of 10%, but this isn't a problem. This doesn't bother anyone.

Expert 3 - the vulture: We've got a lot of cash, and we see some very healthy markets. Lots of foreclosures in Cities A, B and C, so we think we can get some real deals. This is a very healthy situation

Expert 4: Las Vegas is another very healthy market. Things are looking verb good there. (Note: Las Vegas prices are down 26.8% from a year ago - see investment news article below.)

Home prices post record 15.3% drop
http://money.cnn.com/2008/06/24/real...ion=2008062413

Home prices fall further in April: S&P
NEW YORK (Reuters) - U.S. home prices extended their record slide in April, with every top metropolitan area now posting annual losses and many showing double-digit declines, according to the Standard & Poor's/Case Shiller home price index report on Tuesday. KEY POINTS: * The S&P/Case Shiller composite index of 20 metro areas fell 1.4 percent in April from March and slumped by a record 15.3 percent over the year.

* Economists expected prices for the 20-city index to fall 2.0 percent in the month and 15.9 percent from April 2007, according to the median forecast in a Reuters survey.

* S&P said its composite index of 10 metro areas slid 1.6 percent in April for a record 16.3 percent annual drop.

* Home prices in a dozen of the metro areas have fallen for eight straight months.
http://www.reuters.com/article/gc06/...32765120080624

Bay Area home prices continue steep fall
uesday, June 24, 2008
Regional home prices continued to fall at an accelerating pace in April, establishing yet another record low, according to a closely watched real estate market analysis.

The price of a typical single-family home in the San Francisco area plunged 22.1 percent compared with a year earlier, according to the S&P/Case-Shiller Home Price index. The study, published by New York credit rating agency Standard & Poor's, defines the region as Alameda, Contra Costa, Marin, San Francisco and San Mateo counties.

The 10-City Composite index, tracking major U.S. markets, decreased 16.3 percent, also the largest decline in more than 20 years of data.
http://www.sfgate.com/cgi-bin/articl...BUJH11E8UE.DTL

Home prices continue to tumble in April
By Alex Peacocke
June 24, 2008
Home prices continued their freefall in April, with some areas reporting declines of nearly 27% year-over-year.

The composite index of 10 metropolitan areas was down 16.3% in April from the same period a year ago, and the 20-city composite index also posted a record drop of 15.3% from 2007.

The largest losses in metropolitan areas on the year were in Las Vegas, which fell 26.8% and Miami, which tumbled 26.7%.
http://www.investmentnews.com/apps/p.../REG/504497941

Four years of gains in home prices wiped out
Case-Shiller: Prices fall in all 20 cities in past year; slimmer OFHEO decline
last update: 2:02 p.m. EDT June 24, 2008
WASHINGTON (MarketWatch) -- Home prices across 20 major U.S. cities have dropped a record 15.3% in the past year and are now back to where they were in the summer of 2004, according to the Case-Shiller home price index released Tuesday by Standard & Poor's.

Prices in the 20 cities are now down 17.8% from the peak two years ago.
Prices were lower in April than they were a year earlier in all 20 of the major metropolitan areas as tracked by the Case-Shiller index.

Las Vegas, Miami and Phoenix saw the biggest declines, with prices falling by 25% or more in the past year. Prices in 10 cities have fallen by more than 10%.
Home prices in Charlotte, N.C., which was the last holdout to show gains, have now slipped 0.1% in the past year.

Prices were down a record 16.3% on a year-over-year basis in a smaller subset of 10 metropolitan areas that have been tracked over a longer period.

With so many homes on the market and foreclosures rising, prices are likely to keep falling, said Patrick Newport, an economist with Global Insight. He foresees prices dropping a further 10%.
http://www.marketwatch.com/news/stor...7D&dist=msr_13

Conclusion Never, ever believe anything a real estate person tells you. Or always assume the exact opposite is true.

[Free Press]

From Times Online
June 24, 2008
US confidence plummets as house prices slump 23%
US house prices dropped 22.8 per cent over the last three months as American consumer confidence signalled the worst level of consumption since since 1974.

Wall Street economists described the statistics as "incredibly awful" and indicated that the likelihood of the US Federal Reserve raising interest rates when it meets today and tomorrow was very remote.
http://business.timesonline.co.uk/to...cle4206676.ece

[Free Press]

Monday, July 7, 2008 - 12:38 PM PDT
S.F. Fed president Yellen expects house prices to drop further this year
San Francisco Business Times

National home prices will continue to decline this year, given the large number of homes for sale and market expectations reflected in the futures market, said Janet Yellen, San Francisco Federal Reserve Bank president and CEO.

"The bottom line is that construction spending and house prices seem likely to continue to fall well into 2009," she said in a speech Monday at the University of California, San Diego.

She pointed to trading in the futures market that suggests home prices in many cities have further to fall this year. For instance, the Case-Shiller composite index for home prices shows a 15 percent to 20 percent year-over-year decline in the second half of this year. Yellen also cited the ratio of house prices to rents, which remains quite high by historical standards, despite having fallen from its peak in early 2006.

One of the most significant drags on the housing market is the difficulty in financing home purchases. The market for mortgage-backed securities is in shambles. Beyond expanded FHA lending, Yellen said, there is little or no lending to higher-risk residential mortgage borrowers. Jumbo mortgages for prime borrowers are available, but at historically high spreads over rates on conventional mortgages, as banks have been reluctant to make these loans.
http://www.bizjournals.com/sanfranci...7/daily10.html