Mid Year 2009 Foreclosure Market Report

1.9 MILLION FORECLOSURE FILINGS REPORTED ON MORE THAN

1.5 MILLION U.S. PROPERTIES IN FIRST HALF OF 2009


U.S. Foreclosure Activity Up 11 Percent in Q2 to Highest Quarterly Total on Record

June Marks Fourth Straight Month with More Than 300,000 Properties with Filings


IRVINE, Calif. – July 16, 2009 – RealtyTrac® (www.realtytrac.com), the leading online marketplace for foreclosure properties, today released its Midyear 2009 U.S. Foreclosure Market Report, which shows a total of 1,905,723 foreclosure filings — default notices, auction sale notices and bank repossessions — were reported on 1,528,364 U.S. properties in the first six months of 2009, a 9 percent increase in total properties from the previous six months and a nearly 15 percent increase in total properties from the first six months of 2008. The report also shows that 1.19 percent of all U.S. housing units (one in 84) received at least one foreclosure filing in the first half of the year.

Foreclosure filings were reported on 336,173 U.S. properties in June, the fourth straight monthly total exceeding 300,000 and helping to boost the second quarter total to the highest quarterly total since RealtyTrac began issuing its report in the first quarter of 2005. Foreclosure filings were reported on 889,829 U.S. properties in the second quarter, an increase of nearly 11 percent from the previous quarter and a 20 percent increase from the second quarter of 2008.

“In spite of the industry-wide moratorium earlier this year, along with local, state and national legislative action and increased levels of loan modification activity, foreclosure activity continues to increase to record levels,” noted James J. Saccacio, chief executive officer of RealtyTrac. “Unemployment-related foreclosures account for much of this increased activity, and the high number of borrowers who find themselves owing more on their mortgages than their homes’ are now worth represent a potentially significant future risk. Stemming the tide of foreclosures is a critical component to stabilizing the housing market, so it is imperative that the lending industry and the government work in tandem to find new approaches to address this issue.”

Nevada, Arizona, Florida post top state foreclosure rates

More than 6 percent of Nevada housing units (one in 16) received at least one foreclosure filing in the first half of 2009, giving it the nation’s highest foreclosure rate during the six-month period. A total of 68,708 Nevada properties received a foreclosure filing from January to June, an increase of 23 percent from the previous six months and an increase of 61 percent from the first half of 2008.

Arizona registered the nation’s second highest state foreclosure rate in the first half of 2009, with 3.37 percent of its housing units (one in 30) receiving at least one foreclosure filing, and Florida registered the nation’s third highest state foreclosure rate, with 3.08 percent of its housing units (one in 33) receiving at least one foreclosure filing.

Other states with foreclosure rates ranking among the nation’s 10 highest were California (2.94 percent), Utah (1.46 percent), Georgia (1.42 percent), Michigan (1.34 percent), Illinois (1.31 percent), Idaho (1.26 percent) and Colorado (1.25 percent).

California, Florida, Arizona post highest foreclosure totals

A total of 391,611 California properties received a foreclosure filing in the first half of 2009, the nation’s highest total and 2.94 percent of the state’s housing units (one in 34) — the nation’s fourth highest state foreclosure rate. California foreclosure activity in the first half of 2009 increased nearly 14 percent from the previous six months and increased nearly 15 percent from the first half of 2008.

With 268,064 properties receiving a foreclosure filing in the first six months of 2009, Florida documented the second highest state total. Florida foreclosure activity in the first half of 2009 increased 7 percent from the previous six months and was up nearly 42 percent from the first half of 2008.

Arizona’s 89,799 properties receiving a foreclosure filing in the first six months of 2009 was the third highest state total. Arizona foreclosure activity in the first half of 2009 increased 13 percent from the previous six months and was up nearly 55 percent from the first half of 2008.

Other states with totals among the 10 highest in the country were Illinois (68,932), Nevada (68,708), Michigan (60,786), Ohio (58,937), Georgia (56,391), Texas (49,144) and Virginia (28,368).

Report methodology

The RealtyTrac U.S. Foreclosure Market Report provides a count of the total number of properties with at least one foreclosure filing reported during the first half of the year at the state and national level. Data is also available at the individual county level. Data is collected from more than 2,200 counties nationwide, and those counties account for more than 90 percent of the U.S. population. RealtyTrac’s report incorporates documents filed in all three phases of foreclosure: Default — Notice of Default (NOD) and Lis Pendens (LIS); Auction — Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS); and Real Estate Owned, or REO properties (that have been foreclosed on and repurchased by a bank). If more than one foreclosure document is filed against a property during six-month period, only the most recent filing is counted in the report.

U.S. Foreclosure Market Data by State – Jan to Jun 2009















Disclaimer:This is a personal web site, reflecting the opinions of its author. It is not a production of my employer, and it is unaffiliated with any NASD broker/dealer. Statements on this site do not represent the views or policies of anyone other than myself. The information on this site is provided for discussion purposes only, and are not investing recommendations. Under no circumstances does this information represent a recommendation to buy or sell securities.

The Fed Under Fire

The Federal Reserve is one of the most powerful and secretive institutions in Washington, long considered beyond the reach of lawmakers. But now, as details emerge of how the Fed secretly doled out...




Disclaimer:This is a personal web site, reflecting the opinions of its author. It is not a production of my employer, and it is unaffiliated with any NASD broker/dealer. Statements on this site do not represent the views or policies of anyone other than myself. The information on this site is provided for discussion purposes only, and are not investing recommendations. Under no circumstances does this information represent a recommendation to buy or sell securities.

Investors Beware

Recent reports of price appreciation are comparing apples and oranges. We are extremely concerned that policy makers, banking and real estate industry executives, investors and others will use misleading home price data to conclude that home prices have stabilized. They have not.

These same influencers used this data in 2006 and 2007 to make decisions, many of which have proven to be poor decisions. It was a tough lesson, and hopefully one that won't be repeated.

This is a complex issue. Here is why:

Reported home prices and home price indices rely on a small sample of transactions that represent far less than 1% of the owned homes in an area. The rise of subprime-related loans in 2004, and the subsequent foreclosures since then, has skewed the price data significantly. There are many issues associated with the price data, including heavy discounts on distress sales. Because the bulk of the transactions since 2004 have also been in lower-priced neighborhoods, the following has resulted:

Recently reported median prices have been lower than the true value of the median home in the market, resulting in reported prices today that are far less than the value of the median home in an area.

Case-Shiller and other indices have been misinterpreted. They reported a higher percentage appreciation than occurred on most homes in 2006, and more price depreciation than has occurred on most homes since that time because their sample size is based on what has been transacting. Transactions have predominantly been limited to homes in lower-priced neighborhoods. The Case-Shiller and Zillow tiered price indices show this clearly, but this granular detail is usually too much for most news articles.

Today, we are seeing the mix of transactions shifting back to the typical neighborhood. That mix shift is causing the median price to increase when, in fact, there is no real price appreciation going on. Our analysis of 390 metro areas across the country shows that the percentage of markets reporting a month-over-month increase in the median price has jumped to 39% from 22% two months earlier. What is really happening is that people are now comparing the price on a 3-bedroom home in a typical neighborhood to the price on a 3-bedroom home in a poor neighborhood - because that's what was selling several months ago.

We also believe that Case-Shiller and others could report an overcorrection because the low-end price correction has slowed, but the high-end price correction is accelerating. If the high end grabs a large percentage of the transactions, the indices could over-report the price correction because of double counting this phenomenon.

Depending on the decision you are trying to make, there are solutions to understanding the right pricing methodology to use. This includes some relatively new tools and indices. Before you make an important decision, be sure that you understand the facts behind the pricing measures you are using.

Source: John Burns Real Estate Consulting


Disclaimer:This is a personal web site, reflecting the opinions of its author. It is not a production of my employer, and it is unaffiliated with any NASD broker/dealer. Statements on this site do not represent the views or policies of anyone other than myself. The information on this site is provided for discussion purposes only, and are not investing recommendations. Under no circumstances does this information represent a recommendation to buy or sell securities.

Cap and Trade Bill Bad for Housing

Well the Kool Aid drinking liberals and 8 delusional Republicans voted on the Cap and Trade bill Friday night and unfortunately it passed in the House of Representative and now moves to a vote in the Senate. The focus of this article are the problems it would create in the real estate industry. If you think it is difficult getting a deal closed in the housing market now with the government controlling mortgages via Fannie Mae/Freddie Mac and HVCC (appraisals) then this amendment presents another potential dealkillier. Just imagine some Federal "appraiser/inspector" walking in your 30 year home checking the windows, appliances and whatever else will destroy the environment in your home before you can sell it. LOL!!!!

The new legislation that passed through the House Friday night, unread by any of the Congress people, had inserted into the bill a new NATIONAL BUILDING CODE. There is language that would have a national building code override your local and state codes.

The bill would give the federal government power over local building codes. It requires that by 2012 codes must require that new buildings be 30 percent more efficient than they would have been under current regulations. By 2016, that figure rises to 50 percent, with increases scheduled for years after that. With those targets in mind, the bill expects organizations that develop model codes for states and localities to fill in the details, creating a national code. If they don’t, the bill commands the Energy Department to draft a national code itself.


States, meanwhile, would have to adopt the national code or one that achieves the same efficiency targets. Those that refuse will see their codes overwritten automatically, and they will be docked federal funds and carbon “allowances” — valuable securities created elsewhere in the bill that give the holder the right to pollute and can be sold. The Energy Department also could enforce its code itself. Among other things, the policy would demonstrate the new leverage of allocation of allowances as a sort of carbon currency — leverage this bill would be giving to Congress to direct state behavior. washingtonpost.com.

H.R.2454
SEC. 304.
GREATER ENERGY EFFICIENCY IN BUILDING CODES
(b) National Energy Efficiency Building Codes-
`(1) REQUIREMENT-
`(A) IN GENERAL- There shall be established national energy efficiency building codes under this subsection, for residential and commercial buildings, sufficient to meet each of the national building code energy efficiency targets established under subsection (a), not later than the date that is one year after the deadline for establishment of each such target.
`(A) effective on the date of enactment of the American Clean Energy and Security Act of 2009, 30 percent reduction in energy use relative to a comparable building constructed in compliance with the baseline code;
`(B) effective January 1, 2014, for residential buildings, and January 1, 2015, for commercial buildings, 50 percent reduction in energy use relative to the baseline code; and
`(C) effective January 1, 2017, for residential buildings, and January 1, 2018, for commercial buildings, and every 3 years thereafter, respectively, through January 1, 2029, and January 1, 2030, 5 percent additional reduction in energy use relative to the baseline code.

This bill would:
1. Increase mortgage costs
2. Increase building costs
3. Increase appraisal costs.
4. Increase regulations in areas like Charleston that are in flood zones and exposed to hurricanes.
5. Confuse the hell out of everyone because the gov't has no idea what they are talking about.
6. Reduce home sales.
7. Increase inspection lead times before a home can close. You think it is bad now with HVCC just wait until this bill passes.
8. Require every appraiser is retrained to understand these new federal energy efficiency guidelines. Whose gonna pay for that?

If you like "Big Mama" (The Government) placing its hand in every aspect of future business then this bill is for you. If you prefer a country that places an emphasis on "free trade" with less regulations please forward this article to your contacts so the Senate does not kill off a housing market that is desperately trying to rebound and is essential for a full economic recovery.

You can also listen below to Representative John Boehner discuss what a POS (Piece of Shit) this bill really is with regards to housing. Simply unbelievable!





Disclaimer:This is a personal web site, reflecting the opinions of its author. It is not a production of my employer, and it is unaffiliated with any NASD broker/dealer. Statements on this site do not represent the views or policies of anyone other than myself. The information on this site is provided for discussion purposes only, and are not investing recommendations. Under no circumstances does this information represent a recommendation to buy or sell securities.

Redneck vs. Car

A very angry and smart Redneck.





Disclaimer:This is a personal web site, reflecting the opinions of its author. It is not a production of my employer, and it is unaffiliated with any NASD broker/dealer. Statements on this site do not represent the views or policies of anyone other than myself. The information on this site is provided for discussion purposes only, and are not investing recommendations. Under no circumstances does this information represent a recommendation to buy or sell securities.

Say Hello To My Little Home!

"Say hello to my little home."



I guess Tony Montana from Scarface never died. Jim the Realtor gives a tour of this home flush with stone, pillars and columns. It is incredibly TACKY and definitely built by a drug dealer with a large ego.

You have to see the backyard which starts at the 3:40 mark.




Hat tip: Calculated Risk

Disclaimer:This is a personal web site, reflecting the opinions of its author. It is not a production of my employer, and it is unaffiliated with any NASD broker/dealer. Statements on this site do not represent the views or policies of anyone other than myself. The information on this site is provided for discussion purposes only, and are not investing recommendations. Under no circumstances does this information represent a recommendation to buy or sell securities.

Housing Price Problems

Highlights
* Nationally we are now at 2002 price levels.
* Case Shiller down 19.1% Yr/Yr
* The damage is spreading beyond the Sun Belt states.
* No precedent for this price decline on a national scale.
* The Case Shiller has fallen 32.2% since it peaked in Q2 2006. (FYI, the CMR is on record that we were in a "lending bubble" in Q3 2006.)
* Foreclosures becoming an important part of the market. (We knew this a long time ago also)



I included the video below because these analysts back up everything I have been saying for a long time. If you want to stop and fix the real estate market problems you have to fix the foreclosure problems. EASIER SAID THAN DONE!

Jack McCabe mentions the banks need to begin taking principal reductions in order to unfreeze the real estate markets. I do not believe Jack has been talking to banks like I have because this is not happening for many different reasons. Most banks do not want to take a "haircut" or principal reduction because they do not want to have to write down their "Falling Knife" assets which they made horrible loans on during the "Go Go" days. They are stalling folks and waiting on the Accounting Mesiah to come along and make all their toxic loans disappear.




Disclaimer:This is a personal web site, reflecting the opinions of its author. It is not a production of my employer, and it is unaffiliated with any NASD broker/dealer. Statements on this site do not represent the views or policies of anyone other than myself. The information on this site is provided for discussion purposes only, and are not investing recommendations. Under no circumstances does this information represent a recommendation to buy or sell securities.

U.S. Market Problems

There are some troublesome signs in four important markets right now that do not bode well for the U.S. economy. The four markets I am speaking of are:

1. The Stock Market
2. Bond Market
3. Currency Market - US Dollar
4. Housing Market

Stock Market
We have just witnessed a nice bear market rally after a major market implosion that occured in the Fall of 2008. The NYSE Bullish Percent is the main indicator I use to measure risk in the equity market and it is currently in high risk territory sitting at 72%. Any reveral down of the short term and intermediate indicators and then the NYSE BP could result in an eventual testing of the recent S&P 500 low of 666.






















Both of these charts go way back to the 1930's and the first of them shows the extraordinary collapse in earnings of the S&P500 companies. The second of them shows that the resulting overall P/E ratio has risen into the stratosphere.

Maybe if the Fed finally get audited we will all realize where all the money went. It may have gone right back into the stock market through firms such as Goldman Sachs and JP Morgan. I mostly work off technical analysis when evaluating the stock market but these two S&P500 charts are UNBELIEVABLE from a fundamental standpoint. The current run up of the market truly makes ZERO sense.






















Bond Market
The next important market that is much larger than the stock market we want to monitor is the bond market. I like to watch the TNX because this will have an impact on interest rates. It is clear that the US Government has been artificially keeping the mortgage rates down in order to prop up the ailing housing industry. The bond market is also getting skittish due to the Obama Administrations running very high deficits by increasing spending and the slow economy presents a problem to local, state and the federal gov't to collect the necessary tax revenues each municipality is used to receiving for current budgets. The combination of a severe recession and high deficits has resulted in the questioning of US AAA credit rating. If you are an institutional trader and are worried about the US Credit rating you do not want to hold US Dollars or US Treasuries. We are currently witnessing a spike in the TNX. The TNX hit a low of 21 in late 2008 and has recently closed above 34. This is a 38% increase in just a few months after the TNX bottomed out after the Fall 2008 Market Meltdown. Not only have we had an increase in the TNX but it has also broken a trend line at 32 which could result in higher yields for the immediate future.













US Dollar
The last time the US Dollar had a Relative Strength Sell Signal was June 2002. The US Dollar did not reverse from this RS Signal until March 2009 when institutional money flew into the USD for safety after the Fall 2008 market meltdown. Now that the credit markets have thawed out due to Trillions in stimulus it is clear to the world that all is not well in the good old US of A. The temporary rush into the USD has quickly been forgotten due to our internal banking, housing and deficit problems. The worrisome factor from technical analysis standpoint is that the USD is only 1 box away from hitting a RS Sell signal since it last happened in 2002!























Housing Market
Clearly the US Housing Market is not out of the woods yet. There are still mortgages resetting and recasting as prices decline in cities across the US. Inventory levels are still at high levels and now homeowners atttempting to sell are having to compete against discounted short sales and foreclosures in many cases. Most cities are still experiencing weak sales because buyers want deals but sellers can not give them a deal because so many are already upside down in their mortgage versus what the home would sell for on the market today. Add in an increasing unemployment rate without an industry to support new growth or jobs and we have some problems to deal with.




What is important to understand regarding these 4 market perspectives is that this does NOT mean the S&P 500 will roll over and crash tomorrow. This is a process. I am only connecting the dots to some major trend movements that are about to change or are not anywhere close to changing such as housing.

The point of this article is to paint a picture of risk in the market and economy right now and nothing more. Sure the S&P 500 could rally a bit higher but it is certainly beginning to defy gravity from a fundamental standpoint. Just keep in mind that structural bear markets typically last 20 years and we are only 9 years into this one. Also remember that this a severe recession unlike anything we have ever seen because the market and economy are so much different than the 1930s. We are in unchartered territory with quantitative easing from the Fed, corporate takeovers by the government, derivative time bombs still ticking away, unseen levels of debt, out of control spending, consumer debt, foreclosures and short sales, new emerging markets such as China who have more economic power than we do and an extremely high amount of deleveraging occuring at the retail and institutional levels.

Be careful and good luck!






Disclaimer:This is a personal web site, reflecting the opinions of its author. It is not a production of my employer, and it is unaffiliated with any NASD broker/dealer. Statements on this site do not represent the views or policies of anyone other than myself. The information on this site is provided for discussion purposes only, and are not investing recommendations. Under no circumstances does this information represent a recommendation to buy or sell securities.