Ben Bernanke is a Fool

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 Charleston Market Report - November 2007

Happy Veterans Day!
I read that 25% of all homeless are Veterans. Why doesn't our government take care of these Vets???


Hello everyone. We truly live in interesting times. I appreciate all the kind comments I have been receiving from many local subscribers who know me and really like The Charleston Market Report. I do not relish reporting all this bad news each month and wish I had better news to deliver since I am a postive guy. Unfortunately, "What is is." Somebody has to report the truth and reality out there so it might as well be me. Many people in our industry will not do this because they are afraid of someone getting mad about what they say and they will lose business. I have already been through that scenario so I frankly do not care what other people think. I have a strong desire to clear away the Smoke and Mirrors of Real Estate and Wall Street so you can protect and build wealth for you and your family.

BTW, the Q3-2007 has finally been posted on the website if you want to take a look. Just go to the website.

You will also notice some advertising I have placed above on the left side. I wanted to let everyone know that I do Custom Consulting and Market Monitoring for real estate. I have never really advertised this consulting service in the past. I have done a number of feasbility studies and private appraisals (NO BANK APPRAISALS) for clients over the past year. You may ask what makes my consulting different than what other professionals provide. Then answer is trend analysis. 99.9% of the appraisers and consultants do not use Trend Analysis in their reports. In my opinion this is critical information in any real estate analysis report that most of you are not getting. I have a unique background in real estate, finance, appraisals, the stock market and technical analysis that provides data and analysis you will not get anywhere else. This service can be done in most real estate markets around the country. Call or email me for more info if you are interested.

Now I know many of you are forwarding this newsletter to clients or friends. If you have a website and want to link to The Charleston Market Report be my guest. I have heard from many real estate agents that the info in this report helps their relationship with their clients because it puts them on the same page with the cuurent events and market conditions in Charleston and around the country. The best way to forward the newsletter is to scroll down to the bottom of the newsletter and click on "Forward to a friend."

The best way to get this newsletter is to simpy subscribe. I keep all emails confidential and usually only send out 1 email per month.




The Cartoon
I think the cartoon above sums up the current scenario perfectly in real estate and Wall Street. Now I know we have some former "Players" who read this report. Remember in college or your "player" years when you got really drunk and had a blast dancing all night in the bars? Then you suddenly find yourself on the dance floor with a young lady who you think is hot and you have a great time all night. Now, ladies this scenario could go either way ok. Then one thing leads to another and you go home together and you wake up the next morning wondering what happened last night, your head is pounding and you wonder who the hell is sleeping next to you. Then when you take a look that person does not look as hot as you thought when you were drunk and you just want to get out of his or her place as fast as you can. Well, this is how Wall Street feels about securitizing loans right now. They wish they had never gotten in bed with Ms. Mortgage as the writedowns mount each day and clobber their stock prices. Just ask Stan O'Neil from Merrill Lynch or Chuck Prince from Citigroup. They lost their jobs courtesy of Ms. Mortgage.



The party was great while it lasted but the hangover really hurts. There is truly not enough Advil in the world to go around for all the Wall Street firms and Banks who banked so much of their money on the inflated housing market. Sorry fellas because this hangover is going to last a while and Ms. Mortgage just looks uglier and uglier each day. I will say there is going to be one heck of a financial rally in the near future as this sector bottoms out. There will be some fantastic companies on sale via the NYSE.

The Appraisal Industry and Lendron
Last week New York Attorney General Andrew Cuomo sent a shock wave throughout the lending and appraisal industry when he found a "pattern of collusion" between Washington Mutual and the appraisal unit of First American Corp called eAppraiseIT. Cuomo also subpoenaed Fannie Maie and Freddie Mac to conduct a review of all WaMu appraisals and loans they purchased. I will tell you that Cuomo would not have subpoenaed any of these large coroprations without a smoking gun. Washington Mutual is the third-largest provider of loans to Freddie Mac, selling $24.7 billion in 2007, Cuomo said. It ranks 14th at Fannie Mae, with $7.8 billion of loans this year. Click here for the Bloomberg article.

Below is the chart of WaMu imploding:


What is also interesting about WaMu is that last summer they fired their inhouse appraisers and vendors to shift all of their work to the Appraisal Management Company, AMC, eAppraiseIT. I personally know the owner, Jonathan Miller, of one of the appraisal firms in Manhattan called Miller Samuel who lost business to this WaMu decision. Miller Samuel is one of the top appraisal firms in the country. Why would WaMu eliminate what appeared to be a good risk management strategy of appraising properties via in-house and outside appraisers? My only answer is GREED and STUPIDITY, which many finance companies have done such a great job of demonstrating recently with past business decisions related to mortgages and housing. Maybe WaMu was losing to many loans because their appraisers were doing their jobs and not inflating reports and actually cutting deals on overpriced purchases and refis.

Part of the problem in the real estate industry is that mortgage brokers usually work on a commission with their loans and the appraiser gets paid a fee. The mortgage broker probably averages around 1.5-2% per amount their client is borrowing and the appraiser normally gets paid $350 per appraisal. Obviously, the mortgage broker, who carries NO liability for originating inflated loans through their company, wants to push loans through the system so they get PAID. The appraiser who makes the least amount of anyone in this transaction can kill these deals if the data supports it. Their is enormous pressure placed on appraisers by some mortgage brokers to "hit the number" so they can originate the loan and then sell it off to the secondary market (Wall Street) which will bundle various loans together in Mortgage Back Securities (MBS) and sell them to an investors. Many appraisers will not go along with this pressure because the liability and reputation risks are so high. Unfortunately, in any business their are always those bad apples that can be bought and pressured to do anything for some extra cash and business. What is amazing about this case is that the appraisers are hired by the banks/lenders to protect them from themselves. The last thing a bank or lender wants to do is have to repurchase inflated appraisals that show them forcing what are supposed to be independent appraisers into inflating home values. If WaMu loses this case and is forced to repurchase these loans they are DONE, TOAST and will become BANKRUPT.

Now according to Tanta from Calculated Risk in the great article WaMu and The Rep War:

"Fannie Mae is saying that WaMu will take back any loans with dubious appraisals this "independent examiner" digs up. WaMu is saying that it will "rigorously" avoid doing so.

WaMu is also saying, in effect, that it signed a contract with eAppraiseIT that puts all liability for inflated appraisals on eAppraiseIT.

Fannie Mae is saying, in effect, that it signed a contract with WaMu that puts all liability for inflated appraisals on WaMu.

This is very interesting precisely because it isn't going to be about inflated appraisals. It's going to be about how far anyone can get away with two practices that are the lynch-pins of the mortgage industry: outsourcing regulatory liability to a third party bag-holder and doing business on a representation and warranty basis without pre-sale due diligence."
In response to questions about whether he will charge other companies, the attorney general said his investigation is continuing.

"The appraisal process is a systemic weakness, in our opinion, in the housing industry," Cuomo said. "This is a case we believe is symbolic of an industrywide problem, a long-term problem."
OUCH!!

Cuomo said a nine-month investigation uncovered numerous e-mails from senior executives at the companies showing that eAppraiseIT intentionally broke the law to win future business with Washington Mutual.

First American said the e-mails were taken out of context or mischaracterized.

"We get pressured every single day to inflate our values," said Dan Tosh, principal at Tosh & Associates, an appraisal firm in Brentwood. "We get people telling us we'll never work again, or they won't pay us because we won't play ball."

"This makes things such as Enron and WorldCom look small by comparison," said Ted Faravelli, executive director of the California Association of Real Estate Appraisers and principal at San Jose's T.E. Faravelli & Associates, an appraisal firm. "It was an epidemic."

In a nationwide survey released early this year, 90 percent of 1,200 appraisers said they had felt "uncomfortable pressure" to adjust property values. Mortgage brokers were named as the most common culprits, followed by real estate agents, consumers, lenders and appraisal management companies. The increase in pressure was dramatic compared with that found in a similar survey in 2003, when 55 percent of appraisers reported feeling pressured.

The real kicker with this lawsuit is that the way appraisals are currently done may have to revamped. I do not have all the answers as to what the best way for the appraisal business to work. I think the way WaMu originally was managing risk via in-house and outside appraisers such as Miller Samuel was a much better model than using an AMC exclusively. I believe AMCs are not any good for any of the bank and lenders. The AMCs do a poor job of getting the most qualified appraisers the work and instead reduce the fees where often the less qualified appraiser gets the work. There is no doubt this case will have a major impact on the appraisal and lending industry and we need to monitor it closely. If these types of cases spread to other states then this whole Lendron scenario may get even uglier. Stay tuned!

Souces:
Bloomberg- http://www.bloomberg.com/apps/news?pid=20601087&sid=ajFo10xQYMd0&refer=home
Calculated Risk - WaMu and The Rep War
http://calculatedrisk.blogspot.com/2007/11/wamu-and-rep-war.html
Mish's Global Economic Trend Analysis
WaMu Collapses Under Appraisal Probe- http://globaleconomicanalysis.blogspot.com/2007/11/wamu-collapses-under-appraisal-probe.html
Tanta on WaMu vs. Cuomo - http://globaleconomicanalysis.blogspot.com/2007/11/tanta-on-wamu-vs-cuomo.html


Charleston Real Estate Snapshot

I have circled in red what I like to look at in this snapshot of Charleston residential real estate. Clearly the worst segment of the market is on the SFR high end (>$600k) right now. Sales are way down from a year ago and monthly inventory has tripled. This is worse than the high end condo market! Obviously, the inability to get qualified and a good rate on a Jumbo loan is part of the blame. I just can not understand why so many investors continue to put out spec homes in this price range. These are not cheap mortgages while your home sits on the market waiting and waiting and waiting to sell.

Tri-County
Single FamilyResidential
Less than $600,000


Tri-County
Single Family Residential
Greater than $600,000


Tri-County
Condo/Townhomes
Less than $600,000



Tri-County
Condos/Townhomes
Greater than $600,000


Souce: CTAR MLS

Best Regards,

brad
www.charlestonmarketreport.com
http://trendocracy.blogspot.com/
brundbaken@comcast.net




Legal Disclaimer


Disclaimers and Acknowledgements

The research done to gather the data in the Charleston Real Estate Market Report involves examining thousands of listings. With this much data inaccuracies will occur. Care is taken in gathering and processing the data and information within this report is deemed reliable. IT IS NOT GUARANTEED. The real estate market is cyclical and will have its ups and downs. Past performance cannot determine future performance. The purpose of the Charleston Real Estate Market Report is to educate you on current and consistent market conditions by reporting leading market indicators with the support of traditional real estate data.

This information is offered with the understanding that the author is not engaged in rendering legal, tax or other professional services. If legal, tax or other expert assistance is required, the services of a competent professional are recommended. This is a personal newsletter reflecting the opinions of its author. It is not a production of my employer. Statements on this site do not represent the views or policies of anyone other than myself.

Investing in real estate is not a get-rich-quick scheme nor is there any guarantee you will make a profit. Every effort has been made to make this report as complete and accurate as possible. However, there may be mistakes. Therefore, this report should be used only as a general guide and not as the ultimate source for making money in real estate.

Charleston Market Report, LLC
843-297-2701
www.charlestonmarketreport.com
Copyright 2006-2007 The Charleston Market Report


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.

Q3 2007 MSA Foreclosure Report

STOCKTON, DETROIT, RIVERSIDE-SAN BERNARDINO POST TOP METRO FORECLOSURE RATES ACCORDING TO REALTYTRAC® Q3 2007 METROPOLITAN FORECLOSURE MARKET REPORT™

California, Florida and Ohio Cities Account for 17 of Top 25 Metro Foreclosure Rates


IRVINE, Calif. – Nov. 14, 2007 – RealtyTrac® (www.realtytrac.com), the leading online marketplace for foreclosure properties, today released its Q3 2007 Metropolitan Foreclosure Market Report, which shows Stockton, Calif., Detroit and Riverside-San Bernardino, Calif., documented the three highest foreclosure rates among the nation’s 100 largest metropolitan areas during the third quarter.

RealtyTrac publishes the largest and most comprehensive national database of foreclosure and bank-owned properties, with over 1 million properties from nearly 2,500 counties across the country, and is the foreclosure data provider to MSN Real Estate, Yahoo! Real Estate and The Wall Street Journal’s Real Estate Journal.

“Although cities in just three states — California, Ohio and Florida — accounted for more than two-thirds of the top 25 metro foreclosure rates, increasing foreclosure activity was not limited to just a few hot spots,” said James J. Saccacio, chief executive officer of RealtyTrac. “In fact, 77 out of the top 100 metro areas reported more foreclosure filings in the third quarter than they had in the previous quarter. Still, there continue to be pockets of the country — most noticeably metro areas in the Carolinas, Virginia and Texas — that have thus far dodged the foreclosure bullet.”

California, Ohio, Florida cities dominate top metro foreclosure rates

Stockton, Calif., documented one foreclosure filing for every 31 households during the quarter, the highest foreclosure rate among the nation’s 100 largest metro areas. A total of 7,116 foreclosure filings on 4,409 properties were reported in the metro area during the quarter, up more than 30 percent from the previous quarter.

Detroit’s third-quarter foreclosure rate of one foreclosure filing for every 33 households ranked second highest among the nation’s 100 largest metro areas. A total of 25,708 foreclosure filings on 16,079 properties were reported in the metro area during the quarter, more than twice the number of filings reported in the previous quarter.

The Riverside-San Bernardino, Calif., metropolitan area in Southern California documented the nation’s third highest metro foreclosure rate, one foreclosure filing for every 43 households. A total of 31,661 foreclosure filings 20,664 properties were reported in the metro area during the quarter, up more than 30 percent from the previous month.

Other cities in the top 10 metro foreclosure rates: Fort Lauderdale, Fla.; Las Vegas; Sacramento, Calif.; Cleveland; Miami; Bakersfield, Calif.; and Oakland, Calif. California cities accounted for seven of the top 25 metro foreclosure rates, while Florida and Ohio each accounted for five of the top 25 spots.

Riverside-San Bernardino, Los Angeles, Detroit report most foreclosure filings

The Riverside-San Bernardino metropolitan area reported the most foreclosure filings during the quarter, followed by Los Angeles, with 29,501 filings on 18,043 properties. The Los Angeles foreclosure rate of one foreclosure filing for every 113 households ranked No. 26 among the nation’s 100 largest metro areas. Detroit reported the third highest number of foreclosure filings during the quarter.

Atlanta’s foreclosure filing total of 21,695 on 18,940 properties was the fourth highest foreclosure filing total, and the metro area’s foreclosure rate of one foreclosure filing for every 92 households ranked No. 18 among the top 100 metro areas.

Other cities with foreclosure filing totals among the 10 highest were Phoenix, Fort Lauderdale, Fla., Cleveland, Chicago; Miami and Sacramento, Calif.

Report methodology

The RealtyTrac Metro Foreclosure Market Report provides the total number of foreclosure filings by metropolitan area, along with the number of households per foreclosure filing. The household numbers are based on the U.S. Census Bureau’s 2005 estimates of total housing units.

Beginning with the Midyear 2007 report, the report also includes counts of properties with at least one foreclosure filing reported against them. This new metric only counts a property once, even if there were multiple foreclosure actions filed against the property during the time period covered by the report.

Data is also available at the individual county level. RealtyTrac’s report includes 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).

Foreclosure Activity for the Nation’s 100 Largest MSAs – Q3 2007







About RealtyTrac Inc.

Ranked as the third largest real estate site by MediaMetrix and No. 53 on Inc. magazine’s 2006 Inc. 500 list of the nation’s fastest-growing private companies, RealtyTrac Inc. (www.realtytrac.com), is the leading online marketplace for foreclosure properties, providing all the resources that home seekers, investors and real estate agents need to locate, evaluate and buy properties below market value.

Founded in 1996, RealtyTrac publishes the largest and most comprehensive national database of pre-foreclosure, foreclosure, For Sale By Owner, resale and new homes, with more than 1 million properties across the country, property reports, productivity tools and extensive professional resources. RealtyTrac hosts nearly 3 million unique visitors monthly and has been chosen to supply foreclosure data to MSN Real Estate, Yahoo! Real Estate and The Wall Street Journal’s Real Estate Journal. For current news and information regarding foreclosure-related issues and trends, visit our blog at www.ForeclosurePulse.com.


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.

Q3 2007 Foreclosure Report

FORECLOSURE ACTIVITY UP 30 PERCENT IN THIRD QUARTER ACCORDING TO REALTYTRAC U.S. FORECLOSURE MARKET REPORT™


Foreclosure Actions Filed Against More Than 446,000 Properties

Activity Up Nearly 100 Percent From Q3 2006

IRVINE, Calif. – Nov. 1, 2007 – RealtyTrac® (www.realtytrac.com), the leading online marketplace for foreclosure properties, today released its Q3 2007 U.S. Foreclosure Market Report, which shows a total of 635,159 foreclosure filings — default notices, auction sale notices and bank repossessions — were reported on 446,726 properties nationwide during the third quarter, a 30 percent increase from the previous quarter and an increase of nearly 100 percent from the third quarter of 2006. The report also shows a foreclosure rate of one foreclosure filing for every 196 U.S. households for the quarter.

RealtyTrac publishes the largest and most comprehensive national database of foreclosure and bank-owned properties, with over 1 million properties from nearly 2,500 counties across the country, and is the foreclosure data provider to MSN Real Estate, Yahoo! Real Estate and The Wall Street Journal’s Real Estate Journal.

“August and September were the two highest monthly foreclosure filing totals we’ve seen since we began issuing our report in January 2005,” said James J. Saccacio, chief executive officer of RealtyTrac. “Although not all areas are being hit as hard as others, the rise in foreclosures is quite widespread, with 45 out of the 50 states documenting year-over-year increases in the third quarter. Given the number of loans due to reset through the middle of 2008, and the continuing weakness in home sales, we would expect foreclosure activity to remain high and even increase over the next year in many markets.”

Nevada, California, Florida post top foreclosure rates

Nevada posted the nation’s highest foreclosure rate for the quarter, one foreclosure filing for every 61 households. A total of 16,817 foreclosure filings on 12,982 properties were reported in the state during the third quarter, up 23 percent from the previous quarter and more than triple the number reported in the third quarter of 2006.

California’s third-quarter foreclosure rate of one foreclosure filing for every 88 households ranked second highest among the states. A total of 148,147 foreclosure filings on 94,772 properties were reported in the state during the third quarter, up 36 percent from the previous quarter and nearly quadruple the number reported in the third quarter of 2006.

Florida documented a third-quarter foreclosure rate of one foreclosure filing for every 95 households, the nation’s third highest state foreclosure rate. A total of 86,465 foreclosure filings on 60,992 properties were reported in the state during the third quarter, up more than 50 percent from the previous quarter and more than double the number reported in the third quarter of 2006.

Other states with foreclosure rates among the top 10 included Michigan, Ohio, Colorado, Arizona, Georgia, Indiana and Texas.

California and Florida registered the top two state foreclosure filing totals for the quarter, followed by Ohio, which came in third with 46,818 foreclosure filings on 35,242 properties. With 44,092 foreclosure filings on 26,773 properties, Texas documented the nation’s fourth highest total. Michigan’s total of 43,786 foreclosure filings on 29,655 properties was the fifth highest total.

Other states with foreclosure filing totals among the top 10 included Georgia, Arizona, Illinois, Colorado and Nevada.

Report methodology

The RealtyTrac U.S. Foreclosure Market Report provides the total number of foreclosure filings nationwide and by state, along with the number of households per foreclosure filing. Data is also available at the individual county level.

The household numbers are based on the U.S. Census Bureau’s 2005 estimates of total housing units. Foreclosure filings include foreclosure-related documents 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).

Beginning with the Midyear 2007 report, the report also includes counts of unique addresses in some stage of foreclosure. This new metric only counts a property once, even if there were multiple foreclosure actions filed against the property during the time period covered by the report.





About RealtyTrac Inc.

Ranked as the third largest real estate site by MediaMetrix and No. 53 on Inc. magazine’s 2006 Inc. 500 list of the nation’s fastest-growing private companies, RealtyTrac Inc. (www.realtytrac.com), is the leading online marketplace for foreclosure properties, providing all the resources that home seekers, investors and real estate agents need to locate, evaluate and buy properties below market value.

Founded in 1996, RealtyTrac publishes the largest and most comprehensive national database of pre-foreclosure, foreclosure, For Sale By Owner, resale and new homes, with more than 1 million properties across the country, property reports, productivity tools and extensive professional resources. RealtyTrac hosts nearly 3 million unique visitors monthly and has been chosen to supply foreclosure data to MSN Real Estate, Yahoo! Real Estate and The Wall Street Journal’s Real Estate Journal. For current news and information regarding foreclosure-related issues and trends, visit our blog at www.ForeclosurePulse.com.





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.