[RP TownTalk] U.S. Housing Bust!

Andrew Farrington somefool at dvnt.com
Tue Mar 14 14:16:48 UTC 2006


Did you really just forward fear-mongering commercial email to the town
talk list?  "Be terrified!  Give me $130 bucks or you'll DIE!!  Booga
booga!"  Just curious:  Did you send the guy $130?

Andrew Farrington


On Tue, 14 Mar 2006 bruce.wernek at mindspring.com wrote:

> All,
> 
> This is a financial news letter I receive daily from Weiss Research. 
> Since there is a proposal on the table for a "condominum" complex at
> Dumms Corner, I thought the following would be interesting reading.  I
> fear this "condominum" complex will either be just another vacant
> property in our Town Center or an apartment building, most likely the
> later.  I don't consider this economic development, but you can make
> your own decisions.
> 
> Bruce
> 
> 
> 
>      To make sure you don't miss our urgent updates, add Weiss Research to
>               your address book. Just follow these simple steps.
> 
> 
> 
>                    Money and Markets Tuesday, March 14, 2006
> 
> 
> 
>                      • U.S. Housing Bust by Michael Larson
>                        • Asian Tech Boom by Tony Sagami
> 
> 
>                               Dear Stanley Bruce,
> 
> 
>      [larson.jpg] Tony Sagami’s so worried about what’s happening to U.S.
>      tech stocks, he’s hopped on a plane and flown off to Asia. He’ll give
>           you a sneak preview of his research tour in just a moment.
> 
> 
>      But first, Martin has asked me to give you an urgent update on what’s
>                      happening in the U.S. housing market.
> 
> 
>     If you’re like most of my friends and family, your home is your biggest
>      and best investment. It’s worth more than any single stock or mutual
>      fund in your portfolio — perhaps more than all your other investments
>                           combined. But right now ...
> 
> 
>                                   Home Prices
>                                  Are Falling!
> 
> 
>         In Bethesda, Maryland, prices have tumbled 16% from December to
>                                    January.
> 
> 
>      In a key area of Fresno, California, the median sale price for homes
>     was $439,000. But in just the last 60 days, those homes have plummeted
>                              $51,000, to $388,000.
> 
> 
>          In San Diego, new home prices have just suffered the sharpest
>                       month-to-month dive ever recorded.
> 
> 
>       [img1.jpg] In Palm Beach County, Florida, where we live, we see the
>      same thing. Every day, when we drive to work, we see “house for sale”
>     signs sprouting like unwanted weeds along the road. And every night, as
>       we drive home, our eyes turn to a skyline sculpted by dozens of new
>     high-rise condominiums, nearly all in darkness, nearly all unoccupied.
> 
> 
>     And this is just a small sampling. I can give you a dozen more examples
>      — from Sarasota ... Chicago ... Phoenix ... Washington D.C. and more
>        that show this “adjustment” in prices could be sharp, severe and
>                                   widespread.
> 
> 
>                         This Housing Bubble is Busting.
>                         And the Bust Could Spread from
>                       Coast to Coast Like a Giant Storm.
> 
> 
>       It may have reached your area already. Or it may be on its way. In
>       either case, my question for you today is: Are you planning to just
>             ride it out? Or are you going to do something about it?
> 
> 
>     Suppose your home falls 30% in value. What about 40% or 50%? Given how
>        fast and far home values have surged, that would not be unusual.
> 
> 
>     Heck, even if the price of your home falls by a “mild” 10%, that could
>                        be a huge hit to your net worth.
> 
> 
>      Let’s say, for example, your home is worth $500,000, and you’ve got a
>       $450,000 mortgage. Guess what: Just a 10% decline wipes out 100% of
>     your equity. Even if you’ve got another $50,000 in the bank, that still
>             means that half of your net worth has gone up in smoke.
> 
> 
>      I’m writing you now because you don’t have to ride it out. You don’t
>     have to sit there passively while a housing bust wipes out much or most
>     of your net worth. Indeed, there’s a lot you can do to protect yourself
>                   — even to go after unusually large profits.
> 
> 
>                   And it does not require selling your home.
> 
> 
>                               The Biggest Glut of
>                            Unsold Homes of All Time
> 
> 
>       All across the USA, brand new, single-family homes are begging for
>                                     buyers.
> 
> 
>      And empty condos are about as popular as lepers at a kissing contest.
> 
> 
>                                 Here’s why ...
> 
> 
>                           1. Home sales are dropping.
> 
> 
>       The sales of existing homes are at their lowest level in nearly two
>     years ... and sinking fast. That means if you want to try selling your
>      home right now, it’s probably going to take a heck of a lot longer to
>     move it. And more and more people are putting their homes up for sale.
> 
> 
>     The same is happening in the new home market, where sales just plunged
>       to a one-year low. But builders are committed to past contracts. So
>            they’re still building record numbers of shiny new homes.
> 
> 
>                                 As a result ...
> 
> 
>      [img2.jpg] 2. The supply of homes on the market is ballooning out of
>                                    control!
> 
> 
>     The number of new homes for sale just hit 528,000 in January. That was
>                     the worst at any time in U.S. history.
> 
> 
>     At the same time, in the used home market, a whopping 2.9 million units
>          have flooded the market. That’s just shy of an 18-year high.
> 
> 
> 
>                  3. Condos are getting hit the hardest of all.
> 
> 
>      Nationwide, condo and co-op sales have plunged 7.8% over the last 12
>       months. And supplies surged by 49.5%! If you own a condo, good luck
>      selling! And even if you don’t own one, the drop in condo prices will
>       naturally put pressure on your properties as home buyers choose the
>                              cheaper alternatives.
> 
> 
>       These warning signs would be troubling for any market. Yet the real
>                estate lobby keeps whistling past the graveyard.
> 
> 
>     Just yesterday, the National Association of Realtors published its 2006
>       sales outlook, forecasting sales declines of almost 6% for existing
>         homes and 8% for new homes, the biggest drops since the 1990s.
> 
> 
>     But their headline is pure spin: “Housing Market Readjusting to Normal
>       Balance.” Ha! That’s the kind of doublespeak that would make George
>                                  Orwell proud.
> 
> 
>       Look. We’ve just seen the most massive real estate run-up in recent
>     memory. We’ve got a market that’s grossly overbuilt and overpriced. We
>               have millions of unsold homes all over the country.
> 
> 
>     Result: We’re on the brink of a free fall. And it could take the price
>                           of your home along with it.
> 
> 
>                                 From Dream Home
>                             to Financial Nightmare
> 
> 
>                                  What’s next?
> 
> 
>     Millions of American families, already stretched beyond their means to
>        afford their dream homes, will snap beneath the burden of rising
>                                monthly payments.
> 
> 
>       And we’re no longer the only ones warning you about this. Just this
>       past Saturday, the lead article in the Wall Street Journal issued a
>                              very similar warning:
> 
> 
>     Over $2 trillion in adjustable-rate mortgages (ARMs) are going to reset
>                       to higher rates this year and next.
> 
> 
>      Already, a growing number of homebuyers are having a hard time making
>      their monthly mortgage payments. And now, they’ll suddenly see their
>      payments jump 30%, 40% even 50%. Past-due notices will start pouring
>      into the nation’s mail stream — from hundreds of mortgage lenders and
>                  banks to hundreds of thousands of households.
> 
> 
>     Suddenly, nearly everyone will be in a rush to put up their “for sale”
>                    sign before their neighbors do the same.
> 
> 
>       A man’s home is his castle, but when it’s unsellable, it becomes a
>                                     prison.
> 
> 
>          Home foreclosures are already rising ominously. According to
>       RealtyTrac, an online marketplace for foreclosure properties, about
>       103,540 properties nationwide entered some stage of foreclosure in
>     January. That’s up 27% in a month ... 45% in a year, the biggest surge
>                                 I’ve ever seen.
> 
> 
>           Result: Still more pressure on the value of your property.
> 
> 
>                                Steps You Should
>                                 Take Right Away
> 
> 
>       I’ve just written a special report, “The Great Real Estate Bust of
>       2006-2008,” with detailed steps on what to do immediately. Here are
>                        seven to help get you started ...
> 
> 
>     Step 1. Sell your investment real estate. Don’t wait. Don’t worry about
>        replacing the income right now. Just move quickly to protect your
>           capital. (More details on why, how and where in my report).
> 
> 
>      Step 2. Think about your own home. If it means a lot more to you than
>      just an investment, stick with it. If not, run the numbers on owning
>      vs. renting. You’ll probably find that renting is cheaper even after
>      you factor in the tax advantages of owning. By selling, you not only
>          protect your nest-egg ... you also cut your monthly expenses.
> 
> 
>     Step 3. If you absolutely must buy now for reasons that have nothing to
>     do with the ups and downs in home prices, I understand. But don’t spend
>      more than 25% of your gross income on principal, interest, taxes and
>       insurance. And don’t miss the section in my report “10 Ways to Be a
>                              Smarter Home Buyer.”
> 
> 
>        Step 4. If you’re holding mortgage bonds — from Fannie Mae, from
>     Freddie Mac, or based on the high-risk “subprime” mortgages — sell now.
>        The market value of these bonds is likely to fall as home prices
>                    decline and mortgage delinquencies rise.
> 
> 
>         Step 5. From your stock portfolio, dump construction companies,
>       subprime lenders and mortgage REITS. In my report, I discuss seven
>            vulnerable sectors, and I name up to six stocks in each.
> 
> 
>     Step 6. A housing bust can do more financial damage to more properties
>       than any hurricane. You have insurance to protect your home against
>      storm damage. So why don’t you buy some protection against a housing
>                       bust? In my report, I explain how.
> 
> 
>       Step 7. Go for a profit bonanza! There are investments you can buy
>      right now that are designed to double and triple in value as the real
>                             estate market crumbles.
> 
> 
>      For example, you can buy long-term options, called LEAPS, on the two
>      home builders named in my report. The more the stocks fall, the more
>                            money you stand to make.
> 
> 
>       If you download my report now, you’ll be entitled to four follow-up
>     reports. The entire package — my special report and the four follow-ups
>      — is normally priced at $495. But right now, the complete package is
>                                      $129.
> 
> 
>        Your overarching goals: Avoid the avalanche of properties that’s
>      starting to hit the market. Get out of debt. Grow your wealth. Build
>                  your cash. And stash it away in a safe place.
> 
> 
> 
> 
> 
> 
> _______________________________________________________________________________
> 
>                 For more information and archived issues, visit
>                         http://www.moneyandmarkets.com.
> 
> 
>                             About MONEY AND MARKETS
> 
> 
>        MONEY AND MARKETS (MAM) is published by Weiss Research, Inc. and
>      written by Martin D. Weiss along with Larry Edelson, Tony Sagami and
>     other contributors. To avoid conflicts of interest, Weiss Research and
>     its staff do not hold positions in companies recommended in MAM. Nor do
>       we accept any compensation for such recommendations. The comments,
>       graphs, forecasts, and indices published in MAM are based upon data
>        whose accuracy is deemed reliable but not guaranteed. Performance
>          returns cited are derived from our best estimates but must be
>      considered hypothetical inasmuch as we do not track the actual prices
>       investors pay or receive. Contributors include Jennifer Moran, John
>      Burke, Beth Cain, Amber Dakar, Michael Larson, Monica Lewman-Garcia,
>                            Julie Trudeau and others.
> 
> 
>       If you have a friend, co-worker or family member who you feel could
>      benefit from Money & Markets, please forward this issue to a friend.
> 
>      To make sure you don't miss our urgent updates, add Weiss Research to
>               your address book. Just follow these simple steps.
> 
>      The information included in this electronic newsletter is subject to
>                           these terms and conditions.
> 
>                            View our Privacy Policy.
> 
>          Would you like to edit your email notification preferences or
>                       unsubscribe from our mailing list?
> 
>               © 2006 by Weiss Research, Inc. All rights reserved.
>                    15430 Endeavour Drive, Jupiter, FL 33478
> 
> 
> 
> [STPTI] [YT]
> 
> 
>


More information about the TownTalk mailing list