[RP TownTalk] U.S. Housing Bust!
glaros at earthlink.net
glaros at earthlink.net
Wed Mar 15 18:31:25 UTC 2006
Hi.
I really appreciate Bruce sharing the latest concerns on the national real estate market, but I think it is really important to be carefull to not overly generalize that market. From what I see across the country and here in the DC region, the places that will continue to grow and where real estate will continue to gain value or at least hold value (if the bubble bursts) are places accessible to public transportation. Not only that, but we have a "mega" employment center being built in our backyard--the m-square research park! Just yestedray, I mentioned to a very well-respected commerical real estate person that I can take the MARC into Union Station in 15min and be home in 10min. He starred at me in disbelief that places like US still exist. In other words, as homeowners we have made a wise investment in Riverdale Park.
Riverdale Park is a great small town in a big city. As for me, I'd rather press the developers of Dumms to design the building exterior in a way that speaks to the charm of our great city. I'd like to see retail back in our town center and I strongly believe that to fill those vacant storefronts, we need more people living close to our town center.
See you at the next MUTC meeting!
Dannielle Glaros
4800 Sheridan St
-----Original Message-----
>From: Andrew Farrington <somefool at dvnt.com>
>Sent: Mar 15, 2006 10:51 AM
>To: "Regina M. Kreger" <regina at kreger.net>
>Cc: towntalk at riverdale-park.org
>Subject: Re: [RP TownTalk] U.S. Housing Bust!
>
>I suggest you sell all of your properties, and rent until the sky has
>fallen. Also, please send me $130 for more information. A $500 value!
>Thanks. :)
>
>Andrew Farrington
>
>On Wed, 15 Mar 2006, Regina M. Kreger wrote:
>
>> Jeez, Andrew. So what -- you think the way the housing market has
>> behaved over the last few years is rational and sustainable?? I think
>> Bruce is bringing up an extremely important point, and I share his
>> doubts over the viability of the Dumms condo proposal. It is only one
>> of several doubts I have about the proposal, but it's one of the most
>> serious ones.
>>
>> Regina Kreger
>> 5903 Cleveland Ave.
>>
>> Andrew Farrington wrote:
>> 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
>>
>>
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>> Weiss Research, Inc. and
>> written by Martin D. Weiss along with Larry
>> Edelson, Tony Sagami and
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>> its staff do not hold positions in companies
>> recommended in MAM. Nor do
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>>
>>
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