# U.S Housing foreclosures approaching levels not seen since the great Depression



## numbercruncher (3 September 2007)

> Last year, there were 1.2 million foreclosure filings in the United States, up 42 percent from 2005, according to RealtyTrac, a firm that analyzes such data. At current rates so far this year, RealtyTrac expects foreclosure filings to hit two million in 2007, or roughly one per 62 American households ”” a rate approaching heights not seen since the Great Depression.




http://www.nytimes.com/2007/09/02/business/yourmoney/02village.html?pagewanted=1&ei=5087%0A&em&en=72d230760c886eb8&ex=1188878400&adxnnl=0&adxnnlx=1188777788-rsCI2fLhRn+2WW10F7T+KA


Great little article, Housing in the US actually looks like pretty good investments at some of the prices in the article given as examples ..

But i imagine snowballing and sentiment will continue to drive them lower(not to mention loan defaults!)

Surely theres no way the States consumer driven economy can avoid recession when weiging up the evidence at hand.


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## Happy (3 September 2007)

This is one the times of great tragedy for many, as well as window of opportunity for others to score property for less than it would be possible without such an event.

Twisted way of good coming out of something bad.


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## KIWIKARLOS (3 September 2007)

thats only property in some areas of the US its by no means in every suburb but more like spots of high foreclosure. The fact is though foreclosures are just as bad for the lender and the morgagee and the lenders will try to do anything they can to get around foreclosing.

Even if it means letting people pay at lower interest rate etc its still better than taking a 10's of thousand dollar loss. There will be support packages coming out to help these people because falling house prices can't be tolerated or the mess WILL spread.


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## insider (3 September 2007)

The panicky stage of the correction is gone... Hopefully DOW has good night tonight... Not saying the correction is over yet... USA is becoming less of an influence on the world day by day... What sub prime mortgage?


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## numbercruncher (3 September 2007)

I predict dow will move exactly 0pc tonight


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## explod (3 September 2007)

KIWIKARLOS said:


> thats only property in some areas of the US its by no means in every suburb but more like spots of high foreclosure. The fact is though foreclosures are just as bad for the lender and the morgagee and the lenders will try to do anything they can to get around foreclosing.
> 
> Even if it means letting people pay at lower interest rate etc its still better than taking a 10's of thousand dollar loss. There will be support packages coming out to help these people because falling house prices can't be tolerated or the mess WILL spread.





The difficulties go back more than 18 months, why the sudden concern now.  Not because of home owners.   The banks are finally concerned and the assistance it seems to me is only in that direction.   The neighbours to the couple in the story, obviously recieved no consideration from the lenders. Why would they change that now.

The US is making a habit of indifference, take New Orleans since the cyclone, mostly left to rot.     I remember a placard in New York during the last Presidential campaign which read "F..k the poor",, says it all

The supply of money IS drying up and that will ultimately mean paying more to get it, such as higher interest rates and increased forclosures.

If people want to live in dreamland that's OK, but I cant buy it.    Increasingly with the planet becoming  more overpoplulated by the day it will be dog eat dog


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## numbercruncher (3 September 2007)

> Latest home prices
> Second quarter numbers are in from the National Association of Realtors - 149 markets tracked.
> August 16 2007: 10:53 AM EDT
> 
> ...





http://money.cnn.com/2007/08/16/real_estate/home_prices_fall_again/index.htm?postversion=2007081610


I think it is virtually everywhere in the US suffering (except maybe the top end of town?) especially when these figures arnt inflation adjusted.

"Its armageddon out there" i remember some muppet saying


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## KIWIKARLOS (3 September 2007)

I agree over population is a problem but the continental US is hardly overpopulated. With a area the size of Aus with heaps of arible land we can see that relfected in house prices which are still cheaper in terms to Aussie. Say 200K in US for suburbs where as 400-500K in Sydney !. The fact is we are prob more over populated here in Sydney than the US is. Look at Europe the UK and Japan house prices remain steady or increasing due to lack of available land and growing economies. 

Banks also DO NOT want to foreclose their loans they would loose huge amounts of money up front then their incomes would be slashed. The fact is in the US if you can't afford your house you pack up and move out passing the keys to the bank and moving on with your life (In the US their are morgages where if a person can't pay they hand over the deed and walk away with the lender taking the loss if any). Its the banks that take the hits from foreclosures as well as the small guy. But if a small guy losses all his cash he's back to square one if a bank losses its cash its cactus


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## explod (3 September 2007)

KIWIKARLOS said:


> I agree over population is a problem but the continental US is hardly overpopulated. With a area the size of Aus with heaps of arible land we can see that relfected in house prices which are still cheaper in terms to Aussie. Say 200K in US for suburbs where as 400-500K in Sydney !. The fact is we are prob more over populated here in Sydney than the US is. Look at Europe the UK and Japan house prices remain steady or increasing due to lack of available land and growing economies.
> 
> Banks also DO NOT want to foreclose their loans they would loose huge amounts of money up front then their incomes would be slashed. The fact is in the US if you can't afford your house you pack up and move out passing the keys to the bank and moving on with your life (In the US their are morgages where if a person can't pay they hand over the deed and walk away with the lender taking the loss if any). Its the banks that take the hits from foreclosures as well as the small guy. But if a small guy losses all his cash he's back to square one if a bank losses its cash its cactus




Maybe you are right.   But what does not add up to me is US population 300mil, Aussie just over 20mil,   US, few natural resources compared to us, manufacturing base mostly offshore to China/asia.   

We are in good shape but the custodian of the world reserve currencies still looks a bit shaky to this kid


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## kitehigh (3 September 2007)

explod said:


> Maybe you are right.   But what does not add up to me is US population 300mil, Aussie just over 20mil,   US, few natural resources compared to us, manufacturing base mostly offshore to China/asia.




I wouldn't say the US has few natural resources compared to us.  They actually have alot of resources, why do you think aussie listed companies are drilling and exploring over there.  But I actually think their biggest resource is their can do attitude and their ability to attract the best and brightest minds in the world.  Its why some of the best researches end up going to the states, because they get financial backing over there that they don't get in their homeland.  We should take note and start supporting our home grown talent alot more instead of just digging up resources and shipping them overseas.  Yes this give us great returns at the moment but we need to also plan for our future.




explod said:


> We are in good shape but the custodian of the world reserve currencies still looks a bit shaky to this kid




The only reason we are in good shape is because of our resources exports.  If the US goes down the drain (which I don't believe will happen just yet), than we will suffer as well.  I don't see anyone threatening the US's position as the custodian of the world reserve currency.


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## numbercruncher (3 September 2007)

> The closely watched S&P Case-Schiller housing index earlier this week spooked Wall Street when it showed a sharp drop in home prices ”” down more than 3 percent in the second quarter alone.
> 
> Karl Case, a housing economist who helped develop the 20-year-old index, says it's the largest price decline since the inception of the index.
> 
> ...




http://www.npr.org/templates/story/story.php?storyId=14060758

Wow thats a sharp across the board drop considering the bulk of adjustable rate mortgages havnt even reset yet


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## Mofra (3 September 2007)

numbercruncher said:


> Wow thats a sharp across the board drop considering the bulk of adjustable rate mortgages havnt even reset yet



The peak of adjustments is due in Oct this year, that combined with BB's trigger happy rate cutting could soften the blow in the ST - MT. 

One of the videos Wayne posted on another thread stated that in 2006 there was enough property built in the US to house almost 50% of the population. Given the quality of securitisation, lack of new home building activity and clearance rates in Australia, I'm am starting to believe that (outside of mortgage belt suburbs) a massive pullback is not necessarily on the cards - years of stagnation will help natural year on year inflation bring property prices closer to the mean average.


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## numbercruncher (3 September 2007)

Yes stagnation is right on the cards, inflation adjusted it translates to year on year losses just with prices staying the same.

People seem to have quickly forgotten the 90s where prices virtually sat stagnant for the whole decade in most areas.

Its all very interesting!


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## Mofra (3 September 2007)

numbercruncher said:


> Yes stagnation is right on the cards, inflation adjusted it translates to year on year losses just with prices staying the same.
> 
> People seem to have quickly forgotten the 90s where prices virtually sat stagnant for the whole decade in most areas.
> 
> Its all very interesting!



Agree totally. I would expect a medium term stangnation rather than a sudden housing downturn in Australia - we simply do not have the same oversupply issues as the US, which also has lower credit quality and a higher percentage of subprime (and the US equivalent of our non-confirming debt) mortgages.

That's not to suggest the _indirect_ impact of the US subprime issues on the Australian economy will be gentle...


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## chops_a_must (3 September 2007)

kitehigh said:


> I wouldn't say the US has few natural resources compared to us.  They actually have alot of resources, why do you think aussie listed companies are drilling and exploring over there.




Yeah, I was going to say the same thing. We don't even have the most basic of all resources, water.

This reminds me of something I read a while back. When the british navy were stationed in the then colonies, there were terrible riots because the sailors didn't like being fed lobster every day. I guess it is caviar or better over there.


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## Smurf1976 (3 September 2007)

kitehigh said:


> I wouldn't say the US has few natural resources compared to us.  They actually have alot of resources...



The US does have a rather major problem with energy however. They're in the notable position of having pursued a policy of "strength through exhaustion" more aggressively than anyone else. The end result 148 years after the first commercial oil well was drilled is that the US oil (and increasingly gas) resource base is seriously depleted. That's a rather large problem when you've got an energy hungry economy using these two resources for 70% of your energy supply, to the point of using 25% of world oil production.



> We should take note and start supporting our home grown talent alot more instead of just digging up resources and shipping them overseas.  Yes this give us great returns at the moment but we need to also plan for our future.



Totally agreed. We've got a very Third World attitude with excessive reliance on primary production without value adding. That's not to say we shouldn't be in the business of mining, but at the very least let's sell metal not ore.



> The only reason we are in good shape is because of our resources exports.



Can't argue with that one. We'd be stuffed without the mines and heavy industrial plants, a point many in the service economy seem to not understand overly well.


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## theasxgorilla (4 September 2007)

Smurf1976 said:


> Can't argue with that one. We'd be stuffed without the mines and heavy industrial plants, a point many in the service economy seem to not understand overly well.




In a sense I support the idea of Aust playing to it's strengths.  Why should we not profit from what it is that we have?  We still need to be smart and competitive in the way that we service the industries you refer to, lest it become detremental to their profitability.  All cogs within a big machine geared toward mineral and energy exports.


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## Flying Fish (4 September 2007)

So property prices stagnate, inflation goes up interest rates edge a little higher, surely this is going to put pressure on some wantabe property gurus?


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## KIWIKARLOS (4 September 2007)

we also have to think of the impact of the mining boom on house prices. WA house prices skyrocketed because there are thousands of people who moved over there to work and got paid mega bucks to do it. My guess is that as some people work the 3-5 years they planned for they will move back to the other states with pockets full of cash. Sure some will stay but if we are talking 20 year commodity bull then there will be alot of people making big bickies. I have a few mates who have gone over for 2-3 years and they plan to come back with 100's K to buy houses.

Not only that but we have an ageing population with huge super funds looking to invest somewhere. Markets are a bit messy at the moment but rental income is growing. Investment property in Aus looks good.

So from an investment and residential standpoint we have two factors increasing demand. The fact is to that the governments "state" do not want to increase urban sprawl that much, its to infrastructure intensive and would only add to our problems. Right no almost every local council in Sydney has big Urban consolidation plans which involve building tens of thousands of dwellings in each area in the next 5-10 years.


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## Flying Fish (4 September 2007)

KIWIKARLOS said:


> we also have to think of the impact of the mining boom on house prices. WA house prices skyrocketed because there are thousands of people who moved over there to work and got paid mega bucks to do it. My guess is that as some people work the 3-5 years they planned for they will move back to the other states with pockets full of cash. Sure some will stay but if we are talking 20 year commodity bull then there will be alot of people making big bickies. I have a few mates who have gone over for 2-3 years and they plan to come back with 100's K to buy houses.
> 
> Not only that but we have an ageing population with huge super funds looking to invest somewhere. Markets are a bit messy at the moment but rental income is growing. Investment property in Aus looks good.
> 
> So from an investment and residential standpoint we have two factors increasing demand. The fact is to that the governments "state" do not want to increase urban sprawl that much, its to infrastructure intensive and would only add to our problems. Right no almost every local council in Sydney has big Urban consolidation plans which involve building tens of thousands of dwellings in each area in the next 5-10 years.




So you mean they are going to pack lots of big ugly buildings into our major cities and cram the people in. Sounds really appealing.lol


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## KIWIKARLOS (4 September 2007)

hahaha surprisingly i dont think they will be that bad. 
A main part of the plans is to create village type atmospheres with local shops and alot of park/  green space around the immediate area. I think they have now recognised the fact that building slums just creates social problems down the track. 

The 4 big areas in particular are Penrith (lots of housing , new lakes and park land to be built as well) Parramatta big high rise with more land to be dedictated to parks . North Shore and Sutherland shire as well.

Most of the building is in corridor which follow existing rail and bus ways,


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## kitehigh (4 September 2007)

Yep,  They have to build up.  Can't keep spreading out like we have been.  Especially once fuel gets scarce and really expansive.  Plus with a good design they can be good living. 
 With the average family having less than 2 children, what is the need for such large houses.  Seems totally crazy, building such large houses to house a few occupants.


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## numbercruncher (7 September 2007)

kitehigh said:


> Yep,  They have to build up.  Can't keep spreading out like we have been.  Especially once fuel gets scarce and really expansive.  Plus with a good design they can be good living.
> With the average family having less than 2 children, what is the need for such large houses.  Seems totally crazy, building such large houses to house a few occupants.




Its easy to blame people for building big houses ....

1/ youll never remove the desire for the good old aussie quarter acre, somewhere for the kids to play and dont forget the poor old dog he needs somewhere to live to.

2/ Big problem is these developers releasing land riddled with building covenants that force people to build a certain style , size and time fram to build in, its crazy! If people want a 12 or 15 square house let them!


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## Flying Fish (8 September 2007)

numbercruncher said:


> Its easy to blame people for building big houses ....
> 
> 1/ youll never remove the desire for the good old aussie quarter acre, somewhere for the kids to play and dont forget the poor old dog he needs somewhere to live to.
> 
> 2/ Big problem is these developers releasing land riddled with building covenants that force people to build a certain style , size and time fram to build in, its crazy! If people want a 12 or 15 square house let them!




yep thats right. pack em in like sardines.


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## chops_a_must (8 September 2007)

Flying Fish said:


> yep thats right. pack em in like sardines.




Sure, why not? They've done it in Europe forever. And if we are serious about environmental matters, then we can't keep building like we have been.

Plus, you'd be surprised, but most people under the age of 30 prefer to live in high density areas, centrally. Young people generally couldn't give a toss about having a garden etc.


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## explod (8 September 2007)

chops_a_must said:


> Sure, why not? They've done it in Europe forever. And if we are serious about environmental matters, then we can't keep building like we have been.
> 
> Plus, you'd be surprised, but most people under the age of 30 prefer to live in high density areas, centrally. Young people generally couldn't give a toss about having a garden etc.




Yep, older generation also.   Six months ago we moved into small condo type, 300 s/m ground from 700.   Next stage in a multi level, with security of underground car park into lift.  Nearer to the casino would be good also.

Down here on Marnington Peninsular they have height restriction which causes big spread and loss of farmland that would be better used for vegetables etc.

Probably sterilisation after 30 and no sex allowed under twenty will be the go.  Like Ben Benarche and his dollars, birth control aids from helicopters


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## numbercruncher (8 September 2007)

Good little article that sums a very good point up!




> Pity the homeowner who rides out his home's collapse for 10 years
> Posted on Thursday, September 6, 2007 at 03:49AM by Schahrzad Berkland | 26 Comments
> The Real Victims
> 
> ...




http://www.californiahousingforecast.com/commentary/2007/9/6/pity-the-homeowner-who-rides-out-his-homes-collapse-for-10-y.html?ref=patrick.net


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## So_Cynical (8 September 2007)

KIWIKARLOS said:


> we also have to think of the impact of the mining boom on house prices. WA house prices skyrocketed because there are thousands of people who moved over there to work and got paid mega bucks to do it. My guess is that as some people work the 3-5 years they planned for they will move back to the other states with pockets full of cash. Sure some will stay but if we are talking 20 year commodity bull then there will be alot of people making big bickies. I have a few mates who have gone over for 2-3 years and they plan to come back with 100's K to buy houses.




RIO actually got there hands on a 80 seat jet to fly in workers from as far south as Bunbury, 300 km south of Perth...1 flight per week.

As for the US situation im thinking its mostly the southern and mid 
western states affected.....billy bob and family will have to move back 
into the trailer park..  big deal.

In Aust there will be no foreclosures in Balmain etc..thats for sure.


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## Wysiwyg (15 March 2009)

There was an article in the Courier Mail yesterday about US homes going for a song. I could not believe houses were going for less than US$10000 until I had a look on the internet myself.

Houses have a price tag on them of US$3000 but surely the neighbours or locals would snap them up at these ridiculous prices.There must be a catch.

Does anyone know what the truth is with the prices under $US10000?


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## Largesse (15 March 2009)

but the land they are sitting on is worth more as farm land.
cost to demolish is greater then value of house.


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## jet328 (15 March 2009)

The prices are true

http://www.ritholtz.com/blog/2009/03/median-home-price-in-detroit-7500/

When you read a bit about these areas you begin to realise why. Scary stuff!


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## robots (15 March 2009)

hello,

yeap, that sounds just like Australia

go buy house there if you so fascinated by it all, you would want to get membership to the Bloods or Crips pretty quickly

and yes the homicide rate is some 8 or 9 time multiple to australia (yeap that sounds like Australia)

the world is finally coming to terms with the sham place it is

thankyou
robots


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## refined silver (15 March 2009)

The other point not picked up by the Courier Mail about these properties in Detroit, is that US (and Canada) have way higher property taxes than what our rates are. They can be up for $10-15k+ per year just in property taxes.

It makes holding for awhile a lot more expensive.


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## Wysiwyg (15 March 2009)

Okay thanks for the reasoning folks.


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