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

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numbercruncher

Beware of Dropbears
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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.

 
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.
 
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 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?
 


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
 


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
 
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
 
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.
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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
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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.
 

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
 
numbercruncher said:
Wow thats a sharp across the board drop considering the bulk of adjustable rate mortgages havnt even reset yet
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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.
 
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...
 
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.
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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.
 
kitehigh said:
I wouldn't say the US has few natural resources compared to us. They actually have alot of resources...
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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.
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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.
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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.
 
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.
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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.
 
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?
 
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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