What started as a subprime mortgage mess has morphed into a much larger problem of home value destruction. Houses have now lost value for the seventh consecutive quarter with no end in sight. Are we anywhere near an end to this carnage?

No one knows for sure. That's because we are no longer looking at loans gone bad because people overextended themselves; we are now looking at such a significant fall in house prices that about 30% of homes that were sold in the third quarter were sold at a loss. That's up from 23.7% in the second quarter. We are no longer just dealing with people who made bad credit decisions, we are also dealing with the fallout from massive layoffs and the financial hardships that follow.

Houses being sold now are primarily foreclosures or short sales, but people who must move because of a job loss or for other personal reasons can only do so if they are willing to sell at the same distressed prices. So if you don't need to sell, don't. Unfortunately, as job losses continue to mount, more and more people will be forced to sell, driving prices even lower.

Continue reading Houses lose value for 7th straight quarter, where is the help?

Houses lose value for 7th straight quarter, where is the help? originally appeared on BloggingStocks on Wed, 12 Nov 2008 14:15:00 EST. Please see our terms for use of feeds.

Continue reading U.S. mortgage delinquencies hit 20-year high

U.S. mortgage delinquencies hit 20-year high originally appeared on BloggingStocks on Thu, 06 Dec 2007 14:40:00 EST. Please see our terms for use of feeds.

If Chicago Mercantile Exchange traders are betting right, housing prices in ten key housing markets will continue to drop until 2011 [subscription required], according to the Wall Street Journal this morning. The Miami area is the worst hit and expectations are that it will drop another 27.9% between November 2007 and November 2011. Others expected to fall in the same time period include San Francisco (down 25.9%), San Diego (down 18.6%) Las Vegas (down 18.1%), Los Angeles (down 15%), Denver (down 14.4%), Boston (13.8%), Washington, D.C. (down 13.3%), New York (12.1%) and Chicago (down 6.6%).

The CME contracts are based on expected movements of the S&P/Case-Shiller house price indexes. Trading is light, so this report gives us a less-than-scientific view of what might happen in the housing market. Personally. I believe this might be too gloomy a prediction. While prices do still need to drop in most of the areas currently facing a decline in order to get the markets moving again, I'm not sure they need to drop as much, nor for as long.

Continue reading Traders bet on lower house prices until 2011 in ten key markets

Traders bet on lower house prices until 2011 in ten key markets originally appeared on BloggingStocks on Thu, 04 Oct 2007 10:16:00 EST. Please see our terms for use of feeds.