Housing Double Dip or Dance Craze? - 01.31.11
Today's Poll: How badly will a double dip bother you?
A. A lot.
B. Some.
C. A little.
D. Next question please...
Rate this Program
Mike8307: (January 31, 2011 10:00pm)
30 years ago when news took a day or two to develop, economists reports, numbers, outlooks and forecasts would 'guide' the market. Now with the internet, 24 hour cable news, the massive blogosphere, news at your fingertips world we live in, news cycle can be as short as 2 hours. These reports no longer guide but drive the market. If you see an article that gas will go up this summer you will see higher prices at the pump today. Regardless that there is 3 feet of snow on the ground. I want the information to be available, but I want people to understand the information. Economic forecasts can not be given in a 5 second sound bite, and digested 5 seconds after that. Yet, that is what you see happening. The masses react in a herd mentality. Wild swings occur. Long term investing and planning is tossed out the window. Is a 1% decrease in the price of a home reason to spout that the sky is falling? This does nothing but hurt our industry, keeps money sidelined, and serves no one.
GODLIKE: (January 31, 2011 5:34pm)
Some constructive criticism instead of some of the Destructive criticism some have ladled out, the dancing and fun stuff did go on a little too long, but it was fun so it wasn't a waste of time. You're a long way from jumping the shark. ;-)
falcon1: (January 31, 2011 3:44pm)
LOL That was totally funny and more true genius from you guys! You fellas always seem to get the funniest material and bits from the worst of circumstances and make the otherwise serious business of finance/real estate more enjoyable. At least you keep us laughing. :~)Your dance moves are not too bad either...for white guys at least. lol You might be ready for the big screen even or at least your own cable show. Hey, if those boring dudes on 'American Pickers' can do it...IMHO you guys would be much better in your own niche or comedy bit of some kind. That's my 25C Peace Out!
5pence: (January 31, 2011 1:20pm)
2 words - inverted totalitarianism
5pence: (January 31, 2011 11:59am)
Carefree, I think his writer is going to get fired for that one LOL. I don't think "winning the future" will last lol. WTF with Obama hahahah. Brenda, it's not easy here to access old posts but you can type in the date like they do, 1.31.11 (for today) to access old posts. Prior to the new year they used this format 12/31/10. Search is in the upper right corner. I've never tried searching a particular response using keywords, it might work.
doitright: (January 31, 2011 11:58am)
Godlike here is what your Congressman thinks of your letters and phone calls Stickes and stones will break my bones but letters and calls will never ever change a law . What a waste of time that will do nothing at all .
Bono Vox: (January 31, 2011 11:19am)
DebtDoc - we all need to vent sometimes. Frank/Brian - did you P in Harold's Wheaties? Evelyn - if it works, it works, keep on baking.
GODLIKE: (January 31, 2011 11:19am)
Just in from NAMB: Dial the U.S. Capitol Switchboard at (202) 224-3121 today! Ask to be connected to your Member of Congress' office Urge them to Delay the Fed Rule on LO Compensation Regulation Z: 12 CFR 226 ASK FOR THEIR EMAIL OR FAX NUMBER TO SEND YOUR LETTER
carefree jackie: (January 31, 2011 11:16am)
"WTF"? OMG. Toooooo funny. You'd think they would have run this across "the people". Really? WTF?
Valuequestor: (January 31, 2011 11:13am)
The small "dip" in prices during last fall is just seasonal (end of the year, holidays). We will have a slight recovery as we move into early 2011. When all the shadow inventory starts hitting the market is when "double dip part deux" will start playing. I'm still renting thankyou.
bferia: (January 31, 2011 10:59am)
Hey Guys, How do I access your older posts? Brenda
doitright: (January 31, 2011 10:51am)
Hey barbara bake all the cookies you want that will not move Real Estate , sorry to agents never refuse anything free! New home sales lowest in 47 years Fifth consecutive year of declines Updated: Wednesday, 26 Jan 2011, 9:09 AM MST Published : Wednesday, 26 Jan 2011, 8:10 AM MST MARTIN CRUTSINGER, AP Economics Writer WASHINGTON (AP) - Buyers purchased the fewest number of new homes last year on records going back 47 years. Sales for all of 2010 totaled 321,000, a drop of 14.4 percent from the 375,000 homes sold in 2009, the Commerce Department said Wednesday. It was the fifth consecutive year that sales have declined after hitting record highs for the five previous years when the housing market was booming. The year ended on a stronger note. Buyers purchased new homes at a seasonally adjusted annual rate of 329,000 units in December, a 17.5 percent increase from the November pace. Still, economists say it could be years before sales rise to a healthy rate
5pence: (January 31, 2011 10:29am)
Get off your collective asses and then work bent over? At least it's not that far to go is it
Joebob: (January 31, 2011 10:19am)
Good grief debtdoctor...your soapbox takes up WAY too much of everyone's time. Frank & Brian...way to go, keeping it light, when development's are not all positive. AND...way to go with good advice. I'm through listening to the rants, and am getting out more and more, and see business picking up for those willing to get off our collective asses!
Divedude: (January 31, 2011 10:08am)
Screw rap. I only like it when one of them gets shot. Bring back the rednecks!
nnicholas: (January 31, 2011 9:59am)
How about bringing your video marketing summit to Atlanta?
5pence: (January 31, 2011 9:55am)
Cum-bay-ahma's new mantra - "Winning The Future" or WTF. I guess he ditched change we can believe in for more preying on the hopes and dreams of the people. And "Sputnik moment" is the most ridiculous thing I've ever heard. Is he saying it's "Back to the future" now? LOL! I voted for a progressive and got a republican weasel.
5pence: (January 31, 2011 8:47am)
March on Washington in March or they are going to continue to play us as April fools.
zaroom: (January 31, 2011 8:45am)
Kudos to Real Estate Nate!!! Guys, Guys, Guys: Today's show really bit the big one! Sorry, but the dancing, music and everything else was a let down to myself and I hope a lot of other people-I won't be sharing today's show.
Mr Tuxedo: (January 31, 2011 8:39am)
Harold, chill out man. These guys are awesome and informative. You try to put together a daily production the way they do and try to keep it fresh and interesting.
deblakeley: (January 31, 2011 7:37am)
This is not a forever thing. I would love to ave bought some beach houses in Alabama for $70,000 back in the 80s. Still worth about $500,000 with all the melt down. We all just need to find additional income streams along with mortgages. No matter how bad it is here, it's better here than Cairo, Jordan, Syria, Caracas...........Except for flipping, real estate is a long term investment.
Gabecaplan: (January 31, 2011 7:23am)
Four years of declining income coupled with regulations and laws applying additional restraints. Business modules destroyed by HVCC. It is beyond the time to rely upon hope, better plan to find revenue elsewhere for the next six years.
harold: (January 31, 2011 7:11am)
Have you ever seen anything so bad that you knew you had to comment, and you even had to go through the resetting of your password just to make a comment? Well, I will take the double dip over the dancing and the music from today's video. I don't mind the 3 - 5 second clips of music mixed in. I think it is time to get a grip. I don't know if you have ever heard the phrase "jump the shark" or not. Perhaps you might want to look it up. Ask yourself, are your ratings taking a dive? I usually like watching your morning video. I kind of look forward to it. Today you had a story line and wrecked it with rap and dancing, if you could call it that. I am asking you to rethink the background, and remember the foreground. Thousands of people watch you who are professionals and their average age is in their 40's - 50's. If you hired a brand new creative director, fire him or her now. If it was a drinking binge, understandable. If this is the new norm, the emails will become spam by Friday.
austinmtgpro: (January 31, 2011 7:11am)
It's very obvious you guys film the Monday show on Friday afternoon. But I like it!!
barbara: (January 31, 2011 6:28am)
Back to basics. 28 years ago and new to the town, I typed up financing flyers for open houses in the Sunday paper. Took a while to work up and type all the payments, etc. too without computers! Baked cookies, and met new agents. Now the computer makes the calculations a snap. . .the color printer is in my kitchen, and I bake Swedish cinnamon rolls. Two new agents in the last 2 weeks. Personal contact still rules!
debtdoctor: (January 31, 2011 6:24am)
Not sure what got into me today. I will try to wind down here. FIVE STARS to REAL ESTATE NATE ***** for some common sense optimism. Thank YOU NATE! And my GRAND PRIZE goes to PNL CEO for NAILING IT! Back to reality ooops there goes gravity. Keep in mind statisics have been shown to be less than completely accurate 83% of the time. www.tcaHero.com
Kris Realtor: (January 31, 2011 6:20am)
Well all I have to say is yes, the housing market sucks & the prices continue to go down ... but THANKS for the laughs this morning guys - your dancing cracked me up - gonna do a little dance this morning myself & get out there to see what I can do to try to help this mess ;-) Gonna watch the dance again tho first lol....
debtdoctor: (January 31, 2011 6:12am)
Back to HOME PRICES. If one of my kids was looking for housing right now, and were likely to stay put for a while, I would absolutely encourage and help them to own. As far a renting being king, you are helping to make my point. In my area, res. r.e. prices are down 30% to 50% (depending on the neighborhood), while supply/demand pressure on rental units had keep pricing the same or higher. I can buy a home, and rent it out for a 15% to 20% annual ROI, while someone else pays off my depreciating asset. So even if my kid does not stay, as long as he or she buys right, and in a desirable area, it should still be able to work out all right. people always are going to want a place to live (except of course the ones who choose homelessness)
debtdoctor: (January 31, 2011 6:05am)
@doitright I think I may have been unclear. We absolutely CAN predict. Here is mine DEflation of housing prices, which we are currently in coupled with INflation of commodities, which we have already been experiencing for several months. Gasoline, Corn, other foods, Cotton, followed by INflation, followed by HYPER-inflation. Being that is my personal prediction, I am doing my best to prepare accordingly. What I said was that we can not predict with certainty or accuracy. I anticipate another big stock market correction, but I did not expect to see it over 12k or 13k first (I wish I had) if you had asked me a year ago. Did you? If so then you are up 20%. Foreclosures in a pipeline are not predicting. That is analyzing existing data and projecting cause-effect. Did you predict Egypt? When is the next big terrorist attack coming? Which state in America will see riots 1st and demand a federal bailout? The best we can do is deal with what we know.
Real Estate Nate: (January 31, 2011 5:54am)
Two points: Firstly all real estate reporting is so late it's barley useful. November? C'mon, any decent Realtor with a few listings knew there were very few showings in late fall and therefore a dip in prices. Fortunately January has seen a pickup in showings. Maybe not compared to last year (remember the tax credit?) but compared to last month! This "double dip" is here but the severity of the drop will not be bad. The length of time we spend at the bottom will be difficult, which leads me to my second point. No matter what amount of loans and real estate transactions there are in 2011 there are more than enough in your area to be successful. Many of us seem to feel great when the tide rises and despair when the tide drops. What about having confidence in YOUR competitive advantages? If you don't have any (confidence or competitive advantages) it may be time to think about doing something else.
barbara: (January 31, 2011 5:45am)
I would love to see a breakdown of what made all of those buy-back loans "bad." Was there obvious fraud? Did somebody miscalculate the income? Or was the Patriot Act form dated more than 3 days from the date of application? Were the initials missing from some page? Was the VVOE not redone when it took more than 10 days to get an approved loan closed? Are they pushing back only the failed loans, or the performing ones that weren't documented to the Nth degree?
hummingbird858: (January 31, 2011 5:39am)
I think you guys are hilarious and I enjoy your video blogs daily. Thanks guys!
PNL CFO: (January 31, 2011 5:36am)
Hey Utah Mortgage&Real Estate Guy I love the statistics! Do you have how much higher these these taxes are: payroll, federal income, state income, real estate, personal property, state sales, county sales, local sales have increased since the 40's & 50's? Oh yeah we are going to be required to pay higher health insurance premiums or what go to jail? Gas Oil and all energy costs are significantly more. We all need to wake up and see how the government has grown. Some Positive things have been done as a smoke screen to their uninterupted advance of control has now tipped under its own greed. We are screwed. No easy way back. Conclusion - Housing isn't more affordable. We all have to work longer and harder to pay for government services. Since I am from Chicago I have a unique perspective and I still wonder how the "machine" is any different from the "mob"?
doitright: (January 31, 2011 5:31am)
Hey debtdoctor How can we not predict , do you know how many foreclosures are on the way? Simple supply and demand , renting is king right now and will be for a long time . Inflation ? Besides gas and that is actually a deal it should be 4.50 a gallon and is under priced , show us some inflation . More like deflation , the only thing driving rates up is no one wants to purchase MBS . Again supply and demand but on the opposite of the spectrum. If investors and the government are not buying mortgage bonds , then the rate goes up . They should be at 9 % right now based on risk maybe higher but deflation is working on that . Sorry to say debtdoctor but that house you bought in Dec is worth 2% less now , go rent .
debtdoctor: (January 31, 2011 5:29am)
@doitright looks like we were posting simultaneously. All good points you are making. We still have a ways to go before we hit Great Depression level status. Could it get even worse than that? Oh yeah. I do not pretend to know everything, or even most, I just read about 3 to 4 hours a day. That said, the G.D. still saw about 75% employment, and many prospered, even in the darkest of times. Go out to one of the trendy dining establishments in your area any weekend, and see how many people are living like everything is peachy. I say, let's party like it's 1929. www.tcaHero.com
debtdoctor: (January 31, 2011 5:18am)
@doitright no one can predict the future with certainty or accuracy, or know where the exact bottom is in any market. ownership still makes sense over renting in the long term, particularly for those who will be in a home 5 years or more, start out with some equity, and use accelerated payoff strategies. More importantly, when the gov't has to start RAISing interest %'s in an attempt to fend off inFLAtion caused by QE 1-4, your house PAYMENT will feel like a bargain, even if the value doesp some. Look at what a .5% rise in int. rate does to the cost over the life of the loan, many 1,000's of $. www.tcaHero.com
doitright: (January 31, 2011 5:10am)
Dance to this : Mortgage lending to hit 14-year low, MBA says U.S. mortgage lending is projected to sink 36 percent this year to the lowest level since 1997, a trade group said Wednesday. The Mortgage Bankers Association forecast new loans will fall to $966 billion in 2011 from $1.5 trillion this year. MBA said the drop is mostly due to high unemployment and borrowers’ diminished credit coming out of the recession, with concerns about loan buy-backs also having an effect. MBA Chief Economist Jay Brinkmann said lenders are not willing to take on the risk that they’re going to have to re-purchase loans. Insurers and private buyers of bank mortgages have been pushing banks to repurchase some loans they say don’t meet underwriting standards. Earlier this month, Bank of America agreed to buy back almost $3 billion of bad mortgages, but there are billions of dollars in buy-back requests for Bank of America alone.
debtdoctor: (January 31, 2011 5:02am)
union schmunion. let's just all save a step and race into the democrat socialist of america party-last ones in get the gulag! alternatively, you may want to pick up a few silver coins, and/or a secondary way to network plus generate some revenue http.//www.tcaHero.com thank you Frank and Brian for helping to make the slo-mo annihilation of our economic and social system more entertaining and easy to manage. keep it fun and keep it real bros
PZ100: (January 31, 2011 4:30am)
@doitright, a Loan Officers union? are you serious? or just crazy?
doitright: (January 31, 2011 4:11am)
The whole industry anad business is a bag of c**p. Was it not just a few weeks ago two guys from California had been taunting best time to go buy on the show ? Thank god I did not take their advise , prices will decline another 8 to 20 % across the USA then maybe we will bottom out . Hey what happened to Fridays great show on the FED? I know some people push being consistent , well ........ then keep it up don't give up , not one mention today ? It will not be cool to be in this industry again until 2015. :( Lets go Loan Officers Union !
Utah Mortgage&Real Estate Guy: (January 31, 2011 3:36am)
Oh yeah, one more things, Housing Affordibility Index is calculated at a 25% front end ratio assuming 20% down payment. That is laughable. In the last 10 years, less than half of my clients had a front end ratio of 25%. And probably only one in ten (1 in 10) put 20% or more for a down payment.
Utah Mortgage&Real Estate Guy: (January 31, 2011 3:27am)
Not that it will matter to some, but here is my experience in the related industries: 13 years as a mortage broker, 12 years as a Real Estate Agent. Double undergrad degree in Economics and Accounting. 10 years experience as a CPA with major accounting firm. It has taken a while to gather some of these statistics from my previous posts-and realistically, I could offer about 50 more things that can be specualted on as to how things ARE NOT CHEAPER NOW, but the DATA is not currently available from the 40's/50's.
Utah Mortgage&Real Estate Guy: (January 31, 2011 3:19am)
Just a few other facts, disposable income is down by more than half on a percentage basis compared to the 50's, the average person only carried 1.2 consumer credit accounts in the 40's/50's, whereas the average american now carries 7.9 consumer credit accounts. After looking at all these factors, DO YOU THINK HOUSING AFFORDIBILITY IS AT AN ALL-TIME HIGH???? The basic idea of Housing Affordibility is soley based on average gross income compared to a percentage of that income to make the MORTGAGE PAYMENT only, not including taxes, not including home owners insurance, not including utilities, not including maintenance. So YES, if you only look at that one thing- it is cheaper for an American to purchase a home in 2010/2011 than it was in the late 40's/early 50's. I have never seen so many economists/accounts jump on a band wagon without actually doing the math. We generally trust these people, but again we (the American public) are being force fed a pile of crap from administration.
Utah Mortgage&Real Estate Guy: (January 31, 2011 3:11am)
And percentage of gross/net income to pay for maintenance of property. American Consumer that has consumer debt compared to the total population-40's/50's-44%, 2010-%92. More than 9 out of 10 people carry month over month debt on atleast one consumer account-more than double in comparison. Percentage of Income to pay for consumer debt (this is the BIG ONE); 40's50's-4.2% of income, 2010-19.1%. Almost five times as much of peoples income goes to paying consumer debt compared to 50 years ago. Also take into account how much income has increased over the last 50 years and take a percentage of that income. Average LTV for mortgages originated: 40's/50's- 71.9%, 2010-93.9% (down from 95.1% during the boom time of 2006/2007). People are mostly putting little to nothing down comparatively-thus making their monthly cash-flow at a much lower percentage. Last but not least- Percentage of income to maintenance: 40's/50's:1.1% of incomne used, 2010: 5.3% of income used: almost 5 times as much....
Utah Mortgage&Real Estate Guy: (January 31, 2011 2:59am)
I have to apologize ahead of time for this rant. If I hear one more person or economist say that housing afordibility is at an all-time high I am going to go postal. Housing Affordibility (H.A.)and the way it is calculated is TOTALLY OFF-BASE. H.A. does not take into account ease of obtaining credit, amount of open accounts to the consumer, percentage of gross/net income used to pay consumer debt, the percentage of gross/net pay to account for maintenance of said property (and I could go on and on). It has been said H.A. is cheaper for the consumer now than it was post WWII (the last time H.A. was this cheap for the American Citizen-SUPPOSEDLY). There are four statisticals areas that are available to compare our current H.A. to the late 40's/early 50's. Percentage of the American Consumer that has Credit Debt (not including Cars and Homes, just consumer debt), percentage of gross/net income to pay for said consumer debt, average LTV per originated mortgage...to be continued..
Arthur: (January 31, 2011 1:50am)
We should be very concerned. Home affordability is at an all time high, but many homeowners that need to move can't. If prices keep on declining, more homeowners will be underwater on their mortgage and unable to move. As real estate agents and mortgage brokers will continue to sell homes and mortgages, because this is what we do for a living. We all know this market will correct. The problem is we are in unchartered waters and the waves are extremely high. Swim carefully and at your own risk!!!