Get Ready: The Case-Shiller Will Show Housing Is Falling Again

The Business Insider ^ | 10-26-2009 | Vince Veneziani

[blam]

Get Ready: The Case-Shiller Will Show Housing Is Falling Again

Vince Veneziani
Oct. 26, 2009, 12:43 PM

The last few Case-Shiller reports have shown sequentially increasing home prices, but that's about to come to an end when the new numbers come out tomorrow.

The Altos Research 10-City Composite Index is down 1.1% for the third quarter of 2009.

Altos Research:

From our October 2009 Real-time Housing Report, The Altos Research 10-City Composite Index was down by 0.5% in September and 1.1% during the third quarter.

Using the housing market ask prices and more specifically, looking at the ask prices of new sellers entering the market each week, it’s clear that new sellers are viewing the market more pessimistically than sellers entering the market during the Spring. This would make sense because of the clear seasonality in the national housing market.

Existing sellers are starting to show more pessimism as well, as the number of active listings with price reductions is starting to show signs of increasing this Fall. This value stabilized in July and is stabilizing again this Fall.

[snip]

[blam]

The Eye Of The Housing Storm

By Chris Mayer
10/26/09 Gaithersburg, Maryland

This chart shows you it isn’t over yet:

These helped frame where we are in the mortgage crisis, which has been the main shark in the water over the past couple of years. You should know where that shark is and whether or not it is hungry…

Clearly, it is not yet safe to get back in the water: Years 2010 and 2011 face big resets in so-called Alt-A and Option ARM loans. What this means is more write-downs and more losses for banks and others who hold these mortgages.

The bounce in home building stocks looks ridiculous in light of what they have to look forward to. The T2 duo actually recommended shorting the home building stocks through the iShares Dow Jones U.S. Home Construction ETF (ITB)… I like the idea of shorting homebuilders. At the very least, I wouldn’t buy one.

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[C19fan]

**Half sarcastic On***On the bright side***Half Sarcastic off**if you look at customers affected it is probably less than when the subprimes reset because Option ARMs and Alt-A loans tended to be concentrated in markets with higher housing prices, say California, ie higher average balances for Option ARMs than Subprime.

[TwelveOfTwenty]

Years 2010 and 2011 face big resets in so-called Alt-A and Option ARM loans. What this means is more write-downs and more losses for banks and others who hold these mortgages.

It will also be a buyer's market, assuming you have the financial security to buy a house and wait a few years for prices to hit the bottom and rebound. Unfortunately, that may be a hard question for many to answer "yes" to.

[dangus]

In 2007, the interest rates had soared, thanks to Bernanke leading the Federal reserve like a drunk driver. For years, interest rates had been low, then suddenly doubled. But interest rates are rock bottom low again, so will the resets be so devestating? Or are these teaser rates which are about to expire?