Posts Tagged ‘shadow inventory’

32% of Homeowners Expect Home Prices to Drop Next Year, Highest Short-Term Pessimism Ever; Recognition Phase Underway

32% of Homeowners Expect Home Prices to Drop Next Year, Highest Short-Term Pessimism Ever; Recognition Phase Underway

foreclosuresCourtesy of Mish

Rasmussen Reports recently released an interesting survey that shows Homeowners Are More Pessimistic Than Ever About the Short-Term Housing Market

A new Rasmussen Reports survey finds that 32% expect the value of their home to decrease over the next year, the highest finding since Rasmussen Reports began asking the question regularly in December 2008. Now this might make you sell your house fast with Covenant Properties or any other company, but read on.

Just 21% believe the value of their home will go up over the next year.

Looking longer term, people are feeling a bit better. Fifty-two percent (52%) of homeowners say the value of their home will increase over the next five years, the highest level of optimism measured since May.

For the second month in a row, only 55% of homeowners say their home is worth more than their mortgage. A third (33%), however, report that the mortgage is bigger than the home value.

Over half of Americans know someone who has lost their home because they could not pay their mortgage, but just 20% believe that when banks foreclose on a home, it's generally due to unfair lending practices.

Recognition Phase

Some will look at the survey results and see a contrarian indicator. I rather doubt it. I do not think we bottom until homeowners sour on long-term optimism.

Given current conditions, housing inventory, shadow inventory, another jobless "recovery", and changing social attitudes from younger generations, home prices will likely stay depressed for a while.

So instead of the survey being a contrarian indicator, I view these attitudes as part of the recognition phase. Consumers are starting to realize the economic headwinds and what that will do to housing prices in the short-term, even if they have not yet figured out the long-term demographic mess.

Time and Price is the Only Legitimate Cure

The most encouraging sign in the report is that "a majority of Americans continue to oppose any government intervention in the housing market."

The only legitimate cure…
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The Swelling Backlog

The Swelling Backlog

Courtesy of MIKE WHITNEY writing at CounterPunch 

Home ownership has become an albatross. Prices are falling, demand is weak, foreclosures are soaring, and inventory is backed up to the moon. If there’s an upside, it’s a mystery to me.

Many of the people who bought homes in the last 6 to 7 years, realize now that they were caught in a massive mortgage laundering scam. The banks lured unqualified applicants into "easy-term" loans to so they could peddle their "fishwrap" mortgage paper to clueless investors. The con worked so well, that housing prices doubled or--in some cases--tripled in value. But the inflated prices did not reflect supply/demand fundamentals. They reflected fraud-- industrial-scale fraud that created an $8 trillion housing bubble. Now the bubble has burst and prices are returning to trend. That means foreclosures will rise while millions of homeowners will slip deeper into the red.

This is from Bloomberg News:

"The slide in U.S. home prices may have another three years to go as sellers add as many as 12 million more properties to the market. Shadow inventory—the supply of homes in default or foreclosure that may be offered for sale—is preventing prices from bottoming after a 28 percent plunge from 2006, according to analysts from Moody’s Analytics Inc., Fannie Mae, Morgan Stanley and Barclays Plc. Those properties are in addition to houses that are vacant or that may soon be put on the market by owners.

“The best thing that could happen is for prices to get to a level that clears the market,” said Joshua Shapiro chief U.S. economist of Maria Fiorini Ramirez Inc, who predicts prices may fall another 10 percent to 15 percent. “Right now, buyers know it hasn’t hit bottom, so they’re sitting on the sidelines.” (U.S. Home Prices Face 3-Year Drop as Inventory Surge Looms, John Gittlesohn and Kathleen Howley, Bloomberg)

The Obama administration has tried everything to boost housing sales--incentives, subsidies, tax breaks, even record-low interest rates--but nothing has worked. Now it looks like they’re ready to throw in the towel and let prices fall, but that presents risks, too. Presently, there’s a backlog of 4 million homes listed with brokers. (At the current pace, it would take 12 months to sell that number of homes.) However, as Bloomberg notes, there’s another 12 million properties that have been kept off the market. As those homes…
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Phil's Favorites

What if GDP falls more than the stock market?

 

What if GDP falls more than the stock market?

Courtesy of 

In the last recession, GDP contracted by less than 5%, but the stock market fell 57% from peak to trough. Stocks reacted to economic conditions in a way the “real” economy did not.

In our present situation, Wall Street strategists are predicting a second quarter contraction for the economy of up to 30% (annualized), which the drop in stock prices have already achieved.

Michael and Ben sort out some important distinctions between the stock market’s historic reaction to recessions and the recessions themselves…

  ...



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Zero Hedge

Trump Says "No Quarantine Necessary" For NY, NJ And CT As US Death Toll Tops 2,000: Live Updates

Courtesy of ZeroHedge View original post here.

Summary:

  • Global case total tops 600k
  • Global COVID-19 death toll tops 30k
  • US death toll tops 2k
  • After Trump earlier said he was weighing enforceable quarantine order for all the tri-state area, late on Sunday he said that "on the recommendation of the White House CoronaVirus Task Force, and upon consultation with the Governor’s of New York, New Jersey and Connecticut" he would not be imposing a quarantine. ...


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Biotech/COVID-19

The world before this coronavirus and after cannot be the same

 

The world before this coronavirus and after cannot be the same

Gettyimages

Courtesy of Ian Goldin, University of Oxford and Robert Muggah, Pontifical Catholic University of Rio de Janeiro (PUC-Rio)

With COVID-19 infections now evident in 176 countries, the pandemic is the most significant threat to humanity since the second world war. Then, as now, confidence in international cooperation and institutions plumbed new lows.

While the on...



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Digital Currencies

While coronavirus rages, bitcoin has made a leap towards the mainstream

 

While coronavirus rages, bitcoin has made a leap towards the mainstream

Get used to it. Anastasiia Bakai

Courtesy of Iwa Salami, University of East London

Anyone holding bitcoin would have watched the market with alarm in recent weeks. The virtual currency, whose price other cryptocurrencies like ethereum and litecoin largely follow, plummeted from more than US$10,000 (£8,206) in mid-February to briefly below US$4,000 on March 13. Despite recovering to the mid-US$6,000s at the time of writin...



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Insider Scoop

'Psyched': Hawaii Considers Resolution For Shrooms, Champignon Eyes Ketamine Products

Courtesy of Benzinga

Psyched is a bi-monthly column covering the most important developments in the industry of medicinal psychedelics. We hope you follow us periodically as we report on the growth of this exciting new industry.

Champignon Brands Buys IP Company and Adds Ketamine and New Formulations To Its Portfolio

On March 19, Champignon Brands Inc. (CSE: SHRM) (OTC: SHRMF), a Canadian healt...



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The Technical Traders

These Index Charts Will Calm You Down

Courtesy of Technical Traders

I put together this video that will calm you down, because knowing where are within the stock market cycles, and the economy makes all the difference.

This is the worst time to be starting a business that’s for sure. I have talked about this is past videos and events I attended that bear markets are fantastic opportunities if you can retain your capital until late in the bear market cycle. If you can do this, you will find countless opportunities to invest money. From buying businesses, franchises, real estate, equipment, and stocks at a considerable discount that would make today’s prices look ridiculous (which they are).

Take a quick watch of this video because it shows you ...



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Kimble Charting Solutions

Broadest Of All Stock Indices Testing Critical Support, Says Joe Friday!

Courtesy of Chris Kimble

One of the broadest indices in the states remains in a long-term bullish trend, where a critical support test is in play.

The chart looks at the Wilshire 5000 on a monthly basis over the past 35-years.

The index has spent the majority of the past three decades inside of rising channel (1). It hit the top of this multi-decade channel to start off the year, where it created a monthly bearish reversal pattern.

Weakness the past 2-months has the index testing rising support and the December 2018 lows at (2).

Joe...



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Chart School

Cycle Trading - Funny when it comes due

Courtesy of Read the Ticker

Non believers of cycles become fast believers when the heat of the moment is upon them.

Just has we have birthdays, so does the market, regular cycles of time and price. The market news of the cycle turn may change each time, but the time is regular. Markets are not a random walk.


Success comes from strategy and the execution of a plan.















Changes in the world is the source of all market moves, to catch an...

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Members' Corner

Bloody Mob Sh*t: An Interview with Lincoln's Bible

 

Bloody Mob Sh*t: An Interview with Lincoln's Bible

We talk Trump, Mogilevich, Epstein, Giuliani, Fred Trump, Roy Cohn, and more.

Courtesy of Greg Olear at PREVAIL, author of Dirty Rubles: An Introduction to Trump/Russia

(Originally published on Feb. 21, 20.)

...

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ValueWalk

Entrepreneurial activity and business ownership on the rise

By Jacob Wolinsky. Originally published at ValueWalk.

Indicating strong health of entrepreneurship, both entrepreneurial activity and established business ownership in the United States have trended upwards over the past 19 years, according to the 2019/2020 Global Entrepreneurship Monitor Global Report, released March 3rd in Miami at the GEM Annual Meeting.

Q4 2019 hedge fund letters, conferences and more

The Benefit Of Entrepreneurial Activity ...

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Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

Mike will show off the TradeExchange's new platform which you can try for free.  

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Lee's Free Thinking

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

 

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have ...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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