We all need some comic relief in our lives from time to time; and, in the current atmosphere of gloom and doom and dire predictions, such a respite would be more than welcome. Thanks, then, to Professor Robert Shiller of Yale University for giving us something to smile about.
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Yale Professor Proposes Program to Prevent Future Bubbles
Here’s some really good news for anyone involved in acquiring, rehabilitating and reselling foreclosed houses: The Federal Housing Administration is temporarily waiving its “anti-flipping” rules and will now insure mortgages on properties that have been owned by the current seller for less than 90 days.
Continued here:
Investor Report: Anti-Flipping Rules
If you are like many agents, today’s market definitely may make you feel as if you are on an episode of “Survivor, Real Estate!” For some, you face unfamiliar challenges, uncommon objections and often times that nagging uncertainty that can throw you — and your production — off balance.
Excerpt from:
Surviving Uncertainty in Today’s Market: Six Secrets to Keeping Your Balance, Business and Humor
In the past week, I took out my sea kayak (SS. Miller Samuel) and boat (dubbed “Mom Said”) for the first time this season and have started wondering if it has influenced my perception of the credit crunch. Are we already underwater? Zillow and Shiller thinks so.
Last week, the WSJ ran a fun story on page 1 by Michael Corkery called For Mortgages Underwater, Help Swims In.
While lawmakers in Washington struggle to solve the nation’s foreclosure crisis, officials here are using a small fish to clean up some of the mess.
The Gambusia affinis is commonly known as the “mosquito fish” because of its healthy appetite for the larvae of the irritating and disease-spreading insects. Lately, the fish is being pressed into service in California, Arizona, Florida and other areas struggling with a soaring number of foreclosures.
The mosquito fish is well suited for a prolonged housing slump. Hardy creatures with big appetites, they can survive in oxygen-depleted swimming pools for many months, eating up to 500 larvae a day and giving birth to 60 fry a month. That can save environmental crews from having to repeatedly spray pesticides in the pools while the houses grind through the foreclosure process.
Of course, Fannie Mae wants to keep those houses occupied so fish don’t factor into the credit crunch. In James Hagerty’s article Fannie to Aid Underwater Loans:
Fannie Mae is preparing to introduce by midyear a program of refinancing mortgages for people who owe more than the current value of their homes, a situation known as being “underwater.”
The plan is the latest twist in efforts to contain the surge in foreclosures on homes in much of the U.S. It differs from a bill approved by the House on Thursday that would authorize the Federal Housing Administration to insure loans for distressed borrowers only after the lender has written down the principal — something many lenders are reluctant to do. Fannie’s refinance plan would result in new loans of equivalent size, leaving the borrower underwater but giving him or her a lower monthly payment or at least a fixed rate.
Of course, there can’t be a discussion about liquidity without the mention of beer and wine.
Judy Weil, editor at Seeking Alpha, posts a funny: Maybe Beer Will Help Stimulate House Sales.
A group of real estate agents is hosting a free condominium and beer-tasting tour.
I can only imagine the liabilities the Oregon agents were subject to without thinking. Of course, wine generates the same result. It also makes me wonder about Baltimore.
To help you steer through this complicated morass, the following video will show you others that lost their cool.
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[Kayak Liquidity] Mortgages Underwater, Or At Least Those With A Pool
The Economist magazine appropriately named Map of misery article on US Housing showcases a map of OFHEO data that chronicles the change in housing prices by County/State.
The pain of America’s housing bust varies enormously by region. Hardest hit have been the “bubble states”—California, Nevada and Florida, and parts of the industrial Midwest. The biggest uncertainty hanging over the economy is how red will things get.
Yesterday I joked about Bernanke using heat maps and The Economist saw the humor in it as well.
Sounding more like a cartographer than a central banker, Ben Bernanke this week showed off the Federal Reserve’s latest gizmo for tracking America’s property bust: maps that colour-code price declines, foreclosures and other gauges of housing distress for every county. His goal was to show that falling prices meant more foreclosures, and to urge lenders to write down the principal on troubled loans where the house is worth less than the value of the mortgage. His maps—where hotter colours imply more trouble—also make a starker point. The pain of America’s housing bust varies enormously by region. Hardest hit have been the “bubble states”—California, Nevada and Florida, and parts of the industrial Midwest. The biggest uncertainty hanging over the economy is how red will things get.
But can a “bottom” be projected?
One of the most favored ways to measure a housing market by The Economist magazine is to track the ratio of rental prices to sales prices. From 1960 to 1995, rent/price was 5% to 5.5%. When prices soared over the last decade, the ratio is 3.5%. In order to get the ratio back up to 5%, prices have to drop 10% to 15% assuming rents are flat. It’s lookin’ like at least 2010 before this happens.
In terms of projecting when we will see an end to the weak housing market, try correlating it with handgun accuracy. NYC police officers hit their targets roughly 34 percent of the time. Of course, when they fire at dogs, roughly 55 percent of shots hit home.
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[Mapping Misery] Only 10-15% To Go!
