Underwater . . vs. Drowned According to The New York Times, “about $500 billion in mortgage debt is already underwater” (“Bailout Likely to Focus on Most Afflicted Homeowners“). That’s realtor-speak for a house being worth less than the mortgage against it. Unfortunately, based on my calculations, that number appears to be conservative. Using industry statistics,...Read More
Foreclosures Explain Latest Housing Price DropThe most recent batch of housing statistics — from S&P/Case-Shiller and NAR — show that housing prices are continuing to fall nationally. Depending on how you slice and dice the market (sale pairs, top 20 markets vs. all markets, all homes vs. those under $417k, etc.), the year-over-year annual decline...Read More
Want to Entice Home Buyers?Insure Them Against Losses Stock market investors who believe prices are low, but not certain they have bottomed, can hedge their bets by doing what is called “dollar cost averaging.” By committing fixed amounts of capital at regular intervals, they are guaranteed to accumulate relatively more stock when prices are cheapest....Read More
Oct. Case-Shiller Numbers: Down 18% from ’07“People who think they’re going to lose their job don’t buy a home” –Steven Ricchiuto, chief economist at Mizuho Securities; NY Times (12/30/08)There’s not much mystery about the most recent leg down in the national housing market: recessions destroy jobs, and people who are unemployed — or worry they...Read More
