The "wave" comment from the outgoing Fed governor started moving on the financial wires at about 1:40... which is right about the time the market really came off the highs of the day.
Click here to read about Bies' remarks.
Clearly, mortgage mayhem is a big concern on the Street.
So who do you believe? Ara Hovnanian seems to think housing is close to hitting bottom, but if a Fed governor is thinking that home mortgage defaults are just getting started, that surely doesn't bode well for the home builders if inventories of existing homes swell on a wave of defualts.
4 comments:
Jim,
Did you catch this?
BOSTON (Reuters) - General Electric Co.'s (NYSE:GE - News) WMC Mortgage unit is laying off 460 staffers across the United States, representing about 20 percent of its work force, spokeswoman Brandie Young said on Friday.
http://biz.yahoo.com/rb/070309/ge_wmc_layoffs.html?.v=1
cheesefries.. heard about, but hadn't gotten around to reading the gory details. thanks!
Brandie, you're a fine girl.
FYI
Just returned from Florida, real estate has fallen off the cliff.
From what I can gather, it is a combination of several forces driving the market.
1. Speculation i.e. Flippers all bailing at once/leaving many new developments in a state of chaos, No buyers/ houses/condos partially built/rec centers and nothing else. It looks like bomb hit.
2. Taxes/property taxes driven higher by inflated appraisals leading to unaffordability.
3. Homestead exemption/keeps the property taxes artificially low for residents.
Potential homebuyers that would like to move up refuse to because of the huge increase in property taxes they would have to pay.
4. Insurance/Dramatic increases in insurance on real estate.
I do not see any solution to the real estate problem in Florida.
The taxes certainly will not be lowered.
Insurance is going no where but up.
There will be many foreclosures leading to more supply.
You can’t rent property because the carrying cost are to high.
Tom
Tom, thanks for posting... sounds like a total mess down there. No doubt this is a contagion that will spread from highly speculative areas to even just the highly expensive areas like burbs of the big northeast cities where there may have been fewer flippers of $800k+ homes but still they dynamic of low downpayments, neg am mortgages, high taxes etc.
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