The housing market is just getting worse. Home resales tumbled 8% in September to the lowest levels in this decade, prompting the obvious question: When will it all end?
The honest answer is no one knows. Optimists have been saying for more than a year that the worst is behind us, while the pessimists have been saying recovery is still a year, or years, away.
So far, the pessimists have been right about the weakness in the housing market, but their forecast that the collapse in housing would lead to a general economic malaise has, at least so far, failed to pan out. The economy has slowed, but has not fallen into recession, as consumers and investors adjust to a world in which home prices don’t automatically rise 5% or 10% a year.
The natural progression of the housing crisis continues to both gain momentum and expand to include more causalities. Thus far we have only seen the tip of the iceberg. Here in Florida where we are beginning to feel the negative consequences of the housing fallout, business that do not provide essential services are suffering and closing their doors. This will not end well.
Citigroup’s Prince Steps Down, Rubin Named Chairman
By Yalman Onaran and Hugh Son
Nov. 4 (Bloomberg) – Citigroup Inc. Chairman and Chief Executive Officer Charles Prince resigned after $6.5 billion of writedowns and losses from the credit markets and shares of the biggest U.S. bank slumped to a four-year low.
Sir Win Bischoff, chairman of Citi Europe, is interim chief executive until Prince’s replacement is found and former Treasury Secretary Robert E. Rubin has been named chairman, New York-based Citigroup said in a statement today. Citigroup also said it will take an additional $8 billion to $11 billion in writedowns related to mortgage-related securities.
``It is my judgment that given the size of the recent losses in our mortgage-backed securities business, the only honorable course for me to take as chief executive officer is to step down,’’ Prince said in the statement.
I’m not sure what the big fuss is about. Lower prices stimulate sales. Stimulated sales means more business for home inspectors. It’s the loans (lenders) that are slowing sales. This too, will change over time.
I have gotten a number of inspections from Realtors who are thinking about taking on listings for the banks (new construction, house never sold, aout 1 to 2 years old, never lived in. Usually, the bank hired some idiot “winter proofing” guys who mess stuff up.).
Many great deals out there. 4,200 to 5,100 SF, new construtions that would have sold for 1.2 to 1.8 mil, a year or two ago, now going for 620K!
If you have a job and can get a conventional mortgage, you can buy yourself some pretty sweat houses, right about now.
Focus on new avenues. Inspect for builders, for banks, for investors.
I have been pushing the MIC, for these never sold McMansions and have placed about 5 signs.
At least the MIC logo is out there, now. Give it time to be recognized.
The point of turn around has a bit to do with the rents one is able to charge on the asset. Once prices fall to the point where monthly rents approach 1/100th of the listing prices, the boom begins again, but it will be somewhat landlord driven.
I just did a presentation for an investors group and they are getting all their ducks in line to begin to buy up slightly less than middle income properties by the hundreds. They are just waiting for prices to fall a bit more.
They want our chapter to inspect them all first of course, then they will fix them up, rent them out and wait for the boom. Once the boom starts again they want us to re-inspect them through www.MoveInCertified.com in preparation to flip many of them.
One of our chapter members isn’t doing so well in the inspection business so I scared the investor group into hiring him to test all the smoke detectors and replace all the batteries in all their units. What the heck, I had to get something out of them while I was there.
We should start our own NACHI investors group. There are going to be steals everywhere this winter. Our grip at NACHI.TV just bought a $269,000 foreclosure (owner defaulted on a $269K mortgage) for $115K. I’m glad he didn’t listen to me because I told him to offer $150K.
If your serious about starting an investors group, let me know. I want Oracle (yes that’s his real first name) to find another steal.
There is a school district in FL that is actually closing one of its schools due to lack of kids. There are stories in the local paper that say everyone is moving out of FL. Though it might be true, it won’t last long even with the tax problem. Anyway, I’ll have to find out where that town is… that would be the place to buy right now as everyone thinks it’s going to be a ghost town… they’re wrong of course.
