The Fed’s San Francisco branch has published a summary of a economic outlook speech given by its CEO Janet Yellen in which she called the economic crisis “like a hundred-year flood—a disaster of the highest order.”
We offer real estate snippets of the Federal Reserve Bank of San Francisco CEO’s speech, notably the “third act — in which the economy hopefully recovers … Right now, we’re like a patient in intensive care whose condition has stabilized and whose fever is just starting to come down.”
- Even though house prices are continuing to fall in most markets, housing sales and new construction appear to have stabilized.
- I am concerned that mortgage rates, which have risen of late, could place a drag on a still very sick housing market, potentially driving home prices still lower and pushing more borrowers into foreclosure.
- The housing sector too will eventually rise from the ashes. Home construction has fallen dramatically over the past few years as the nation works off the massive overbuilding of the boom years. But, once this adjustment is complete, housing construction will need to increase significantly just to keep pace with the growth in the number of households.
- High on my worry list is the possibility of another shock to the still-fragile financial system. Commercial real estate is a particular danger zone. Property prices are falling and vacancy rates are rising in many parts of the country. Given the weak economy, prices could fall more rapidly and developers could face tough times rolling over their loans. Many banks are heavily exposed to commercial real estate loans. An increase in defaults could add to their financial stress, prompting them to tighten credit. The Fed and Treasury are providing loans to investors in securitized commercial mortgages, which should be a big help. But a risk remains of a severe shakeout in this sector.
Curiously, S&P recently said it was finding hints of housing stabilization, too!
Other real estate trends …
Remember, the Fed CHAIRMAN didn’t think we had a housing bubble, before it popped. So, we know how much we can trust the Fed. http://www.youtube.com/watch?v=HQ79Pt2GNJo
Gary … thank you for posting that video. It indicates that Bernanke is either a liar, or complete idiot.
It’s a shame the Lee in Irvine figured this out 6 years ago, but the Fed denied it all the way until the end. They ruined America’s economy
Third person I see. Wow Lee, How did u ever predict that prices would go down?? Mind boggling. LOL
And you added what again? Oh that’s right nothing….stay classy SHockG!
Shockg. Why do you have such a wanker handle and what do you do for a living.
“Go ahead. Be a sucker.”
Well it looks like they didn’t read the Bloomberg.com today’s report
were said, Housing will keep in Prices-decline unti 2011.
Even if “median” is stabilizing, most intelligent people still see room for further declines, which is consistent with houses in our area priced from 800k-1.5M not selling despite many reducing their prices. There are a small number that sold in the 800s, but for the most part, houses/townhomes that are selling are in the 500s in areas that are not as nice, as to be expected. And signs of stabilization could certainly mean that declines will continue, although at a slower pace, then prices level off (which would be “stable” as opposed to signs of “stabiliation”).
she never saw the bubble from the get-go– nuff said
orange county layoffs — over 11000 in just the first half
of the year- doesnt include under-employed and part-time
workers– arent we supposed to be adding jobs to maintain
real estate prices?– I dont know but I’ve been told–
orange countys economy is mighty cold–
http://www.ocregister.com/ocregister/business/article_2287266.php
it’s so cold in fact that i’m jobless-
and i had to beg my landlord for $200 off my rent-
otherwise it would’ve been back to super 8 motel-
but at least they have free cable there-
and they even have nudie channels-
kinda squiggly and blurry, but it gets me by-
Yeah….says the guy who acts like other posters flaming them for telling the truth…who exactly has time on their hands?
At least you filed it under Fed Follies.
The Fed is right less often than a broken watch.
If we can put all these crooks on jail for misleading the public with inflated number skewed towards the RE it will be the best day in Cali’s history. We will not be on these mess. Thanks Lansner for your contribution.
Total nonfarm payrolls are now back to where they were in mid 2000, and in a few months they’ll be back to pre-2000 levels.
21st century job creation: GONE
Boy those credit bubbles that produce and specialize in ‘pretend’ economics are nasty little suckers.
http://static.10gen.com/businessinsider.com/~~/f?id=4a54fc314b5437ba0029f926
DON’T CENSOR ME!!!
Ok, I have seen enough. Those before and after pictures keep changing. The same “before” has had three different “afters” and none of them have the same belly button. Now I know this spot is famous for its gullible readers, but that is just too much to expect.
Was this meant for the OCR’s plastic surgery blog?
I have a question: today I received a notice from the county increasing the assessment values 2% more.
so here is the question…I was paying all increase assessments since the big boom, and now my property went back in price to 2003 more/less.
why still the county keeps jacking up the assessments?
Rants-
I know you’ve spent between $60,000 and $90,000 in rent since you sold in 2004. What’s the ROI on your condo arbitrage scheme up to this point?
rant
non of the above, I purchased in 1989, and no money spend.
what’s ROI means?
opss I think I respond by mistake…sorry
the condo is now worth about 150 thousand less than I sold it for
and its still droppin- I put a nice chunk into gold at about 430 an ounce
of which I’m still holdin onto- whoops I’m sorry what was your question again?
I didn’t ask your rate of return on gold. You could have invested in tulip futures and it wouldn’t affect whether selling the condo was a smart decision.
So if you saved $150,000 in depreciation minus $75,000 in rent, you’ve netted $75,000 in profit over 5 years. $15,000 a year.
Also, you NEED prices to keep falling or your ROI gets whittled down further every time your write a check to the landlord.
It’s an interesting experiment rants.
Did I read that right:”it wouldn’t affect whether selling the condo was a smart decision.”
Are you frickin kidding me? If you had an opportunity to shelter hundreds of thousands from depreciation and then reinvest in other appreciable assets and make a bundle, you do not think that is relevant?
I know the point you are trying to make - you are limiting the scope of the analysis to RE only and money spent on living quarters.
Yet - many - and I mean MANY - have bought and sold, like I did, investment property and am absolutely amazed at what we banked in late 2006 thru mid-2008.
Bro - that move alone put me ahead by well over a decade. yet - many that stayed in with their investment property feel much less wealthy. And I’m buying back in at much lower prices - the very same damn assets.
Leave the myopic analyses for those that have no inkling on how to invest and play the game. OC RE is all a frickin’ game.
oh and by the way I dont make a mortgage payment now
so subtract that from the rent amount that you calculated—
TA TA
What was the oustanding balance on your loan, and what rate were you paying? Only the interest payment should be subtracted. The principle paydown was yours to keep.
LL, how much of your principal have you paid off over the past 3 years…
now interest???? llloolll
I’m saving money for a second property, otherwise my loan would be about a third paid off with the extra payments I could have made. Instead I’ll put down 20-25% next year on a house.
so i guess you are severely under water, and all you did was pay interest…… keep being a good citizen, please
My loan is fully amortizing. I’ll rent from the bank for 3.37% (2.18% after tax)and one of you smart guys can rent from me.
Homeowner? lollllllllll
Homedebtors rent their homes from the bank. They’re just made to believe thru fuzzy math, creative marketing and Govt carrots and sticks that they’re not renters.
Plus, the banks stick homedebtors with the taxes/maintenence/repairs/insurance/mortgage insurance etc., and paying interest for 17 years before the point of inflection is reached with the principle.
Homeowner….Ha!
You jerks have been spewing that crap forever. Here’s a suggestion for you: rent forever. Problem solved!
You forgot: you get to leverage your money many times over and get a hefty tax deduction for your trouble. Ain’t the system grand?
Dealeo,
You’re heavily in debt from your mortgage.
You have no voice in this department!
dealeo run it by me again how much you have lost on your house since purchase…….. how about some facts on how much you are paying a month versus renting…. lllloollll
Mav,
Exactly!
Dealeo thought that buying a home during the peak of the bubble was going to save him huge amounts of money.
Dealeo doesn’t realize that OC real estate is on the “riskiest markets in the country” list.
It’s way too early to compare rent savings vs. buying when the housing bubble is only half way over.
Housing still has another 30%+ to fall, then you can talk to them about how much they have saved.
The feds also told us that the financials weren’t in any trouble and were very healthy right before their collapse.
The feds also told us Fannie and Freddie were also doing fine before they both collapsed.
The feds also said we had a little froth during the biggest bubble of all time.
I think the majority of people are is shock from all of the fallouts and meltdowns that continue to occur each day.
It just keeps building up to an alarming amount of debt.
Look at OC’s headlines today, it’s unbelievable!
Delinquencies on home-equity loans, credit cards hit records
Mortgage fraud is ‘rampant’
O.C., L.A., Inland Empire on risky home market list
No new manufacturing jobs soon in O.C.
Major institutions will not take Cal IOUs after Friday
End the Fed!
http://finance.yahoo.com/tech-ticker/article/275761/Ron-Paul-Is-Right!-We-Should-Audit-the-Fed?tickers=XLF,GLD,SPY,DIA,TBT,TLT,^DJI
News Flash: The ‘leverage your money’ days are over, done, kaput. Plus, homes are illiquid now and will be viewed as consumption items in the new economy.
Hefty tax deduction? Puhleeeze. A10K tax deduction = $3500 in the pocket, BFD. Maintenence/repairs/insurance/mortgage insurance etc., etc. will eat every bit of that up in months.
I’ve been thinking about the loss of equity problem and the low rates. Bear with me here as it’s kinda tin foil hatish but here it is: The government needs new buyers to come in a buy up all the low value homes at inflated prices in a large enough quantity to save the bigger loanowners who will default in large numbers if their homes decline too much. See, the problem isn’t the little sub-prime loans going bad (who cares there’s always another buyer), it’s the big alt-A, Option-ARM, non-conforming loans going bad, those ones where there’s very few buyers who qualify. So, if we keep loan rates low, Mr. and Mrs. move-up buyer can sell for more and leverage more if they can qualify for a GSE or other lending (scarce). That way the so-called high end can stay high-end and we’ll just churn the low to mid end for as long as it takes. Here’s the tin foil part, the reason the fed is doing this, is that many of the people in the so called high end donate large quantities of money to PACs and politicians thus the necessity to keep the appearance of high home values. They’ll feel like the have more money if they believe their homes are worth more. In fact, that’s the very soul of our economy. If I feel I will make more or have more, I’ll spend more. Let’s see if it works because if first time buyers walk away from this ponzi scheme then the whole scam collapses, right Mr. Madoff?
Nice conspiracy theory Lee uh I mean Eat it. You care way toooo much about RE for supposedly not caring.
And you add nothing again….well played sir! Talk about a waste of time….
the realtor bozos on this blog are soooo clueless to the overall picture
its scary…….
commercial real estate is imploding as we speak… the fallout
will be nothing short of devastating…….
http://www.cnbc.com/id/31831512
Am I reading this correctly?
The Fed has noted that over 25% of all foreclosures are strategic in nature.
PEOPLE ARE STILL WALKING AWAY FROM THEIR HOMES!!!
The point: who the hell cares when everyone here bought their homes? Isn’t it about whose buying now and who is still waling away from their homes?
The lack of reasoning is astounding.
BTW: Those that sold at a profit (2004 was a bit too early in my opinion though) and then made sound investments have made a HUGE impact on their networth when compared to what would have happened if they held. I am not touting flipping by any means - but I know people that have entered the home market in 1997 and retired in 2007. It sure as hell was not from buying and holding.
get over it - the wealthiest people in this nation have bought and sold real estate. Very few were buy and hold all RE.
Real estate only goes up. Go ahead. Be a sucker.