The situation around the country is patchy, but the overall trend is down. The largest estate agency chain in Britain, Countrywide, has closed 48 branches in 2007, a source close to the company told MSN Money. The privately-owned group which owns a dozen chains including Bairstow Eves and Mann, now has 1,100 branches, including six new ones opened in 2008.
LSL Property Services, which includes Yourmove and Reed-Rains, has closed 12 of its branches and cut 315 jobs. Smaller chains, many of which are privately owned, will have been cutting jobs even if branches remain open.
The problem for estate agents hasn't been the end of ever-upward price moves, but the fall in overall levels of business and particularly the logjam in the mortgage market.
"The banks have gone from lending everything to everybody to lending nothing to anybody," Wood said.
Consumers' mood grim in May: survey
Friday May 16, 9:57 am ET
NEW YORK (Reuters) - Consumer confidence tumbled to its lowest in 28 years this month, a survey showed on Friday, as short-term inflation expectations hit their highest since the stagflationary early 1980s.
The news heightens the dilemma for the Federal Reserve, which has bet that slowing economic growth will tame inflation pressures that are building up.
The Reuters/University of Michigan Surveys of Consumers said its preliminary index of confidence fell to 59.5 in May, its lowest since June 1980. In April it was 62.6.
...
This was well below economists' median expectation of a reading of 62.0, according to a Reuters poll.
One-year inflation expectations surged to 5.2 percent -- their highest since February 1982 -- from 4.8 percent in April.
...
_________________ "It's called the American Dream because you'd have to be asleep to believe it."
Joined: Apr 12, 2007 Posts: 1172 Location: Central NC
Posted: Fri May 16, 2008 9:40 am Post subject: Re: Housing & Economic Collapse - In Progress - #2
Housing posts surprising rebound in April
snip:
"The Commerce Department reported Friday that housing construction rose by 8.2 percent in April to a seasonally adjusted annual rate of 1.03 million units. Building of single-family homes continued to weaken, however. The growth came from a big jump in apartment construction."
The outlook for UK [price] inflation has "deteriorated markedly", the Bank of England governor Mervyn King has said.
He added that house prices were set to fall further, though no one could be certain how far they would decline.
"The balancing act faced by the Monetary Policy Committee (MPC) is even more challenging than it was in February," he said as the Bank presented its latest quarterly inflation report.
"The MPC is facing its most difficult challenge yet. For the time being at least, the nice decade is behind us."
"The credit cycle has turned, commodity prices are rising," he explained.
"We are travelling along a bumpy road as the economy rebalances. Monetary policy cannot and should not try to prevent that adjustment."
"The MPC must focus on bringing inflation back to the target in the medium term."
"In some ways we're only beginning to see the difficulties that have faced banks feed through now to conditions in the credit markets for companies and for households," he said.
It is far from clear how he plans to achieve this wish list, or indeed what he has done to try. What adjustment does he mean when he says monetary policy should not be used as a tool to prevent it? Commodity prices? Or the credit cycle? If it is the former, we can debate whether he has a point. If it is the latter, he is a hypocrite.
The Financial Times has been on the ball recently. Good articles questioning whether further UK rate cuts are possible, Bradford & Bingley getting a thoroughly deserved panning, and it looks as though the UK government's treasury swap facility will not only be massively oversubscribed, but used to park the riskiest of assets. Banks are tapping the ECB in similar fashion. Interestingly, some of this packaging is new and ongoing, with the three big ratings agencies being asked to stamp with As, packages of debt created for the sole purpose of parking at central bank windows. I get the feeling once again the ratings will be purchased. _________________ "The American people are watching the numbers climb higher and higher at the pump and they're waiting to see what the Congress will do." - George W Bush
Posted: Fri May 16, 2008 12:50 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
Homesteader wrote:
Housing posts surprising rebound in April
What say the people?
The increase was because multi family (read apartment buildings) was up by about 30%. It's a flow of funds thing. The liquidity is out there looking for a place to invest.
This is good for bitter renters and bad for Heloc honeys.
Single family starts continue to outpace sales and therefore the months of inventory continues to increase. _________________ Cougar
"Use it up, wear it out, make it do, or do without." - Brigham Young
Posted: Fri May 16, 2008 1:05 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
Have you ever wondered were all the OF2’s come from? Here is the headline from Goggle News on housing.
Quote:
HispanicBusiness.com
US April housing starts up 8.2 pct to 1.032 mln unit annual rate ...
J6P sees the headline and says, “look Martha, the housing crisis is over. We can go to Disney World this year”. Here is the Bloomberg article it came from, that Joe probably never got around to reading, probably because reading is not his thing!
Quote:
U.S. Builders Broke Ground on Fewest Houses Since '91
May 16 (Bloomberg) -- Construction of U.S. single-family houses in April dropped to the lowest level in 17 years, even as building of condominiums and townhouses rebounded.
Builders broke ground on 692,000 single-family homes at an annual rate, the fewest since January 1991, the Commerce Department said today in Washington. Total housing starts jumped 8.2 percent to 1.032 million as construction of multifamily units rose 36 percent following a 35 percent drop in March.
(snip)
``The trends are horrific,'' said Ian Shepherdson, chief U.S. economist at High Frequency Economics in Valhalla, New York, who had the closest housing-starts estimate in Bloomberg's survey. ``There's just no reason things are getting any better. Why would you buy a house? Why would you spend money to buy a depreciating asset?''
from TF:
condo starts were down 35% in March and up 36% in April so this is just noise,
Quote:
Goldman Sachs says:
11:32 House values to return to 1993-2003 Average over next several years
11:34 House price declines could trigger $500bln. mortgage credit losses
Condo construction is up; condo sales are down. Isn’t doing the same thing over and over that didn’t work in the first place a sign of lunacy.
We are so screwed, and too stupid to know it!
Twilight said:
Quote:
Good articles questioning whether further UK rate cuts are possible, Bradford & Bingley getting a thoroughly deserved panning, and it looks as though the UK government's treasury swap facility will not only be massively oversubscribed, but used to park the riskiest of assets. Banks are tapping the ECB in similar fashion.
So it looks like the same thing is happening across the pond that is happening here; the central bank is swapping its internals for hog wash. This amounts to the complete gutting of our monetary systems.
This is so honorable of them - falling on their swords to save the banking industry. I just wish they weren’t asking the populous to participate.
Posted: Fri May 16, 2008 1:54 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
NEWS FROM THE FRONT - LIVE REPORT: HOUSING DOWNTURN STILL IN INFANCY.
As many know, I'm a lawyer in Arkansas dealing with mortgages gone bad. Some balance may be needed in light of the report today that "housing starts unexpectedly jumped." Apparently, they haven't heard about the woman I met with today.
Today, I had an office conference with a 22 year old Hispanic woman that, 3 years ago (when she was 19!), bought a $370k home with no documentation "liar loan." In fact, had they checked, they would have seen she didn't have a job. Her extended family has been living there paying the bills. Now that the economy is going down and their bakery business isn't going so well, they can't make the payments and the loan is in default. They wanted to know if they could simply leave the house. Of course they can, but I had to explain the many different possible scenarios.
This loan is only 2 months overdue, so its not showing up on anyone's "radar" yet. So, not only is the bank getting ready to be burned, but everyone living in the expensive homes around her will get burned when the home is foreclosed and it drops the prices on the surrounding homes.
Also, in light of the recent bank failure we had here (ANB), the OCC (Office of the Comptroller Currency) is now in our area and crawling through the books of all the banks here. You all may remember that the banks, to cover bad loans, were simply having the debtors (big developers) sign a new note, therefore, bingo, bad loan doesn't exist. However, the OCC is requiring the banks to get new appraisals before they can renew a note now. If the appraisers are honest, this should bring to a close this fraudulent practice. So, I think my area at least will get a waive of foreclosures against the big developers that the banks have allowed to "ride" so far. What does this mean? It means some more banks will not make it. It means Bernanke was absolutely right when he said there will be more regional bank failures. ANB was the first but will not be the last. For those not familiar with the OCC, here's a link to their website:
Also, I represent a local pawn broker. He said people are trying to pawn anything and everything, but bc people don't have any money, most stuff they want to pawn isn't worth much, bc he can't sell anything for very much. He confirmed that lots of people are selling gold, silver, diamond rings etc (not gold or silver coins, just the silver plates, gold jewelry etc). This stuff still has value and lots of it. Easily sold. He said no one is selling their coins, and that for him to buy any, he has to pay above spot prices. He says that there is a shortage of physical silver as being reported on PM sites.
House building has slumped under the impact of the credit crunch and is on its way to its lowest level for nearly a decade, government figures show.
There were 32,100 new housing starts in England in the first three months of the year, the Department for Communities and Local Government said.
That was 21% lower than in the previous quarter, and 24% down on a year ago.
Astonishingly, the government considers this to be bad news, as it means their aspirational targets for new construction are unlikely to be met. In their twisted universe, existing housing stock valuations can be propped up through loose regulation and in the final event, credit market intervention, while a broad social change agenda can be implemented through vast new construction which can be sold cheaply without causing oversupply or affecting the prices of the aforementioned existing inventory.
Not content with watching the "housing ladder" become an escalator, the government made a policy plank of parachuting the less fortunate onto it.
The FT quoted Stewart Baseley, the chairman of the Home Builders Federation, as saying the industry is on the edge of a precipice with dramatic job cuts only weeks away.
To assist, the government is considering setting up a fund which it would use to enter the BTL (buy-to-let) market. Quite apart from its paltry size (£200m buys you only 1000 average houses), it would be the height of folly for the taxpayer to become the "greater fool", the buyer of last resort for the detritus of the very heart of our real estate bubble.
Once again I emphasize BTL is where many of our walk-aways will be generated, destroying the banks most deeply invested in the process. This was a new, specialist, speculative market which generated a million mortage loans and tempted a horde of inexperienced yet hopeful people into becoming first-time landlords. They will walk away and create a spike in bankruptcies if the lenders are quick to chase lost equity. The banks will also be left holding the near-worthless assets of liquidated property developers, such as unfinished city centre apartment blocks.
It is disturbing to see the merest hint of government intervention, as the size of the problem is such that it would mean laying down the taxpayer in front of a train. After Northern Rock and what emerged from that, I doubt the players involved can be saved, either openly or in secret. This is just too big.
Joined: Jan 14, 2008 Posts: 321 Location: The Yukon
Posted: Fri May 16, 2008 3:31 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
The economic models reveal that consumer expenditures, a proxy for GDP, rises and falls with families' perception of their net worth. This Wealth Factor will not invite a Recession 'til the USA nat'l home price avg declines below the 2002 threshold. Such a paper loss will induce consumers to pull back on spending and confidence... _________________ www.TrendLines.ca/scenarios.htm Home of the Real Peak Date ... set by geologists (not pundits)
WASHINGTON (AP) -- Treasury Secretary Henry Paulson said Friday that financial markets are "considerably calmer" now than they were two months ago. He predicted the economy will be rebounding by the second half of this year.
Posted: Fri May 16, 2008 3:46 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
FreddyH wrote:
The economic models reveal that consumer expenditures, a proxy for GDP, rises and falls with families' perception of their net worth. This Wealth Factor will not invite a Recession 'til the USA nat'l home price avg declines below the 2002 threshold. Such a paper loss will induce consumers to pull back on spending and confidence...
Uhhh, the spigot of liquidity that took the form of $100k HELOCs has been effectively stopped dead in its tracks. That, and that fact alone, "will inducehas already induced consumers to pull back on spending and confidence." Augmenting annual incomes with your home ATM is a thing of the past. The 2002 threshold that you mention is worthless; negative equity is negative equity, and the historically high rate of turnover in the housing market makes an owner who bought their current house back in 2002 most definitely a "long-term" owner. _________________ "It's called the American Dream because you'd have to be asleep to believe it."
George Carlin
Last edited by emersonbiggins on Fri May 16, 2008 3:52 pm; edited 1 time in total
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