<img style=“display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;” src="/images/07AugNTR.jpg" border=“0” alt=“Click for full size"id=“BLOGGER_PHOTO_ID_5107270921523980290” /> August’s total was 3249, beating last month’s record high by an additional 746! Historical Comments houseofpain (2007-09-07): It defies gravity, holy moley!!!
…Or is it Peruvians? Or perhaps Peruvian Roman Catholics? From Yahoo News: Hundreds had gathered in the pews of the San Clemente church on Wednesday — the day Roman Catholics celebrate the Virgin Mary’s rise into heaven — for a special Mass marking one month since the death of a Pisco man. With minutes left in the Mass, the church’s ceiling began to break apart. The shaking lasted for an agonizing two minutes, burying 200 people, according to the town’s mayor. On Thursday, only two stone columns and the church’s dome rose from a giant pile of stone, bricks, wood and dust.
July, 2007, saw 2503 Notices of Trustee’s Sales in Maricopa County - yet another record. Historical Comments houseofpain (2007-08-01): Holy moly, apocalypse!!! Anonymous (2007-08-01): I agree with house of pain. The pain is coming to the real estate market. I need more popcorn for this double feature.
One of the serious problems I have with our democracy is that politicians are a package deal. When one gets elected we celebrate their good ideas, but we have to endure their idiotic ones. I think this could explain the popularity of the “lesser-of-evils” argument people often use to persuade others to vote for their pet candidate of the moment. Arguably, all politicians are idiots - to a greater or lesser degree. Case in point: Ron Paul. You can love him for his stance on the war in Iraq, but this sort of stuff really makes me wonder about the guy: The notion of a rigid separation between church and state has no basis in either the text of the Constitution or the writings of our Founding Fathers. On the contrary, our Founders’ political views were strongly informed by their religious beliefs. Certainly the drafters of the Declaration of Independence and the Constitution, both replete with references to God, would be aghast at the federal government’s hostility to religion.WTF??? Isn’t Ron Paul supposedly a constitutionalist? It’s not a big surprise to me to find that the source of the above patent absurdity is an article posted at lewrockwell.com - home of the kookiest of the kooks in the “libertarian” world. Thanks to the no god zone, which has more to say on this topic. UPDATE by Jim (October 18, 2007): Dispatches from the Culture Wars has more on Ron Paul’s views on religion and government, with lots of data in the comments. UPDATE by Jim (December 25, 2007): Ron Paul rejects evolution. ...
<img style=“display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;” src="/images/Jun07NTR.jpg" border=“0” alt=“Maricopa County’s Notices of Trustee’s Sales, 1993 - 2007"id=“BLOGGER_PHOTO_ID_5083422755374284578” /> June’s Notices of Trustee’s Sales for the Phoenix metro area topped out at 2330, continuing the trend line set a year or so ago. At this point I can’t help thinking we’ve got nowhere to go but up. Even the scammers are saying that Phoenix is a bad market.
May’s total was 2009. The graph needs little comment this month, I think. M.C. N/TR Descriptive StatsMean939.6912752Median822Mode746Standard Deviation323.391527Range1527Minimum482Maximum2009Sum140014Count149
Bill Maher criticizes the Republican presidential debate and does an excellent job of re-contextualizing Ron Paul’s position on Iraq and doesn’t let the idiotic politician he’s speaking with continue to misunderstand: He wasn’t saying that we were “asking for it.” What he was saying was, “We should listen to our enemies and maybe the reason they’re mad at us is because we’ve been meddling in the middle East.” We were in Saudi Arabia. That’s what Bin Laden was mad at us for. Now we’re in Iraq and we’re screwing up that country. Maybe if we listened to them instead of saying, “We’re always the good people” we would actually make ourselves safer.It’s nice to see this position finally getting some serious consideration. Better late than never, I suppose–but dammit if the libertarians haven’t been saying this crap all along! ...
The Arizona Regional Multiple Listing Service just released their ARMLS Economic and Market Watch Report for the first quarter of 2007. The report says that the current market in Maricopa County (MC) for residential real estate is neither a buyer’s nor a seller’s market - it’s right in the middle. As I have argued elsewhere, to call the current Phoenix market anything other than a seller’s market is absurd. If you buy right now you lose, in my humble opinion. In spite of the fact that MC housing inventory grew from 43,164 homes (at the end of Q4 ‘06) to 52,055 on March 31st, and that the number of homes sold fell by 910, the report has the audacity to claim that “[c]ombined with historically low mortgage rates, home sales should continue at a steady pace”, and that Q2’s average sales price will be higher than Q1’s $350,400 (I’m not a big fan of using the average price as a gauge of anything. Its value is too easily influenced by outliers on the high end). In the section on “Trends”, Ken Fears says the following: …there were 26,135 sub-prime loans issued in 2005 [sic - I think that should be 2004] for the Phoenix-Mesa-Scottsdale metro area, which represent 15.4% of the total population of loans for this area. In 2005, the percentage of sub-prime loans in the Phoenix-Mesa-Scottsdale area rose to 31.5% for a total of 69,997 sub-prime loans issued. This figure was higher than the nation as a whole where 28% of loans in 2005 were sub-prime compared to 14% in 2004. So what does this mean for local Realtors®? There is no doubt that the rules for making sub-prime loans have been to [sic] lax. Furthermore, defaults will rise as mortgage rates rise and employment begins to falter with the waning economy. However, banks learned an important lesson in the last two mortgage banking crisis [sic]. It is much better to help the holders of sub-prime loans to meet their monthly payment than it is for the bank to write off the loan as a loss; a small bite to profits is better than a total loss. So banks will be much more inclined to re-work loan agreements. In addition, sub-prime loans make up a small percentage of the total number and dollar volume of existing mortgages. These factors help to mitigate the notion that there is a large overhang of defaults about to splash on the market, bringing down home prices and sales and the overall economy with it. David Lereah’s “Commentary” had this to say: On balance, I expect about 10 to 25 percent of subprime households to be unable to secure a mortgage loan because of today’s stricter lending standards. However, many of these households will probably, over time, purchase a home when they have attained the financial capacity to do so (e.g., saving for a down payment, growing their income). So the long-term health of the housing market will probably stay in tact. In the near-term, I would expect home sales to fall by 100,000 to 250,000 annually during the next two years due to tighter underwriting practices, slowing the nation’s housing recovery. As for the over 8 million adjustable-rate loans (25 percent of which were sub-prime) originated during the past three years, First American Corelogic estimates that about 1.1 million of them totaling about $326 billion are likely to end up in fore-closure. A bit over $300 billion of subprime adjustable mortgage loans are due to re-set by October 1st of this year. Most lenders will attempt to work out problem loans by refinancing borrowers into other mortgages. A disproportionate share of these foreclosures will occur in high cost regions, like California. Certainly, a rise in foreclosures results in an upward blip in housing inventories, depressing home values. But the good news is that these foreclosures will occur in relatively healthy local markets that boast decent levels of economic activity and job creation, improving the prospects of selling the foreclosed properties in a reasonable amount of time. Foreclosures will create temporary inventory problems, but inventories will be eventually worked out.“Inventories will eventually be worked out,” which will be “depressing home values” - but, nonetheless, Q2 in MC will see a “steady pace” in home sales and a higher average sale price? Hmmmmm… Dr. Lawrence Yun, in his “Forecast” section, says that in the last year Phoenix jobs grew by 89,000 and that this may increase the number of potential homebuyers. Yun acknowledges that Phoenix has seen a fall in home sales, but he says that rental rates have, as a result, been “climbing fast.” He asserts that, “very soon, the squeezed renters will begin to search for a home purchase." Rents in the area are definitely rising, as you would expect, but they’ll have to rise a long way to catch up with area home prices! Forecasting the impact of the subprime fallout, Yun presents this analysis: Consider, the subprime loans comprised about 13% of the overall mortgage market, and 20% of mortgage originations since 2005(though there are divergent figures depending upon the source). The recent overall rise in default rates is primarily associated with the subprime loans rather than with the predominant prime loans. The delinquency rate on prime loans was only 2.8% by comparison with the foreclosure rate running at 0.5%. Both delinquencies and foreclosures for prime loans have been steady with very little movement. Therefore, a 14.3% delinquency on 13% of the loan market means subprime problems are impacting close to 2% of all loans. Factor in the fact that one-third of all homeowners own their home free-and-clear, the subprime problems are associated with about 1.4% of all homes. History says that less than half of these homes with delinquent mortgage payments ever move into actual foreclosure. So roughly speaking, 0.7% of all homes will at most run into eventual foreclosure from recent meltdown in the subprime sector. Something tells me that Yun’s numbers are overly rosy. Using his 1.4% figure only gives us an average of 1459 Trustee’s Sale Notices per month in Maricopa County. Since we’re already seeing numbers higher than that, and there’s no indication that things are going to be slowing down, Yun appears to be missing a piece of the puzzle. To be fair, Yun’s numbers refer strictly to subprime loans - so one could argue that the additional numbers seen in the real world are delinquencies in alt-A and prime mortgages. In any case, the next few months should prove very interesting.
Given the explosive growth Maricopa County's Trustee Sale Notices saw in the second half of 2006, the numbers for the first four months of 2007 have seemed somewhat like a plateau. April’s total was 11 below March’s 1720, leading me to seriously wonder what the future holds. From a recent Reuters article: Subprime mortgages to less creditworthy borrowers comprised only 13.7 percent of outstanding U.S. mortgage debt in the fourth quarter of 2006, and their delinquency rate was 13.3 percent, according to the Mortgage Bankers Association. If, like the article, you believe that the woes of the subprime mortgage market are “well contained,” then perhaps we have a hint of what the remainder of 2007 has in store. Assume, for (extreme) simplicity’s sake, that... 1) All 1,250,231 houses in Maricopa County have a mortgage, and 2) The percentages quoted above remain the same for all of 2007, and 3) No one who does not have a subprime loan will become delinquent, ... then that means the average number of Phoenix-area trustee sale notices per month should come to 1898. I’m inclined to take it as a good sign that we’ve only seen a peak of 1720 so far, in spite of Mish’s contention, over at his Global Economic Trend Analysis, that containment is spreading. However, the graph below, far more than Mish’s falling sky pronouncements, gives me pause: Trustee’s Sale Notices are a lagging indicator, since they don't happen until the borrower has been in big trouble for several months. That fact, in conjunction with the data behind the Credit Suisse graph, leads me to believe that late 2007 through early 2008 (and beyond) is when we should be expecting the big wave to hit. How big? Who can say? Anonymous (2007-09-10): Is this ARM reset schedule just for Arizona?? ...
The count for March’s Notices of Trustee’s Sales in Maricopa County was 1720. Not a record beater, but certainly within sight of the summit. MC Trustee’s Sale Notices (1995-Present)Mean929.5Median819Mode746Standard Deviation306.2041743Range1256Minimum482Maximum1738Sum135705Count146 The daily average in March (78.18 Notices recorded per day) was also not a record beater. <img style=“display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;” src="/images/DailyAvgMar07.jpg" border=“0” alt=“Click for full-sized image"id=“BLOGGER_PHOTO_ID_5048174691379040498” /> Here’s an interesting chart I threw together based on sales data I pulled from the Arizona Regional Multiple Listing Service. The take-away from it is that, clearly, the inventory of unsold homes in the Phoenix area has been increasing for quite a while, now. The words “downward pressure” come to mind. <img style=“display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;” src="/images/listingsales.jpg” border=“0” alt=““id=“BLOGGER_PHOTO_ID_5048176301991776514” /> ...