The April S&P/Case-Shiller figures were released this morning. They showed home prices in 20 top metropolitan areas down 18.1% from a year earlier. That was better than the forecast for a reading of -18.6% and an improvement from the previous month’s -18.7% reading. Prices fell in all 20 cities tracked by the research organization, with Phoenix performing the worst (-35.3%) and Denver doing the best (-4.9%). The monthly decline came in at -0.6%, an improvement from -2.2% in March and the smallest drop since last June. Prices rose in 8 of 20 cities on a monthly basis.
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- S&P/Case Shiller: Home prices down 17.1% in May The latest home price figures from S&P/Case-Shiller just hit the tape. They showed a 17.1% year-over-year decline in the 20...
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If you think housing is stabilized wait until the 4th quarter of this year. The banks and institutions were jawboned into holding foreclosures in abeyance but the foreclosure machine is starting up again. It takes 60-90 days to get it up and running fully.
I think we will have worse housing news in the 4th quarter on into ‘10 especially since the tax incentive for first timers will expire.
Unlike much of the major financial media, I don’t see you touting this report as evidence of a “bottom forming” in the housing sector. Thank you for that, Mike! The weekly calls of a bottom on the major networks is embarrassing.
Of course, this little tidbit of interest got pushed to the back pages:
United Western Bancorp just sold their portfolio of option ARM-backed securities for the total price of $368,000 to an unaffiliated third party. Considering that this portfolio was originally valued at 47.3 million, with AA ratings from two major rating agencies, that’s quite a hit: $46,922,000 or 99.2%.
I guess it is good news for the shareholders. Thanks to the largesse of the US taxpayer via TARP bailout funds, UWBK was able to unload their toxic mortgage-backed securities, plus reap a nice tax deduction.
But it also points out just how toxic these mortgage-backed securities can be, especially when the underlying mortgages are so thoroughly designed to fail. And with bank portfolios stuffed to the gills with them. Expect to see a lot more of the same to come. Only question is, at what point in the divestiture process of the toxic assets will the bailout funds dry out?
For a graphic of the pain to come in Alt-A and Option ARM mortgages, view the Monthly Mortgage Resets, courtesy of Credit Suisse.