1.5 million will lose homes, 100,000 in housing related industries to lose jobs

[Herman Munster]

http://www.bloomberg.com/apps/news?pid=20601087&sid=ahwzaBwuNaII&refer=home

As many as 1.5 million more Americans may lose their homes, another 100,000 people in housing-related industries could be fired, and an estimated 100 additional subprime mortgage companies that lend money to people with bad or limited credit may go under, according to realtors, economists, analysts and a Federal Reserve governor. Financial stocks also could extend their declines over mortgage default worries.

The spring buying season, when more than half of all U.S. home sales are made, has been so disappointing that the National Association of Home Builders in Washington now expects purchases to fall for the sixth consecutive quarter after it predicted a gain just last month.

``The correction will last another year,'' said Mark Zandi, chief economist for Moody's Economy.com in West Chester, Pennsylvania.

A five-year housing boom that ended in 2006 expanded home- ownership to a record number of U.S. households. Now it has given way to mounting defaults, failing subprime mortgage companies and an increasing number of unsold homes.

[wildhorses]

1. do you know anything about land to home ratios

whereby the land is worth more than the home?

[SoCalDem]

2. A "money-honey" said not too long ago:

Well.. a person with a $40K income , really should not be looking for a house that costs more than $400K.. I don't know what planet she lives on, but a family with a 40K gross income would have a hell of a time making payments on a house that expensive * (with a "real" loan)

[MazeRat7]

3. I'm not really buying this bear story right now...

I did through the last half of 2006 and have gone back and forth since on what the financial outcome will be to the housing sector. I don't see it - at least not as characterized by the Bloomberg article. Yes a couple of subprime lenders are in trouble, but the majors (Goldman,Schwab, Morgan Stanley, et al) only have about 10% of that subprime paper on their books. I do expect to see several of the "new" mortgage lenders going under this year, but dont agree with the estimates about defaults and downsizing. I do believe there will be more correction in the financial sector in the quarters to come, but I'm not buying it will be strong enough to have any catastrophic consequences.

I could go on and on about my reasoning... but its really late so I'll leave it at that.

MZr7

[fasttense]

4. Only 100,000 people will lose their jobs

in housing-related industries? I find that estimate strange. If this housing crash is so dismal then where are all the people in those industries? Will they be keeping their jobs? Will they go on to other things in the same field? There are certainly more than 100,000 people living off the housing boom. So where are they?

[matcom]

5. The spring buying season has been dissapointing?

on March 12th?

:eyes:

in this part of the country, we are seeing a sudden surge of interest. open houses, empty not a couple of months ago, are now packed with buyers.

we had 3 or 4 buyers just last week lose out because they dragged their feet too long and made offers on properties that already had offers.

why don't we let spring actually GET HERE before we declare it a disaster