Real Estate
Housing Is “In a Precarious State,” Yale’s Robert Shiller Says
A 10-20% drop from here would be disastrous for bank balance sheets and the US economy. Cross your fingers that recent weakness in the housing numbers is simply a seasonal blip. »
11-year-old spends $44 million on Dubai homes
Sometime early last year, an 11-year-old boy from Azerbaijan became the owner of nine waterfront mansions in Dubai. I don’t even think I could afford the front door of one of those houses. In fact, I’ve been putting off repairing an old fence in my backyard. It turns out that the boy may be the... »
Rogoff: Japan’s Slow-Motion Crisis
Ken Rogoff, who recently wrote a book on financial crises and recoveries (This Time is Different: Eight Centuries of Financial Folly), published an article on the never-ending Japanese recession. Nobody wants to end up like Japan, And yet, visitors to Tokyo today see prosperity everywhere. The shops and office buildings are bustling with activity. Restaurants are... »
Gross Says Sovereign Debt to Resemble Corporate Returns
Bill Gross talks with Bloomberg’s Margaret Brennan about the outlook for sovereign debt and Federal Reserve monetary policy. Again, he discusses the impending end of Fed purchases of MBS. Nobody really knows if this will end well. Consequently, many institutional investors are avoiding MBS’s in case rates rise. However, the aversion to the asset class by... »
Death Pledge: Mortgage market is a disaster
- 25% of US mortgages are underwater - 11.3 million Americans owe more the their house is worth - 10% of people with mortgages owe 25% more than their home is worth - 2.3 million mortgages had less than 5% equity in their home - 70% of Nevada mortgages were underwater - 1/3 of California mortgages are underwater Bottom Line:... »
What Housing Recovery?
It seems like the bottom is falling out of housing again. Months inventory is back up, mortgage applications are down to a 13yr low and home prices are at a 7yr low. The following chart shows the massive rise in time required to sell new developments. Folks, housing remains a big drag on the economy. David... »
Rosenberg on Canadian Housing Bubble
This is from a live webcast on the Globe and Mail website. Here’s a comparison of today’s bubble vs that of 1990. And here’s a question on how to hedge exposure to Canadian real estate: »
US Looks to Foreign Buyers
As the Fed sees it, keeping mortgage rates low is essential to a housing recovery. Unfortunately, mortgage loan supply completely dried up, which could have significantly raised mortgage rates, until the Fed stepped in. Now the Fed and government-sponsored entities are buying up every mortgage in sight. This is the main reason rates are... »
Canadian Housing Bubble?
This is the question on many Canadian homeowners’ lips lately. Toronto home prices, for instance, have risen steadily over the past 12 months. This is in stark contrast to the acute housing problems in the US, so it is natural to question the fundamentals behind rising Canadian home prices. Many analysts are screaming ‘bubble’. To... »
Next Stop – CMBS Hell
This is one scary chart. Commercial real estate mortgage defaults have risen dramatically over the past year and show no signs of abating. This is the next crisis everyone has been talking about. Someone is going to take a hair-cut when these loans roll over. Moody’s prepared a full analysis on the state of the... »