USA- Really how bad is the RE market now

vijay · Post by **vijay** » Tue Mar 13, 2007 8:00 am

http://news.yahoo.com/s/nm/newcentury_lenders_dc;_ylt=AtLgb9oza.JGmMjb_apU2D4DW7oF

The US RE is really struggling now. I had read an article a week ago from Robert Kiyosaki about how things are going to get real worse before they get any better and it could take some years before it turns around. Looks like a lot of potential R2Iers may have to hold off for the next few years, either that or hope to break even.

realentity · Post by **realentity** » Tue Mar 13, 2007 6:36 pm

That is true. R2Iers can put up direct sale boards outside their houses. "For sale by owner". Instead of giving 4.25% to the RE agent, offer that amount to buyers directly. That way it will sell easier. If it sells, move into a rental house until R2I.

b2b · Post by **b2b** » Tue Mar 13, 2007 7:15 pm

realentity;12203That is true. R2Iers can put up direct sale boards outside their houses. "For sale by owner". Instead of giving 4.25% to the RE agent, offer that amount to buyers directly. That way it will sell easier. If it sells, move into a rental house until R2I.[/quote]

Is It a double whammy?..............Can't sale US RE because the rates are much lower than expected and can't buy Indian RE because the rates are much higher than expected...

Can't comment much on US RE scenario as no first hand experience of it.

realentity · Post by **realentity** » Wed Mar 14, 2007 1:00 am

Scary math: More homes, fewer buyers

http://money.cnn.com/2007/03/12/real_estate/new_real_estate_reality/index.htm?cnn=yes

b2b · Post by **b2b** » Wed Mar 14, 2007 1:42 am

US probes sub-prime mortgage firm

Question marks are hanging over the US mortgage market

US markets regulator the Securities & Exchange Commission is investigating troubled sub-prime mortgage lender New Century, the firm has revealed.

New Century has stopped making loans and its shares have tumbled, with some analysts now predicting bankruptcy.
The firm also said it had received a grand jury subpoena for documents.
Sub-prime lenders provide money to clients with a poor credit history, and the current problems have been sparked by a rise in defaults and bad loans.
These, in turn, have been triggered in part by a relentless rise in interest rates from rock-bottom levels in the past four years, and falling house prices and rates of homebuilding in many parts of the US.

Ripple effect

The problems, which have seen default levels on sub-prime mortgages hit a seven-year high, are not limited to New Century, and other lenders have also announced that they have been caught up by the downturn in the sector.
Another sub-prime company Accredited Home Lenders Holding said on Monday that it may have to raise extra funds, seek debt waivers, cut jobs and put back its earnings announcement. Its shares fell by 28% on Monday.
Countrywide Financial, the biggest US mortgage company, warned that the current problems would hurt profit in the short-term and added that it would cut 108 jobs.
New Century shares were suspended on Monday after tumbling almost 50% in pre-market electronic trading. The stock is down 90% this month. The company has warned that it may have to buy back more than $8bn (£4.2bn) in loans, and its creditors are claiming that the company is in default of loan agreements and have halted financing. New Century now has less than $60m in cash, according to the SEC.

pala69 · Post by **pala69** » Wed Mar 14, 2007 1:50 am

The harsh side of the housing boom

http://www.mercurynews.com/realestatenews/ci_5411822

This article came in the SUNDAY edition of mercury new on the main page

DosaiLvr · Post by **DosaiLvr** » Wed Mar 14, 2007 2:21 am

realentity;12203That is true. R2Iers can put up direct sale boards outside their houses. "For sale by owner". Instead of giving 4.25% to the RE agent, offer that amount to buyers directly. That way it will sell easier. If it sells, move into a rental house until R2I.[/quote]

FSBO (For sale by owner - pronounced "FuzzBow") has its pros and cons. Some things to bear in mind/consider

1) Every seller would like to avoid paying agent fees.

2) Almost all buyers like to retain an agent to represent them because they(the buyers) are not required to pay the agent's fee and the agent watches their back.

3) An agent is educated, trained and licensed expert. One should look up the issues that could arise in property purchase/sale before deciding to go the FSBO route.

4) FSBO props typically don't sell because buyer's agents will not bring their cleints to view the FSBO prop.

5) There are a myriad of clauses, contingencies, forms, state laws etc. that one needs to be aware. If you have violated the rules, ignored or over-looked these, a buyer can come back sue you in case of problems w/ the prop.

In CA one could use flatfee brokers and sell a prop. for about 15k (7k + 7k) in agents fees.

I would strongly recommend using a Realtor. They or their company become liable to a certain extent in case of problems down the road.

vijay · Post by **vijay** » Wed Mar 14, 2007 4:19 am

hey B2B,
that investigation into that RE company sounds like what happened to ENRON, really cooked books etc.

DosaiLvr · Post by **DosaiLvr** » Wed Mar 14, 2007 4:33 am

Stocks drop amid foreclosure, retail uncertainties

"Stocks plummeted today as data showing rising home foreclosures and disappointing retail sales sparked fresh concern that the collapse of the sub-prime mortgage market could drag down the broader economy."

"Among financial-company shares, Washington Mutual lost $2.11 to $39.79, Countrywide Financial dropped $1.65 to $33.49 and Merrill Lynch sank $3.75 to $79.74.

In the home-builder sector, KB Home fell $2.50 to $43.86 and Lennar lost $2.07 to $43.83"

Inspite of all this bay area RE mkt has held it own until now. This could be the result of a strong local economy?

abuSibu · Post by **abuSibu** » Wed Mar 14, 2007 6:58 pm

Lenders Initiate Foreclosures at Record Pace
http://news.yahoo.com/s/nm/20070313/bs_nm/usa_mortgages_delinquencies_dc;_ylt=Ah7oWo1iZZuCMKStweqqHUNeW7oF