Comments on: Those Wet and Wild Houston Mortgages: 18 Percent Now Underwater, 7 Percent More Still Paddling for Air http://swamplot.com/those-wet-and-wild-houston-mortgages-18-percent-now-underwater-7-percent-more-still-paddling-for-air/2009-03-05/ Houston, Texas real estate development, home buying, landscape, and design Fri, 19 Mar 2010 21:46:34 +0000 http://wordpress.org/?v=2.6.3 By: Erion Shehaj http://swamplot.com/those-wet-and-wild-houston-mortgages-18-percent-now-underwater-7-percent-more-still-paddling-for-air/2009-03-05/#comment-33582 Erion Shehaj Mon, 29 Jun 2009 04:35:36 +0000 http://swamplot.com/?p=7037#comment-33582 Looks like I called this just right 3 months ago and with a few weeks to spare :-) Looks like I called this just right 3 months ago and with a few weeks to spare :-)

]]> By: rollo http://swamplot.com/those-wet-and-wild-houston-mortgages-18-percent-now-underwater-7-percent-more-still-paddling-for-air/2009-03-05/#comment-22334 rollo Fri, 13 Mar 2009 01:52:38 +0000 http://swamplot.com/?p=7037#comment-22334 oil prices are already going up. i see gas priced over $2.00 a gallon. sure i know supply and all that, but oil is on its way back up. gee i am sorry for the dr doom followers on here who seem to love gory stories, oil is going up. deal with it. oil prices are already going up. i see gas priced over $2.00 a gallon. sure i know supply and all that, but oil is on its way back up.

gee i am sorry for the dr doom followers on here who seem to love gory stories, oil is going up. deal with it.

]]> By: MikeRG http://swamplot.com/those-wet-and-wild-houston-mortgages-18-percent-now-underwater-7-percent-more-still-paddling-for-air/2009-03-05/#comment-22007 MikeRG Tue, 10 Mar 2009 12:19:48 +0000 http://swamplot.com/?p=7037#comment-22007 I think Mook's got it right. You can see the collapse happening in West U. Noticed what I thought were an unusually high number of for sale/for rent signs there in late January, so started keeping an eye on the number of listings. (There's an easy link on the chron.com site and then you can click on a neighborhood.) At the beginning of Feb. there were 297 residences listed. It has climbed more or less steadily over the past 6 weeks and stood at 353 today. A drive down Edloe from Westpark towards Holcombe is almost scary. There is a combination of developers finishing the last of the giant McMansions for this cycle and likely reseting of adjustable rate mortgages and job losses. There will probably be a cascading effect as very expensive places that can't be sold get reduced and put pressure on prices of smaller places that have to be cut in turn. I disagree with Erion's sentiments about oil prices. Over the past year, we have seen the beginnings of deflation in all asset categories. Oil has been at historically high levels over the past 5 years coinciding with the growth of the debt bubble. See this chart: http://www.wtrg.com/oil_graphs/oilprice1947.gif While there were many dire predictions about "peak oil" and $200/barrel oil last summer, oil is simply doing what everything else, e.g. real estate and milk, is, returning to historically normal prices that were in effect back around 2003, or $30-40/barrel for oil. Of course, the price will bounce around because of speculation, but OPEC has little control over prices. If they had, there wouldn't have been a bubble last summer and there wouldn't have been a collapse in prices following the bubble. I think Mook’s got it right. You can see the collapse happening in West U. Noticed what I thought were an unusually high number of for sale/for rent signs there in late January, so started keeping an eye on the number of listings. (There’s an easy link on the chron.com site and then you can click on a neighborhood.)

At the beginning of Feb. there were 297 residences listed. It has climbed more or less steadily over the past 6 weeks and stood at 353 today. A drive down Edloe from Westpark towards Holcombe is almost scary. There is a combination of developers finishing the last of the giant McMansions for this cycle and likely reseting of adjustable rate mortgages and job losses. There will probably be a cascading effect as very expensive places that can’t be sold get reduced and put pressure on prices of smaller places that have to be cut in turn.

I disagree with Erion’s sentiments about oil prices. Over the past year, we have seen the beginnings of deflation in all asset categories. Oil has been at historically high levels over the past 5 years coinciding with the growth of the debt bubble. See this chart:
http://www.wtrg.com/oil_graphs/oilprice1947.gif

While there were many dire predictions about “peak oil” and $200/barrel oil last summer, oil is simply doing what everything else, e.g. real estate and milk, is, returning to historically normal prices that were in effect back around 2003, or $30-40/barrel for oil. Of course, the price will bounce around because of speculation, but OPEC has little control over prices. If they had, there wouldn’t have been a bubble last summer and there wouldn’t have been a collapse in prices following the bubble.

]]> By: Erion Shehaj http://swamplot.com/those-wet-and-wild-houston-mortgages-18-percent-now-underwater-7-percent-more-still-paddling-for-air/2009-03-05/#comment-21966 Erion Shehaj Mon, 09 Mar 2009 22:34:36 +0000 http://swamplot.com/?p=7037#comment-21966 @mook I think your point is absolutely valid. Lower oil prices have already affected the local economy as demonstrated by the higher unemployment numbers that just got released as well as the drop in prices caused by the heavier weight that foreclosures carried in home sales. But in my opinion oil prices have been on an upward trend heading into the summer. Not to mention that OPEC cannot afford oil at these prices for much longer so more supply cuts are sure to come. I truly believe we will see oil between 60-70 dollars per barrel by the end of the summer. And this time, those petroleum underpinnings will not only shield us from pain but fuel our turnaround as well. @mook

I think your point is absolutely valid. Lower oil prices have already affected the local economy as demonstrated by the higher unemployment numbers that just got released as well as the drop in prices caused by the heavier weight that foreclosures carried in home sales. But in my opinion oil prices have been on an upward trend heading into the summer. Not to mention that OPEC cannot afford oil at these prices for much longer so more supply cuts are sure to come. I truly believe we will see oil between 60-70 dollars per barrel by the end of the summer. And this time, those petroleum underpinnings will not only shield us from pain but fuel our turnaround as well.

]]> By: Mook http://swamplot.com/those-wet-and-wild-houston-mortgages-18-percent-now-underwater-7-percent-more-still-paddling-for-air/2009-03-05/#comment-21836 Mook Sun, 08 Mar 2009 01:14:23 +0000 http://swamplot.com/?p=7037#comment-21836 Houston's economy has diversified since the 80's, but we're still largely an oil & gas town. High energy prices ($145/barrel last summer) kept a lot of cash pumping into the Houston economy and cushioned us from much of the RE downturn faced by the rest of the country. At the same time, plant expansions and engineering contracts (refineries, chem plants, etc) were also experiencing record upswings and that boom has dropped significantly over the last 6 mos. The big cushion factors to our local RE market, oil/gas/petrochem have all dwindled down significantly, and that drop has occurred only recently. I seriously doubt the impact of those downturns underpinning our local economy has been priced into the Houston RE market to any significant extent. RE problems will not be limited to subprime loans by any stretch IMO. Houston’s economy has diversified since the 80’s, but we’re still largely an oil & gas town. High energy prices ($145/barrel last summer) kept a lot of cash pumping into the Houston economy and cushioned us from much of the RE downturn faced by the rest of the country. At the same time, plant expansions and engineering contracts (refineries, chem plants, etc) were also experiencing record upswings and that boom has dropped significantly over the last 6 mos. The big cushion factors to our local RE market, oil/gas/petrochem have all dwindled down significantly, and that drop has occurred only recently. I seriously doubt the impact of those downturns underpinning our local economy has been priced into the Houston RE market to any significant extent. RE problems will not be limited to subprime loans by any stretch IMO.

]]> By: EMME http://swamplot.com/those-wet-and-wild-houston-mortgages-18-percent-now-underwater-7-percent-more-still-paddling-for-air/2009-03-05/#comment-21825 EMME Sat, 07 Mar 2009 22:42:04 +0000 http://swamplot.com/?p=7037#comment-21825 EMME grows weary of all the name and label calling and wishes for a world where people can live harmoniously, whether they agree on political philosophy or not. EMME grows weary of all the name and label calling and wishes for a world where people can live harmoniously, whether they agree on political philosophy or not.

]]> By: Eric http://swamplot.com/those-wet-and-wild-houston-mortgages-18-percent-now-underwater-7-percent-more-still-paddling-for-air/2009-03-05/#comment-21815 Eric Sat, 07 Mar 2009 21:08:50 +0000 http://swamplot.com/?p=7037#comment-21815 Wait, get rid of cars, or the people in them? Just kidding. My point: If all accidents are caused by cars that are exploding left and right and with increasing frequency, then, yes, let's hitch up to old Bessie. Anything built on financing is a house of cards. Wait, get rid of cars, or the people in them? Just kidding. My point: If all accidents are caused by cars that are exploding left and right and with increasing frequency, then, yes, let’s hitch up to old Bessie. Anything built on financing is a house of cards.

]]> By: EMME http://swamplot.com/those-wet-and-wild-houston-mortgages-18-percent-now-underwater-7-percent-more-still-paddling-for-air/2009-03-05/#comment-21809 EMME Sat, 07 Mar 2009 19:10:56 +0000 http://swamplot.com/?p=7037#comment-21809 Thanks Erion. I would include Fox News (in fact put it in front of the list) with the world going to hell in a handbasket waste of time. Thanks Erion. I would include Fox News (in fact put it in front of the list) with the world going to hell in a handbasket waste of time.

]]> By: Erion Shehaj http://swamplot.com/those-wet-and-wild-houston-mortgages-18-percent-now-underwater-7-percent-more-still-paddling-for-air/2009-03-05/#comment-21807 Erion Shehaj Sat, 07 Mar 2009 18:54:00 +0000 http://swamplot.com/?p=7037#comment-21807 > Current events much? We’re turning into Zimbabwe at a breathtaking rate. Not even close. If Zimbabwe woke up tomorrow to 8% unemployment and 3% inflation, they would declare it a national holiday and people would be dancing on the street. > My family has worked very hard, saved, paid cash for everything we’ve bought–cars, homes, and airplanes. We have bought only what we could afford to buy, to maintain and enjoy, and afford to lose. Life has been simpler that way, without loans or insurance. Agreed. Agreed. And Agreed. But to say that the reason we're in this mess is because there is such a thing as mortgages and insurance is at best a freakish overreaction. That's like saying: "All accidents are caused from people in cars, so we should get rid of them and go back to horses" If common sense financial principles are applied and <strong>enforced</strong> (operative word) we would not be in this mess either. My advice: Turn off the news. Watch something else: A movie, a ballgame, hell even Poker on TV if that's your thing. Participating in the current 24 hr cycle of "the world is going to hell in a handbasket" also known as CNN is a waste of time, at best. > Current events much? We’re turning into Zimbabwe at a breathtaking rate.

Not even close. If Zimbabwe woke up tomorrow to 8% unemployment and 3% inflation, they would declare it a national holiday and people would be dancing on the street.

> My family has worked very hard, saved, paid cash for everything we’ve bought–cars, homes, and airplanes. We have bought only what we could afford to buy, to maintain and enjoy, and afford to lose. Life has been simpler that way, without loans or insurance.

Agreed. Agreed. And Agreed.

But to say that the reason we’re in this mess is because there is such a thing as mortgages and insurance is at best a freakish overreaction. That’s like saying:

“All accidents are caused from people in cars, so we should get rid of them and go back to horses”

If common sense financial principles are applied and enforced (operative word) we would not be in this mess either.

My advice: Turn off the news. Watch something else: A movie, a ballgame, hell even Poker on TV if that’s your thing. Participating in the current 24 hr cycle of “the world is going to hell in a handbasket” also known as CNN is a waste of time, at best.

]]> By: Eric http://swamplot.com/those-wet-and-wild-houston-mortgages-18-percent-now-underwater-7-percent-more-still-paddling-for-air/2009-03-05/#comment-21805 Eric Sat, 07 Mar 2009 18:22:32 +0000 http://swamplot.com/?p=7037#comment-21805 Redundant, yes, and failed. All of the aircraft manufacturers are bankrupt, or nearly. I use currency-- we'll see how much longer that holds up. Redundant, yes, and failed. All of the aircraft manufacturers are bankrupt, or nearly. I use currency– we’ll see how much longer that holds up.

]]> By: jt http://swamplot.com/those-wet-and-wild-houston-mortgages-18-percent-now-underwater-7-percent-more-still-paddling-for-air/2009-03-05/#comment-21802 jt Sat, 07 Mar 2009 18:03:35 +0000 http://swamplot.com/?p=7037#comment-21802 Eric, So because you personally pay cash for stuff you think the entire financial system is redundant? Do you conduct all of your transactions only within some closed gold-and-barter bubble? How do you think your family's airplane got built, or invented in the first place? BTW, I don't like the graphic. It's hard to tease out the effect of state size on total negative equity numbers. So you can tell NV and AZ are doing relatively badly, and NY must be doing relatively well, but only with some effort. I'm not normally such a curmudgeon... jt Eric,

So because you personally pay cash for stuff you think the entire financial system is redundant? Do you conduct all of your transactions only within some closed gold-and-barter bubble? How do you think your family’s airplane got built, or invented in the first place?

BTW, I don’t like the graphic. It’s hard to tease out the effect of state size on total negative equity numbers. So you can tell NV and AZ are doing relatively badly, and NY must be doing relatively well, but only with some effort.

I’m not normally such a curmudgeon…

jt

]]> By: Eric http://swamplot.com/those-wet-and-wild-houston-mortgages-18-percent-now-underwater-7-percent-more-still-paddling-for-air/2009-03-05/#comment-21793 Eric Sat, 07 Mar 2009 15:44:22 +0000 http://swamplot.com/?p=7037#comment-21793 Current events much? We're turning into Zimbabwe at a breathtaking rate. I heard the President of the United (Socialist?) States of America point out 451,000,000 jobs have been lost since this recession began, as justification for his "We need to do something BIG, NOW, even if it's WRONG" program-- which includes the second largest redistribution of wealth the world has seen. My family has worked very hard, saved, paid cash for everything we've bought--cars, homes, and airplanes. We have bought only what we could afford to buy, to maintain and enjoy, and afford to lose. Life has been simpler that way, without loans or insurance (except the minima required by law)(ever wonder why the lawyers require insurance?). I wonder if my children, or grandchildren will be able to live the way we have, or just what they will be reduced to. Finance and insurance industries inflate the cost and make needlessly complex every commercial transaction. What value do they add? They are the destruction of the health care industry, of_________... They are the entropic yin to the plaintiff bar's yang. So much greed has led us to this fix we are in. Feel that poverty trickling up, comrades. Current events much? We’re turning into Zimbabwe at a breathtaking rate. I heard the President of the United (Socialist?) States of America point out 451,000,000 jobs have been lost since this recession began, as justification for his “We need to do something BIG, NOW, even if it’s WRONG” program– which includes the second largest redistribution of wealth the world has seen.

My family has worked very hard, saved, paid cash for everything we’ve bought–cars, homes, and airplanes. We have bought only what we could afford to buy, to maintain and enjoy, and afford to lose. Life has been simpler that way, without loans or insurance (except the minima required by law)(ever wonder why the lawyers require insurance?). I wonder if my children, or grandchildren will be able to live the way we have, or just what they will be reduced to.

Finance and insurance industries inflate the cost and make needlessly complex every commercial transaction. What value do they add? They are the destruction of the health care industry, of_________… They are the entropic yin to the plaintiff bar’s yang. So much greed has led us to this fix we are in. Feel that poverty trickling up, comrades.

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