Recently in Real Estate Category

After a very long hiatus I present to my readers my first Rapidminer 5.0 video tutorial.  Its just a quick 10 min introduction to the GUI and data import functions of Rapidminer 5.0.  You're gonna like the way it looks!

Video download link: Rapidminer 5.0 Video Tutorial #1 PS: I'm glad to be back guys. Leave me a comment if you want more, please stroke my fragile ego. LOL. PPS: My Youtube Channel is here: Neuralmarkettrends1 PPPS: For those who want to follow along, see the original GE.xls file.

My friend at Paper Economy is testing out his new data visualization engine and he pulled together a scary chart of Year over Year house prices in Phoenix, Arizona. Can you believe it? We are below 2000 prices?

 

 

This is truly a frightening chart and I suspect that real estate prices could go even lower in Arizona, and the rest of the country for that matter, if people continue to get laid off.  This would confirm my observation from earlier this year about real estate and equity prices having further to fall.

As I wrote in my Feb 2009 post,  "Where's the Market Bottom," I believe the real estate and equity markets have more downside coming.  Now someone's IYR model , is setting up for a possible test of its March lows. Hehehe. I built a fast IYR model myself using Stock Neuromaster to see if I can match his "box" model.  My model show a short signal generated on 4/1/09 for 4/2's open, which remains short this morning. Overall I'm hoping that we see a test of the equity market bottom and maybe even a break of it, I want to go balls to wall long with the remaining 401k monies have I have. Only time will tell what happens.

I'm still alive but been extremely busy with work and some old REI acquaintances. The rumor is that my REI friends have overseas investors interested in acquiring NJ property and they want me to be a part of this. So I've been busy poring over the latest foreclosure data and I'm utterly shocked by the damage that's out there. Within a six town radius of where I live (secret location), there are over 600 new default filings in the last 3 months alone. Stalwart places like Bergen County are mushrooming to levels I've never seen before when I was an active foreclosure investor. Back in the day I never went near Bergen County because the filings were so pitiful and the property would be snapped up in seconds by the retail market. Now its a different story, from 320 filings to over 2300 in four short years. Part of me wants to organize the investors and start buying but the other part of my is scared shitless right now because its really bad and could get worse...

I roamed around a lot when I lived in New Mexico and I came across several ghost towns. I loved finding them out in the middle of nowhere and poking around in them. If I had more time I would probably researched the reason why they were abandoned but we didn't stay too long at them. Usually they were on private property and had big "KEEP OUT" signs and we had to always watched out for a Rancher with a big rifle. Still though, the sign and the lure of ghost town adventure didn't deter my friend Kevin or me! I mean, how could you not be deterred? I was chatting with the Chairman yesterday when he sent me this link from Bloomberg about the rise in house inventories and how they're at the same level since 1973.

In January 1973, the number of finished new homes for sale was 97,000, when the U.S. population was about 212 million, according to the U.S. Census Bureau. In December 2007, 197,000 completed homes were on the market and in January 2008 there were 195,000. The current population is 303.5 million.

It seems that back in 1973, the % inventory to the US population was 0.05% and today its 0.06%. I really don't know if these numbers are a cause for all the calamity the Bloomberg article alludes too but what it does mean is that home prices probably have further to fall. It's just a matter of time till we work off the inventory and hit bottom and I think we're almost there.

Ugly posted this interesting LA Times article his Del.icio.us link role a few days ago. It seems that people with upside down mortgages (where your mortgage is greater than the value of your house) are voluntarily letting their properties be foreclosed on.

A homeowner who can't sell his house tells the L.A.Times, "Foreclose me. ... I'll live in the house for free for 12 months, and I'll save my money and I'll move on." Banks and lenders fear this kind of thinking -- that walking away from a house could be the smart economic move -- appears to be on the rise. Wachovia, in a conference call yesterday, warned investors that increasing numbers of homeowners are walking away from their homes by choice: "... people that have otherwise had the capacity to pay, but have basically just decided not to because they feel like they've lost equity, value in their properties..."

It sure makes business sense to me why homeowners are doing this, cut your losses and get out but is it the right thing to do? I don't know if its right or wrong but I do know that the Banks need to start being more accommodative to all borrowers now. Lending has gotten so tight that our mortgage company wants to charge us $5,000 just to refinance our investment property, and we have great credit! With all this voluntary foreclosure activity, is it time to be a foreclosure vulture capitalist? Not yet, wait till the banks are choking on supply.