All GLG News Analyses Filed Under: Residential Market Trends

Post-moratorium Spike Expected

March 17, 2009

Analysis by: GLG Expert Contributor

Analysis of:Rise in foreclosures 'a shock' | money.cnn.com

The extension of the current moratorium to March 31 on new assignments to Realtors for pre-listing activities on Bank-owned assets delays but does not mitigate the spike in foreclosures. Except for a week in February, the moratorium has been in effect since December in order to allow Federal and State changes to procedures for mortgage modifications to take effect. However, the forecast 2009 decline in home values nationally by an additional 10% undercuts modification efforts disincentivizing homeowners to pay even a reduced mortgage payment on a house worth less than the principal balance.  The RealtyTrac results for April through June will be materially distorted to the high side until the volume can normalize with the moratorium lift. Some Asset Managers report their current backlog of foreclsoures awaiting assignment to Realtors exceeds their total volume for 2008. Even if fully implemented, the Obama administration plan targets relief to only one in nine households. 

Just Compensation for "Illegal" Residences

March 16, 2009

Analysis by: GLG Expert Contributor

Analysis of:Property owners seek compensation over illegal Spanish apartments | www.propertywire.com

The threshold questions is: Do the property owners have legal standing to demand just compensation for the Market Value of their residences? Similarly, can the impact (stigma) of their "alleged" illegal status be excluded from consideration in evaluating their individual and/or collective market value? Assuming that both of these questions can be answered affirmatively, then it is a classic case of public taking of private property and just compensation should be the market value of the properties as of the date of determination of the government's right to demolish. Collateral issues could include relocation expenses; cost of substitution; attorney and expert witness fees and costs. Not being familiar with Eminent Domain law in Spain, these would be rather simple issues in the United States. William A. McCann, MAI Real Estate Appraiser

Mortgage application jump meaningless in resurgence of the home market.

March 16, 2009

Analysis by: GLG Expert Contributor

Analysis of:Mortgage applications jump 11% | money.cnn.com

The 11% increase was fueled by first time buyers and the refinancing of performing mortgages. It is a fact that first time buyers are in the marketplace taking advantage of market incentives so are home owners with good credit refinancing existing mortgages. So what does the 11% jump signify? My opinion  is that this jump does not directly help the lagging home market. The article is touting Mr. Oboma's programs as the reason for this activity but it's another allusion without significant clarity to directly point to a change in the lagging home market or even justify Mr. Oboma's programs just cheerleading without a score.

Gee, an inverse relationship between cost and demand; how novel

March 16, 2009

Analysis by: GLG Expert Contributor

Analysis of:Mortgage applications jump 11% | money.cnn.com

The President, irrespective whether you are in agreement or not with recent Government actions, had it right when he recently suggested there is too much emphasis on daily announcements of varied statistical releases (speaking on March 12 before the Business Roundtable - source WSJ): "We live in such a rapid-fire information-rich environment that people’s attention spans go like this. And that makes for volatility in confidence. A smidgen of good news, and suddenly everything is doing great. A little bit of bad news — oh, we’re down in the dumps. And I am obviously an object of this constantly varying assessment. (Laughter.) I’m the Object-in-Chief of this varying assessment. (Laughter.)"

Avoid Creating REO Properties - Logical to Wait for Inevitable Return of Economy

March 13, 2009

Analysis by: GLG Expert Contributor

Analysis of:Citi: Mortgage break to unemployed | money.cnn.com

Citi offers a win-win solution to keep their borrowers in their homes while they find employment. Sound thinking to provide a workout solution that gives the bank and the borrower time for the economy to finish its corrections. When jobs return, the bank has a solid paying customer relationship and they have avoided the costly scenario of increasing their Real Estate Owned REO portfolio. Nothing is really gained from foreclosure when price corrections continue to devalue the REO properties and the bank isn't receiving any debt service. Best to take half a loaf and wait out the crisis. It serves all involved with a solution that doesn't add to the problems of the bank and borrower.

Kenneth EganBroker and RealtorRe/Max All Cities Realty

Yun is a Joke

March 11, 2009

Analysis of:Pending home sales hit record low | money.cnn.com

NAR pays his salary.  Yun has not integrity, or is just plain out of touch with reality.  Yesterday Bernacke said the recession will possibly end by the end of this year.  These guys should form a club. Perhaps economists do not ever take courses in reality.

Buyers Trying to Predict the Bottom

March 9, 2009

Analysis by: GLG Expert Contributor

Analysis of:Home Sales Plunge Again As Buyers Remain Hesitant | www.cnbc.com

Will there be another major price correction? Will we see Jumbo Loans (>$750K) @ 4%? What is the right initial offer to start a negotiation with a seller?    

First Time Home Buyers Will Return

March 9, 2009

Analysis by: GLG Expert Contributor

Analysis of:Home Sales Plunge Again As Buyers Remain Hesitant | www.cnbc.com

Low Cost Financing will be the norm for the foreseeable future Inventory is still staggeringly high Eager Sellers  will conisder any offer, just want a live body to talk to  negotiate with    

John KilpatrickChief Executive OfficerGREENFIELD ADVISORS

Why this housing recession is a bit different

March 9, 2009

Analysis of:Pending home sales hit record low | money.cnn.com

1.  Prior post-war recessions were not accompanied by nominal housing price declines 2.  This leads to fewer homes on the market -- in many cases due to "paper" holding losses on homes that otherwise would transact. 2.  There is a massive liquidity preference at work, with households paying down debt and retaining cash.

John KilpatrickChief Executive OfficerGREENFIELD ADVISORS

The Devil's in the Details

March 9, 2009

Analysis of:Citi: Mortgage break to unemployed | money.cnn.com

1.  Is this a real interest rate reduction -- either temporary or permanent -- or a big negative amortization? 2.  How will this affect homeowners credit reports and ratings? 3.  Does this apply only to CITI-owned mortgages, or also to mortgages serviced by CITI but owned by institutions and other investors?

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