ace, I avoid staying in a stock or an option position for more than a day or two,
for the reasons that you stated, but IMO, that will change as the scope of the unwinding of the overall economy that the decline in residential real estate valuations will be the catalyst for, picks up "mo" that is the mirror opposite of the upside "energy" that drove prices to "bubble" levels, and minimum borrowing qualification criteria to ridiculously lax levels.....
jorgelito, what makes you confident that you will have an income that will put you in a position to take advantage of lower housing prices, with news like this?
No one knows what will happen, because it says that it is "unprecedented". The clue that we do have, is that current homeowners ("bag holders"???) have never been more leveraged....more susceptible to bad consequences from even small housing price drops...
Quote:
http://www.baltimoresun.com/business...ness-headlines
...."The subprime mortgage market has taken a beating because of an unexpected surge in defaults," said Patrick Newport, an economist at Global Insight. He predicted that home prices would fall in 2007, making it the first annual decline on record....
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...and, this is just out in the last hour....did anyone else know that cancellations of contracts for "new home" sales, <a href="http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_baum&sid=aFll0Y8wJuVQ">are never adjusted</a> into previously released date.....making this even more optimistic than it actually is....if that is even possible to consider:
Quote:
http://www.marketwatch.com/news/stor...B0BA246F1DE%7D
By Rex Nutting, MarketWatch
Last Update: 10:25 AM ET Mar 26, 2007
WASHINGTON (MarketWatch) -- Sales of newly constructed U.S. housing unexpectedly slowed again in February, falling 3.9% to a seasonally adjusted annual rate of 848,000, the lowest level since June 2000, the Commerce Department reported Monday.....
.....Sales are reported when a contract is signed, not at the closing of the sale. Builders have reported a large increase in cancellations in recent months. Since cancellations are not reflected in the government data, reported sales are likely overstated.......
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....so....it could actually be as bad as 30 percent lower than reported, with even higher inventories...and more unsold units nearing completion....and consider that these numbers are not yet affected by new lending qualifications restrictions, or by an increase in the unemployment rate, or by a huge rise in foreclosures...it's coming....count on it....or even by sellers who have lost hope because this year's "selling season" is over.....
....and there have been no significant layoffs in the homebuilding, realty, appraisal, home inspection, landscaping, building supplies employment sectors, or even a reported downturn in their activity levels....and it will all weigh on the economy...with a delayed and then sustained ripple effect. Check out reports on morgage industry employment impact in Orange County...and, how many commercial office spaces will stop producing revenue.....as this picks up "steam"?:
Quote:
http://www.cnbc.com/id/17759945
By CNBC.com Staff | 23 Mar 2007 | 05:24 PM
CNBC's Scott Cohn reports on how the lending mess is playing out in Orange County, where the mortgage product was born.
.......CNBC's Diana Olick and Scott Cohn have more on the story.
One in five jobs in Orange County is tied to the mortgage industry. No wonder then, that unemployment has ticked up half of a percentage point recently. Foreclosures in January were up 22% from a year ago.........
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