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Banned
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Originally Posted by The_Jazz
Host, I find this very interesting from a professional perspective since residential construction currently accounts for about 45% of my income. While it's certainly true that the housing bubble has burst in certain places, what's true about politics - that it's all local - is true about real estate. There are current housing booms in 5 major cities that I deal with on a daily basis that aren't showing any signs of slowing down appreciably. Las Vegas is the most obvious one, especially for condos on the Strip.
That said, I think that you've drawn too narrow a window for a look at the fiscal health of the country. While I agree that the economy could be heading for a downturn, I disagree that the lending standards and housing boom are the cause. If we do see a recession, I think that it would be a minor one at best but the timing would be absolutely crucial for the 2008 election season. We've already seen how foreign regulations can affect our stock market, but the trends that I see in the industrial manufacturing arena don't really lend themselves towards a major recession around the corner. Sales on big-ticket consumer products are going up, and that's my most accurate assessment of national economic health. People are buying more RV's than they did last year, and that's been an excellent barometer for me for the past 10 years.
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It's a big country, and only in three markets have realty sales held their own, but with price reductions:
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http://www.cnbc.com/id/23705117
There Are Pockets of Strength in The Housing Slump
By Reuters | 19 Mar 2008 | 09:39 AM ET
.....While Ross and surrounding Marin County may be a special case, a report last month by S&P/Case-Shiller showed that three metropolitan areas posted modest gains in home prices last year -- Seattle; Portland, Oregon; and Charlotte, North Carolina.
Both Charlotte, a major financial center, and Seattle, a high-tech hub, have low unemployment rates and all three are seen as desirable places to live.
But even in those three markets, average home prices declined in December from November, leading home owners and real estate agents to hope declines will be small.
Seattle's home prices may give up some gains -- but not much, because "they weren't as far out of kilter as in other places," said Glenn Crellin, director of the Washington Center for Real Estate. .....
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Even in 1930, at the beginning of the Great Depression, the Empire State Building still got built....not this time:
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http://news.rgj.com/apps/pbcs.dll/ar...80329024/0/ENT
Wall Street Journal: Vegas tower project in trouble
Staff Report • March 29, 2008
One of the biggest projects planned for the Las Vegas Strip appears to be falling apart, the Wall Street Journal is reporting today.
"The site of what was supposed to be the tallest tower in Las Vegas, and among the tallest in the U.S. at 1,064 feet, is now for sale," the Journal reports. "Las Vegas developers and Wall Street securities analysts assume the proposed $5 billion project, which was scheduled to open in 2011, is dead."
Last year, Australian gambling company Crown Ltd. and Texas developer Christopher Milam teamed with private-equity firm York Capital Management LLC to build a casino complex and 5,000-room hotel on the Strip, according to the Journal.
<h3>Overall in Las Vegas, 23,000 hotel or hotel-condo-rooms planned have been canceled or suspended recently, the Journal reports,</h3> citing information from Deutsche Bank AG casino anaylst Bill Lerner.
The economic slowdown and credit crunch are blamed.
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The author of this article is talking up the job market in Denver, not in Las Vegas....it sucks there:
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http://www.forbes.com/realestate/200...ealestate.html
Housing Trends
America's Riskiest Real Estate Markets
Matt Woolsey, 03.31.08, 10:30 AM ET
In Pictures: America's Riskiest Real Estate Markets
There's roulette and there's skydiving. Then there's investing in Detroit and Cleveland real estate.
That's especially risky because those markets are in freefall. Lenders have fled, foreclosures are on the rise, homes aren't selling and local economies have stalled.
Given the state of the country's housing market, it wasn't hard to find others like them. To do so, Forbes.com looked at the country's 40 largest metros and combined data on foreclosures, from RealtyTrac, a foreclosure listing service; job growth from the Bureau of Labor Statistics; transaction volume data from Radar Logic, a New York real estate research firm; and vacancy and current inventory rates from the U.S. Census Bureau and ZipRealty, an aggregator of multiple listing service data. .....
.....Not as fortunate are hard-hit foreclosure markets such as Denver, which saw 50,000 foreclosure filings last year, according to RealtyTrac, which comes out to a 2.6% foreclosure rate, ninth in the nation behind the likes of Las Vegas and Detroit. Here, GSE loan limits won't change to boost liquidity, though at the beginning of this year the local economy had added jobs at a rate of 2%, which is triple the national average, according to the Bureau of Labor Statistics. ......
http://www.forbes.com/2008/03/31/hom...hisSpeed=20000
In Pictures: America's Riskiest Real Estate Markets
Read the full story Matt Woolsey
6. Las Vegas, Nev.
In 2004 and 2005, Vegas lead the nation in jobs added. But after the housing bubble popped, the job growth--driven largely by construction--stopped, and has been flat since March 2006. The true danger here, besides the foreclosures and unsold homes is that the economy won't grow enough to burn off the excess inventory and that as rates reset there are going to be a lot of people with mortgages, not jobs....
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...and current RV sales environment:
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http://www.forbes.com/feeds/ap/2008/...ap4808851.html
Associated Press
Analyst Cuts Rating on Winnebago
Associated Press 03.24.08, 7:20 PM ET
NEW YORK -
Shares of Winnebago Industries Inc. climbed Monday along with the broader market even as an analyst downgraded the recreational vehicle maker, citing its disappointing second-quarter results.
Late last week Winnebago reported its earnings tumbled 67 percent on weak RV sales. The Forest City, Iowa-based company also said it cut about 300 jobs, or 9 percent, of its work force.
BB&T Capital Markets analyst John Diffendal said in a client note that Winnebago's quarter was one to forget, with "simply not much good to report.".....
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Quote:
http://www.hometownannapolis.com/cgi...8/03_27-29/BUS
As economy fizzles, business picks up for RV rental company
KATIE ARCIERI Staff Writer
Published March 27, 2008
....As the economy slows, RV sales typically follow suit. According to the Recreation Vehicle Industry Association in Virginia, RV shipments to dealers declined 9.5 percent last year after five consecutive years of record growth. Kevin Broom, association spokesman, said the industry is typically a "bellwether" for economic downturns.
"When shipments go down, it usually precedes a recession," he said.
Meanwhile the RV rental industry is growing, he said.....
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Quote:
http://www.bloomberg.com/apps/news?p...Q_g&refer=home
U.S. Auto Sales Likely Fell in March Amid Luxury Drop (Update2)
By Greg Bensinger
March 31 (Bloomberg) -- Automobile sales in the U.S. probably fell for a fifth straight month in March amid a drop in demand for luxury vehicles such as Honda Motor Co.'s Acura and General Motors Corp.'s Saab.
Orders for premium brands declined by at least 10 percent, estimated Jesse Toprak, an Edmunds.com analyst in Santa Monica, California. Overall sales for GM, Ford Motor Co. and Chrysler LLC probably slid by at least 5.5 percent from a year earlier, according to the average estimate of nine analysts in a Bloomberg survey.
Sales by automakers' luxury divisions -- broadly defined by analysts as those selling autos for $40,000 aimed at the most- affluent consumers -- were down 12 percent in February from a year earlier as the impact of the credit crunch and declining home prices spread.
``It's largely a myth that the luxury market holds up better throughout the economic cycle than the rest of the market,'' said George Pipas, chief sales analyst at Dearborn, Michigan-based Ford. ``Ask the guys on Wall Street if their bonuses are as big as they were in years past.''
Ford's Lincoln, Volvo, Jaguar and Land Rover brands are among 13 luxury marques that recorded sales shortfalls in the first two months of the year.
The analysts' estimates for the month account for two fewer selling days than in March 2007. Bloomberg and some automakers use unadjusted percentage comparisons, which would be about 8 percentage points lower than the analysts'.
Lowest Since 2005
The industry's annualized sales rate probably fell to 15.1 million cars and light trucks in March, which would be the lowest since October 2005, based on a survey of 19 analysts and economists. That compares with 16.3 million a year earlier.
Automakers release March results tomorrow.
U.S. auto sales fell 5.4 percent in January and February, and may drop to their lowest total since 1998 this year after a 2.5 percent tumble in 2007.
The average estimate among the analysts surveyed by Bloomberg is for a 12 percent decline this month at Chrysler, 9.7 percent at Ford and 5.5 percent at GM.
Among the biggest Japanese automakers, Toyota Motor Corp.'s sales may have dropped 5 percent and Nissan Motor Co.'s 2 percent, while Honda's may have risen 4 percent, New York-based Deutsche Bank analyst Rod Lache said
Luxury brands account for about one in 10 auto sales in the U.S. Of 18 luxury brands, only five -- GM's Cadillac, Nissan's Infiniti, Fiat SpA's Maserati, Daimler AG's Mercedes-Benz and Bayerische Motoren Werke AG's Rolls Royce -- posted higher sales in January and February. ....
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Unemployment has not had any impact yet.....two predictions, five years from now, all of this year will be considered part of an era of economic depression in the US. There will be agreement on this board, much more than there is now....that we are in a depression, no later than one calendar year from now. Signs will be unemployment between six and severn percent, gasoline at the pump selling at less than $2.25 per gallon in areas where it is $3.15/gal now...
China's principle stock exchange action is predictive of less petroleum consumption from China until China finds export markets to soak up merchandise intended for shipment to the US.....
I doubt the Shanghai exchange would be down half as much if they were not as concerned as they are there about the prospects for US demand for the goods that they export:
<img src="http://chart.finance.yahoo.com/c/1y/0/000001.ss">
There has been a lot of whining in the US lately about short sellers and put options traders pushing down US stock prices because of their "artificial" selling of stocks....China does not permit short selling of stocks, and does not have stock futures options traded on their exchanges, so....the decline in the US has nothing to do with manipulation, if China's chart is an indicator of what a market without "shorts" and "put buyers" looks like.
..two more major investment banks will end up like Bear Stearns , or worse...filing BK, and one of the four major commercial banks, probably Citi Corp or Wells Fargo, will have a stock price under $5.00. Fannie or Freddie or both will also see their stock selling under $5.00.
The Dow 30 (DJIA) average will be below 9000, sometime during April, 2009, and the S&P 500 index will fall below 1000, before April 30, 2009.
There will be talk that the Fed is becoming more concerned about fighting deflation, than inflation....not that it has ever been concerned about inflation, it lowered the key short term interest rate 2 full pts. in the past month.
Last edited by host; 03-31-2008 at 11:11 PM..
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