Realty Trac Outlook - More Foreclosures Ahead

Dear Friends,

Wondering what is the current Home Foreclosures' situation now that the economy is supposed to be in the "economic recovery phase" as some have claimed?

On 13th January 2010, Wall Street Journal's Dawn Wotapka interviewed Realty Trac's Rick Sharga for his opinion. Realty Trac is the key body in the US that tracks foreclosure statistics. Rick's outlook in a nutshell - More Foreclosures Ahead.

Best wishes,

Ooi

US Commercial Real Estate - Next to Get Hit?

Dear Friends,

A good summary of the Real Estate Situation in the US from Wall Street Journal's Alex Frangos. Is the US Commercial Real Estate Industry the next to get hit by the economic downturn?

Best wishes,

Ooi

US Housing Situation Worsening

Dear Friends,

It would seem, based on this NBC Interview of CNBC's Erin Burnett, that the Housing Situation is worsening, and housing prices broke down further.

Best wishes,

Ooi Hun Pin

US Properties at US$250k to US$300k

Dear Friends,

Want to buy a nice property? What can US$250,000 to US$300,000 get you today? Check it out.

Best wishes,

Ooi

US$100 for a House with Land?

Dear Friends,

Some of you are probably thinking, "All of you Doomsayers, and Media are just sensationalizing the situation. Are you sure it's as bad as you say it is?"

Well, watch this video clip from MSNBC and make up your own mind. Can you really buy a House (4 Bedrooms) with Land for a mere US$100?

It's a beautiful house which for more than 2 years, it couldn't be sold, and thus, the owners are actually raffling (lottery) the house off, i.e. you buy a lottery ticket for US$100, and if you are lucky, you may just get the house for that price.

That's how creative people are becoming, to sell their house, even nice houses like the one in the video. Very sad. Heart breaking, but true.

Necessity is the Mother of Invention. As Hannibal said, "We'll either find a way, or make one."

Best wishes,

Ooi

WSJ - Home Auctions Find Few Buyers

Dear Friends,

This is a very important situation to consider if you intend to invest in properties. There is a significant gap between what the banks want in auction prices and what buyers are willing to pay, resulting in only 3 properties sold, out of 23 properties auctioned in this video.

Usually, there will come a time when the sellers will decide that any amount is better than not getting the sale done, and this will result in severe "Distressed Selling", which will be the last phase in a Property Market Cycle. However, the last phase may last for some time, if and when it happens. So, do be careful, when you invest in properties today.

Best wishes,

Ooi

Dear Friends,

Here are three Wall Street Journal Video Clips that summarize the Real Estate situation in the US today.

The first video clip brings news of continued record plunges in Home Prices.

This 2nd Video Clip from Wall Street Journal explains what the US Government, mainly the FDIC is doing to help Slow Foreclosures, and whether it is working.

This 3rd and last video clip from Wall Street Journal attempts to explain "What the Housing Bottom Will Look Like?"

Best wishes,

Ooi

Housing Situation - IMF Perspective

Dear Friends,

In the video clip, Advisor to IMF Research Department, Mr. Prakash Loungani. states that in general, a Housing Upturn Cycle lasts about 6 years, with prices rising by about 45%, while in the Housing Downturn Cycle, it usually lasts 4 years, and prices drop by about 25%.

Right now, house prices in US have dropped by 25 % on average, depending on the areas we are looking at. However, before you rush to buy, do invest some time to listen to Professor Roubini, (in my earlier blog) who is of the opinion that housing prices will correct by 40% this time around.

In my opinion and experience, Housing Prices have never gone any where without the stock market having gone up substantially first, and the Unemployment Rate usually comes down. in the process Both these factors add to the liquidity and wealth of the general public, and with this new found wealth, only then will people start to think about longer term financial commitments like properties.

There is no hurry to buy any property at this stage. Watch out for the US Unemployment figures to drop first, and the US Housing Prices to stabilize. The distress selling of properties is expected to continue for another 6 months to a year, at the very least. In any case, the key indicators are that

• the US Housing Mortgage Defaults will have to slow down drastically,
  
• before the actual Mortgage Distress Selling starts to slow down.

I will try to get some data on these indicators and monitor them for the appropriate strategic timing to first, buy stocks, and make a good return, and then, eventually, move into properties, at the later stage of the Positive Sum Game in the Economy.

Three key areas in US are worth monitoring for price stability, i.e. Los Angeles (California,) Las Vegas (Nevada) and Miami (Florida). These are the hardest hit cities / states in the US, but they are also the darling stars of the housing speculative bubble a few years ago. If these areas are not recovering, other areas' property prices will not go very far from where they are today, even though they have been less hit by the housing crisis.

Best wishes,

Ooi

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