US: Mike Morgan's Real Estate and Housing Industry Outlook

Green_Bear · October 1, 2007, 9:07pm

When I first spoke about negative sales more than a year ago I was the butt of many jokes. I have the last laugh, and I am going to make it a full belly laugh. Analysts like Kim, Oppenheim, Whelan and Zelman refused to leave their plush offices and homes. They went on builder sponsored tours instead of ground zero tours in the trenches. They saw what they wanted to see. Many analysts had to balance banking relationships, and we know what that has led to. Now it is very clear that most builders are experiencing negative sales in communities throughout the country. Negative sales are what you see when you have more cancellations than you have sales. But that is just one color of the nightmare I am going to paint . . . and have been painting for three years now.

The deterioration of the housing markets over the past six week has been devastating. I really don’t care what we hear on the conference calls this week, because I’m here to tell you from ground zero, it is much worse than anyone has discussed, and it is going to get far worse than any of the builders wants to admit.

Of the top five builders, maybe two will make it through this crash. But maybe just one. And here’s why. >>>>

Real Estate and Housing Industry Outlook
treasure-coast.us/weeklyupdate09-23-07

whizzbang · October 1, 2007, 11:12pm

I was wonder where he had got too! Those are good reports.

FrankenFish · October 2, 2007, 1:51pm

I can’t tell you how dreadful things are in Florida right now as the credit crunch puts more pressure on an already crashing market. I just had a quick look at prices in my old neighborhood and was shocked at the prices. Here is a quick history of homes in the development.

Spring 2005 - House could have sold quickly for $220,000

Prices held steady through spring 2006

Summer 2006 - $210,000

Fall 2006 - $200,000

Winter 2006 - $190,000

Spring 2007 - $175,000

Summer 2007 - $160,000

Today - House listed at $139,000 (same as 2003 prices)

The funny thing is, there are still people holding out trying to get $220,000 for their house and have been listed for nearly two years. I think current prices will return to year 2000 levels at below $100,000. Start putting together your vulture funds, because cash will be king in the summer of 2009!