Many layoffs coming in housing, economists say

[w¡n9Nµ7 §£@¥€r 123]

The home-building industry collapsed in 2006, but surprisingly few workers lost their jobs, revised government data show. That could change this year, economists said.

[...]

Two economists think construction employment will plunge this year as many of the homes started last year are finished. It typically takes six months for a new home to go from the groundbreaking to the final steps of construction. The latest data show 1.26 million homes were still under construction in December.

"What it means is that we have a steeper cliff to fall off from," wrote David Rosenberg, chief North American economist for Merrill Lynch, in a research note.

The drag from housing will diminish this year, wrote Steven Wieting, an economist for Citigroup, in a research note. But despite his general optimism, Wieting believes the worst is yet to come for jobs.

"We are doubtful, however, the gross job losses tied to the housing cycle are any more than one-third complete," he wrote. He's looking for losses to "easily exceed a half million."

Rosenberg estimates that employment in residential construction will fall about 20% in 2007, or about 600,000 jobs. In essence, the number of jobs in home-building will return to 2002 levels as the pace of home building does.

http://www.marketwatch.com/news/story/many...5706815027D7%7D

[GaryC 7]

I seem to remember seeing the very same thing last year and the year before. The housing "bubble" was going to burst and a recession would follow. If they say it in enough years in a row they will finally be right. This year? Who knows.

[w¡n9Nµ7 §£@¥€r 123]

I seem to remember seeing the very same thing last year and the year before. The housing "bubble" was going to burst and a recession would follow. If they say it in enough years in a row they will finally be right. This year? Who knows.

We may not be in a recession but anyone who's been following RE knows the bubble did burst in 2006. The optimists think we'll be back in boomtown in 2007 and the pessimists... well, the pessimists are who this article is about

[Fandango 1,440]

Eh, no one can deny that the new housing mkt is having a surplus, but they're getting rid with incredible co-broke commissions and bonuses that I've never seen before.

It's a good time to sell a new const home

[Boiler 47,509]

Where I am the big problem is the number of funny mortgages, a lot of new home buyers are upsuide down as soon as they close and if they have to sell anytime soon no chance of paying back the Mortgage - Repossesion - Bankruptcy.

And of course those repossed houses have to be sold some how so that drives down the rest of area and so it goes.

Anyway around here most of the construction jobs fall into the ones Americans will not do, well for the wages they offer.

[w¡n9Nµ7 §£@¥€r 123]

Where I am the big problem is the number of funny mortgages...

Here, too. Way too many people who have negative amortization loans or did 100% financing with interest-only loans. Prices are dropping, especially in townhomes/condos (SFHs are holding up much better around here) and anyone who bought in that way in 2005 and needs to get out now is pretty much screwed.

[peejay 327]

It reminds of of Texas in the 1980's during the oil bust. People bought high just before the bust and either let it go to forclosure or sold at a loss to get out from under the notes while unemployed. The city went into negative population growth and some houses stood 1/2 finished for years as the bankruptcies mounted.

[w¡n9Nµ7 §£@¥€r 123]

It reminds of of Texas in the 1980's during the oil bust. People bought high just before the bust and either let it go to forclosure or sold at a loss to get out from under the notes while unemployed. The city went into negative population growth and some houses stood 1/2 finished for years as the bankruptcies mounted.

I actually know a few people who lived in Houston and had to declare bankruptcy because they owed too much on their homes.

[one...two...tree 2,762]

Where I am the big problem is the number of funny mortgages...

Here, too. Way too many people who have negative amortization loans or did 100% financing with interest-only loans. Prices are dropping, especially in townhomes/condos (SFHs are holding up much better around here) and anyone who bought in that way in 2005 and needs to get out now is pretty much screwed.

I'm curious when these types of mortgages came into existence and if it happened from deregulation?

[w¡n9Nµ7 §£@¥€r 123]

I'm curious when these types of mortgages came into existence and if it happened from deregulation?

They have been around for a very long time. They were not very popular until prices got so high that these loans began to represent the only way many households could bridge the affordability gap. Of course, they were lied to non-stop by the real estate industry with their bogus "prices never go down" swan song.

[one...two...tree 2,762]

I'm curious when these types of mortgages came into existence and if it happened from deregulation?

They have been around for a very long time. They were not very popular until prices got so high that these loans began to represent the only way many households could bridge the affordability gap. Of course, they were lied to non-stop by the real estate industry with their bogus "prices never go down" swan song.

The whole real estate market seems like a sham. Brokers have way too much influence on inflating housing prices when people are buying. Everyone is this country should have the opportunity to own their own home with reasonable income.

[w¡n9Nµ7 §£@¥€r 123]

The whole real estate market seems like a sham. Brokers have way too much influence on inflating housing prices when people are buying. Everyone is this country should have the opportunity to own their own home with reasonable income.

I agree that realtors are a scam. Zillow.com (or a copycat site that shows up on the scene later) is going to end up changing the game completely.

As for everyone having the opportunity to own a home, I disagree. Prices should be driven up and down by the market. The problem with the market as it stands today is that it is based on an imbalance of information. The realtors have access to MLS and the rest of us have to bow down and fork over 6% for that information. That is obscene. Free up the sources of information and let the market function without the encumbrance of realtors.

[one...two...tree 2,762]

The whole real estate market seems like a sham. Brokers have way too much influence on inflating housing prices when people are buying. Everyone is this country should have the opportunity to own their own home with reasonable income.

I agree that realtors are a scam. Zillow.com (or a copycat site that shows up on the scene later) is going to end up changing the game completely.

As for everyone having the opportunity to own a home, I disagree. Prices should be driven up and down by the market. The problem with the market as it stands today is that it is based on an imbalance of information. The realtors have access to MLS and the rest of us have to bow down and fork over 6% for that information. That is obscene. Free up the sources of information and let the market function without the encumbrance of realtors.

Appraisers determine the value of the home, but they factor in the selling price of nearby homes and the realtors will inflate the selling price as much as they can because most of them work on commission, so it takes on a snow ball effect when people are buying homes. That's the problem with leaving the value of homes entirely of the market - people will always need a home. That to me is a sham and it is why the housing market is usually the fastest way to grow capital, which in turn attracts investors.

There needs to be regulations to ensure that families with reasonable incomes have the opportunity to afford buying a home.

Edited February 8, 2007 by Steven_and_Jinky

[w¡n9Nµ7 §£@¥€r 123]

There needs to be regulations to ensure that family's with reasonable incomes have the opportunity to afford buying a home.

The only kind of regulation I'd be in favor of is regulation banning the use of "exotic mortgages" and maybe the elimination of the mortgage-interest deduction. There is a consumption aspect to home ownership (it is not purely an investment) and that needs to be stressed as well.

There have been many warnings like this one lately. Here is the latest I found:

HSBC Says Bad-Loan Charges to Exceed Analysts' Estimates by 20%

Feb. 7 (Bloomberg) -- HSBC Holdings Plc, Europe's biggest bank, said it's increasing loan-loss provisions for 2006 because mortgages to risky borrowers in the U.S. are going bad faster than the company expected only two months ago.

Provisions will be 20 percent higher than the $8.8 billion that analysts now estimate, London-based HSBC said in an e-mailed statement.

``It is clear that the level of loan-impairment provisions to be accounted for as at the end of 2006 in respect of Mortgage Services operations will be higher than is reflected in current market estimates,'' the bank said in the statement.

[Nikita2Charles 33]

I was in the market for a house and looking at some condos and townhouse, There are a lot of shams going on,

THe market was already going down and the realtors were doing ILLEGAL Stuff to keep the price HIGH. One such examples on a townhouse i was interested

The other realtor

price

$460,000. the realtor said you give us $475,000 with $15,000 Closing cost assitance, I told him we were not interested we want to buy at $460K, for the owner he's still going to get his $470,000 but since the realtor works on commission he will get a bigger cut 14,250 instead of 13800

For the owner

15000

-29,250

His net gain

$445,750

For the owner he only gets $420 extra while the realtor comes up with $450 but the bottom line the BUYER is the one that's screw because His property nice will be base on a $475K purchase instead of 460