Mr. Mortgage Refines His Outlook

Ironically, if you've checked out his site lately, Mr. Mortgage is figuratively homeless for the next coupla weeks. Updates are available by email, once one signs up.

In his latest missive, there are at least several choice tidbits well worth pondering:

CA Jan 2009 home sales fell 22.1% from Dec and were at the lowest level years. The median price hit $224k, down 10% from last month and 53% from the peak. 60.4% of total sales came from the foreclosure stock. This is now a categorical wipeout.

Next, is for the mid to upper end homes to follow in expeditious fashion accelerating the Alt-A, Pay Option, Jumbo Prime and Prime Implosion. This will make the ‘Subprime Implosion’ look like a walk in the park.

Are we running out of buyers? Where will they come from? Homeownership going into this crisis was at an all-time high, credit is tight and the all-important market-moving move-up buyer is gone. Prices are falling so fast and rents closely behind that we could conceivably see a default and foreclosure crisis among investors who bought foreclosures too early thinking they were getting a good deal a year ago. The investor today can rent the home for much less than the one who bought nine-months ago putting pressure on past buyers.

Note to potential buyers of average to nicer houses: as previously mentioned in "But in the Nicer Neighborhoods," end of this year and beginning of next oughter be interesting times.