by Calculated Risk on 2/15/2007 05:49:00 PM

DataQuick reports: Bay Area home prices edge down, slowest sales in eleven years

Home sales in the Bay Area fell for the 24th month in a row in January as prices slipped to their lowest level in a year and a half, a real estate information service reported.

A total of 6,168 new and resale houses and condos sold in the nine- county Bay Area last month. That was down 26.3 percent from a revised 8,372 in December, and down 4.1 percent from a revised 6,434 for January last year, according to DataQuick Information Systems.

A decline from December to January is normal for the season. Sales last month were the lowest for any January since 1996 when 5,504 homes were sold. The average January since 1988 has had 6,455 sales. Last month's year-over-year decline was the most moderate since March 2005 when sales fell 2.7 percent. Year-over-year sales declines peaked last July at 32.4 percent.
...
The median price paid for a Bay area home was a revised $601,000 last month, down 2.8 percent from a revised $618,000 for December, and down 1.5 percent from a revised $610,000 for January last year. Year-over-year price changes have been negative three of the last four months, ending a 57-month rise that started in December 2001. Last month's median was the lowest since $597,000 in May 2005.

by Calculated Risk on 2/15/2007 04:05:00 PM

From Bloomberg: Subprime Mortgage Bondholders to Get Earlier Warnings From S&P

Standard & Poor's said it will no longer wait for homes to be foreclosed and sold for losses before alerting investors in mortgage-backed securities that it expects to lower ratings on their bonds.

The ratings company will now consider issuing downgrade warnings based on the amount of loans that are delinquent, in foreclosure proceedings or already backed by seized property, Robert B. Pollsen, an analyst at the firm, said on a conference
call today.
...
``It is a watershed event'' because it means S&P is now actively considering downgrading bonds within their first year and has a new program to address high levels of early delinquencies, said Daniel Nigro, an asset-backed securities portfolio manager in New York at Dynamic Credit Partners ...

And it's not just subprime:

One of the bonds S&P warned about yesterday was backed by Alt A -- often called ``near prime'' -- mortgages, the firm's first warning about that type of security sold last year.
...
``In terms of performance, I'd say there are equal concerns'' about Alt A loans and subprime loans at S&P based on early delinquencies, [Ernestine Warner, an S&P analyst] said. The Alt A bond that S&P warned about was issued by Calabassas, California-based Countrywide Financial Corp., the country's top mortgage lender.

S&P also expressed concerns about home equity loans.

by Calculated Risk on 2/15/2007 02:27:00 PM

Click on graph for larger image.

The National Association of Home Builders/Wells Fargo Housing Market Index (HMI)increased from 35 in January to 40 in February, its highest level since June of 2006.

Here is the NAHB press release.

by Calculated Risk on 2/15/2007 11:12:00 AM

From the WSJ: Mortgage Hot Potatoes. Excerpts:

Efforts by major banks and Wall Street firms to unload bad U.S. housing loans are speeding up a shakeout in the subprime mortgage industry.

As more Americans fall behind on mortgage payments, Merrill Lynch & Co., J.P. Morgan Chase & Co., HSBC Holdings PLC and others are trying to force mortgage originators to buy back the same high-risk, high-return loans that the big banks eagerly bought in 2005 and 2006.

by Calculated Risk on 2/14/2007 08:09:00 PM

Rex Nutting at MarketWatch reports: Big downward revision to GDP coming

The U.S. economy was growing much slower in the fourth quarter of 2006 than the government's first estimate of 3.4%, economists say.

Instead of fairly robust 3.4% annualized growth, the government's next estimate will probably be closer to 2.2%, according to median forecast of economists surveyed by MarketWatch. Instead of bouncing back, the economy would have turned in its third quarter in a row of below-trend growth.

The first quarter also looks fairly tepid, with weak retail sales, falling homebuilding and growing signs that business investment isn't picking up the slack.

This has been discussed at MacroBlog, The Big Picture and by Nouriel Roubini.