The View from Here, February 2008

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The View from Here, February 2008

Wow-

I hear there's another wave of writedowns in the offing. That would be unfortunate. I can't see it coming from more foreclosures, but rather from the compouding effects on both the investment banks and the insurers....Most people think this is the impact of September/Octobers delinquency rate, and if that's the case, this all wont be over until well into the Summer (height of the resets is January 08) With the freeze in effect, and other government intervention, who knows. It really is like a Hail Mary pass at the moment isn't it?

I read this week also, that there were 8.8 million people who were going to be helped out by our government's latest mortgage bailout, and that this number represented only 10% of those who were considered underwater. (Owe more on their house than it's worth.)

Now that number scares me. 88 million people are underwater in their homes? Impossible. That's got to be like 40-50% of the entire home ownership in America......If this is the magnitude of the problem, it looks completely different, but not what you'd first expect. It's kind of like "home owner mobility lockdown".....(i.e. It's cheaper to stay put than it is to move and take the bankruptcy.)

Even with all the recent shenanigans in Hood River Real Estate, a majority of the home owners are still sitting on equity (unless they refinanced and took money out)So once again, Hood River is not too hot, not to cold, and in playing the long game, looks pretty good overall.

That, combined with rising value in resource lands, makes for a decent spring.

I cannot wait until I can stop writing about the Sup-Prime Mortgage market.......

See you next month. I'm still bullish on the Market, but my timeframe has expanded a touch. No strapping on of shoes (see last post) until Spring of 2009.........

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