On Tue, 21 Oct 2008 07:32:52 -0500, Ignoramus24384
wrote:

Fitch thinks that housing prices have another 10% to go down. This is
a more mild number than my guess of 15-20%. Very nice interactive
graphic also.

http://blogs.wsj.com/economics/2008/...e-stabilizing/
================
Remember that Fitch is a *BOND* rating agency, one of several
that gave AAA ratings to the synthetic structured residential
mortgage [and commercial mortgage, student loan, and credit card
receivable] backed collateralized debt obligations that provided
the foundation for the spontaneous combustion currently burning
the global credit "house of cards" to the ground.

Without knowing their methodology, sources of data, and
objectives it is difficult to evaluate the validity of their
conclusions, although these seem plausible. Note that the
particular methodology used is not right or wrong, but may be
better or worse for the particular use you wish to make of the
data.

There is not a uniform national real estate market, and different
conditions exist in different areas of the country. Indeed in
many rural areas there was no [or very little] run-up or boom in
residential housing and there very little "bust," albeit
financing has gotten somewhat more difficult, although still
available from the many solvent local and regional banks for
qualified borrowers.

A possibly more accepted residential value metric is
Case-Shiller.
http://www2.standardandpoors.com/por...0,0,0,0,0.html
http://www2.standardandpoors.com/spf...lue_082653.xls
[excel or equivalent required to pen]

also see
http://macromarkets.com/csi_housing/sp_caseshiller.asp
http://www.zillowblog.com/zillow-hom...dexes/2008/03/
http://bigpicture.typepad.com/commen...hiller-in.html

FWIW -- an additional drop of "only" 10% in aggregate residential
house prices seems far too low given the 18 month supply of new
houses in many areas, the huge run-up in values in many "hot"
urban areas, tightening lending terms, and probability of a
serious recession or economic contraction. I think your estimate
of 15-20% is far more likely, however even this may be low.

It should also be noted, despite repeated administration, banking
and media claims to the contrary, an active market exists for the
residential mortgage backed CDOs. The problem is that this
market is rating the values of these derivatives at 15 to 60
cents on the dollar. ==The market that does not exist is the
one that prices these CDOs at face/nominal value.== This is not
unique with the CDOs [there is just so many of them, with so much
capital tied up] but many corporate bonds have similar problems,
for example Ford and GM long bonds.


Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).