Friday, February 22, 2008

IdeaWorks: First day was great

The first day of the eLynx IdeaWorks conference here in Vegas was great. A really good lineup of speakers, made better by the fact that many have recently been displaced and were willing to share much more with the audience about some of the actual events that led to the demise of some of the industry's top firms.

The show started out with an overview of the current situation, provided by Orawin Veiz, senior director of economic forecasting for the MBA. Orawin pulls and analyzes a lot of the stats that Doug Duncan looks into the MBA's crystal ball.

She set the stage: we're entering the third year of a housing recession, but it's still not clear whether the other indicators will conspire to make this an actual economic recession. Many indicators, such as builder confidence, don't look good at all and indicate that we haven't hit bottom yet.

The biggest threat to recovery: lender REO. If lenders dump all of those properties back on the market -- when we already have one million new homeowner vacancies above the 1.7% rate of 1985-2005, we'll have so much stock that it may be impossible to recover in the short term.

But what will they do with them? The longer the lender holds the property, the less likely they are to be able to control their loss severity. A speaker later in the day gave us one possible solution. I'll post that here soon, along with other great ideas from other IdeaWorks speakers.

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