The Dependence On House Prices
I suggested a topic on the latest housing hype. “Found in the US media in the past week: ‘buy now while you can’, ‘prices are still way below where they ought to be’, ‘new homes’ prices are bound to go up, too’, ‘we’re paying money toward something we own instead of throwing it away on renting’, ‘Buyers feel a sense of urgency to get into this market.’ ‘History says prices are likely to rise. By not acting now, certain buyers run the risk of being priced out down the road’. ‘This is diamonds in the rough …neighborhoods that will skyrocket in value’.’
A reply, “So I’m not imagining this new campaign by the Housing Crime Syndicate and their media proxies?”
One said, “It’s the trickle-down grifter economy. Starts at the top, in gubbomin and finance, makes its way down to mortgage brokers, realturds, employers and the general public. People WANT to be fooled. I don’t know why, but there are plenty willing to oblige, to volunteer to be victims. Personally I couldn’t handle the stress.”
Another, “And why do they so badly want to believe in the easy money? It would seem it’s because earning the old fashioned way has become nearly impossible for most people.”
A reply, “Because they have been taught (and observed as well) that only fools actually work for wages. The real money is in getting cuts from productive people’s labor and making deals.”
The Orange County Register. “Orange County is seeing its best housing market since the final days of the housing boom in 2005, with the number of homes for sale at its lowest in nearly seven years and the number of sales contracts in progress at its second highest, a new housing report shows. The only month to see more deals reached than March was April 2010 – when buyers rushed to meet the deadline for the first-time homebuyers tax credit.”
“O.C. broker Steve Thomas noted that the types of homes now selling and the prices at which they’re selling is very different than during the boom, with the hottest demand for homes selling at $750,000 and below, and very little demand for homes in the $1.5 million range and above. ‘We’re still digesting and absorbing short sales,’ he said, referring to homes selling for less than is owed on their mortgages. Still, he said: ‘If you’re a buyer stepping into the market, it feels just like ’04 and ’05. … It’s still a crazy market.’”
“For example, agents are canceling appointments with buyers because there aren’t enough homes to show them. Thomas noted also that a neighbor in Ladera Ranch got two offers on his home before his agent could put a lock box on the door. ‘Agents are clamoring to get their buyers into a home,’ he said.”
“Thomas said that the market could change dramatically if homeowners suddenly see an opportunity to sell and put their homes on the market. ‘That could be the monkey wrench in this thing,’ he said.”
The Coloradoan. “In case you haven’t noticed, this year’s presidential race is heating up and candidates are weighing in on a number of important issues that will have great impact on our country and its economy. However, there is one topic in particular this year that is crucial to all Americans - homeownership. Of course, I would say that as an executive of the local Realtor Association right?”
“However, take the following into consideration. Restoring the health of the housing market and supporting homeownership in America has been shown time and time again to contribute to economic recoveries. Moreover, recent polling demonstrates that housing is a top-of-mind issue for voters and should become a national public policy priority. After all, we all need a place to lay our heads down at night.”
“In May, the National Association of Realtors is expecting thousands of members from around the country, including Fort Collins and Colorado, to rally in front of the nation’s Capitol with the intention of compelling our elected officials to consider how our country as a whole benefits from protecting the American Dream of Homeownership.”
“Despite seeing early signs of stabilization in our market this year, creditworthy buyers are still being denied their dreams of owning a home because they cannot qualify for a loan. In addition, homeowners in our area still are struggling with foreclosures and underwater mortgages. More must be done to reduce the rising inventory of foreclosed homes and address the lack of available and affordable mortgage financing. ”
“Realtors also would like to see more financing opportunities for buyers. Increased fees and higher down payments are making it difficult for many creditworthy buyers to obtain financing.”
“A survey by the National Association of Home Builders demonstrated that homeownership is a bipartisan issue in the eyes of potential voters. A majority of those surveyed said the government should do more to support homeownership and were opposed to getting rid of tax benefits for homeowners.”
“As the leading advocate for homeownership, Realtors will continue to urge lawmakers to make sure housing and homeownership issues are a top priority on the nation’s public policy agenda. The American dream of homeownership needs to be alive for generations to come.”
The Globe and Mail. “When it comes to the economy, the outlook on jobs and the ability to afford even the most basic things in life, Prairie dwellers are more optimistic than consumers in British Columbia, Ontario, Quebec and the Maritimes. Research shows that people don’t open their wallets based on what they think will happen to the national economy, but rather are governed by what is happening in their own life, said David Herle, principal of Gandalf Group. ‘That’s why we don’t see spending resurgence anywhere else in the country, because there have been no income gains anywhere else in the country.’”
“The survey underlines that many Canadians are suffering significant financial strain, because their incomes have nor kept pace with increased costs, Mr. Herle said. More than 30 per cent of respondents said they are making less money than they were in 2007, one-third said their savings or investments are worth less, and 20 per cent said their job is less secure.”
“‘Economic growth, as it matters to individuals, is not there,’ Mr. Herle said. ‘You have between a quarter and a third of Canadians who say they have a less-than-adequate budget for groceries, for housing, for clothing, for electricity costs, [and] for transportation. If they are parents, [they don’t have enough] for education for their kids or for extracurricular activities for their kids. There is a subset of the population that is struggling to manage with just the essentials.’”
“One bright light is that almost two-thirds of Canadians said their house or condo is worth more than it was in 2007. But this dependence on house prices to prop up individual net worth also has a dark lining, Mr. Herle said. ‘If you took away house prices, people … would be in really difficult financial straits. In the last five years, the only thing that has improved for most people is the value of their house.’”
