The Housing Market Looms Large For Voters
Readers suggested a topic on market manipulation. “Here’s something that pisses me off: I think banks think the area I live in is more valuable, way more valuable, than it actually is. The wishing prices on REOs, in many cases, are astronomical. Bubble pricing got so high here because everyone was in on it. Den of thieves. It’s amazing what prices are in other parts of the country that don’t have all of the FL problems, and yet, most of the jobs here pay crap and we still have massive price points.”
“And seriously, I check homepath.com every now and then. Really? Only 4 Fannie Mae homes in Seminole? Really? REALLY?”
I replied, “I’ll give you my theory on this; the Republicans have been saying they want to get rid of the GSE’s. The Democrats say they want to save them. It’s possible that the GSE’s and HUD are holding back on inventory to make the housing market look better so Obama has a better chance at being re-elected, and they keep their jobs.”
One said, “A step further…… could it be proven that inventory is artificially lowered by the GSE’s in swing districts and states?”
One had this, “I was under the impression that the current goal was to move (transfer) the investment bank’s former illiquid assets to the taxpayers through the FHA backed lending. The investment banks preyed on the low-class poor folks using no-doc, high-fee mortgages toward the end of the bubble when everyone else knew the gig was over. This is why many of the modest properties appearing on the market are ‘as-is’ fixers in chit neighborhoods.”
“The better ‘here’s the keys’ homes in nice neighborhoods are still over-priced, and the GSEs have raised the qualifications threshold on potential borrowers.”
And another, “I suspect it has more to do with banks being able to unload inventory at a higher price. Seriously money controls everything in our gov. You really think some Gov worker would be able to stand in the way of what the banking sector wants. Fat chance.”
Finally, “That would certainly make sense based on the data I posted the other day. Fannie was reducing inventory in all bubble states…except FL. There, the REO inventory of Fannie was growing fast. You would think that with reports of rising prices in FL, Fannie would have an easier time selling homes…”
“They give data on how long from first missed payment to foreclosure (over 1,000 days), but they don’t give information on how long on average it takes from foreclosure to sale date… Foreclosure Radar has this for CA (264 days–and rising gradually), AZ (232 days–and rising FAST), and NV (216 days–and rising gradually). No data for FL.”
From Reuters. “The November 6 U.S. presidential election between President Barack Obama and presumptive Republican challenger Mitt Romney may be decided by a small number of “swing” states - those that could go to either man - where the health of the housing market looms large for voters as they weigh their choice. A Reuters examination of the latest housing data in 10 states that may determine the election’s outcome shows signs of hope in even the most battered real estate markets, notably Florida, with some other key battlegrounds doing much better.”
“In addition to Florida, the other states were: Arizona, Colorado, Iowa, Nevada, New Hampshire, North Carolina, Ohio, Pennsylvania and Virginia. The recovery in home prices in battleground states is good news for the Democratic president as he stays barely ahead of Romney in national opinion polls.”
“In the northern Virginia suburbs of Washington, home prices in the first quarter of this year rose 5.9 percent compared to the same period a year earlier, and were up 2.4 percent for the state as a whole. The uptick already may be helping Obama. A survey released this month by the firm Public Policy Polling put Obama 8 percentage points ahead of Romney in Virginia, which backed a Democratic president for the first time in a generation when Obama won there in 2008.”
“Realtors in Denver, which dominates the Colorado real estate market, are reporting a shortage of housing and a 10.5 percent price rise in April versus a year ago. Obama has conceded that his administration could have done more to improve housing market conditions across the country. An overhang of foreclosed properties worth less than the price for which they were purchased has been a particularly difficult issue to resolve, in part because of questions around loan forgiveness. Romney has attacked Obama for failing to fix the problem.”
“But Romney provided ammunition to the Obama camp when he said the foreclosure process should be allowed to run its course and hit bottom. That may be a very unwelcome message in a state like Florida that is still saddled with hundreds of thousands of foreclosed properties.”
“Florida is considered a crucial battleground state in the election as Obama and Romney plot a path to winning the 270 electoral college votes needed to secure the presidency. Florida, which Obama won in the 2008 election, accounts for 29 electoral college votes - more than 10 percent of the total needed to win. ‘There is no path to victory for Romney without Florida and Virginia. Those are going to be tough states for Republicans to get this time around, particularly Virginia,’ said Jim Kessler, at Third Way, a Washington think tank.”
“Thomas Schoenrock and his wife Jessica recently bought a house in Las Vegas after moving to the city to take advantage of prices that are roughly half compared with the cost of homes in their native Washington state. ‘For us to get a house in the market we came from would have cost $250,000. In the market here, they are practically giving them away,’ Thomas Schoenrock said.”
From Tallahasee.com. “I am hearing reports of low inventory. At face value, this is not just good news, it is the very news that we have been waiting to hear. Falling inventory is a major ‘next step’ in the return of the housing market. But sadly, thus far it is just unsubstantiated positive sentiment from real estate agents who have a vested interest (as do I) in seeing a housing market recovery.”
“My reports show falling inventory, but they also show that home sellers who have failed to sell their homes in recent years (as a statistical group) are growing far larger than our existing inventory. My reports also show a rise in foreclosure activity, so I know that the next few years will see an increase in the number of distressed homes for sale in Tallahassee. This shadow inventory of homes is also larger than our current inventory.’
“Thus I believe it would be nothing more than false prophecy for me to just report falling inventory, because the bigger picture shows something different entirely. In Tallahassee, our units sales are down to 50% of the historical norm. Think about it, if we’re not selling them, where are they going? This ‘forgotten inventory’ of homes is the future supply, and had our market retained values, these would be current supply.”
“The forgotten inventory of homes in Tallahassee is more than double what our current active inventory shows in the Tallahassee MLS, and for this reason, and do not think the falling inventory numbers are going to have the impact that we all are hoping for. So, real estate agents everywhere, step up to the challenge and show us where your market really is. I bet there are some markets out there with true recoveries underway, I just want to see some real evidence, not just the normal chirping real estate agents who have never changed their tunes.”
