There Is No ‘Typical’ In This Market Anymore
A report from Quartz. “Yale economics professor Robert Shiller won the Nobel prize for his work on bubbles. As Shiller sees it, ‘big things happen if someone invents the right story and promulgates it.’ Quartz spoke with him about some of the frothiest assets today, from bitcoin to tech stocks. Quartz: What are the best examples now of irrational exuberance or speculative bubbles? Shiller: The best example right now is bitcoin. And I think that has to do with the motivating quality of the bitcoin story. And I’ve seen it in my students at Yale. You start talking about bitcoin and they’re excited! And I think, what’s so exciting?”
“Quartz: Hasn’t the internet democratized information? Someone can promote their views widely without getting buy-in from editors or other gatekeepers? That’s what Trump has done with Twitter.”
“Shiller: One really important thing that’s happened is that reputations don’t seem to matter as much at this point in history. You’re asking about bubbles. These are the stories that drive the bubble. Trump speaks to these things, and he seems to be saying things that nobody else will say but maybe you’re thinking.”
“He also legitimizes wealth. It wasn’t that long ago that we held rich people in contempt. We have a billionaire president, and he’s kind of welcoming: You can be rich, too. The Trump story helps inflate all kinds of bubbles, not just bitcoin. I think there are aspects of a housing bubble, and a stock market bubble right now.”
From The Daily News in Washington. “Cowlitz County home prices dipped slightly in August as more homes were listed on the market, helping to ease some pressure on the tight housing supply. Yet supply still isn’t keeping pace with demand and the market is still tilted heavily in the seller’s favor. Median home prices dropped to $216,000 in August, down from $231,000 the previous month, according to Northwest Multiple Listing Services.”
“Typically the housing market cools down in the fall and winter, but realtors say the busy market could continue longer than expected this year. ‘There is no ‘typical’ in this market anymore,’ said Sheri Evald, a broker with Keller-Williams in Longview.”
The Desert Sun in California. “A Coachella Valley lender is trying to entice buyers with the promise of getting into a home with a tiny down payment — or none at all. They’re not the kind of zero-down loans lenders offered in the years leading up to the housing market’s 2008 crash. But with clever stacking of programs, they allow people to buy houses without putting down much, if any, cash.”
“Mark Stewart, sales manager for Axia Home Loans, a lender that recently opened an office in Palm Desert, explained that first-time homebuyers can qualify for FHA loans, which only require them to pay 3 percent of the home’s purchase price up front. Then, they can get a ‘non-repayable grant’ from the Golden State Finance Authority or the California Housing Finance Agency, state agencies that support residents trying to buy homes, for as much as 5 percent of the loan amount — enough to cover the remainder of the down payment and most if not all closing costs.”
“‘A lot of times (people think) you’ve got to save $10,000 before you can get into a home,’ Stewart said. He asks realtors, ‘Do you have any borrowers that just don’t have enough of a down payment to buy a house? Do you have borrowers waiting to save up for a down payment? … In this case they don’t have to.’”
“‘Yeah, there’s always risk,’ Stewart said. ‘The likelihood of you (walking) away from something you never put your money into is greater, I agree with that, but I think the people buying these homes want to buy. I don’t think there’s a problem with zero down if you’re paying attention to the borrower. I think right now, in this period of time, the zero down’s not going to hurt anybody.’”
