A Sea Change In The Way Americans Look At Housing
A report from the Northern Virginia Daily. “Penelope Saville worked three jobs for years to get her finances back in order after a divorce, all in the hopes of owning a home. Finally in 2006, her dream came true, and she purchased a home on Randolph Avenue. But it didn’t take long for the dream to turn into a nightmare. Expensive roof repairs and a decrepit furnace kept her on a treadmill. Refinancing seemed like a good option, and in the short term, it did help. But when the mortgage came due, she was shocked to find out just how much the payments had gone up. The new interest rate was 23 percent. Poor health forced her away from two of her jobs. The third followed soon after. She lost her home in December.”
“‘I wasn’t very smart about some things,’ she said. ‘I only thought my payments were going up a little bit.’”
“Not that long ago, new homes were sprouting like weeds all over the region, and new residents were flocking in to get their piece of the American dream. It’s only been a few years, but it might as well have been in a different lifetime. That was before the housing bubble burst, taking hundreds of millions of dollars in economic activity with it — and leaving a massive number of foreclosures in its wake.”
“The speed at which boom became bust has people on all sides of the equation asking what happened. How did thousands of new home starts per year turn into hundreds of foreclosures and evictions? There’s no simple answer, but builders, Realtors, credit counselors and economists all point to a common starting point — cheap loans and easy credit standards that emerged in the years following 9/11.”
“Virtually anyone was able to qualify for a mortgage, demand for homes skyrocketed and the market rushed to provide the supply. Prices took off. In April 2006, just after the peak of the boom, the average price of a home sold in Strasburg was $278,585. Winchester prices were up to $285,000, while Front Royal homes went for an average of $270,000.”
“For Dale White, of White Construction in Frederick County, it was almost as if someone flipped a switch. ‘One day in October 2005, it just stopped,’ he said.”
“Buyers who were approved and ready to start construction began bailing out of contracts, leaving behind any deposits or other money they’d put on the table — ‘kick-outs’ in building industry parlance. ‘We had no kick-outs for years, then in a three-month period, we had seven,’ White said. In hindsight, the kick-outs were the first sign that easy credit was coming to an end. ‘We had loan approval letters from lending institutions that these people qualified, then all of the sudden these people didn’t qualify anymore,’ he said.”
“Others ran into trouble with refinancing, cashing out growing equity to pay off credit cards, college tuition and other debts. ‘They may have refinanced that house four times,’ said Kay Gentry, a counselor with Clearpoint Credit Counseling Solutions in Staunton. ‘They’ve reached a point now that their house isn’t worth what they owe on it.’”
“Builders suddenly found themselves competing for buyers with homes they’d just built a few years earlier. ‘It’s destroyed our lives, it’s destroyed our families’ lives,’ White said. ‘Pretty much everything that you’ve worked for has, at the best case, been put on hold. The banking industry won’t give builders revolving credit any more. And they probably shouldn’t. But that means clients have to do their own construction loans.’”
“When clients have to arrange their own financing, they are much less likely to wade into the market. ‘People who buy houses like the builder to build them and not pay anything until closing,’ White said. ‘And those days are over.’”
The Frederick News Post in Maryland. “Ken Abrecht, president of the Frederick County Builders Association, said he has heard from other local builders association members that things are picking up, but like other builders, Abrecht said financing can sometimes be an obstacle. ‘I’ve heard from some small builders who aren’t doing anything,’ Abrecht said.”
“At Dan Ryan Homes, Division President Dina Andrews said May was good, but June has been flat so far. Andrews said the $8,000 program has helped, ‘but they (buyers) have to get everything settled by December, when the program runs out. If we can’t get them going quickly on new construction, we can maybe get them into one of our (existing) spec homes.’”
“Dan Ryan’s customers, Andrews said, whether in Frederick or Washington counties, southern Pennsylvania or West Virginia, are going for smaller homes, 2,000 to 2,500 square feet, rather than 3,000 to 4,000 square feet.”
“At Drees Homes, Division President Stuart Terl said he’s getting a lot of prospects, but no contracts. ‘People out there are serious and many want to get in on that $8,000,’ Terl said, but he hasn’t had them take the process to fruition.”
“For remodeler Larry Schaffert, banks continue to be the holdup for potential customers. ‘We are finding people are considering projects on more of a long-range basis, planning for work, but not necessarily wanting the work done now,’ said the owner of Schaffert Construction.”
“With the drop in home prices, banks are lending at lower amounts based on the home’s current market value. ‘It seems (banks) are holding to a strict maximum of 80 percent loan to value and the comparables they are using for values are low due to short sales and foreclosures,’ Schaffert said. ‘Low interest rates do no good if you can’t get a loan for your project.’”
The Associated Press. “Delaware housing officials are expecting another jump in foreclosures this year, but officials are taking steps to help people avoid losing their homes. Gov. Jack Markell announced a plan Wednesday to begin working with lenders and borrowers before homeowners enter the foreclosure process.”
“Officials say the historic average for foreclosures in Delaware is about 2,000 a year, but that number more than doubled to 4,500 foreclosures in 2008. Officials say the state is on pace to record 6,000 in 2009.”
The Cape Gazette in Delaware. “The Delaware Housing Authority has allocated $2 million in federal funding to Sussex County for its Neighborhood Stablization Program, created under the Housing and Economic Recovery Act of 2008. The program’s mission is to stabilize communities that have suffered from foreclosures and abandonment by offering low- and moderate-income buyers the chance to purchase homes left vacant.”
“‘The whole idea behind this initiative is to create sustainable, long-term affordability for qualified homebuyers so they can put down roots in communities that have been greatly affected by the foreclosure crisis,’ said Brandy A. Bennett, Sussex County’s housing coordinator. ‘The goal is to build and strengthen a community by cutting down on vacant, foreclosed homes. That is precisely what ‘stabilization’ suggests.’”
“County officials expect the initial seed money of $2 million to remove as many as 25 to 30 houses from the foreclosed stock and put those homes into the hands of new homeowners.”
“‘Sussex County and Delaware need an economic boost, and this will be a great way to stimulate our local economy,’ said county Administrator David B. Baker. ‘More importantly, we believe this program will offer Sussex Countians a real chance to be a part of their community and to realize the American dream’”
The New York Times “The Beacon in Jersey City seems to have a record for setting records and establishing superlatives. Created from the towering Art Deco buildings of the city’s former medical center, it is — according to officials at the national historic tax-credit program — the largest residential restoration project currently under way in the country. And a couple of years ago, developers said, the Beacon became the first condominium building in Jersey City to sell a unit for more than $2 million.”
“Now, its developer has announced that the Beacon will be the first high-end complex in the Hudson River area to auction units.”
“In what is being billed as a ‘closeout’ auction, 25 one- and two-bedroom units in the first two towers to be restored are to be auctioned on June 27. Original prices ranged from $380,000 to $700,000; suggested starting bids are $150,000 to $250,000.”
“Based on how things are going after the first dozen condos are sold, said the Beacon developer, George Filopoulos of Metrovest Equities, he will decide what to do next: sell some or all of the 13 remaining units at whatever ‘absolute’ price they attain during the course of the auction, or set a minimum acceptable price.”
“‘At first I was a little shocked by that absolute-price idea,’ he said. ‘After all we put into this!’”
The Philadelphia Inquirer. “As one of the lawmakers on Capitol Hill with responsibility for navigating the country out of the housing crisis, Rep. Barney Frank is a force to be reckoned with. So when the Massachusetts Democrat, chairman of the House Financial Services Committee, announces that ‘the notion of homeownership as the goal universally is greatly flawed,’ and that an adequate supply of affordable rental housing might have prevented the subprime-mortgage debacle, it well may signal a sea change in the way Americans look at housing once the economy recovers.”
“Frank will be taking that attitude into summertime deliberations over President Obama’s proposals to reform the financial system - legislation designed to prevent a recurrence of the bubble that has burst all over in the last two years.”
“One of the more important parts of the proposals is ‘to require that no one ever securitize 100 percent of any loan ever again,’ Frank told real estate writers and editors yesterday during a meeting in the committee hearing room. ‘What’s happened in America is that the lending business has been transformed, and that’s at the heart of the real estate crisis,’ he said.”
“Rep. Paul E. Kanjorski (D., Pa.), chairman of the Financial Services subcommittee on capital markets, insurance and government-sponsored enterprises, said it was important ‘to take everything one step at a time.’”
“‘Until we get the real estate market stabilized, we can’t go forward,’ he said. ‘The next six months will be crucial. . . . If you remove the tourniquet, the blood will start flowing even faster than before,’ especially with growing unemployment.”
“Not everyone on Capitol Hill is enamored of Obama’s proposals. Sen. Christopher ‘Kit’ Bond (R., Mo.), a member of the Appropriations Committee, said the growing dependence on what he called the Federal Housing Administration ‘powercade’ could create an even bigger financial crisis.”
“‘The FHA has long been a major problem, with inadequate staff and technology . . . that hasn’t changed since the 1970s,’ Bond said. ‘Still, FHA’s share of mortgages has increased from $59 billion to $180 billion in the last year, and home sales, minus refinancing, have increased from 6 percent to 20 percent of the total.’”
“Bond said he would do everything he could to get the FHA what it needed in return for ‘more skin in the game’ - down payments higher than the current 3.5 percent. ‘More skin in the game seems to have a wonderful, cleansing effect on regulations,’ he said.”
‘Rep. Barney Frank is a force to be reckoned with. So when the Massachusetts Democrat, chairman of the House Financial Services Committee, announces that ‘the notion of homeownership as the goal universally is greatly flawed,’ and that an adequate supply of affordable rental housing might have prevented the subprime-mortgage debacle…’
‘Frank will be taking that attitude into summertime deliberations over President Obama’s proposals to reform the financial system - legislation designed to prevent a recurrence of the bubble that has burst all over in the last two years.’
‘One of the more important parts of the proposals is ‘to require that no one ever securitize 100 percent of any loan ever again,’ Frank told real estate writers and editors yesterday during a meeting in the committee hearing room. ‘What’s happened in America is that the lending business has been transformed, and that’s at the heart of the real estate crisis,’ he said.’
Of course, there are a lot of opinions on this. But, IMO, it looks more like various interests are looking at parts of the roots of the mania and using that for political agendas. If one looks at the housing bubble on its own, the first question has to be, “when did it begin?” And I think it can be easily shown that the bubble began in the 90’s, not after 2001.
So, sure, the lending at that point made things worse. But subprime didn’t expand until late 2002-2003. And then even crazier lending hit 2005-2006. To me, this shows that lending abuses followed the bubble mentality, and simply prolonged it.
Some of this political stuff also tends to overlook programs like the GSE’s, tax code issues, and that little elephant in the room called the Federal Reserve. But I guess that it’s a good thing people are discussing the idea that we can and should prevent future bubbles.
I am shocked that Barney said that. But I guess it’s better late than never. I wonder if he’s going to be like one of those ex-smokers who becomes an evangelist against smoking?
I wonder if he’s going to be like one of those ex-smokers who becomes an evangelist against smoking?
There is NOBODY on the face of the earth more annoying than a reformed sinner. I’ve observed this before, so I studiously made a note to myself to never reform.
“There is NOBODY on the face of the earth more annoying than a reformed sinner. I’ve observed this before, so I studiously made a note to myself to never reform.”
Thank Goddness Oly…we’d hate for our World to go into shock and stop spinning if you ever did .
*splutter *
Oh, like YOU’D even know what a ‘reformed sinner’ looks like in any case!
Would it come stomping out from Utarr short and mean complete in a little bonnet and gingham dress preaching hell n’ brimfire while chopping up local dive bars ?
There’s even a yuppie bar in Los Gatos CA named “Carrie Nation’s”. The wooden pub sign over the door is in the shape of an ax.
DennisN,
Olygal would never really attack a bar with a hatchet unless it was to pop open an old fashioned wooden keg.
On the other hand, she might take an axe to me for my short n” mean” comment above
I wonder if this means the flow of money from the banks/financial s/realtards has finally dried up? Or is he bucking for some extra green?
Yes, the bubble began in the late 1990’s, but had it run a normal cycle it would have peaked in 2003 and we would have had a minor correction. The crazy lending turned the normal real estate cycle wave into a tsunami.
I don’t think it can be said there was one time period for the housing bubble. The markets that peaked in 2005-06 (MA, AZ, NV, FL, CA) probably would have ended a normal cycle in 2000-01. So it may have been the post 9/11 momentum that carried it into the beginning of the subprime expansion. But IMO, option ARMs, etc, were just the industry greed feeding on the late stages of the psychology of the mania. Like the condo thing at the end.
I’ve thought about this a lot. What feeds a mania, like tulips? It is the mental aspect; people begin to feel there is no risk, and fear missing out on a no-lose situation. Remember, how late in the bubble, when many could no longer “get on the ladder”, we often heard here that we were bitter, because we had “missed out.” And people talked about a permanent landed class and us poor, lifelong renters.
I really think that to understand this mania, we have to re-imagine those conditions. It WAS crazy to believe it would never end, but that’s exactly what the vast majority did believe. And that’s a definition of a mania to me.
Absolutely, and the idea that you just HAVE to buy is illustrated by the first entry in todays post. Woman worked 3 jobs for years to get out of debt and the first thing she does is buy an overpriced house at the peak. Anything other than buying is absolutely unthinkable - which is how it has to be, because if you thought about it and examined the numbers, you might wise up.
The housing bubble was a mania - a social phenomena. It was common socially-accepted wisdom that you had to buy, buy up, and leverage. To refute that was to be scoffed at. Even bankers, the guys with the money (and yes, citi drank an ocean of their own kool-aid) believed that mortgages were rock-solid (they used to be, you know) and that house prices could only go up.
Social phenomena. We are evolved from herding tribal animals. It’s not going anywhere.
I feel like a lot of people STILL have this sentiment. We are considered an oddity in our social group b/c we rent.
People concede we were smart to not buy, but then the next question is always — “So when are you buying?” Followed by some BS about low interest rates and real estate always coming back etc.
I truly believe for a large segment of the population, if you give them enough rope they will hang themselves. Enough fast food, they become obese, access to alcohol — they drink too much, and easy lending? They shop, shop, shop until they are deeply in debt.
BTW — our water heater was acting wacky and our landlord replaced it with a new energy efficient one yesterday. Love renting!
“It WAS crazy to believe it would never end, but that’s exactly what the vast majority did believe.”
When I lived in NYC, I truly believed it would never end. It wasn’t until about 2003 that I realized something was up.
In California the bubble - compared with the rest of the US - really began circa 1975. My parents bought a condo in Los Gatos for $55K in 1974 and sold it for $185K in 1979. That’s a big run-up in only 5 years. Prior to 1975 the housing price curve in California was mostly a gentle slope upward - this an observation from my own family’s history in Santa Clara county.
There was a huge run-up from 1975-1981, then a slack period from 1981-1987.
Then another huge run-up from 1987-1992, then another slack period from 1992-2001.
Then another huge run-up from 2001-2006, then what we’ve got now.
Darned curve looks like the teeth of a saw.
You will not prevent future manias. Mania is by definition a cyclic thing, a mood swing, and IME when it’s time for a mania, an object will present itself. It’s true on an individual level, and I believe it is true on a communal level.
I am sure folks used to understand this, and then forgot, and then found it out again, and then forgot, and then…………
One thing’s for sure, there won’t be another housing mania while you and I are still alive. God help my grandson. i wonder if a note in a bottle would help him at all.
‘Mania is by definition a cyclic thing’
If it is, then the cycle is certainly not an ordinary shape. Plus, look at how they pop up in history, here and there. Was there ever a second tulip mania? What about the Japanese bubbles?
IMO, the seeds of mania are probably always around. But beanie babies can’t get enough momentum, for example. It takes a confluence of events to produce something like this. This is why I think a lot of what the politicians and the Fed is a waste of effort. They fail to acknowledge what has happened and are eager to appear to be doing something about all the side effects. So they rail against lenders, or subprime, when it was the housing prices themselves that were the problem. But facing up to that means rejecting their goal of “stabilizing” the housing market.
The housing market IS stabilizing, all the way down to where it has to go.
The housing prices became the problem after EZ-Loans were made available to enable future FBs to drive them up.
You can’t have a really serious mania without a source of money to fuel it.
But it sure would be helpful during the down cycle if the politicians would admit that housing prices are too high. Unfortunately, admitting that is not in their immediate political interests.
It’s interesting to read that ‘ol Blarney is now talking about rental property. Maybe the next bubble will be in apartments.
AND a large source of seriously stupid people, you need both
————-
You can’t have a really serious mania without a source of money to fuel it
“AND a large source of seriously stupid people, you need both”
That has never been a problem in the past…
“appear to be doing something about all the side effects”
In the bipolar world, we call this “enabling”. They are incapable of seeing the elephant in the living room, much less dealing with it. They can only help make matters worse by postponing the day of reckoning, fixing things that are not the problem. Covering symptoms and avoiding payday.
I’ve played this out on the household level, being the enabler. It doesn’t end well.
You’ve called this the financial event of our lifetimes. Ben, that hardly covers it.
Bubble manias are clearly the result of Keynsian economics, money not backed by Gold or any other tangible asset.
As long as our monetary base is has nothing as a basis then these wild speculative swings will continue.
They create opportunities for those that understand them, but the general masses get burned badly and the gov’t ends up picking up the bill.
By the gov’t I mean you and me.
The stock bubble up to 1929 and (probably) the tulip mania happened in gold-standard systems. Fiat money isn’t the problem.
“‘I wasn’t very smart about some things,’ she said. ‘I only thought my payments were going up a little bit.’”
This type of denial reminds me of the very angry response I got from a family member whose only hope of any post-industrial financial future is “housing always goes up.
In late 2006 at a family gathering, this Bubble Disciple was ringing the bell and the response was, “what the hell is wrong with you…. housing will only go down ‘a little bit’ and then keep on climbing fast.”
Now there is nothing but silence from him when I advise him to sell today because the price you get tomorrow and many years to come will be lower.
Dead silence.
“Now there is nothing but silence from him when I advise him to sell today because the price you get tomorrow and many years to come will be lower.
Dead silence.”
Consider yourself lucky. It would take a whole lot more to shut my father-in-law up. His daughter, the 42-yo princess, is a Realtor and if SHE says this bust is just a very temporary blip, then it IS.
Molly,
Just sing the old time Stones favorite…
Time…. is on my side. Yes it is.
“‘I wasn’t very smart about some things,’ she said. ‘I only thought my payments were going up a little bit.’”
That my dear, is an understatement. A 23% interest rate and she thought her mortgage would only go up a little? Life is tough for the math impaired ones.
I hope and pray that we demand you pass a heavy dose of civics and economics before you can graduate high school. And maybe again for college
But OHbahma is not for educating people, just hire a school monitor (czar) to beat them into submission.
President Obama’s not for educating people? Link? Source? I’ve never heard this before.
YES forcing kids in High School to have mandated civics and econ lessons to graduate is a far better use of taxpayers money then to have a new sprawling guv agency to overlook the practices of the financial business.
You can’t have fraud without a mass quantity of Dumb people.
I have a relative who just got her real estate license and is gung ho, almost a Moonie, in her enthusiasm. Think Annette Bening ala American Beauty, which is totally my cuz down to the Jimmy Choos… She thinks she’s going to make a killing, since in her words, all the bimbo agents are dropping like flies, and she’s so intense & disciplined (& glamorous) that she’s going to just scoop up all these qualified buyers dying to buy their piece of heaven. Does she have a snowball’s chance?
I always think of Frank in 03 and 04 railing against anyone who questioned Fannie and Freddy. He is the worst kind of Political creature.
F him and the Boy he rode in on.
Well, sometimes I like what he has to say. He does at times question the basic concept of owning a house as being the most important thing in our lives. But while that is important, from a public policy standpoint, there are things that need attention right away. From the NOVA article:
‘In Frederick County, from April 2007 to April 2009, a full 40 percent of Federal Housing Administration-insured loans valued from $300,000 to $325,000 went into default in the first two years after the loan was issued, according to the Department of Housing and Urban Development.’
‘Even more conventional loans saw catastrophic levels of default. Loans valued from $150,000 to $175,000 defaulted 12.5 percent of the time, more than four times the national average.’
And this from the PI:
‘Under the Obama proposals, Frank said, mortgage brokers first must offer “plain-vanilla mortgages” to consumers, and then the borrowers themselves can decide whether they want to pursue other financing, such as adjustable-rate mortgages.’
‘That puts the burden on the consumer,” he said. “Remember, the problem in the subprime market is that borrowers who really did qualify for prime loans were sold subprime loans instead. We want to stop that practice.’
This stuff doesn’t make sense. It wasn’t prime versus sub-prime. It was a housing bubble, and it wouldn’t have made much difference what loan these people got. Once they are underwater, the incentive is to walk away.
I think we put a lot of conversation into, and I truly enjoy it, the Mortgage type etc. etc..
If we simply hold individuals and corprations liable for what they represent for themslves in Contracts, a lot of this stuff becomes moot.
ie incomes and or balance sheets, including asset valuations for corporations.
We would be prosecuting many, many people just on the stated income side. Although I doubt it would of got to the point it did if we held the Contract as well a Contract.
Of course, what would we have to talk about
“Well, sometimes I like what he has to say.”
Sometimes I have a vewwy hawd time undewstanding what he has to say. I have to read the print version, because when I see him on C-Span, I can’t make heads or tails of what he’s saying. The next thing I know, he morphs into a strange combo of Elmer Fudd and Porky Pig before my eyes and all I can hear is the Looney Tunes/Merrie Melodies theme song going round and round in my head.
Whatever the case, I’ll never forget this was the guy who pushed the Hank Paulson agenda, along with Pelosi. One of the most disgusting episodes in this whole debacle. That a creature like Barney Frank has any say in this is totally pathetic to me.
Thatssssssssssss all folks.
“This stuff doesn’t make sense.”
It only makes sense to people who don’t understand economics and want an easily understood but false explanation for what went wrong.
Whether out of ignorance or artifice, the thing Democratic politicians like Frank, Dodd, Hitlery and Pelosi never, ever bring up is the market advantage that subprime loans gave to those of little means who used them to buy houses they could not afford. These people made a Faustian gamble which enabled them to live for several years at a standard of housing luxury they would have never been able to afford without liar loans, negative amortization, payment option ARMs, etc. Others who valued financial stability over the false trappings of wealth were outbid in the housing market by those of lesser means who were willing to assume greater leverage. Now that the day of reckoning, recasts and resets are upon us, politicians like Frank are doing their best to avoid any discussion of personal responsibility, preferring instead to pretend that the lending industry is solely to blame for FB’s plights and attempting to legitimize all manners of household-level mortgage bailouts for those who chose to live beyond their means.
PB, it REALLY cracked me up when you said Fwank the other day.
Ad hominem, but totally appropriate!
I just discovered this blog and find it very interesting and informative. It’s also refreshing to find posters who are so polite to each other.
Professor, With all due respect, I found your comments about subprime mortgages puzzling. “Subprime” just means that the loan has a higher-than-usual interest rate because the borrower’s credit was less than desirable. That’s it. Some subprime loans were otherwise conventional re: the down payment and the term of the loan — and some were not.
But liar loans, negative amortization loans and ARMs were hardly exclusive to subprime borrowers. Many borrowers with excellent credit who had prime loans (i.e., with the prevailing interest rate) opted for unconventional mortgages to buy more house than they would (and should) otherwise afford.
“Others who valued financial stability over the false trappings of wealth were outbid in the housing market by those of lesser means who were willing to assume greater leverage.”
Huh? Please explain this. If anything, subprime borrowers were at a DISADVANTAGE compared to prime borrowers because the former had to settle for smaller mortgages to compensate for the higher interest rates they were paying. Also, some subprime borrowers had to put down bigger downpayments, another factor that would affect how much house they could buy. I don’t see any way you can say they, as a whole, had an unfair advantage.
However, borrowers who took out liar loans, ARMs and negative amortization loans DID have an advantage over conventional borrowers because the former could buy more house. But this group was NOT confined to subprime borrowers.
I find it disheartening that at this late date, people still are blaming the housing mess on subprime borrowers. This was a ploy by the government at the beginning of the mortgage meltdown to falsely make Americans believe that things wouldn’t get too bad because the bubble would affect only subprime borrowers, i.e., not you or I, but that OTHER guy. But it was clear early on that prime borrowers would be in trouble too.
It is convenient to make the mortgage lenders into the bad guys. Never mind the critical piece of advice: Don’t buy a house you can’t afford.
….But when the mortgage came due, she was shocked to find out just how much the payments had gone up. The new interest rate was 23 percent.
Big Vinnie’s Mortgage Company??
No kidding ! Where the hell did they come up with that rate and how did they expect anyone to be able to pay it ?
An 1800 a month payment at a 23% interest rate would mean the mortgage was roughly only 94k.
I hear they have a “knee jerk” reaction to collecting past due accounts.
“Rep. Paul E. Kanjorski (D., Pa.), chairman of the Financial Services subcommittee on capital markets, insurance and government-sponsored enterprises, said it was important ‘to take everything one step at a time.’”
“‘Until we get the real estate market stabilized, we can’t go forward,’ he said. ‘The next six months will be crucial. . . . If you remove the tourniquet, the blood will start flowing even faster than before,’ especially with growing unemployment.”
This is kind of funny here. Hate to tell you this but if you have a tourniquet on for any substantial portion of time its an amputation. That would be a good analogy for cutting our losses here.
Brillian! Testify, brothah!
Testify, brothah!
You know what, palmy, I say this frequently now. I even said it in a public hearing the other day.
Thanks.
I meant, ‘thanks to you’, palmy, because from you is where I heard this, and it completely took my fancy and invaded my lexicon like a giant earthworm.
Like this:
“~~~~~~~~~”
(that’s a representation of a giant earthworm, there)
And I got it from the brothahs, who most likely cringe whenever they hear the Palmster give a big shout-out Testify! It’s almost as bad as watching me try to dance. Huk-A-Poo shirt and all.
Anyone watching this discussion about putting in a 15K home buyer credit for next year? They just won’t let this thing naturally correct, will they? I really don’t want to buy when these credits are active; it devalues my savings and puts me in competition with people who shouldn’t be able to purchase the house (thereby pushing prices up).
Also, 15K, leverage 5 to 1 (20% downpayment) raises the price of the homes about 75K.. At least that’s the way I’m looking at it, by far the biggest obstacle for most buyers in the downpaymet, this removes that hurdle and allows bigger and bigger purchases.
http://tinyurl.com/nwe7ou
I could not agree more.
I refuse to put 20% against no skin in the game.
Haven’t we been down this road before?
This new trickle of FB & GF they’re drumming up are already bankrupt…they just need a little time, pain and debt to help them realize it.
Just humor them and keep your powder dry
Ah yes, nothing like looking out for your friends. This from the site about Isakson pushing for the 15K credit:
“Before serving in the Senate, Sen. Isakson spent more than 30 years in the real-estate industry. He opened Northside Realty in Cobb County, Ga., in 1967, and the brokerage later became Georgia’s largest independent residential real-estate brokerage, and one of the largest in the nation, according to Sen. Isakson’s biography.”
“Ah yes, nothing like looking out for your friends”
Nothin’ from nothin’ leaves nothin’
You gotta have somethin’
If you wanna be with me
Nothin’ from nothin’ leaves nothin’
You gotta have somethin’
If you wanna be with me
I’m not tryin’ to be your hero
‘Cause that zero is too cold for me, Brrr
I’m not tryin’ to be your highness
‘Cause that minus is too low to see, yeah
Nothin’ from nothin’ leaves nothin’
And I’m not stuffin’
Believe you me
Don’t you remember I told ya
I’m a soldier in the war on poverty, yeah
Yes, I am
Nothin’ from nothin’ leaves nothin’
You gotta have somethin’
If you wanna be with me
Nothin’ from nothin’ leaves nothin’
You gotta have somethin’
If you wanna be with me
You gotta have somethin’
If you wanna be with me
You gotta bring me somethin’ girl
If you wanna be with me
-Billy Preston
Had to do some digging, since Senator Isakson’s website doesn’t mention his party affiliation, though perhaps I’m blind. Anywho….Isakson is a Republican who won the seat vacated by Newt Gingrich in 1999.
Obama created and signed this into law.
the real kick in the ass is that it’s our tax money they’re using to do it with.. talk about taxation without representation…
Will these credits continue indefinitely? Because if they don’t when ever they stop it will be like a junkie in withdrawal. The longer our govnt prolongs the high, the worse the shakes when the needle is taken away.
From the North Virginia Times piece: “In April 2006, just after the peak of the boom, the average price of a home sold in Strasburg was $278,585. Winchester prices were up to $285,000, while Front Royal homes went for an average of $270,000.”
Those numbers are so far off the charts. To give some perspective, Front Royal is a pretty small town that’s approx. 60 miles or so from dowtown D.C. If someone were to commute in to DC for work, then they’d be looking at four or maybe five hours of commuting time. My guess is that median home prices in that area should come in no higher than $120,000……but $270,000 is un-friggin’ - believable…!
If you have any doubts as to whether or not the NAR are a bunch of shameless, lying hucksters who deserve to have glass catheters inserted in their Urethras then shattered, consider this:
Working for realtors, David Lereah was famously optimistic. Not anymore.
By Donna Rosato
Money Magazine - January 2009 Issue
As chief economist for the National Association of Realtors, David Lereah was famously optimistic. Now a private consultant, he’s abandoned what he calls the “positive spin.”
Q: Were you wrong to be so bullish?
A: I worked for an association promoting housing, and it was my job to represent their interests. If you look at my actual forecasts, the numbers were right inline with most forecasts. The difference was that I put a positive spin on it It was easy to do during boom times, harder when times weren’t good. I never thought the whole national real estate market would burst.
Q: The NAR’s latest forecast calls for a slight increase in home prices next year. Thoughts?
A: My views are quite different now. I’m pretty bearish and have been for the past year and a half. Home prices will continue to drop. I think we’ll see a very modest recovery in sales activity in 2009. But we’ve still got excess inventories, a bad economy and a credit crunch that will push prices down further, another 5% to 10% more. It’ll take a long time to get back to the peak prices we saw in many markets.
Q: Any regrets?
A: I would not have done anything different. But I was a public spokesman writing about
housing having a good future. I was wrong. I have to take responsibility for that.
-DONNA ROSATO - Fri Dec 19 2008, 11:14
“I have to take responsibility for that.”
Through early morning fog I see
visions of the things to be
the pains that are withheld for me
I realize and I can see…
That suicide is painless
It brings on many changes
and I can take or leave it if I please.
The game of life is hard to play
I’m gonna lose it anyway
The losing card I’ll someday lay
so this is all I have to say.
That suicide is painless
It brings on many changes
and I can take or leave it if I please.
A brave man once requested me
to answer questions that are key
‘is it to be or not to be’
and I replied ‘oh why ask me?’
‘Cause suicide is painless
it brings on many changes
and I can take or leave it if I please.
…and you can do the same thing if you choose.
Ahhh MASH. Great movie and great TV show.
Back in 1982 I was in Korea doing some networking support for an exercise. For a while I was up at Camp Red Cloud which IIUC is where “MASH” was supposed to be taking place. It was really odd to sit in the O Club after hours drinking at the bar and watching re-runs of “MASH” on the TV.
There was another option besides suicide. One could also drink and smoke heavily like my Korean War medic uncle did. Much later, after he finally lived through the loss of his family and a lucrative medical practice to wind up on skid row, he somehow managed to go through rehabilitation and kick the drinking habit. As fate would have it, he died of lung cancer within the next year.
That sounds like a bad way to go. Do you really think we could talk Lereah into giving it a try?
Wow, Prof. What a story he must have held. I hope he had a sense of humor…??
NOPE, I disagree. Sales people are sales people. Buyer beware. Someone dumb enough to believe NAR propoganda is gets what the deserve.
Here’s the thing about the woman’s story above: Her priority is the same as about 75% of Americans out there. The bubble might have risen people’s desire for houses to a feverish pitch, but people today in this country put the house as THE end game. I can’t tell you how many people I know out here in the Bay Area who are desperate- yes absolutely desperate to buy a house this very minute. If only they could get their hands on the money to do so…
You are so right! Americans are so thoroughly brainwashed about the countless benefits of home ownership that they would rather be fleeced members of the Ownership Society than financially secure renters. If only the sheeple had any money, they would be ripe for the shearing!
“…yes absolutely desperate to buy a house…”
And let’s be honest here: You are pretty much talking in particular about the gender which experiences the nesting instinct, right?
“Suzanne researched this” was really not far off the mark. In hindsight of course
Guys too.
My husband was the antsy one. I now know his true motivation: the ability to grill. (CA regulations meant we couldn’t at our apartment complex.)
Now that I’ve tasted what he can do with a $90 Weber, I see his point. Mmmmmmm.
“A Sea Change In The Way Americans Look At Housing”
What about the ‘Ownership Society’ concept? After serial crashes in stocks, real estate and stocks again, is it pretty much dead in the water now?
What about the ‘Ownership Society’ concept
its been changed to the debitorship society thanks to the good work of the FED trading treasuries for debt
Ownership Society? That’s sooo last year.
The FBs are all owned now.
And the pols are cooking up a new plot to manipulate markets to their advantage. Look at the new Medicare drug deal… if J6P is not on Medicare, he’s going to have to take out a loan to buy prescriptions, because they’re doing more cost-shifting to non-Medicare buyers in order to pretend to pay for Obama’s health care scheme.
The Ownership Society. Centerpiece (Only piece) of the Bush domestic policy platform.
The fact is that the GOP policy of Ownership Society actually destroyed the economy of the country and individuals and created the mess we’re in right now.
Here is folks… He’s touting “home”ownership as the “american dream”. George Bushes PUBLIC POLICY.
You wanted him. You got him and more. Now he’s all yours. Now OWN it.
http://tinyurl.com/ngpudf
Link is youtube clip of the Great I Am, May 17, 2002.
no your wrong. Them Dems were touting and fighting for this. we remember Frank and the likes acting like we had to do more for the minority’s rights to own a home.
Snap out of it. The gop held the whitehouse, senate and house.
Can’t we agree both parties were pushing this? Anytime Republicans and Democrats agree on something, hold on to your wallet.
Classic!!!!!!
ya’ll do recall how we forecasted RealTurds, mortgage floozies and “appraisers” resume their old occupations of flipping burgers, slinging hash, selling used cars and dancing on tables???
Look at this gem of a quote from an MSN article:
She says she quit her job as a mortgage broker in San Francisco last year to begin dancing at Sapphire Gentlemen’s Club in Las Vegas in January. “But you sacrifice your normal life,” she says.
http://tinyurl.com/ltrhn5
(very last paragraph on 2nd page)
(the obligatory) BWHAHAHAHAHAHAHAHA!
Imagine that. I’ll wager she didn’t quit too. It shouldn’t be a mystery as to why these creeps could never speak in a quantitative way about anything. Commissioned salesmen aren’t capable of telling the truth. In the event they had an epiphany and decided to get honest, the intellectual depth isn’t there either.
loved that o club story, i as off the coast of nam, chief of staff, had two docs sort of working for me, one loved the flic and one hated, guess which one i liked more, later, met a floutist from Julliard who played that tune, her gf did herself in, i slept with her even though she was a lesbian, she thought i was funny, life is good
Robert Shiller CNNMoney interview:
“…so it was just this impression that homes were this get rich quick scheme, and that is not coming back.”