July 19, 2013

Recovering Prices Fundamentally Unhinged From Reality

It’s Friday desk clearing time for this blogger. “The median home price in Southern California surged a stunning 28% in June compared with a year earlier — outpacing any month during last decade’s housing bubble. The gain puts the median at $385,000, up from $300,000 last June. Syd Leibovitch, founder and president of Rodeo Realty in Beverly Hills, said he expects prices to double from their bottom last year. ‘You have a lot of room to run,’ Leibovitch said. ‘Because historically, they always double in these cycles, and then they drop back a bit.’”

“In the first half of 2013, house flipping was on the rise in more than two-thirds of housing markets. Investors who flipped houses in Washington, D.C., saw an average 80 percent gross profit, the highest in the nation. Nebraska was next with 62 percent gross profit, followed by Oklahoma (35 percent), Pennsylvania (31 percent) and Florida (25 percent). ‘We’re seeing house flipping exceed what we saw back during the height of the housing bubble,’ said Daren Blomquist, VP at RealtyTrac.”

“Wall Street-backed investment groups have emerged as a new breed of homebuyer in Charlotte. ‘Oftentimes they like the newer-built homes on slab with vinyl siding,’ said Anthony Moore, co-owner of Charlotte-based real estate company Pike Properties. ‘A lot of times they really won’t even look at the properties very hard. They’ll literally just buy sight unseen.’”

“The interest rate boost is actually working in the buyer’s favor, according to Dean Wegner with Guaranteed Rate. He said for the past couple of years sellers held all the cards, picking from multiple offers. This interest rate boost levels the playing field. ‘Buyers will have more flexibility negotiating with an easier close of escrow, you won’t get bullied by other buyers or their agents,’ he said.”

“And to potential home buyers who are frightened off by a 5 percent mortgage rate, Wegner said rentals come with a 100 percent interest rate. Wegner said the rate hike to almost 5 percent prevented a possible housing bubble because seeing home prices jump 20 percent year over year was unsustainable. ‘We needed something to hit the brakes.’”

“Are we in another real-estate bubble? Zillow chief economist Stan Humphries considered the typical monthly mortgage payment after a 20% down payment. Between 1985 and 2000—the ‘normal’ period—the typical American homeowner paid 20% of their income on a mortgage payment. The median mortgage payment fell to 12.6% in 2012 and, at current mortgage rates—4.63%—homes in the biggest 30 metropolitan areas are more affordable than their historic norms. But that starts to change when rates rise above 5%, Zillow says. At that point homes in several metro areas start to look more expensive than their historic norms.”

“‘And, logically, the six markets that were more expensive at 5% only look even pricier at 6%. In San Jose, for example, at 6% mortgage interest rates, homeowners can expect to pay 36% more of their monthly salaries on mortgage payments than they were paying between 1985 and 2000,’ Zillow says.”

“The Federal Reserve should begin tapering its $85 billion bond-buying plan very soon with an eye toward ending it by the end of this year, said Charles Plosser, the president of the Philadelphia Fed Bank. ‘We don’t want to create another housing boom and we have to be careful of the unintended consequences of our policies,’ Plosser said.”

“New England may have been spared the worst of the Great Recession, but the slow and uneven recovery is widening the divide between the affluent and the poor and threatening to create a permanent underclass with few prospects for better jobs or better housing, according to the Federal Reserve Bank of Boston’s July Community Outlook Survey. Sixty percent of survey respondents said they expect little change in low-wage job availability over the next six months.”

“Most respondents were also pessimistic about the availability of affordable housing, which will be ‘even further out of reach’ for low-wage residents if home prices continue to increase. ‘If this trend continues,’ the Fed concluded, ‘it ensures further income disparities, which economists and service providers alike suggest lead to additional long-term negative effects on the social and economic well-being of the region.’”

“Our nephew, a high school teacher and coach in southern California, decided to stop paying on his mortgage a year ago. Matt, 34, is still in the home. I thought about him recently when I read that foreclosures are taking longer to complete, with the average time it takes a lender to repossess a home jumping to 477 days, up from to 414 days in the fourth quarter of 2012. ‘I was really concerned about doing the right thing,’ Matt said. ‘I didn’t want to hurt my credit by getting behind, but there were larger homes in our neighborhood we could rent for half of what we were paying on a mortgage.’”

“Meanwhile, the Office of the Inspector General (OIG) at the Federal Housing Finance Agency announced it is trying to find strategic defaulters and collect on what they still owe. The OIG says such walkaways have constituted mortgage fraud, and the OIG plans to refer them for criminal prosecution. The OIG estimates that strategic defaulters owe more than $1 billion to Fannie Mae and Freddie Mac, and they’re ready to start collecting. ‘We’re not just going to demand repayment,’ Heather Wolfe, OIG assistant inspector general for audits, was quoted as saying. ‘We’re going to lock [people] up.’”

“Each month, sales reports say the housing market is recovering in Ohio and in the rest of the country. But Ohio still had more than 90,000 foreclosures last year. The National Mortgage Settlement alone was worth $25 billion. In March of 2012, 49 states signed on to the deal with mortgage servicers who had admitted to massive ‘robo-signing’ of loan documents and other abuses. The settlement was supposed to be an expedient way for some 1 million people to keep their homes.”

“But Paul Bellamy director of research for a group called Empowering and Strengthening Ohio’s People, an advocacy group involved in foreclosure prevention statewide. likens it and other programs to ‘foaming the runway, again and again and again.’ As in, preparing for a major crash and trying to keep things from blowing up.”

“You might think that we have been living in a post-bubble world since the collapse in 2006 of the biggest-ever worldwide real-estate bubble and the end of a major worldwide stock-market bubble the following year. But talk of bubbles keeps reappearing. Bubbles are essentially social-psychological phenomena. One problem with the word bubble is that it creates a mental picture of an expanding soap bubble, which is destined to pop suddenly and irrevocably. But speculative bubbles are not so easily ended; indeed, they may deflate somewhat, as the story changes, and then reflate.”

“It would seem more accurate to refer to these episodes as speculative epidemics. A new epidemic can suddenly appear just as an older one is fading. A new speculative bubble can appear anywhere if a new story about the economy appears, and if it has enough narrative strength to spark a new contagion of investor thinking. This is what happened in the bull market of the 1920’s in the US, with the peak in 1929. A major boom in real stock prices in the US after ‘Black Tuesday’ brought them halfway back to 1929 levels by 1930. This was followed by a second crash, another boom from 1932 to 1937, and a third crash.”

“Speculative bubbles do not end like a short story, novel, or play. There is no final denouement that brings all the strands of a narrative into an impressive final conclusion. In the real world, we never know when the story is over.”

“In March 2000, the Nasdaq composite stock market index closed at an all-time high of 5,048.62 and then promptly rolled off the table, losing nearly 80 percent of its value by October 2002. One way to look at it — the way real estate people look at the for-sale housing market — is that in more than 13 years the Nasdaq composite has never ‘recovered.’ It’s still down more than 25 percent from its peak.”

“The thing is, stock market people didn’t usually talk about the Nasdaq composite in terms of recovery after the Nasdaq bubble burst, maybe because they were simply too embarrassed. So why is ‘recovery’ the word just about everybody uses when discussing the housing market? This is more than a complaint over a word choice; the language broadly used to describe financial assets and choices for consumers really does matter. Talking about a recovery suggests some sort of natural level for housing prices, much like a rainy spring after a drought leads to a recovery of lake water levels.”

“But it’s batty to imply that any asset should quickly reach its previous high in valuation as more normal times return, not when the old high reflected prices that were fundamentally unhinged from reality.”

“Consumers, of course, could be accepting all this talk of recovery at face value. That could be what explains news like what was reported by the June Thomson Reuters/University of Michigan consumer surveys. It turned out that the highest proportion of consumers since 2007 expect an increase in house values in the coming year and the fewest consumers in 10 years believe it is a bad time to buy a house.”

“Herb Tousley, the director of the Shenehon Center for Real Estate at the University of St. Thomas Opus College of Business, produces closely watched real estate market data. In looking at conventional sales, by which he means a real estate deal that wasn’t through a foreclosure or a short sale, the median price in June was $232,000. That’s inching very close to the peak of the bubble, a median price of $239,000 in June 2006.”

“So, enough about the ‘housing recovery,’ and worries over the fragility of the ‘recovery’ and the sustainability of the ‘recovery.’ In fact, by one common measure of valuation — the median value of a house as a multiple of median household income — the market may already be overvalued.”

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Comment by P.T. Barnum
2013-07-19 05:46:31

“The OIG estimates that ’strategic defaulters’ owe more than $1 billion to Fanne Mae and Freddie Mac, and they’re ready to start collecting. ‘We’re not just going to demand repayment … we’re going to lock people up.”

One born every minute. The strategic defaulters pay a hefty fee to get some sort of legal advice from someone who tells them what they want to hear, which is that they don’t have to pay anything anymore on their mortgage.

But … but … but, sometime later the mean ol’ Government comes collectin’.

And where are these legal advisors and what happens to them? Well, nuttin’ because they are not the ones who signed the dotted line and then decided to simply walk away.

Comment by P.T. Barnum
2013-07-19 06:49:40

What’s nifty from the legal advisor’s point of view is the cash-strapped FB is no longer cash strapped once he stops paying on his mortgage.

When he stops paying on his mortgage the FB will suddenly have lots of cash available to pay the hefty fees he owes to his legal advisors.

Comment by Al
2013-07-19 07:16:56

I think the OIG is off on this one. If an FB stops paying a mortgage, it’s a breach of contract like any other breach of contract. Nothing criminal or fraudulent.

Comment by inchbyinch
2013-07-19 07:54:17

True enough, but we collectively are paying the tab in bailouts and money printing. When you breach a contract it is usually a bilateral agreement, whereas strategic defaulters have done more than a breach, imho.

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Comment by inchbyinch
2013-07-19 08:07:31

I assume the IOG is giving it lip service. How many we’re coming after you, have we all lived through?

Comment by Al
2013-07-19 10:03:49

hey ibi,

It probably is lip service, or maybe an attempt to intimidate the next round of strategic defaultes. As far as the bailouts go, they weren’t covered in the mortgage contract so they shouldn’t play a part in a legal decision. Moral could be argued.

Comment by inchbyinch
2013-07-19 10:18:09

Firstly, you’re a first class act, to have an opposing viewpoint w/o attacking. Good point, but these pos need their comeuppance. When we belonged to Foreclosure Radar, we were blown away w/ no house payment for years, yet our drive-by would see a new vehicle in the driveway. Something is terribly wrong w/ gaming the system and getting away w/ it. Meanwhile us honest folks are getting screwed.

Case in point, our neighbors. They are strategic defaulters. Saved their house payment money, and eventually walked away with all their savings, and went FHA 3.5% down on the house next door. They had the cash to remodel some, plus they are finishing their remodeling w/ a refi. Then we have neighbors doing it right, having to wait for their savings to pay for it. It’s just wrong, Al. I get the life isn’t fair thing, but this goes beyond that.

Comment by "Uncle Fed, why won't you love ME?"
2013-07-19 11:03:22


I doubt anyone would get another mortgage so soon after defaulting on the first.

Comment by inchbyinch
2013-07-19 11:16:29

Uncle Fed
FHA and a year or two later. Happens.
Lots of legislation to help these poor “victims” out. Credit is healed quicker. Read up on it. Your BP will go up.

Comment by inchbyinch
2013-07-19 11:22:00

Uncle Fed- a quick internet search…
•FHA guidelines are two years after a foreclosure, which means you could qualify for as little as 3.5% down.

Good rental history for the last 12 months may be required. A lender may require a Verification of Rent (VOR) from a Rental Management Company or 12 months of cancelled checks showing rental history if the landlord is a private owner.

To buy a home after foreclosure you must have a minimum down payment of 3.5% if your credit score is above 580. The down payment can be the borrowers own funds or can come from a gift.

Borrowers with credit scores below 580 must make a 10% down payment.

Comment by Al
2013-07-19 12:06:31

It’s also possible that the people that bought next door hadn’t even been foreclosed on yet. They might have stopped paying, received NoDs but not actually been foreclosed on.

I see there being 2 types of strategic defaulters. Those that could easily pay but don’t want to, and those that can pay for now but know they’ll destined to default anyway and speed up the process.

Comment by "Uncle Fed, why won't you love ME?"
2013-07-19 12:17:06

I’m guessing Al is right. The bank never foreclosed on them, so their score was still above 580. I think a foreclosure lowers your credit to a super-low number.

Comment by mikeinbend
2013-07-19 12:45:14

That is why my wife defaulted on our dream home. We were going to lose it regardless as its “appraised value” plummeted by 65%. We did not do our due diligence but neither did the bank when they loaned a grocery checker a third of a million.

Not too afraid that anyone will come knocking looking to be made whole; nor could she do it anyway should anyone try.
Oregon is a non-recourse state anyway; if that has any bearing on who fannie and Freddie are fixing on coming after.

So far the only repercussions (other than a hit on her credit) have been a couple years free rent (in her, I mean the bank’s home), and then a check issued to her this June to the tune of $1400, for the banks robosigning shenanigans.

So the bank has some ’splaining to do if they want $$; like who was undersigning these loans and why were they risky lending to anyone with a pulse in the first place.

a third of a million handed to a grocery checker; seems low risk, right?? We were banking on some appreciation but that did not happen so we flailed. Don’t get to live in the dream home anymore so all has been restored just took some time.

Comment by Housing Analyst
2013-07-19 13:05:56

“dream home” lolz

Comment by oxide
2013-07-19 13:44:30

Hi Mike, how’s the organic grocery store going?

And I guess that HA/Pimp was right, condos in Bend did crater by 65%.
Note the past tense.

Comment by Housing Analyst
2013-07-19 14:15:13


DC is next.

Comment by mikeinbend
2013-07-19 15:10:27

HA- glad you are chuckling even at my expense. Go ahead laugh it up, on me! It was our dream house for many reasons; not being able to afford it was not one of them. But it puts things right in the universe (I mean why should someone let equity gains alone, especially from an historically depreciating asset, plop them into their dream home?). Now we are in a 1000 sq ft rental. Close but no cigar. Was able to buy a business debt free though so I don’t feel too sorry for myself; that feeling I reserve for you.

Oxide-Farm store is going well, thanks for asking. Small biz is a lot of work; I suppose all you “bootstrappers” out there know that. Wife and I hit the sheets at 9 pm and I am out the door at 5AM to set up the next day.. Not so much idle TV or internet bs-ing time. Kids working the register PT is valuable experience for them too.

Have doubled weekly sales since taking over; a lot of that is seasonal but having our own commercial kitchen means we also have available lots of value added products such as daily soups and sandwiches, cookies, pies cakes etc. So we don’t have to close when the snow flies and the veggies die.

And catering gigs; tomorrow its three salad offerings for 25 people. Lots of room to expand using the commercial kitchen (lease it out when we are not open, make our own juice, jams, salsa etc.). Also room for a flower stand or nursery. Sold quite a few heirloom tomato starts last month. We are adding a big grocery component next week as we lined up an account with a large wholesale natural foods supplier.

Another good thing is that our main organic produce supplier, Organically Grown Co. is sending a truck to Central Oregon starting August 17 (means I don’t have to drive 2 hrs to Eugene to pick up). Plus its all fun for me; like teaching it is something I enjoy.

Comment by inchbyinch
2013-07-19 16:40:41

So happy to hear your small organic grocery business is growing, and your family is happy. I envy your new path.

NPR had a great piece on how Madison Avenue created Whole Pay Check.

Trader Joes had ginger products w/ unacceptable lead level. Ginger candies were one item. Ca’s Attorney General got on their backs to remove the items from their shelves.

Comment by mikeinbend
2013-07-19 19:06:09

Whole Paycheck kept me in the organic industry in a way.

Somewhere in the nineties corporations decided that going organic was the way to make more money, as organic farmers had created demand for a higher priced commodity; of course corps are gonna want a piece/or all of that action. The wholesale market got a lot tougher for the producers as a result. The consumer got “organic”, but much more produced using the monoculture model, and on a much larger scale, (all the big farms on the Oxnard floodplain now offer organics grown right alongside their conventional crops, rather than rotating small crops which was the traditional organic model as I understood it.

Could have spawned the birth of the “local” movement as consumers still wanted food that was lovingly cared for; organically grown does not mean that AT ALL anymore. The big boys have taken over the market for the most part. Think Safeway, Walmart Target and others all carrying organics these days. That sort of production does not lend itself to loving each tomato individually!

Whole Wallet, well they were such sporadic buyers and even then it was just based on price; thus impractical to farm for.
Around the same time they bought out Wild Goats.

I convinced the area’s biggest organic truck farm (Goleta) to take their goods straight to the consumer rather than truck farm for such crappy buyers. And I kept working in the industry since my old boss went under.

Comment by inchbyinch
2013-07-19 22:52:23

What a fascinating post.
I would love to buy all organic, but money
is too tight. I use the Environmental Working Group’s pesticide list and avoid high pesticide produce. I do buy organic apples and was shocked at first bite. It tasted like an apple, not a chemical fruit cocktail.

We live in east Ventura County and try and shop the Farmer’s Market for organics when we can. We eat 80% healthy and move our bodies everyday.
I miss Mrs. Gooch’s. WF sucks.

I am jazzed for you, and although you’re busy, let us all know how you’re doing.

Comment by "Uncle Fed, why won't you love ME?"
2013-07-19 11:00:36

I don’t think that it’s illegal to default on a mortgage for any reason.

Comment by Rental Watch
2013-07-20 01:01:41

I didn’t think so either…I wonder if there are certain circumstances/certain loan covenants in play in some situations that allow claims to be made. I can’t think of what those might be, but if you have enough attorneys looking at the documents, there might be something…

Comment by Puggs
2013-07-23 10:57:14

Funny, It looks like they want to tweak the rules to raise some capital? Probably the best policy in life is to pay your bills and stay above board. You just MIGHT avoid headaches down the road?

Comment by Beer and Cigar Guy
2013-07-19 06:06:49

“…Wegner said the rate hike to almost 5 percent prevented a possible housing bubble because seeing home prices jump 20 percent year over year was unsustainable. ‘We needed something to hit the brakes.’”

You won’t need to worry about brakes, Einstein. It will all stop very shortly after it goes off the edge of the cliff.

2013-07-19 07:02:49

Great post! I think prices are going to continue to rise as more and more people realize they are wasting money with their rent!

Comment by AmazingRuss
2013-07-19 07:06:36

And everybody gets a free pony!

Comment by Whac-A-Bubble™
2013-07-19 07:13:18

“I think prices are going to continue to rise as more and more people realize they are wasting money with their rent!”

Everyone who buys now will soon be a millionaire, as real estate always goes up!

Comment by Ben Jones
2013-07-19 07:14:13

From your website:

‘Buy vs. Rent

Benefits of Owning A Home

Pride, comfort and stability in owning your own home. You can customize your home exactly the way you want it to fit your needs.
When paying money towards the principal on your loan each month, you increase the percentage of your home that you own.
Mortgage payments remain the same with a fixed rate loan. Rent costs, however, inevitably go up.
When filing your tax returns, you can deduct the interest you pay on your mortgage.
You gain from the appreciation on your home. The whole house appreciates, not just your down payment.
Recent tax law changes allow you to sell your home after 2 years without paying tax on your gain.

Downside of Renting

In renting, you do not accumulate equity. You are essentially giving away your money each month.
The landlord benefits from the appreciation values, not the tenant.
You are at the mercy of the landlord – if your rent is increased, you are subject to the lease.
You live in a space not designed for you and without your personal touch.
The landlord benefits from your work and improvements on a house or apartment that you rent.
Rent payments are not deductable from income taxes

Comment by Housing Analyst
2013-07-19 07:22:39

Krusty The Realtor. ;)

Comment by Bubbabear
2013-07-19 07:38:16

Another Shill out peddling his wares …is it one bottle for $5 or two bottles for $8

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Comment by AmazingRuss
2013-07-19 08:03:29

Did you see their photo on the site? A pack of sleazoids if ever I saw one.

Comment by pazuzu
2013-07-19 16:27:24

What’s up with the “hands clasped at the crotch” pose so many of them have, is this something they are taught at NAR school? Gah looking at so many commission grubbers at one time makes the skin crawl.

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Comment by Beer and Cigar Guy
2013-07-19 08:53:10

Wow! We may have just discovered the center of the Vortex of Stupid. $500,000 for a 3,200 sq/ft chipboard box on 1/5 of an acre in a cookie-cutter sub. ‘Experience the joys of zero lot-line living as you are trapped nose to nose- along with your equally screwed neighbors- in the unfolding collapse of Bubble 2.0.’

Comment by oxide
2013-07-19 10:51:08

I suspect these idiots show up because they google for Charlotte. Ben quoted a Charlotte article today. Probably trying to sucker in a lurker.

Go away, Realtors. Don’t call us; we’ll call you.

Comment by Housing Analyst
2013-07-19 10:57:47


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Comment by Robin
2013-07-19 12:20:59

I think a better label for the residential housing market would be “Balloon”, rather than “Bubble”. As someone earlier said, it never pops completely, just deflates and re-inflates over time.

Comment by "Uncle Fed, why won't you love ME?"
2013-07-19 11:04:35

Isn’t this the same spammer that has been selectively allowed to post several times on this blog?

Comment by AmazingRuss
2013-07-19 13:06:37

I found him pretty amusing. Almost parodic.

Comment by In Colorado
2013-07-19 08:20:40

Wall Street-backed investment groups have emerged as a new breed of homebuyer in Charlotte. ‘Oftentimes they like the newer-built homes on slab with vinyl siding,’

My brother has observed this in his suburban (more like exurban) Raleigh nabe: A house goes on the market, the ‘under contract” sticker appears on the “For Sale” sign, which then disappears. Then within a month a “For Rent” sign appears.

Comment by "Uncle Fed, why won't you love ME?"
2013-07-19 11:07:49

They were saying on NPR this morning that several of the big players in this scheme are under investigation for illegal business practices, including Blacksone. They are colluding.

Comment by snake charmer
2013-07-19 12:52:22

The big players are under investigation for illegal business practices? They have got to be scared. The government’s going to sic its golden retriever on them. Look out Blackstone!

Comment by AmazingRuss
2013-07-19 13:14:08

They shall endure an horrendous licking!

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Comment by United States of Moral Hazard
2013-07-19 14:21:08

Blackstone, Blackrock, Goldman Sachs, JP Morgan, etc.- they don’t play by the rules you and I are subject to. These bastardizations of “free market capitalism” are corrupt to the core. They are, at this point in time, above the law. There is no political will to prosecute, as anyone with the authority to do so has been bought off. It is a dire situation.

Comment by Whac-A-Bubble™
2013-07-19 23:40:26

“Wall Street-backed investment groups have emerged as a new breed of homebuyer in Charlotte.”

It’s an old group, known as fly-by-night investors.

Comment by snake charmer
2013-07-19 09:00:39

Not only are we deliberately resurrecting the housing bubble, but we also are resurrecting the academic celebrity intellectuals whose failures materially contributed to the associated economic crisis. I read, to my amazement, a rumor that Larry Summers is being considered as Bernanke’s successor at the Fed. Are we kidding ourselves? In addition to his posture on derivatives, no one that conceited should hold a leadership position in any organization, much less one in an entity where individuals not subject to the democratic process set national economic policy. If we’re going to go in that direction, why not re-install Alan Greenspan? I remember when Glenn Hubbard, who Countrywide paid $1,200 an hour to be an expert witness, was being suggested as a potential Secretary of the Treasury in a Romney administration. I thought, “what kind of a country would do that?”

We are a foolish people and we are going to get what we deserve.

Comment by inchbyinch
2013-07-19 11:59:27

“Larry Summers is being considered as Bernanke’s successor at the Fed”

Two words “Oy Vey”. Summers is in the inner circle and makes Bernanke look like a Boy Scout.

Comment by snake charmer
2013-07-19 12:57:07

There’s actually an Irish bookmaker laying odds on this. Summers has 11-2 odds. Janet Yellen is the prohibitive favorite at 1-4.

Jeffrey Sachs, who no doubt disqualified himself by virtue of his recent candid remarks, is 300-1. Taleb is 1000-1.


Comment by michael
2013-07-19 09:31:52

“The Federal Reserve should begin tapering its $85 billion bond-buying plan very soon with an eye toward ending it by the end of this year, said Charles Plosser, the president of the Philadelphia Fed Bank. ‘We don’t want to create another housing boom and we have to be careful of the unintended consequences of our policies,’ Plosser said.”

holy crap…holder needs to open an investigation into this asshat!

Comment by "Uncle Fed, why won't you love ME?"
2013-07-19 11:11:42

“Should”, not “will”.

Comment by imaadesi
2013-07-19 09:53:59

Question for experts here
I am interested in a house which is market in South NJ. As far as I know, the owner/defaulter is living in the house for almost 3 years without paying any mortgage payment to bank. The deal with the bank is perhaps that you keep the house maintained and you move out when the bank is able to sell the house.
The house was listed for 229K few months back and I offered the listing agent 229k but he said that there is another offer but the bank is not agreeing to anything less than 265K. The house after sometime went into under contract but one month later it again came back in market at 205K. I contacted the listing agent again but he is not responding. To me it seems that current owner and listing agent are conspiring against the bank and are engaging in fraud, so that they can buy the house at much less than what others can give.
My question is what should I do?

Comment by Al
2013-07-19 10:06:26

My advice.

If you have time, make life difficult for the bank, listing agent and ‘owner’. But forget about owning that house.

If you don’t have the time, just forget about owning that house.

Comment by "Uncle Fed, why won't you love ME?"
2013-07-19 11:13:08

You should contact the bank directly and make your offer. The RE-tard is using it as a pocket listing.

Comment by imaadesi
2013-07-19 11:26:50

if i knew the bank which owns the house I would have contacted them and this would have been best way to do it. Not sure how to find this info.

Comment by "Uncle Fed, why won't you love ME?"
2013-07-19 12:18:26

Look up the ownership info on the county recorder’s website.

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Comment by imaadesi
2013-07-19 10:09:15

Thanks, I definitely want to forget about that house but how do I make life difficult for owner, listing agent and perhaps bank:), I have lot of free time

Comment by Housing Analyst
2013-07-19 11:29:36

Report it as a financial crime.

Comment by snake charmer
2013-07-19 12:58:25

Too funny. That will make life difficult for imaadesi.

Comment by imaadesi
2013-07-19 20:35:33

Nope it was easy for me. I reported it to Listing agent’s agency and someone else from the agency contacted me and they would help me with this.

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Comment by michael
2013-07-19 10:18:44

the MSM fuels the flames of racism with faux sympathy for the Martin family’s plight that white privelage deprived their son of justice yet they are giddy as gumdrops over the prospect of a new british royal.


Comment by Lemming with an innertube
2013-07-19 11:04:10

“giddy as gumdrops” - lol!

Comment by sippin on some sizzurp
2013-07-19 11:07:39

‘hell naw u could just use robitussin nd soda to make some fire ass lean’

Trayvon Martin’s knowledge of substituting Robitussin for Promethazine with codeine syrup shows that had he lived, he would have one day likely become a recipient of the Nobel Prize in Chemistry.

Comment by Robin
2013-07-19 12:30:00

If the Royal Fetus presents as a hermaphrodite, is it Prince, Princess, or something new? - :)

Comment by "Uncle Fed, why won't you love ME?"
2013-07-19 10:41:05

“It would seem more accurate to refer to these episodes as speculative epidemics.”

Yes, I think the word “epidemic” is becoming more apt, since it describes a continous cycle of deflating and reflating bubbles. I do not agree, however, that it’s a psychological phenomenon. I think it’s a socio-economic phenomenon.

The global bubbles keep happening because of coordinated efforts by central banks, “international” governing organizations, and, ultimately, corporatism. The march forward toward global corporatism is making it easier and easier for a few people to dominate the punch bowl. They drink all the punch when they’re thirsty, and then order a refill.

If the various international governing boards gave a rat’s tail about capitalism, democracy, or the rule of law, then things would not be this away. The global elite does not care about those things. Most of the world doesn’t understand or respect those concepts at all. Most people in the world believe that society must be run by a select few of special people, and so of course those few should dominate the punch bowl.

As long as we continue trending toward international rule, then American ideals will continue to erode, and the wealthy will continue to game the system until every sheep has done been sheared.

Comment by kmo722
2013-07-19 10:43:18

Ben.. thanks, as always, for your excellent work on this blog.. Given your unique perspective and history on all of this, I would be interested in how you see this whole thing play out over the next few years… Is John Paulson really right ? a home is the best investment you can make today ?

Comment by Housing Analyst
2013-07-19 11:04:19

Depreciating assets like houses aren’t “investments”.

Comment by kmo722
2013-07-19 12:48:45

not trying to argue any point with you.. for some, houses are just another asset to move money into and out of like bonds or equities… for others, its a just a home..

now, to my question..

Comment by AmazingRuss
2013-07-19 14:27:04


Comment by Rental Watch
2013-07-20 01:15:11

Unless you can support a strong rental yield with the purchase price, it is a speculative investment. The opportunity to buy at those yields is largely gone, and so an investment in a home today is a bet that rental yields continue to fall in a rising rate environment.

This may occur for a time in some markets.

HOWEVER, housing today is much more of a speculative bet than one based on cash flow anchoring value.

Do I think home prices will continue to rise? In many markets, yes.
Does that mean I think a house is a good investment? No…it’s illiquid (just the time you want out, you can’t sell quickly), very expensive to maintain and with high transaction costs.

If you want to make a bet that home prices will continue to rise generally, invest in companies that do well with rising home prices (home improvement, homebuilders, etc.). If you ever want to get out, it’s a click of a mouse, and small commission.

Comment by United States of Moral Hazard
2013-07-19 16:57:53

Everything is fundamentally unhinged from reality. Look at the crude oil bubble. It’s almost $110, while consumption is down, down, down. Bubbles Bernanke and his merry band of bankers.

Comment by Bubbabear
2013-07-19 22:44:45

Everything is fundamentally unhinged from reality.

…and as a result

The Economy Is Contracting: Real GDP Is Now Likely Negative And No Taper Coming

Underlying economic reality remains much weaker than Fed projections. As actual economic conditions gain broader recognition, market sentiment should shift quickly towards no imminent end to QE3, and then to expansion of QE3. The markets and the Fed are stuck with underlying economic reality, and, eventually, they will have to recognize same. Business activity remains in continued and deepening trouble… - John Williams, Shadowstats.com


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