Seeing The Effect Of Unabated Speculation
It’s Friday desk clearing time for this blogger. “Houses sold in one day, above asking price, with multiple offers. It’s the reality of the Austin area’s hot housing market. Realtors have a unique way to get you the house of your dreams. These pocket listings, as they’re called, are nothing new. In Austin however, they’re becoming more prevalent as realtors use them as a tool. It’s the result of a housing market realtor Matthew Layman describes as ‘crazy, bananas.’ ‘Your buyer was frustrated because you’re going against that multiple offer situation and a lot of times paying way too much,’ Layman says.”
“In La Cañada Flintridge, the number of homes for sale eked up by one to 28 last month. The number of homes sold showed a healthy gain from seven in January 2013 to 16 last month. The median price for a home shot up from $1.19 million to $1.48 million in a year-to-year comparison. Paul Habibi, real estate professor with the UCLA Anderson School of Management, said sales of high-end homes priced over $5 million are ‘on fire.’ While there may not be many of them on the market, the ones that are for sale are fetching ‘egregiously high’ prices, he said.”
“The foreclosure rate in Maryland has steadily risen in recent months. A consortium of community and civil rights groups are pressuring Maryland legislators to commit to a six month moratorium on foreclosures in the state. Del. Aisha Braveboy joined state Sen. C. Anthony Muse in introducing legislation in the General Assembly that would put more restrictions on banks during the foreclosure process and on how banks maintain foreclosed properties. ‘The [legislation] will hold the banks accountable and prevent the artificial depreciations of home values in our state,’ she said.”
“The number of New York and New Jersey homeowners losing their houses reached a three-year high in 2013. Banks in these states have been slowly working through a backlog of delinquent loans that enabled borrowers to skip mortgage payments for years. Now these properties are poised to empty onto a market where affluent Manhattan suburbs neighbor blighted towns that are struggling most with surging defaults. Jon Pardi, a 62-year-old resident of Edison, said he could no longer pay his loan because his commission-based income as a mortgage broker dropped to $20,000 a year from a peak of more than $100,000. Having little confidence in New Jersey’s housing market rebounding, and the career prospects for loan officers, Pardi is training to become a holistic nutritionist.”
“‘My odds are down but the chances of saving my home aren’t zero,’ Pardi said. ‘If I start making money again, everything changes. But if jobs don’t come back for me, and for my country, then it’s going to keep moving in a down direction.’”
“‘Inventory is down, there’s no doubt about it,’ said Jan McInturf, owner and broker at McInturf Realty in New Philadelphia. McInturf said there were a high number of homes foreclosed on over the last few years, and he anticipates more to be added. ‘Homes were foreclosed on in massive amounts and we’re still slowly recovering from that,’ McInturf said. ‘And, from what I understand, there is still a surplus of homes that are going to be foreclosed on yet this year and brought back on the market. The government intervened and stopped all that from happening so our market wouldn’t be so saturated that it would really hurt us.’”
“The party might be over for Vancouver’s high-end luxury housing market, according to Immigration lawyer Richard Kurland who’s studying the impact of Canada’s investor program – and more importantly, what will happen now that it’s been cancelled. Kurland foresees a wave of listings for high-end properties seeking buyers before the market drops. ‘I’ve been waiting for this to happen,’ Mr. Kurland says. ‘I expect to see ‘for sale’ signs on expensive properties sprouting like mushrooms, once people figure out what it means to cut off 1,000 buyers at the high end.’”
“The property sector is divided in its opinion on the direction of China’s housing market, with a pessimistic sentiment growing among buyers and worrying some developers, the Shanghai-based China Business News reports. ‘There is a real worry about becoming a buyer at peak prices,’ said a woman surnamed Li, who had bought a house in Guangzhou at the end of last year. ‘I already have trouble sleeping.’”
“Speculators looking to make quick profits by flipping newly built properties are likely to be disappointed this year, the Malaysian Institute of Estate Agents said. With most of these properties scheduled for completion in 2014 and 2015, the primary market will be flooded and depress prices, said MIEA president Siva Shanker. Shanker said many Malaysians had previously rushed to buy new properties from developers, thanks to incentives such as interest-free loans during the construction period. ‘Now we are going to start seeing the effect of this unabated speculation in the past three to four years,’ he told reporters.”
“More than 11m homes lie empty across Europe – enough to house all of the continent’s homeless twice over – according to figures collated by the Guardian from across the EU. In Spain more than 3.4m homes lie vacant, in excess of 2m homes are empty in each of France and Italy, 1.8m in Germany and more than 700,000 in the UK. There are also a large numbers of vacant homes in Ireland, Greece, Portugal and several other countries. Many of the homes are in vast holiday resorts built in the feverish housing boom in the run up to the 2007-08 financial crisis – and have never been occupied, many of which were bought as investments by people who never intended to live in them.”
“‘It’s incredible. It’s a massive number,’ said David Ireland, chief executive of the Empty Homes charity. ‘Homes are built for people to live in, if they’re not being lived in then something has gone seriously wrong with the housing market.’”
“The housing recovery ought to be gathering steam, since the economy is improving, the unemployment rate is falling and banks are easing up on lending standards. Yet the opposite seems to be happening, with home price gains flattening out and sales of existing homes–the vast majority of all sales–dipping. ‘We’re just losing our general sense of optimism about housing,’ real-estate expert Robert Shiller, a professor at Yale University, said in a recent conference call. ‘It’s not fun anymore.’”
“Home prices fell by about 35% on average from 2006 to 2012, according to the S&P/Case-Shiller index, and they’ve bounced back by about 25% since then. But the pace of growth is likely to slow in 2014. Many analysts expect modest price gains of 5% or so in 2014, but another downside surprise is distinctly possible. ‘There really is a worry we might see falling prices by 2015,’ says Shiller.”
‘Your buyer was frustrated because you’re going against that multiple offer situation and a lot of times paying way too much,’
It’s amazing to me how many suckers there are who will fall for these scams.
It truly is a scam. I’m stunned by the number of gullibles that believe the realtor lies.
It’s their lives and their money to throw down real estate rate holes.
“rat holes”
We all have built in lie detectors called brains. Most people are terrible liars. They just don’t get caught because most people think it impolite (or are too scared) to directly question them about the lie and closely observe the reaction. Usually the reaction tells you all you need to know.
I only had the “there is another offer” thing happen to me once while I was looking. The realtor’s face fell when I told her, “fine, they can have it.”
That’s awesome. I’d love to end it with “…the price is to high anyways”.
UHS talk themselves out of interest all the time. Don’t they know a buyer isn’t going to like it when they say, market time is under a month (or less). Want to really see a look on their face? Tell them, I’m only interested in something that’s been on the market a long time and has had several price cuts. Call me when you have one of those.
“fine, they can have it.”
I’ve made that statement on the phone and hung up on the Realtliar before.
Another experience;
A very close friend was looking for a a piece of dirt to set up shop. A lot with a pole barn or steel building was ideal and he found one for sale and asked me to do a walk through with him. Without enough info I told him I’d be there on Saturday not realizing the scumbag realtard was going to be there. Very well….. I tolerated this babbling slob for what seemed like hours, cringing at his every lying word until….. until he made the statement “there is an offer on it”. That’s all it took.
“I tell you what you lying piece of _hit. I just drove 5 hrs to help someone out and you disclose there is an offer on it after I get here? You got 5 seconds to get in your _ucking car and get the _uck out of here because you’re gonna get carried out in pieces if you don’t.”
He left promptly. I’m glad he did because I’d have gone to jail that day.
PS- That was in 2010 and the dump is still for sale today. I wonder if the seller knows he’d have had a buyer 4 years ago if it weren’t for a lying conniving scumbag?
This media sound bite suggests that it’s all about psychology in Shiller’s corner of the economic universe. Dismal fundamentals have nothing to do with the situation.
I can remember when there weren’t TV shows about buying and selling houses. At least someone is laughing:
‘Earlier this week, we considered the amount of laughter in Federal Open Market Committee meetings as a sign the Fed wasn’t fully cognizant of the coming financial storm.’
‘Today’s chart (via Elliot-today) adds another component to this, overlaying the Fed’s laughter with the Case-Shiller residential real-estate price index. Perhaps the best way to examine the contrast is as a function of mass psychology: The Fed appears to have become complacent, apparently relaxed and satisfied with the way it handled the aftermath of the dot-com/technology/telecom bubble that burst in 2000.’
On this:
‘it’s all about psychology in Shiller’s corner of the economic universe’
It’s not just his, all these people. Bernanke’s never been unemployed. Jobs are just numbers on a page to Yellen. They see a $800,000 house and get excited at how much people will pay in interest.
Just this past week, we’ve seen people say, “we need those milenials to buy a house” or “we need sellers to list their house”. Why? Where are they going to go? Somebody out there needs churn in the housing market to make a buck? Who cares about them?
I can anticipate when there no will longer be TV shows about buying and selling houses.
Now THAT will a sign that we’re actually getting somewhere in terms of resolving the bubble!
Their policies always favor a small group of FIRE organizations, and to heck with the rest.
It was interesting to read the Indian central bank head say this: “There really is no reason other than political pressure for the Fed to take us from bubble to bubble by cutting interest rates to near zero and flooding the market with liquidity. Ironically, the lesson friom the Great Depression - that letting the banks go under is not a good idea - has been so well absorbed by the Fed that it is played for a patsy by the banks.”
There’s no such thing as a disinterested technocrat. And there’s no such thing as a person immune to political pressure.
I find it interesting that, in countries that purport to be democracies, appointment of neoliberal economic “technocrat” leaders is becoming an acceptable substitute for a free election.
‘Federal Reserve Governor Jeremy Stein said central banks cannot pretend that their policies have no impact on the stability of the financial system.’
“There is no general separation principle for monetary policy and financial stability,” Stein said today. He was responding to a paper from Michael Feroli, the chief U.S. economist of JPMorgan Chase & Co., and three co-authors, arguing that the Fed’s eventual policy tightening risked causing financial market turmoil.’
‘Stein’s response to the paper expands a debate on the Federal Open Market Committee over how to incorporate financial stability concerns into its policy framework. The discussion at the Fed, which is mandated by Congress to focus on unemployment and inflation, has arisen since the 2007-2009 financial crisis plunged the economy into the longest and deepest recession since the Great Depression.’
“Monetary policy is fundamentally in the business of altering risk premiums such as term premiums and credit spreads,” Stein said. “So monetary policy makers cannot wash their hands of what happens when these spreads revert sharply. If these abrupt reversions also turn out to have nontrivial economic consequences, then they are clearly of potential relevance to policy makers.”
‘expands a debate’
I propose a committee be formed on barn doors. This well-funded group will examine, what is a barn door? Is this theoretical barn door open? What are the implications of such an opening? What will it take to close the barn door if it is open?
Barn door left open
All of the horses are gone
Hurry, close the door!
I can remember when there weren’t TV shows about buying and selling houses. At least someone is laughing:
There also didn’t use to be shows about “real housewives”, The Kardashians, bimbos named Snooki, Bounty Hunters, Pawn Shops, etc.
We are so hosed.
Ya just gotta believe baby!
I’m all for positive thinking. Sometimes you do not know what you are capable of. But certainly don’t ignore fundamentals. Believing you can in fact bench press 300 pounds is for people who have already bench pressed 275, not someone struggling with 185. That guy’s gonna get crushed until fundamentals change.
“Home prices fell by about 35% on average from 2006 to 2012, according to the S&P/Case-Shiller index, and they’ve bounced back by about 25% since then. But the pace of growth is likely to slow in 2014. Many analysts expect modest price gains of 5% or so in 2014, but another downside surprise is distinctly possible. ‘There really is a worry we might see falling prices by 2015,’ says Shiller.”
And for a fundamentals-based alternative hypothesis to the ‘no fun anymore’ conjecture, could it be that we just finished witnessing the most protracted dead cat bounce in the history of modern finance?
we’re off peak by about 6% in 22151 s of central committee
“training to become a holistic nutritionist”
http://www.quickmeme.com/img/5d/5d1d9738654447db4c6ff91647faf863ae0c2688c903a43f27d5e8ae83786b1a.jpg
I think he’s minoring in Colonics, that always seems to be somehow connected.
‘But if jobs don’t come back for me, and for my country…’
My country? Who talks like that?
Free $hit Army soldiers.
Jon Pardi, a 62-year-old resident of Edison, said he could no longer pay his loan because his commission-based income as a mortgage broker dropped to $20,000 a year from a peak of more than $100,000. Having little confidence in New Jersey’s housing market rebounding, and the career prospects for loan officers, Pardi is training to become a holistic nutritionist.”
Did he default on a loan he steered to himself ?? Was his master plan to arrange a loan on a house he couldn’t afford then sell (flip) because you know housing always goes up. A $100,000 G’s to $20,000 G’s cut in pay Jon must must have been sweating bullets while telling himself “it’ll come back (housing) I know it”.
“We’re just losing our general sense of optimism about housing.”
I never gained that sense of optimism, so I’ve nothing to lose.
HEE-HAW.
Happy Friday.
‘Chinese celebrity Ma Jiajia’s recent remark about her generation, born in the 1990s, being less inclined to buy homes, has led to heated discussions in the property sector, reports the Shanghai Morning Post, run by the Shanghai party committee’s newspaper Jiefang Daily.’
‘Ma said that she surveyed 100 online users from her generation, whose main reasons for not buying a house are as follows — they will inherit one from their parents, they have given up on the idea because they cannot afford it, and they would rather spend the money on themselves or on enjoying life.’
Contrast:
‘There is a real worry about becoming a buyer at peak prices,’ said a woman surnamed Li, who had bought a house in Guangzhou at the end of last year. ‘I already have trouble sleeping.’
“I never gained that sense of optimism, so I’ve nothing to lose.”
They call it ‘optimism’. You, I and we intuitively refer to it as self-delusion knowing housing prices are 250% higher than long term trend.
HEEHAW!!!
A healthy amount of skepticism can save you a bundle of money when markets go bubbly.
Here, here! I’ll drink to that!
‘The British Property Federation has produced a report (PDF) looking at who bought the 21,300 new build homes in London last year and why. The BPF represents the interests of those involved in real estate ownership, so it’s no lefty think tank. After talking to developers and examining information on sales in 2013, it finds that a staggering 61% of new homes were bought by investors last year.’
‘German home prices rose by the most in at least 10 years in 2013 as low interest rates made it cheaper to finance purchases and prompted investors to switch from bond markets to real estate. The gains slowed in the fourth quarter.’
“Residential prices rose faster than economic and demographic fundamentals would suggest” in 2013, the Bundesbank said in its monthly bulletin today. “This was particularly so for the urban property market, which was measured as being overvalued by between 10 percent and 20 percent. Prices in cities diverged upward by an estimated 25 percent.”
‘A Portugal property roadshow will travel to Macau on March 18 to market the country to Chinese investors. The continued growth of private investment in the luxury real estate sector in Portugal – a significant proportion of the country’s foreign direct investment – led the Portuguese Industrial Association (AIP) to organise a mission to China.’
‘The driver behind private Chinese investment in Portugal is obtaining so-called golden visas. They provide residency permits valid across the European Union’s Schengen visa area to those investing more than 500,000 euros in real estate.’
Unemployment among young people in Portugal is 35%, so bad that college graduates are moving to Brazil and Angola, but let’s woo the corrupt and debauched Chinese elite just like everybody else.
http://www.forbes.com/sites/nextavenue/2013/03/01/next-avenue-money-scorecard-how-do-you-rate/2/
these stats show why the peeps will vote to steal your savings
already happened in 4 of the smarter than bush countries
‘Chinese policymakers must ensure the property market, which has started to show signs of cooling, does not become a source of social and financial instability, the official China Daily said in an editorial published today.’
‘China Daily, noting local media reports about angry homeowners in the southeastern city of Hangzhou protesting offers of deep discounts by some developers, said policymakers also need to be prepared to deal with any social impact that may result from a weaker housing market.’
“Chinese policymakers must take measures to prevent house prices from becoming a source of financial instability, and they should prepare as early as possible to deal with the social impact that falling house prices may exert,” it said’
This is funny:
‘angry homeowners in the southeastern city of Hangzhou protesting offers of deep discounts by some developers’
Oh wait, this isn’t fun anymore; for them!
Another one:
‘While Citigroup has little exposure to countries where growth seems to be weakening the most, such as Argentina and Turkey, a broad malaise in emerging markets may already be having an impact on its results.’
‘Just outside the town of Zumpango, about an hour from Mexico City, packs of stray dogs sniff around abandoned homes in a half-empty neighborhood. Buyers came to realize something about living far from cities: it was not as cheap as it seemed. In the case of the Santa Fe development near Zumpango, bus fare to and from Mexico City is about equal to a day’s minimum wage, according to residents of Santa Fe.’
‘Soon after Banamex made the loans, a government census showed that as many as 20 percent of residents in some regions of the country had abandoned their homes.’
‘Moreno, 38, said many people bought the homes in this development unseen, attracted by the cheap prices and the idea of owning their own home. It was only when they took a bus to the development for the first time that they discovered there were few employment opportunities nearby, he said.’
“Maybe 60 percent of the people didn’t know where their home was,” Moreno said. “We’re in a distant town, and there are no jobs.”
“The name Zumpango is derived from the Nahuatl word “Tzompanco” which means string of scalps.”
You can’t make this stuff up!
“Maybe 60 percent of the people didn’t know where their home was…”
People are smart.
‘It was only when they took a bus to the development for the first time that they discovered there were few employment opportunities nearby’
Can you imagine the look on their faces when they got off that bus?
“Can you imagine the look on their faces when they got off that bus?”
While hearing this http://goo.gl/hblrFN
“Buyers came to realize something about living far from cities: it was not as cheap as it seemed. In the case of the Santa Fe development near Zumpango, bus fare to and from Mexico City is about equal to a day’s minimum wage.”
___________________________/
Oops. In large Latin American cities, transportation is a significant part of the daily budget, even with public transportation available, and you will see many people walking at least part of the way to work. But that won’t happen here.
I saw a few photos in Google Images of new houses in that town; many don’t even have bars on the windows, which suggests to me that the possibility of actual residents was an afterthought.
‘angry homeowners in the southeastern city of Hangzhou protesting offers of deep discounts by some developers’
Behind every collapsed bubble is a sad panda club of angry bagholders.
weekend suggestion:
what’s up in your hood
in 22151 selling to non investors after presidents day is brisk -2 week turnover- last of the lemmings
Inventory up, prices and demand down in your back yard.
Arlington, VA(DC metro) Area Housing Prices Down 12% YoY</b.
http://www.movoto.com/arlington-va/market-trends/
All these articles point to one fundamental;
There are crushing, tremendous losses built in to the housing market and housing prices.
“Home prices fell by about 35% on average from 2006 to 2012, according to the S&P/Case-Shiller index, and they’ve bounced back by about 25% since then. But the pace of growth is likely to slow in 2014. Many analysts expect modest price gains of 5% or so in 2014, but another downside surprise is distinctly possible. ‘There really is a worry we might see falling prices by 2015,’ says Shiller.”
With prices already falling once again, Schillers statement(bolded) appears to be mere a$$ covering so he can say ToldYaSo.
We all know that the YOY stats will show this some time in mid to mid late yer because these are rear view mirror stats. Just like unemployment was obviously going to decline as people fell off or got pushed off.
Then everyone will claim to be shocked.
It’s like Orr in Arizona. He sees the numbers coming in and starts saying, “it’s looking bad, hold on, oh boy!”
I think it’s funny when Shiller goes to Brazil, or Krugman goes to Sweden, and says “it’s a bubble” and the press reports it like it’s news. Heck, every person on the street that doesn’t have their head up their a@@ knows that.
HUD Employee and Nephew Indicted On Mortgage Fraud Charges
http://www.bizjournals.com/atlanta/news/2014/02/27/former-hud-oig-agent-indicted-in-metro.html
Housing sales is stunningly corrupt. Google any combination of fraud + realtor or mortgage salesman and it reads like a police blotter.
“Buying a house at these massively inflated prices and doubling your losses by financing it results in a lifetime of peonage.”
You better believe it mister.
‘A small, run-down house in Uniondale, N.Y., may sum up why bad blood is brewing between some of the biggest players in today’s housing market…On one side of the divide are the investment firms that funnel trillions of dollars into the housing market, helping people get mortgages. On the other is Ocwen Financial.’
‘the investment firms are concerned that they are taking unnecessary losses when Ocwen modifies loans. And one subprime mortgage, made in 2007, illustrates why they are suspicious. That mortgage, for $382,500, was packaged with hundreds of other loans into a bond. The Wall Street giant Morgan Stanley sold that bond to investors in 2007.’
‘it appears that the $382,500 mortgage is on the house in Uniondale, which was purchased for $425,000 in 2006. The home, at 573 Northern Parkway, is not well maintained today, unlike many of the other houses on this unpretentious Long Island street. No one answered when a reporter knocked on the front door. Emails and phone calls to the person listed as owner of the house were not returned.’
‘The bond’s data suggest that Ocwen did quite a big favor for the borrower behind this mortgage recently. The borrower had not made a payment on the loan for over six years, according to the data. Yet in January, Ocwen modified the loan.’
‘The amount owed on the loan is now $176,085, the bond disclosures say, less than half the mortgage’s original amount. The interest rate was also slashed.’
‘It is hard to know what Ocwen could get from selling 573 Northern Parkway right now…Investors in the bond might wonder whether money they could have recovered has in fact been eaten up by the modification.’
‘“When you do principal reductions, it benefits everybody long-term,” said Bruce Marks, chief executive of the Neighborhood Assistance Corporation of America, a nonprofit housing advocacy group. “You can’t let their greed get in the way of doing the right thing for everybody,” he said, referring to the bond investors.’
Live in a house for free 6 years, get a modification. If any one out there has a pension, don’t be greedy and expect to get any money back.
‘If you’re a future homebuyer, you might have used one of those “How much mortgage can I afford?” calculators online. These calculators typically gather information like your down payment amount, credit score range, monthly or annual income and debts.’
‘Then, they’ll spit out an estimate of what a bank might lend you mortgage-wise…Banks will also typically allow a total debt-to-income ratio of up to around 36 percent. This means that your mortgage, credit card payments, student loan payments and car payments shouldn’t exceed 36 percent of your total monthly income.’
‘The bank (and those calculators) aren’t telling you how much house you can comfortably afford. They’re only telling you how much, at a maximum, they’ll actually lend you.’
‘And often, a bank will lend you much more than you’re actually comfortable paying over the long term.’
‘Too often, homebuyers shop for homes at the top of their affordability range, only to find themselves in an untenable financial situation a few years later. A temporary job loss or small hike in homeowners insurance payments can send these homeowners spiraling out of control, financially speaking.’
This comes to mind:
http://www.jokeroo.com/pictures/animal/1150230.html
eh heh… Much like the rent/buy “calculators”. These calculators remove the intellectual and common sense boundaries and keep the subject in a relativism loop.
Wha… the?? To bad nobody is home to realize they got such a lottery ticket win.
who needs growth- we have janet the weather girl
BAHHHHHHHHHHHH
She has a side gig in standup comedy:
‘New transcripts of the Fed’s meeting in 2008, based on recordings made at the time, provide one of the most revealing views to date of Ms. Yellen, who was sworn in earlier this month as chairwoman of the central bank. “In the run-up to Halloween, we have had a witch’s brew of news,” she said to the laughter of her colleagues, before quickly apologizing for her sarcasm.’
‘As a forecaster, Ms. Yellen was at something of an advantage. She was based in California, where some of the earliest signs of distress appeared. In a lighter moment, she joked that the problems were not just in the collapsing housing market.
“East Bay plastic surgeons and dentists note that patients are deferring elective procedures,” she said to laughter, according to a transcript of the meeting on Sept. 16, 2008.’
“The Silicon Valley Country Club, with a $250,000 entrance fee and seven- to eight-year waiting list, has seen the number of would-be new members shrink to a mere 13,” she said to more laughter.’
‘But she also was looking for clues anywhere she could find them. In June, she told her colleagues about employees at her bank who “had their home equity lines slashed.” “One has deferred a planned home renovation project as a consequence,” she said. “If that is happening to them, I can only imagine how hard it must be to get a loan if you have a merely average credit rating.”
So in a thoughtful moment, she worries that HELOC’s won’t be funded. Jumpin’ Jehosaphat, Janet, it was the HELOC’s that were the problem! (Along with all the other loans at nose-bleed prices).
Pending Home Sales Crater 9% Year over Year
http://www.fxstreet.com/news/forex-news/article.aspx?storyid=a37eec7c-e770-48e3-957c-c934d1cd4c21
Collapsing demand is what occurs when prices are grossly inflated.
Dude when you use words like “crater” to describe a 9% drop, you sound like a complete idiot.
you coward.
Furlow you sound cranky, you a loan owner? Used house salesman? Both?
“The Biggest Toy – McMansions In The Housing Crater”
http://savedbydesign.wordpress.com/2014/01/04/the-biggest-toy-mcmansions-in-the-housing-crater/
“The Mortgage Market Just Cratered And The Fed Should Be Worried”
http://www.huffingtonpost.com/2014/01/14/mortgage-rates-housing_n_4596218.html
‘There really is a worry we might see falling prices by 2015,’
Why is this a concern?
Wouldn’t falling prices be exactly what is needed to make entry-level housing more affordable for the younger generation of new households who just want a home for nesting purposes, not as an investment?
Considering our economy is made up of 70% consumption, you would think we would benefit from not having 50% of the average homeowner’s take home pay tied up in one single mortgage payment and instead spent on Televisions and eating out.
Oh wait, the average homeowner does both, which is why credit card debt is in the trillions.