Watchhttp://www.marketwatch.com/story/ten-cities-that-just-cant-turn-housing-around-2012-09-15
Wall St./MarketWatch) — Since the peak in early 2006, the median price of a U.S. home is down by a third. And though the market has begun to show signs of having bottomed, prices are still down nationally by 1.9% from last year and are expected to fall an additional 1% from the beginning of this year through 2013.
Follow
Befriend (8)
1 threads
792 comments
Danville, CA
Premium
Say what you want about Modesto being in the middle of nowhere, but I made a nice little trip there in a Cessna 172 about three years ago. It was a gorgeous day, not a cloud in the sky and no wind. They have a nice airport as well.
Follow
Befriend
6 threads
55 comments
Fontana, CA
I wouldn't mind living in Modesto ... if I could find work there (big problem).
Follow
Befriend (12)
140 threads
1,355 comments
Emeryville, CA
Gary Condit is looking for a mistress. No experience necessary!
Follow
Befriend (5)
31 threads
2,265 comments
Premium
I read the linked article and was amazed by the degree of FIRE/realtor(tm) POV and sometimes outright shilling. The article really illustrates the need to read Patrick's book, where he exposes these biases systematically.
For example:
"24/7 Wall St. reviewed the markets with the worst home-price declines from their pre-recession peak. Of those metro areas, we identified the markets where the median price did not improve in any of the periods measured by Fiserv as of the first quarter of 2012. The 10 worst are housing markets that have fallen at least 55% and have yet to recover."
Note the biased word choice: price declines are bad ("worst...did not improve...worst") but price inflation would be good ("improve...recover"). This POV is precisely the opposite of a consumer's POV. Imagine if the article were about some other necessity of life: the "worst declines" in grocery prices, the markets where the price of eggs "did not improve" (from their POV, did not increase), the 10 "worst" have yet to "recover". It's upsetting to see this bias presented as objective news, but it gets worse.
"Continually depressed home prices also have led to unusually high foreclosure rates in these markets. According to foreclosure data from RealtyTrac, a site that tracks housing data [ACTUALLY A REALTOR(tm) AND MORTGAGE SITE but nevermind], these cities had among the worst foreclosure rates in the country as of the second quarter of 2012." They're so desperate to rationalize Bubbles Ben's "Operation Twist" that they have completely reversed the causal connection between prices and foreclosures. Foreclosures do lead to lower average sale prices, because they increase supply and due to the collapse of the subprime bubble they have tended to be at the low end. Depressed sale prices can lead to more short sales, if creditors were required to mark to market and recognize their losses, but Bubbles Ben is propping up the banks so that doesn't happen.
"Like Detroit, many of the 10 worst-off markets appear to be about to recover because buyers see bargains."
OMG Detroit! Let's all suit up in Kevlar and BUY BUY BUY!
“investors, who were part of the problem back in the boom years will be trying to jump into these markets at a low.”
They are being forced in by Bubbles Ben, deliberately reflating the bubble. That isn't improvement, it's lunacy. It would be like trying to reflate Madoff "investor" account statements, so they will feel rich again and SPEND SPEND SPEND. It's easy to see the "logic," but it's obviously a Ponzi scheme to anyone who isn't directly profiting from it (i.e. the Fed).
Follow
Befriend (3)
50 threads
368 comments
Oakland, CA
rootvg says
Modesto sucks. You flying there on a gorgeous day with no wind and landing at a nice airport doesn't change that, lol.
Follow
Befriend
33 comments
I think these cities on the list are showing their worth by declining in value. Turning around? will happen when all those foreclosures are gone and resold, maybe 10 yrs? The industry is ready to put another refinancing swindle on us.
Follow
Befriend (14)
759 threads
2,591 comments
63 male
Las Vegas, NV
bgamall4's website
Premium
This article is really not true for Las Vegas. The city is up in the last 4 months. It is because the wealthy are buying the town up. 50 percent of the purchases are cash and prices are rising faster than inflation. It is a 1 percent bubble.
It is disgusting.
Follow
Befriend (13)
103 threads
3,768 comments
I don't think it's the one percent. It's small investors like robertoaribas.
Of course Rob is out in Phoenix, but there are plenty of people like that in LV.
Follow
Befriend (14)
759 threads
2,591 comments
63 male
Las Vegas, NV
bgamall4's website
Premium
FortWayne says
I appreciate your thinking, but it is wrong. Read my article at BI:
http://www.businessinsider.com/the-1-percent-is-buying-up-all-the-real-estate-beware-of-tom-lee-of-jpm-2012-5
You may be surprised.
Follow
Befriend
3 threads
164 comments
So what exactly do they mean by "turning housing around"? Are they talking about going back into a new overpriced bubble? Maybe these are the 10 best places to buy then if there is no new bubble in sight?
Follow
Befriend (14)
759 threads
2,591 comments
63 male
Las Vegas, NV
bgamall4's website
Premium
CashWillCrash says
Well said. They want a bubble. Bernanke wants the missing piston of real estate (even though the real missing piston of the economy is manufacturing) to churn a bubble. So does Mitt Romney, who wants Dodd-Frank, an impediment to the bubble, out of the way.