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Propped Up Convoluded Housing Market


By David9   Follow   Sun, 25 Nov 2012, 9:49am PST   2,268 views   12 comments   Watch (0)   Share   Quote   Permalink   Like (5)   Dislike  

Just some Sunday evening reading:

http://articles.businessinsider.com/2012-03-21/markets/31219076_1_shadow-inventory-insolvent-banks-real-estate-market

http://finance.fortune.cnn.com/2012/07/24/foreign-home-buyers/

http://blog.redfin.com/blog/2012/07/home_prices_up_3_but_when_will_the_other_shoe_drop.html

http://www.counterpunch.org/2012/09/04/obamas-secret-plan-to-prop-up-housing-prices/

http://www.theburningplatform.com/?tag=home-prices

I personally like this quote:

"HOW TO INCREASE HOME PRICES WHEN HOUSEHOLD INCOME IS FALLING?"
"It’s easy. You artificially create a shortage of supply by not putting foreclosed homes on the market. You have the Central bank artificially keep interest rates below market rates by buying up the bad mortgage debt from the criminal Wall Street banks. You encourage the same dumbass flippers that contributed to the first housing bubble to jump back into the game. Then you convince clueless math challenged dupes across the land that they better buy before it’s too late. Then get the corporate MSM to run blaring headlines when home prices and sales blip up by the tiniest fraction, and still 60% below the levels of 2005. Dr. Housing Bubble lays it all out. "

Comments 1-12 of 12     Last »

bmwman91   befriend   ignore   Sun, 25 Nov 2012, 11:39am PST   Share   Quote   Like   Dislike     Comment 1

Everyone can see that it is being propped up. The thing is, though, that it looks like the things that are artificially propping it up are made from bricks and mortar, not rotten balsa wood like some seem to think. The fucked up housing market IS the system, and it's generally a waste of time to fight the system. You can opt-out, but you probably can't beat it. You can also try to wait it out, but it looks like Bubble 2.0 will be deliberately created and maintained by the government, as opposed to the last one where the government was just too incompetent to see why it wasn't going to end well and they just let it roll.

JohnLaw   befriend   ignore   Sun, 25 Nov 2012, 12:06pm PST   Share   Quote   Like (2)   Dislike     Comment 2

bmwman91 says

You can also try to wait it out, but it looks like Bubble 2.0 will be deliberately created and maintained by the government, as opposed to the last one where the government was just too incompetent to see why it wasn't going to end well and they just let it roll.

They can't keep propping it up forever when 40% of the USG is funded by debt (over half of which is monetized). There is either going to be run away inflation and a currency crisis or the bond market is going to implode, in which case the mortgage market will freeze. Does anybody really believe that the USG is going to put propping up the housing market above paying for civil servant and military pensions and salaries? I'm afraid that's what it will eventually come down to.

Goran_K   befriend   ignore   Sun, 25 Nov 2012, 12:09pm PST   Share   Quote   Like (2)   Dislike     Comment 3

Well at the very least, as sales drop, and demand is destroyed by literally no inventory, maybe the NAR will disappear as a political force.

David9   befriend   ignore   Sun, 25 Nov 2012, 12:29pm PST   Share   Quote   Like (2)   Dislike     Comment 4

JohnLaw says

They can't keep propping it up forever

And publishing those ridiculus real estate cheerleading articles which I find so irritating.

Most people get signs 'things just aren't right' in their daily lives.
Just before posting this, I did a search of 1 bedroom (not studio) apartments under $2,500 a month in New York City, over 2,300 came up.. Of course I didn't do through all of them but what I saw were in decent parts of town like the Upper East Side. My point is, I was surprised by that many 1 bedrooms, the propaganda machine had me believing the price was more and with limited availability.

dunnross   befriend   ignore   Sun, 25 Nov 2012, 12:55pm PST   Share   Quote   Like   Dislike     Comment 5

bmwman91 says

The thing is, though, that it looks like the things that are artificially propping it up are made from bricks and mortar

These are the same people who have been trying to keep gold price from rising for the last 30 years. Look where that got them.

Goran_K   befriend   ignore   Sun, 25 Nov 2012, 3:39pm PST   Share   Quote   Like   Dislike     Comment 6

Man, that is a sobering read. Will someone stop this insanity already? C'mon Obama. Seriously.

marco   befriend   ignore   Sun, 25 Nov 2012, 8:03pm PST   Share   Quote   Like (1)   Dislike     Comment 7

Neither Obama or Romney gives a rat's ass about the average person ... Seriously..

"Mama, she keeps them unprepared
To meet the enemy
That's comin' unto us
Teach them that evil dwells across the sea
Lives in a mountain
Like they see on TV

Down in the heart of town
The Devil dresses up
He keeps his nails clean
Did you think he'd be a boogeyman?"

Buffy St. Marie

David9   befriend   ignore   Mon, 26 Nov 2012, 2:57am PST   Share   Quote   Like   Dislike     Comment 8

underwaterman says

Thanks David for giving up these links.

You're welcome. My pleasure.

For shared knowledge sake, when I search for links, I try to think up different search phrases, 'housing market' just brings up the irritating cheerleader stuff, this seach was
'propped up housing market', other links I found were phrases like 'housing fraud', 'housing inventory withheld', etc.

MMR   befriend   ignore   Mon, 26 Nov 2012, 7:09am PST   Share   Quote   Like   Dislike     Comment 9

Just before posting this, I did a search of 1 bedroom (not studio) apartments under $2,500 a month in New York City, over 2,300 came up.. Of course I didn't do through all of them but what I saw were in decent parts of town like the Upper East Side. My point is, I was surprised by that many 1 bedrooms, the propaganda machine had me believing the price was more and with limited availability.

A lot of apartments on the upper east side lack convenient subway access. Unless it's close to lexington avenue. There is plenty supply of crappy apartments at low rents you speak of. Try finding something closer to the subway (such as the 6 line) and the rents are much higher. How many of those apartments are between 59th, 68th 77th, 86th and 96th near lex? Just UES alone doesnt equal desirable. Subway access drives asking price. Having to cross more than one avenue or 3 or 4 blocks has a profound downward effect on the asking rental price. If you do all that, then you have a clear picture of whats desirable and what it costs. NYC is a part of a very large bubble. Currently, there is very little in NYC that is actually affordable and desirable. Those 1 bedrooms are probably below 700 sq ft to boot.

MMR   befriend   ignore   Mon, 26 Nov 2012, 7:11am PST   Share   Quote   Like   Dislike     Comment 10

David9 says

Most people get signs 'things just aren't right' in their daily lives.
Just before posting this, I did a search of 1 bedroom (not studio) apartments under $2,500 a month in New York City, over 2,300 came up.. Of course I didn't do through all of them but what I saw were in decent parts of town like the Upper East Side. My point is, I was surprised by that many 1 bedrooms, the propaganda machine had me believing the price was more and with limited availability.

A lot of apartments on the upper east side lack convenient subway access. Unless it's close to lexington avenue. There is plenty supply of crappy apartments at low rents you speak of. Try finding something closer to the subway (such as the 6 line) and the rents are much higher. How many of those apartments are between 59th, 68th 77th, 86th and 96th near lex? Just UES alone doesnt equal desirable. Subway access drives asking price. Having to cross more than one avenue or 3 or 4 blocks has a profound downward effect on the asking rental price. If you do all that, then you have a clear picture of whats desirable and what it costs. NYC is a part of a very large bubble. Currently, there is very little in NYC that is actually affordable and desirable. Those 1 bedrooms are probably below 700 sq ft to boot.

woppa   befriend   ignore   Mon, 26 Nov 2012, 7:32am PST   Share   Quote   Like   Dislike     Comment 11

Well the fact is that houses have lost 20% here from their peak. I hope you are right though, as I feel they should have lost probably 50%.

David9   befriend   ignore   Mon, 26 Nov 2012, 8:00am PST   Share   Quote   Like   Dislike     Comment 12

MMR says

Subway access drives asking price.

MMR, Thanks! I always appreciate advice and tid bits about New York City. Seems you love it or you hate it. What a microcosm of 'Class' New York city is, all determined by how much money you have.

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