patrick.net

David Losh says

Many homes went through a foreclosure process that kept them off the market. In a more sensible market those homes would have been sold by the home owner rather than them go back to the banks. That created at least a between six months to two years of low inventory.

With this rise in prices some home owners, banks, investors just might sell into the housing market, rather than buy.

Good point.

Inventories up, mortgage applications down, price reductions outnumbering price increases.
I didn't predict it either.
And there is evidence of continued "recovery" in housing?
It's over.

Here is your bubble:

Trulia gives nice long term graphs.

http://www.trulia.com/real_estate/Chicago-Illinois/market-trends/

http://www.trulia.com/real_estate/Miami-Florida/market-trends/

Not as much of a bubble in the first place, in the Bay area, at least compared to places like Miami or Vegas, or Phoenix.

http://www.trulia.com/real_estate/San_Francisco-California/market-trends/

True, but it's so sick that the republicans play the people like that. I don't see how the politicians can be that stupid. Which means it's just a political game to them.

They're all afraid to confront the issue and talk about things like really taking a lot of the money out of politics.

IT is scary though. What is it going to take for us to try to solve these problems ? Can we still be the America that we are now when the government isn't spending beyond its means ?

It's not that scary.
The problem is very simple: the debt and corresponding money supply grew, but inflation was killed, and that meant the debt gets accumulated. The extra money was simply absorbed by the rich.

There are solutions: you could let inflation rise by massively taxing the rich and spending the proceed (the Krugman solution), or you could deflate the debt. Or a combination of the 2.

The worst solution is what they try to do: continue to increase the debt with no inflation.

Heraclitusstudent says

They hear the stridents cries of Krugman shouting "not now", when it has lasted 3 decades+ and nothing has changed or gotten better.

in a general sense the problem is that the concept of 'freedom' invented in the 60s and proliferated in NY and California are simply not financially feasible at all. These "3+ decades" were basically the entire lives of the flower children cum yippies cum yuppies cum retirees with real estate assets. It's simply financially feasible and if we don't stop these people we're all going to be in a load of !@#$.

Heraclitusstudent says

It's not that scary

I wasn't looking at the side of the issue you are. You're right about the net result. But there's also the military power that we project, and use, as well as the way that ways that we deal (and don't deal) with poverty.

MershedPerturders says

in a general sense the problem is that the concept of 'freedom' invented in the 60s and proliferated in NY and California are simply not financially feasible at all

I consider this mostly BS propaganda. The rich benefit from all that spending.

I say the bigger issue is not being willing to pay for what we (the government) spend. Taxes are too low, relative to spending. And that can never resolve itself until we pay our bills. When we pay for what we spend, then we will face the tough decisions. Until then it's all lies and bullshit games from the politicians.

The people who would pay most of the taxes are the same powerful people that need to make the tough decisions. They would rather not pay, but keep on spending too much because it ultimately benefits the 1% as long as this can last.

What happens when it can't last any longer ?

I don't know. Let's hope it isn't a dictatorship.

Raise taxes, eliminate loopholes, cut defense spending (the #1 discretionary expenditure).

What family says "Well, we're spending $500 on groceries, $500 on retirement and education, $500 on rent, and $1000 on paint ball. It's clear we're spending entirely too much money on non-essentials like food, provision for the future, and basic infrastructure. How can we cut those while keeping our vital paint ball budget fully funded?"

Why, yes, yes they are. Just like official government economic figures.

I'm confused. Why are they laying off so many employees if posters here are saying the housing market is strong and prices are going to keep going up due to strong demand. Serious question to those guys

1) If I buy a house in SoCal: $500,000 with 20% down, 30 year mortgage, 3.5% interest rate vs. 4.5% interest rate, the payment is $1,796.18 vs $2,026.74 or a difference of $230.56 per month. Yet you say mortgage rate increases are not relevant?

2) If the Ca economy is going sideways to down, wouldn't home prices being going down as well in conjunction with #1 above?

3) Seasonal increases in home prices along with negative economic conditions in the State along with interest rate increase would make home ownership even more expensive and risky for the homebuyer.

When one considers these three factors in conjunction with each other one comes to the conclusion that home prices will move sideways to lower over the next 6 months. Yet your conclusion is that they will move higher.

I guess you need money to make money and not everyone can be a "big baller" like you.

As for the rest of us looking to home ownership as a place to live, we sit on our downpayment and we wait and rent.

In either case good luck!

looks like no interest in thread ... so add a bump

... sure thing ... it can only go up and up and up... buy now or be priced out forever ...

Go Congress! Don't pay the debt if it will destroy the hyped up,
overpriced housing market.

The govt. is not free enterprise.It operates on my taxes & I cannot sell the stock because of POOR MANAGEMENT. Fuck the other stockholders for electing the Dummass Board of Directors.

New rule? The federal govt. cannot spend money in does not have.

marcus says

Taxes are too low, relative to spending. And that can never resolve itself until
we pay our bills

You do realize the US didn't have income taxes for a long time? Now we tax income of even non resident citizens and scour the globe looking for Americans keeping assets in other countries. That is unless you are a corporation.

Who cares? Jesus is coming back.

Not too surprising. Prices are back to historical averages, at least nationally.

Call it Crazy says

Yep, let's raise the debt ceiling so the government can spend MORE money and write more bad checks for funds it doesn't have...

Federal Budget... we don't need no stinkin' budget!!

Or how about this: tax dividends and captical gains more so that the uber-wealthy can actually pay their fair share? Warren Buffett pays a lower tax % than you do!

inventories are rising and foreclosures are going up

Foreclosures are going up because houses in the US are TOO CHEAP®.
People refuse to pay a mortgage on something that is TOO CHEAP®.

The solution is very easy: raise property taxes on houses beyond the primary residence to triple cost. This will harm ONLY rent seekers, causing them to think twice about monopolizing the real estate market in certain urban areas. Rent seekers could get an exception to the rule by letting their properties go to rent control. They likely dump their property, thus escaping onerous taxes that eat up their rent-seeking profits, which makes housing drop precipitously. Priced-out families can now buy, and the ones who could afford to buy at higher prices have already bought, and can absorb the loss (or default as they wish).
This results in a situation like that of Texas: low housing costs for most. And THIS results in a hugely boosted economy!!!! If people weren't required to pay 30-50% of their gross income for shelter, they'd have lots more money left to buy goods and services! This would boom the economy and increase government tax receipts tremendously.
A few cuts to bloated war and NSA and we got it fixed!

Quigley says

If people weren't required to pay 30-50% of their gross income for shelter, they'd have lots more money left to buy goods and services! This would boom the economy and increase government tax receipts tremendously.

In a consumer spending driven economy, this would be amazing. Money could be spent on productive activities rather than finance.

sbh says

How would you define the economic system under which this would take place?

A growing middle class.

sbh says

Further, I just bought a new condo in Texas and have listed my house in Tucson. Should I be penalized for a slow sale of the AZ home?

If the price point was set at the market value (i.e., what someone will pay for it immediately), it would have sold before it hit the market. Once it hits the market, it has already gone through the real estate agents and is not a good buy...just waiting for the "right buyer".

Create middle class jobs by sweeping away stupid property-value protection schemes. Let people sell gum and bread out of their garage. Even in this high end neighborhood in South America, I can walk to about 5 different informal "7-11s" within 5 blocks of my house. Not to mention hair stylists and barbers. If you want to sell liquor, you just sell it. There aren't drunks walking around at all hours because they can buy whiskey in somebody's garage, which is what liquor license advocates claim.

In the US, the PVNF (Property Value Nazi Front) sics LEOs on kids selling Lemonnade or having a Bake Sale on Saturday on their driveway. Or growing tomatoes in their front yard instead of useless grass. Or having a couple of hens. Or having lawn jockeys.

The hilarious thing about PVNF is they are usually private property absolutists - until somebody does something with their property that they think 'devalues' theirs.

I deliberately look for walkable stuff near an apartment or house. I don't want to have to drive for 20 minutes just to grab eggs or bread. You have to drive, otherwise in most places you have to cross 2-3 danerous high traffic streets with 4 lanes to get somewhere. And if I can support a family-owned business instead of a corporate chain, so much the better.

Call it Crazy says

Have you found someone yet to help carry that HUGE, ego driven head of yours around??

Most likely an Indonesian prostitute.

sbh says

You're smarter than this.

You must not read many of her posts.

rooemoore says

I think Republicans would argue that before they pay the bill they want the
wife to cut up the credit card.

I agree it is stupid, but it is just politics. Been going on like this (and
worse) long before you or I were born.

Call it Crazy says

Wereas, the Democrats would just call the credit card company to get the
credit line raised so she could keep spending, even though they both have
minimum wage jobs at McDonalds....

While that is the conventional wisdom on the difference in parties, it is not accurate IMO. Reps spend on defense. Dems on social programs. If you look at facts, Dem Presidents increase spending at a much slower rate than Reps Presidents do.

Reps have better propaganda machines though--I'll grant that...

Heraclitusstudent says

There are solutions: you could let inflation rise by massively taxing the
rich and spending the proceed (the Krugman solution), or you could deflate the
debt. Or a combination of the 2.

How would the money be spent and who would spend it under the proposed increased taxation?

Say hey! This was in the Wall Street Journal on March 30, 1999:

Holy cow/interesting/compelling ...!

And where is it up to date??? Right here ... see the first chart shown in this thread.
Recent Dow day is Friday, September 13, 2013 __ Level is 98.2

WOW! It is hideous that this is hidden! Is there any such "Homes, Inflation Adjusted"? Yes indeed, go here:
http://patrick.net/?p=1219038&c=999083#comment-999083

Indeed you are right, this IS like the wife spending the money then having the husband not pay it.

But what has happened is that 44% people believe that locking in the debt ceiling is the same as reducing the limit on the credit card, which is what fiscally responsible adults might do to prevent out of control spending.

So how do the American people limit the size of the shit pickle that their government is feeding them?

WellsFargo is expecting this because they havent heard there is a big recovery in housing in full swing

freak80 says

Call it Crazy says

Yep, let's raise the debt ceiling so the government can spend MORE money and write more bad checks for funds it doesn't have...

Federal Budget... we don't need no stinkin' budget!!

Or how about this: tax dividends and captical gains more so that the uber-wealthy can actually pay their fair share? Warren Buffett pays a lower tax % than you do!

But then they will all move to Belgium or Cuba and take all their precious job creation with them. . . .

Sorry, I was being sardonic.

Moderate Infidel says

Foreclosures are going up because houses in the US are TOO CHEAP®.

People refuse to pay a mortgage on something that is TOO CHEAP®.

or if the mortgage rate is too low

Make sure when using it to spray explicit epithets from your mouth like a machine gun (technically this also is legal).

Yes it's Because of extraordinary government meddling, intervention, protectionism, fraud, lies, and more underhanded double dealing than can be mentioned that the housing market recovered before reaching market equilibrium. Who could have predicted that? Certainly I didn't see it. It wasn't until this year that I saw the system behind the system that made the second housing bubble not only likely but inevitable. There was never any doubt that the banks would not lose. That the government housing debt would not fail. That prices would have to return to bubble levels (at least in some places) so that the financial industry would get the final bail out it needed. Everything has been done. It's over.
The American people lose.
The wealthy consolidate their power, enhance their empire, and insulate themselves from future risk of any kind while creating a system of permanent impoverishment for anyone who wasn't quick enough to hop on the billionaire bus.

Just in time for back to school!

Quigley says

Certainly I didn't see it. It wasn't until this year that I saw the system
behind the system that made the second housing bubble not only likely but
inevitable.

Thank you Quigley. A reply was swimming around my head, but you put it together more eloquently.

patrick could indeed retire today if he bought a 4 bedroom home in palo alto when he was writing his book telling people what a sham buying a house is. (09? 10?)sooooooo ironic!!!!!!

http://www.amazon.com/The-Housing-Trap-ebook/dp/B009DRL91K/ref=sr_1_1?ie=UTF8&qid=1379113383&sr=8-1&keywords=patrick+killelea