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Learn more about Government Sponsored Enron. The GSE's business is just legalized crime;they rip everyone off and when they get caught, they retire the execs that got caught and give them a huge bonus package (more than some of us will earn in our life).
a crack house was burned to the ground a few months back in my town. Wonder how the property values are doing on that street?!
Maybe it was a marketing strategy to kick start price increases in your town.
Hmmmm maybe you’r right …. after all supply was reduced by 1 unit thank to the fire
So if 90% of a neighborhood is burnt down by a riot the remaining 10% will see prices skyrocket, right? ;)
Ain't that sweet....Husband is a mortgage banker, wife is a realtor. I wonder what their next occupations will be. :lol:
Ain’t that sweet….Husband is a mortgage banker, wife is a realtor. I wonder what their next occupations will be.
I personally know two such couples. :)
"...humiliation and poverty Germany suffered at the hands of the Allies following their defeat in WWI"
Not to mention that possibly a few key German manufacturers were interested in profiting by another romp through Europe.
Sounds like perfect Real Estate Bull logic if you ask me!
Yes, they will contend that after an earthquake housing prices should go up.
I wonder what happened in SF after 1989?
@SQT,
I don't want to belabor the drug issue (it looks like the other bloggers want to get back on topic), so I'll keep this short:
--I don't think children should be allowed to buy or use drugs --period.
--There are some drugs that probably should never be legalized because there is no such thing as a safe dose (heroin, PCP, etc.).
--If we stopped spending $ billions on criminalizing and incarcerating adults and taxed drugs instead, we would have TONS of money for public health education, rehab and other programs.
--I'd rather spend money here on curing heroin addicts than spraying poppy fields in Afghanistan.
--Legalizing the "soft" drugs would no doubt make the price of them plummet dramatically, and reduce street crime as well as the influence of organized crime. I still think these would be net positives for society.
I too, have a brother who is a long-time recovering cocaine addict, who has had many run-ins with the law. Somehow, the fact that drugs here are illegal has not stopped him from obtaining drugs ;-) . The fact is, there will always be a small segment of society that will gravitate towards reckless, self-destructive behavior. Criminalizing everything under the sun won't ever change this. The best we can do is offer these people a helping hand and opportunities to make better choices.
Sorry for the digression. Now, back on topic :-)
The Loma Prieta quake of 1989 did not help San Francisco, nor did the LA riots of 1992 - if anything these 2 events only added fuel to each city’s early to mid 90s real estate stagnations.
Also, the 1995 Kobe earthquake did not help Japan's RE market.
HARM--
The drug discussion was off-topic, so I'll stop.
Too bad, because I was hoping to hear Bull$hiter's perspectives on that one :-) Where is he/she lately?
I propose we produce a film about the evils of overborrowing during a housing bubble. We could call it "Refi Madness". lol
Friends don't let friends flip condos!
I propose we produce a film about the evils of overborrowing during a housing bubble. We could call it “Refi Madnessâ€. lol
How about a new XBox role-playing game "Flip that condo". Players can assume roles such as builder, mortgage broker, realtor, flipper, and renter. Internet game-play will be supported.
New article Real estate investors bailing out?
[snip]
A researcher at Arizona State University told the paper that in the hot market of Phoenix, as many as 30 percent of the properties for sale on the market right now are owned by investors, while Sandra Geary, a real estate broker in Sonoma County in California said that her sales to investors have dipped by over 75 percent.
"Now that the market is slowing down, it's scaring investors away," Geary told the Journal.
Tsk, tsk, SQT...
That will never happen here, because we have limited land, a high population density and millions of rich, well educated asians buying our properties.
I just read the article on Patrick’s links about the slowly re-emerging Japanese housing market. It mentioned that a 750sqft apartment goes for about $350K, which is a lot of money. But not too long ago, the same apt sold for $1.5 mil. Ouch.
Japan does look like it is recovering. However, I did see a new construction single family house in Kyoto selling for less than $500K. It does not look too small. I can post a picture tonight. New 900sqft apartments are going for less than $400K.
Japan has much tighter zoning regulations than California and people feel more strongly about keeping their homes. Yet their market crashed badly. What does this say about the California RE market?
From the August "Housing Bubble Glossary" thread:
“MIRAGE†(Moneyed Immigrants, Rich Ancestors, Generous Expatriates): Acronym coined by yours truly to lampoon the bulls’ argument that housing demand is being supported by cash-rich immigrants, wealthy parents and transplants from other states.
I was also in Hong Kong. It appears that the media that are openly saying that the housing market is cooling there and that rate hikes will harm the market more.
Despite common perception, no one is immune.
Not even the Marina district?
Interesting, many people who have contended that there is no housing bubble are now saying that there is a housing bubble but they are immune because...
A small newsflash: our Marin Bubble Blog was mentioned in a local paper.
Rather amusing...it's really helped the blog's visibility
Overall, the response has been positive.
You’re blaming Fannie Mae and Freddie Mac for the price of homes?
I blame zoning regulations and supply-side restrictions.
However, GSEs do attempt to affect "affordability" by facilitating liquidity on the financing side. This leads to imbalances in pricing IMO.
You’re blaming Fannie Mae and Freddie Mac for the price of homes? That reflects a severe misunderstanding of the market. Fannie and Freddie place repossessed homes on the market at FAIR MARKET VALUE, which is the going rate for comparable homes. It is hardly their fault the price of homes has risen dramatically.
The fact that the GSE's put AG's monopoly money into the system is what drives up the prices. They buy mortgages from banks, thus taking the risk away from banks. When the banks are relieved from their risks, they loosen their standards to allow anyone to get a loan (as long as they don't have more than 9 bankruptcies). When you allow people from all walks of life to buy houses by putting huge amounts of money in their hands, the laws of supply and demand will drive the prices up. It's very simple and very obvious....I don't know why you would even deny this!
Any attempt to make things more "affordable" without increasing supply will create imbalances and is counter-productive.
I do not blame anyone for this bubble because it will correct itself. Market prevails eventually.
I do not blame anyone for this bubble because it will correct itself. Market prevails eventually
...and many of those who created the bubble will suffer from the aftermath.
…and many of those who created the bubble will suffer from the aftermath.
Free entertainment. :twisted:
ScottC,
Again, fixing up repossessed homes is a great thing, but this is not the business the GSEs are in (perhaps you have them confused with HUD and Habitat for Humanity?).
As Allah & Peter P noted, their core business and reason for being is purchasing mortgages from the banks/originators, repackaging them as MBSs and selling them to institutional investors at a profit (thus, providing mortgage market “liquidityâ€).
We seem to be arguing apples and oranges here.
I expect that the magnitude of the housing bubble bust will exceed my expectations.
Did I just create a paradox?
Talk about entertainment.
http://sacramento.craigslist.org/rfs/116568833.html
With all the chatter about free food, they forgot to mention this is mere minutes away from Folsom State Prison!
Did I just create a paradox?
Which one is greater: Peter P's immovable pessimism, or the bubble's irresistable implosion? :-P
Which one is greater: Peter P’s immovable pessimism, or the bubble’s irresistable implosion?
If I am immovably pessimistic, I must be optimistic about my pessimism, right?
A small newsflash: our Marin Bubble Blog was mentioned in a local paper.
http://tinyurl.com/e22s7
-Kurt S
Listen to this guy from the article:
"Clearly, this is a case of someone who has come up with an early case of Marin real estate flu," laughed Marin Association of Realtors President Jack McLaughlin, who was quoted in an Independent Journal article posted on the blog. "We don't have the vaccine for this guy."
Laugh it up while you still can Jack. What an a-hole!
"Hoo hoo hah hah, it's as if the foolish peons don't even realize that I have the most to gain personally for keeping this housing bubble inflated," chortled Marin Association of Realtors President Jack McLaughlin. "Oops, did I just say that in my out-loud voice? Can I get a retraction on that? I mean, I was just kidding!" added McLaughlin.
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I’ve noticed that lately there have been a lot of big industry players raising Cain over proposals to limit or even eliminate the mortgage interest deduction (http://tinyurl.com/bht2q). These are the same “pro-business†industry blowhards who typically lobby with all their might against the evils of government “regulation†(which usually translates as “consumer protections†or “eliminating my favorite sacred-cow tax subsidyâ€).
I have a few questions for these people:
Consider the incentives government currently provides for individual homeowners: the 1997 tax law greatly increased the RE capital gains exemption ($250K single/$500K married: http://tinyurl.com/bsfzd). This exemption was even extended to second (investment) properties, for reasons we can only “speculate†about (*smile*). Add to this the already existing generous mortgage interest tax deduction and the popular “1031†tax shelter. Result? A tax incentives system rigged heavily in favor of RE “investing†over saving or investing in any other asset class –stocks, bonds, commodities, etc.
If this weren’t lopsided enough, taxpayers are also partly subsidizing risk for banks and mortgage companies. By selling their conforming loans to the GSEs and selling non-conforming (sub-prime) loans to private MBS issuers & REITS, the lender can simply walk away from default risk with profits in hand and go make more bad loans. (Btw, the GSE conforming loan cap was just raised another 16%: http://tinyurl.com/azd48.) Chickens will no doubt come home to roost for investors in private MBS paper at some point, but GSE-issued MBS paper has the implied full faith and backing of the U.S. taxpayer. This (assumed) low risk has translated into extremely low risk premiums by investors, and incredibly loose-to-nonexistent lending standards. To this day, the GSEs, which still purchase some 50% of the nation’s residential mortgages for MBS resale, remain privately owned for-profit companies with exclusive government monopoly charters, along with implied taxpayer guarantees and access to unlimited Treasury capital. And let’s not forget that the Fed kept their funds rate negative in real (inflation-adjusted) terms for two years, which no doubt “helped†many home values go parabolic over the past few years.
Whatever you subsidize, you get more of –right? Now the taxpayer is heavily subsidizing both sides of the RE market: supply and demand. Predictable end result: historically low risk premiums (low rates on mortgages & MBSs) in a time of historically high default risk, sky-high prices and overextended borrowers. See PMI Group’s breakdown of default risk by city at WSJ.com: http://tinyurl.com/dd6ps.
Is having the government pick winners & losers really a “free market†or “pro-business†philosophy? Are you a “Big Government Libertarian�
Discuss, enjoy...
HARM
#housing