patrick.net

realitycheck says

I wish the interest rates go up and prices finally fall to decent levels.

http://research.stlouisfed.org/fred2/graph/?g=4RG

blue line is middle class debt/wages ratio (systemic leverage)
red line is the Fed rate

Note the -2 label on the right. Does the St Louis Fed know something we don't ???

; )

Everrything is relative, depending on your point in time reference, you could say that prices are up, falling, or flat.

Now vs jan 2010 = flat
Nowvs jan 2005 = falling
Now vs jan 1982 = up

When I look at the charts, it surely looks that prices have fallen for a couple consecutive months, and overall for about five years. To put things in context, I feel its necessary to include the gov efforts to buck the trend of 07-09 with all the gimmicks

People stay in a house for seven years on average, so that ought be a fair time frame for comparison purposes. As someone that uses a house for its utility (a shelter), price would be a concern only when trading (buying/selling).

All things considered, if I were in the market to buy a mortgage for a house, I wouldn't be in any kind of hurry right now. Good things come to those that wait, and imo those that wait will see

-lower rates
-lower prices
- and as a bonus, more subsidies from the taxpayer

To buck the current trend, I believe we will need

- improving employment #'s
-improving wages
- better accesibility to credit (and demand for debt)

In the zero sum world we live in, housing dollars are waging war against energy (which includes food) and healthcare dollars, which are both still following higher price trends. You have to eat, the fedgov is mandating that we flow more $ towards the health insuarnce complex, and while we need shelter, there is plenty of that to go around

The easiest solution to the rental parity 'problem', is to raise rents

errc says

The easiest solution to the rental parity 'problem', is to raise rents

And sadly, that is what seems to be happening. It certainly was the case in 2010 all across the Silicon Valley, at least in managed apartment complexes. Folks in privately owned rentals fared a little better it seems.

I'm not questioning whether or not US paper is in demand. I'm challenging the assertion that the reason they lowered the rates to 0%, was because of high demand for US dollars.

"The entire world is demanding as much U.S. currency as possible, which is the reason why interest rates are near zero."

-This statement is false. Look up "Correlation does not imply causation" if the reasons for this still elude you. Sorry I don't have a graph to demonstrate that.

Prices are falling here on Long Island.

You do understand that the rate on 3-month to 2-year government bonds ranges from 0% to a staggering .25% right?
I saw last week that the Treasury will decide by May if they will be offering negative interest rates for their auctions. Some bonds are already traded with an effective negative rate. No reason that the primary dealer should be the only beneficiary.

Lester Appleton-Young says

I can't find a decent house in Fremont area. Old dilapidated houses are selling for half a million and inventory is so low that I can't find a decent house..

What is going on?

Not really. Nothing is selling in Fremont. Did you expect anything to sell there given the prices?

Nothing for sale in SF under 600K except in sketchy neighborhoods or deep in the fog belt.

I can't believe I'm contributing to this idiot's thread. Well, he'll like this: banks are starting to throw in the towel on the high end (although this story applies to expensive and cheap houses) . To paraphrase John Paul Getty: If you owe the bank $100, that's your problem. If you owe the bank $1 million on a non-recourse loan, that's the bank's problem.
Banks, accelerating efforts to move troubled mortgages off their books, are offering as much as $35,000 or more in cash to delinquent homeowners to sell their properties for less than they owe.
Lenders have routinely delayed or blocked such transactions, known as short sales, in which they accept less from a buyer than the seller’s outstanding loan. Now banks have decided the deals are faster and less costly than foreclosures, which have slowed in response to regulatory probes of abusive practices. That reminds me of a saying by AF...

ContStinks DeGroot says

realitycheck says

I can't find a decent house in Fremont area. Old dilapidated houses are selling for half a million and inventory is so low that I can't find a decent house..

What is going on?

I wish the interest rates go up and prices finally fall to decent levels.

Not really. Nothing is selling in Fremont. Did you expect anything to sell there given the prices?

Living in the empty skulls of realtors. Rent-Free.

Infact houses are selling in Fremont. Decent houses go fast and are going for more than half a million! I am waiting and waiting....

Schizlor says

'm not questioning whether or not US paper is in demand. I'm challenging the assertion that the reason they lowered the rates to 0%, was because of high demand for US dollars.

Yah, what he said. Remember, also some of that demand for U.S. notes/dollars is actually coming from the fed themselves. Don't lump that in with world demand, lump that in with mortgage rate manipulation to divert a national crisis in housing. They wouldn't do this if they didn't see a very real problem bearing its ugly head. Think about it. The true numbers (not the NAR manipulated numbers) must be scary as hell for this to happen. I'd love to see them.

realitycheck says

half a million

Remember, you couldn't get a 1bd/1ba condo in Freemont for half a million in 2007. Just give it time to flush out. Telsa is not the saving grace of Fremont. It will not explode because of the BART extension or a new stadium. Fremont will be exactly what it is now in 10 years, except much more reasonably priced homes.

RentingForHalfTheCost says

They wouldn't do this if they didn't see a very real problem bearing its ugly head. Think about it. The true numbers (not the NAR manipulated numbers) must be scary as hell for this to happen. I'd love to see them.

I can't believe that someone "liked" this comment. The Fed ALWAYS does this during times of recession. This is one of the first tricks out of their bag.

I thought the government is printing money to buy back their own bonds = keep interest rates low - is that not the mechanism?

SubOink says

I thought the government is printing money to buy back their own bonds

That would be "quantitative easing" and other Fed interventions.

Theoretically this would be visible on the Fed's balance sheet:

http://www.federalreserve.gov/releases/h41/current/h41.htm

which shows that the Fed has in fact "printed" $467B over the past year, pushing its balance sheet from $2.5T to $2.967T, a rise of 25%, which does strike me as pretty aggressive. ($360B of this money add was in fact net Treasury purchases).

But this has not been helicopter money so it is not as inflationary as monetarist theory asserts.

What was helicopter money was:

http://research.stlouisfed.org/fred2/series/CMDEBT

I was reading Steve Keen's book today (Debunking Economics) and was pleased as a peach to see somebody FINALLY making this obvious observation that debt take-on is income as far as demand goes.

bubblesitter says

Even 0% rates won't prevent the continuing housing price slide.

Not unless I can take out a no-fee, no closing cost, 200-year balloon mortgage where I don't have to make the first payment for 200 years, and the property tax appraisal is for much, much less than the sales price.

If all of these conditions are met, I'd buy a house at the current prices. I figure that inflation will make the price reasonable when I finally have to pay it.

Dan8267 says

no-fee, no closing cost, 200-year balloon mortgage

Haha. Nice way to put it.

Dan8267 says

I figure that inflation will make the price reasonable when I finally have to pay it

That could very well be the most intelligent thing I have ever heard on this list. I am hoping the same and all indicators of everything I have read in paperback and online seem to point in that direction. It might take some time, but time is what I have in abundance. Wage inflation coupled with housing price collapse because of rising interest rates could very well be the future of this country. Imagine people having to work hard to save, rather than watch their paint and wood age and deteriorate to become wealthy. Seem more logically to me.

RentingForHalfTheCost says

snyderkv says

person making the claim that should provide reputable resources to back there claim

Just like the 20 years of "prices never go down" rhetoric that was pushed at everyone by the whole housing industry. Now you realtard know that the scam is up and you have to appear like you have facts to back up the "buy now!" chants. Give it up! Be honest with people. Now is probably the worst time ever to buy a house. I can't say that for sure, but all data that I have been following for the last 10 years has me worried enough to make that claim. The only people that should be buying in this market are the ones that don't mind taking a haircut or the ones in the trenches getting 30-40% off of the averages on distressed. Everyone else, just back away and let the crap settle. There will be books written about these next 5 years and they will not be pleasant to read.

Saving this choice quote as I just saw that other thread where RFHTC said leaving the site, and I wouldn't be surprised if he engaged in a massive deletion campaign before he left.

In a nutshell, this quote, written on 2/7/2012 epitomizes who he was and his predictions on the future of the housing market, circa 2011-2013...

CDon, he still has over 3 years on his prediction. I have no dog in this debate, but I thought I should point that out. In 3-4 years, a lot can happen.

APOCALYPSEFUCK is Shostakovich says

The only growth industry is meth production and sale.

Of course housing prices should be doubling every month!

Only in Stockton!

APOCALYPSEFUCK is Shostakovich says

The dollar is worthless.

No one will hire unless you can prove you'll work for half of what a Chindian will ask for.

Mortgage rates are doubling per hour.

Oligarchs appear on their front lawns to demand blow jobs from their paper boys and landscapers, any subhuman fuck that works for a living.

The only growth industry is meth production and sale.

Of course housing prices should be doubling every month!

We can't even produce quality porn anymore!!!

It's being outsourced to Bangladesh where you can film the Dhaka 500 by paying the woman a chicken.

Mick Russom says

working jobs we hate so we can buy shit we don't need. We're the middle children of history, man. No purpose or place. We have no Great War. No Great Depression. Our great war is a spiritual war. Our great depression is our lives.

Well said.
Enjoy the wealth effect!

Facebooksux says

We can't even produce quality porn anymore!!!

It's being outsourced to Bangladesh where you can film the Dhaka 500 by paying the woman a chicken.

There's such a thing as quality porn?

John Bailo says

Well...but actually we are. The life of a millionaire from the 1960s with jet travel, international resorts, garage door openers and sports cars is well within the reach of a middle class family. Or would be except for one factor.

Perhaps but the 1960's millionaire had a private jet, a private house in Malibu/Maui/Bermuda/wherever, a chauffeur to open garage doors, and sports cars that no middle class person even today can afford:

http://jalopnik.com/391696/1961-ferrari-250-gt-california-sells-for-10976000-setting-world-record-as-most-expensive-car-ever

http://wheels.blogs.nytimes.com/2012/01/23/4-62-million-mercedes-gullwing-leads-strong-auction-weekend-in-arizona/