patrick.net

His argument appears to be that every homeowner with negative equity, a second mortgage, or "impaired credit" is a distressed seller.

People who believe this shit represent everything wrong with housing bears. You have to argue using actual data, not the kind of BS fantasy writing from people who think they're going to be buying 10000sf beach front mansions for a satchel of gold coins next year.

I'm not sure we have 25,000,000 homes sitting around ready to be put onto the market, but I do believe that inventory ready for market is being suppressed (my own neighborhood has empty homes with a "Chase" letter on the door, and they are not on the MLS).

Also he's correct in that the FED soft stabilization is the only thing propping prices in the market. If the FED stopped buying MBS, the 2011 to the first half of 2012 downward spiral would have continued in California.

QE seems to be working, except for the fact we also have demand destruction (sales are down 20% month-over-month in OC, higher in other cities). You can make prices rise, but can you actually get buyers at the inflated prices?

FHA is about to be bailed out and restructured.

Private banks certainly won't make those loans without some real skin in the game (20% down).

So I'm not sure what the end game is, but the housing market is in gridlock right now in OC (rising prices, disappearing demand, disappearing supply).

I actually wonder how some brokers/realtors make a living in OC these days. There's a little over 1 month's supply, and sales have drastically come down since the Summer high (not that I favor having as many RE agents as we already have, we could use a good culling).