patrick.net

Well, they were right. Ain't no housing bubble now, huh?

"The New York Fed study said although house prices have risen strongly, increases in family income and low mortgage rates have meant that homes remained affordable, while demographic forces have also supported demand."

This is true as far as it goes but failed to understand that rising real estate values were shoveling cash into the wider economy, a stealth stimulus much greater than the 2001-2003 tax cuts, especially for the non-wealthy.

This NY Fed piece was propaganda in justifying the ending of the low interest rate regime.

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

The Fed also failed to account for the suicide lending products that were newly available, "affordability" lending that allowed borrowers 2 to 5 years of fuse time before their loans blew up on them. Once the prices started coming back down, millions of buyers in the 2003-2006 period were left high and dry.

Let's see, official Fed policy is that bubbles are impossible to see except in retrospect. So obviously they are not going to start talking about a bubble, much less do anything about it.

Likewise, permanent official policy of the NAR is that *NOW* is a good time to buy, in fact it's never been a better time. Go out and buy a house *NOW* through a licensed Realtorâ„¢. And don't worry about price. It's impossible to overpay, and even if you somehow do you'll be better off in the long term.

Greenspan and Yun will not be regarded well in history.

MarkInSF says

Greenspan and Yun will not be regarded well in history.

Lets not forget Mr NAR himself.. David Lereah.

LOL.

A bubble would indicate nothing was affordable and that the trend had no way of continuing.

Current housing is affordable (people can buy), even if prices are higher than most of us would like, they are affordable. A 30 year mortgage, at these interest rates makes housing affordable. People are willing to put forth the required monthly payments and purchase at these levels, so it's sustainable.

pkennedy says

A bubble would indicate nothing was affordable and that the trend had no way of continuing.
Current housing is affordable (people can buy), even if prices are higher than most of us would like, they are affordable. A 30 year mortgage, at these interest rates makes housing affordable. People are willing to put forth the required monthly payments and purchase at these levels, so it’s sustainable.

It is different this time. I agree it is affordable but at the cost of putting bigger part of the income in mortgage.

On Trulia's Q&A section ("ask the experts!") when you type in, "Is now a good time to buy?" you get 20,958 posts going back to 2008. I don't have time or interest to read the multiple responses for each of them, but a random sampling is overwhelmingly YES! It's the time to buy...then AND now and forever.

"Is it a good time to sell?" has 17,060 posts and multiple replies. There are some bald "No" answers and iffy "Maybe/Pockets of Opportunity" and a lot of "Let a licensed Realtor(r) help you make that decision!"

I've been subscribed to a Trulia search for my parents' area for 3 years now, and lately the foreclosure listings are just BOILING through (a single recent alert had 1,455 in my search parameters). But the prices have stayed constant for the past two years even as the number of listings skyrocketed. I've read that the demand has been supported by cash investors and government intervention, but can that really go on forever? There is a whole industry of buying short sale homes to rent to foreclosed and defaulted owners from the same neighborhood. It's musical chairs. In a high percentage of anecdotal cases (note the waffley language, I'm just speaking from the table conversation when all the relatives get together), this "new class of renters" is a lot of strategic defaulters. They want the marble countertops and pools and 3-car garages but won't pay twice as much by staying in their homes so they walk away (or don't pay and get evicted). As soon as their credit repairs, they plan to buy again for half the price.

Just as in a soap bubble, there was so much air in the housing market. And just as you have to rinse and rinse to get rid of the soap, there's still a lot of bubbly residue and a scum line. I'm still amazed at listing after listing where the asking price is less than half the selling price 2-3 years ago. The money didn't just evaporate. The computers didn't just burp and reboot. Somebody paid the difference, somewhere. That would be the taxpayer.

Bernanke has been dead wrong about nearly everything since this financial debacle began.

He's on tape, there's no denying it:

http://www.youtube.com/watch?v=HQ79Pt2GNJo

Billionaire investor Jim Rogers has openly opined Ben to be a complete idiot and said that he should resign (in shame/embarrassment) due to incompetence.

http://www.youtube.com/watch?v=zzTXaAXusiI

From http://globaleconomicanalysis.blogspot.com/2010/08/former-bank-regulator-william-black-us.html

Aaron Task: What does it say to you that Tim Geithner and Larry Summers are still on the job?
William Black: Well I said it from the beginning, Geithner and Summers were selected and promoted, and the same is true with Bernanke, because they are willing to be wrong and have a consistent track record of being wrong. That's useful for senior politicians but disastrous for the country.

Such a hard job that would be, being wrong all the time! Not even the weatherman can do that!

pkennedy says

A bubble would indicate nothing was affordable and that the trend had no way of continuing.
Current housing is affordable (people can buy), even if prices are higher than most of us would like, they are affordable. A 30 year mortgage, at these interest rates makes housing affordable. People are willing to put forth the required monthly payments and purchase at these levels, so it’s sustainable.

On a historical context, homes are still way overpriced. Our bubble in the Bay Area stated long before easy lending and toxic loans. Even as far back as 2002-03 affordability was down to 15-20%. You have to go back to mid-90s plus inflation to get back to a real sustainable price level.

pkennedy says

Current housing is affordable (people can buy), even if prices are higher than most of us would like, they are affordable. A 30 year mortgage, at these interest rates makes housing affordable. People are willing to put forth the required monthly payments and purchase at these levels, so it’s sustainable.

Uh huh.

Based on the economic data that is now coming out (as if any solidification of pessimistic opinions were required), the Fed also saw a "recovery" when indeed there was none at all. It was all just a fleeting, temporary snowjob induced by the largest expansion of debt and balance sheet gymnastics in history.

Double dip, here we come.

Does anyone know where the next stop for the "Summer of Recovery Tour" is? I have some time off and would be just excited beyond compare (maybe even faint) to hear what the President has to say about the "recovery." Please answer ASAP .... my luggage awaits at the front door.

Greenspan said in Feb, 2004 that affordability problems could be solved with adjustable mortgages. The Fed was in on the ponzi housing scam.

RayAmerica says

Does anyone know where the next stop for the “Summer of Recovery Tour” is?

It's the printing factory where the unemployment checks are made.

I don't know about YOUR area, Ray, but here in Minnesota we DO have economic growth happening all around us. Up the road from me near St. Cloud we have a boom in employment and construction with the following:

http://www.sctimes.com/article/20100819/NEWS01/108190032/Local-debt-collection-business-expands-to-Sartell-

A local debt-collection business is more than DOUBLING their office space and employment!
I hear bankruptcy attorneys are also in very high demand.

There are jobs a plenty!

Thank you very much. I'm feeling a lot more confident than I ever have before. I just knew this would be a great summer. YES WE CAN recover .... and you've proved that it's happening and working (no pun intended).

I hear Oregon is cutting like 9% from its budget.

Ouch. That's a ton of jobs.

Oh, all this optimism is so uplifting! I was feeling so discouraged, looking at all the bills and the family members getting downsized and our taxes increasing and now they aren't going to replace our street light bulbs, but then I came here and was blinded by the sunshine and all the radiant luminosity of hope and the fabulous future that awaits us and our grandchildren!

(koff)

Cautious1, I'll try and help you out. The city not replacing the light bulbs is wonderful. Artificial illumination messes with your circadian rhythms, insulin levels and melatonin secretion in your brain. Your body will be healthier without them. Not only that, but after having to use a baseball bat repeatedly on the thieves/vandals who try to damage your darkened property, you'll attain those ripped biceps and triceps that the ladies love.

Think on the bright side.

schmitz_kris says

Cautious1, I’ll try and help you out. The city not replacing the light bulbs is wonderful. Artificial illumination messes with your circadian rhythms, insulin levels and melatonin secretion in your brain. Your body will be healthier without them. Not only that, but after having to use a baseball bat repeatedly on the thieves/vandals who try to damage your darkened property will allow you to achieve those ripped biceps and triceps that the ladies love.
Think on the bright side.

Studies have shown that the more streetlights in an area, the more crime. Just sayin'.

Another good point - without street lights the criminals will bump into something hard and fall down.

Schmitz_kris, you're an angel. But I'm a widow with young kids, so I will kinda miss the street lights. And the sheriff's office is too understaffed to respond right away, so the feller a couple of blocks over had to shoot two guys who broke into his house, and it sorta' creeped me out, and stuff like that. But you're right, there's ALL KINDS OF POSITIVES if we JUST LOOK FOR THEM and I suppose in this new economy, ripped guns are going to be a girl's best asset.

Men love toned arms on the ladies too, Cautious. NOBODY lusts after those flappy arm wings that you see on a grandma who doesn't take care of herself.

pkowen says

Studies have shown that the more streetlights in an area, the more crime. Just sayin’.

You're so right! And lights attract bugs!
Bless you, too. I feel so safe now.

schmitz_kris says

NOBODY lusts after those flappy arm wings that you see on a grandma who doesn’t take care of herself.

But since we won't be able to afford electricity, we'll need bat wings for personal cooling.

"bat wings" lol.