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Bloomberg Business has an interest issue last month covering the housing market - Flips, No-look bids, 300 percent returns, What could possibly go wrong?
It brings to mind that nursery rhyme -- Humpty Dumpty sat on a wall, Humpty Dumpty had a great fall, all the king's horses and all the king's men couldn't put Humpty together again.
What idiots are running this country. Or maybe not -- someone will get filthy rich by convincing people to run out and buy houses they cannot afford.
How can people rush out and buy houses they can't afford, if banks still aren't loaning? It's much more difficult to qualify for a loan. There may be a rush in certain areas, like the Bay Area where the tech sector is booming, but examples like that are far from the norm.
It brings to mind that nursery rhyme -- Humpty Dumpty sat on a wall, Humpty Dumpty had a great fall, all the king's horses and all the king's men couldn't put Humpty together again.
What idiots are running this country. Or maybe not -- someone will get filthy rich by convincing people to run out and buy houses they cannot afford.
Investment bankers want to see housing price rising rapidly. They want everybody to believe the best time to buy a home is now.
Housing bubble 1.0: national scale, fuelled by cheap/easy lending to people who cant afford the big house they are buying.
Housing bubble 2.0: localized in few areas only (to maximize the speculation effect), fuelled by investors (very rich people and investment banks) pouring their cash (not mortgage) into real estate instead of into job-creating investments. Maybe it is a more profitable investment than job creation right now, or maybe they are preparing for the next global financial crisis (saving their own asses, sorry assets). It might have something to do with quantitative easing, as banks get cash from government/fed (for their garbage) and they have to put it somewhere. Also many Chinese and other foreign people (non-US residents) buy many homes here for investment. Chinese in China buy many homes in their own country as well purely for investment, it is like a national habit. And I think Obama said something about this in the TV that this is good as it helps irresponsible over-mortgagers (not the words he used) to get up to above the water.
The bubble created before 2006 was too large, and the price just fell back to the reasonable level.
Thy didn't get back to a reasonable level. They would have had to go below the starting point to get that accomplished.
Quote:
Originally Posted by cpg35223
Not wanting to get political, but Obama wants to loosen lending restrictions. Never mind that's what got us in this pickle in the first place.
You want house prices to go up and stay up then we need wages to pay the loans on them.
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