[Tarara Boomdea]

December 18, 2012
Housing Up, Home Ownership Down
The Mysterious New Housing Bubble
by MIKE WHITNEY

The Mysterious New Housing Bubble » Counterpunch: Tells the Facts, Names the Names

So let’s keep things in perspective. Housing is still in the doldrums despite the hype, despite the low rates, despite the unprecedented meddling and intervention by the Fed, the banks and the USG. Just look at the data. Naturally, if the banks withhold distressed inventory, the government lends money to underwater homeowners, and the Fed slashes rates to record lows and buys whatever MBS the banks produce, then there’s going to be a surge in activity. But how long will it last?

No one knows. But one thing is certain, the Fed’s loosy goosy policies never seem to work as planned. Case in point: Bernanke’s zero rates and QE4 have not revived interest in housing as much as they have touched off a surge of speculation which could generate another destabilizing asset-price bubble. <snip>

Get a load of this from the SF Gate:

“There is a tsunami of money coming into the market, billions of dollars to buy distressed single-family homes,” said Jeff Lerman, a San Rafael real estate lawyer, speaking about the national landscape. “The window of opportunity is rapidly closing (as prices rise). Over the next 18 months, profit margins in single-family opportunistic buying will be compressed quite a bit.” <snip>

Repeat: “A tsunami of money coming into the market” from deep-pocket speculators. That’s your “recovery” in a nutshell.

Of course the article focuses on the Bay Area, but the same thing is going on in the hotter markets across the country, particularly Las Vegas, Phoenix, Atlanta and Miami. Investors are buying up all the cheap homes they can get their hands on . The flurry of activity has pushed prices higher, but can it last?

[lvoc]

Originally Posted by lvnyc

December 18, 2012
Housing Up, Home Ownership Down
The Mysterious New Housing Bubble
by MIKE WHITNEY

The Mysterious New Housing Bubble » Counterpunch: Tells the Facts, Names the Names

You have to square all that with decreasing volume in the local market. I would think there is lots of interest in the lower end where the property makes a good rental. But we don't have any inventory in the middle either...where the rental return is not there. I am presently sitting on at least three buyers between half a million and 3/4 million who can't find a suitable home that can be bought at a rational price.

I hear stories of volume buyers but so far I know of one who appear no longer to be active. I got a list from an agent in AZ of the outfits buying in volume there but found only one of the ten or so active here. There are lots of active investment buyers but they peak at 10 or 20 a year.

Looks to me we are well into a substantial price increase. I would note however it will have to go on at the existing rate for perhaps three years to return homes to the level commensurate with history.

Anyone who wants to see it just get the Case Shiller Las Vegas chart. It is pretty clear cut.

[ScoopLV]

Originally Posted by djslakor

What if you believe we're in another mini-bubble, and in a year or two, prices may be low again. Is that still lunacy to wait?

You've been waiting since 2003. You could be free and clear on a couple houses by now.

To quote Stewie Griffin, "Jim Henson also took a 'wait-and-see' attitude. Now we're stuck with strange-sounding Muppets."

[Trader Joe99]

The real secret behind the real estate scam is getting young dumb lovebirds to sign up for half of both of their incomes thirty years in the future to get keys to their own love nest.
What is the problem with that you may ask? It equals 30 man years of leveraged, often college educated time when, with modern building techniques, it only takes about one man year of semi-skilled labor to assemble a house. Pretty sweet deal as long as the lovebirds don't find out they are double screwed with college debts and their names on a thirty year peonage contract. They might be mad if they found out in their fifties that they could have retired in their twenties. But that is what Realtors are for: to put the sizzle on the steak so they don't find out, until the papers are signed, that: if you don't know who the sucker at the table is, It's probably you

[von949]

Yeah but realtors are not out there recruiting home buyers. A potential home buyer is always in search of a good realtor.

On the flip side...

My wife has several employees out and about marketing for her apartments all the time.

How backwards is that?


Posted from Nokia 8210

[WestieJeff]

It takes about a week to build a car and on average, 5 to pay it off. Who cares?

Where do you come up with this stuff?

I can be homeless and retired at any age. That's not the life most want to live, neither pre nor post retirement.

You sound like you need to buy 50 acres off the grid and show us how the good life is lived.

Originally Posted by Trader Joe99

What is the problem with that you may ask? It equals 30 man years of leveraged, often college educated time when, with modern building techniques, it only takes about one man year of semi-skilled labor to assemble a house.

[Trader Joe99]

Where do you come up with this stuff you asked me.
I'm NOT brainwashed like most of you are.

It will be interesting to see how far the sheeple go in this round of mania.

[von949]

^^^
Do you currently enjoy life right now?


Posted from Nokia 8210

[aardogfsu]

Originally Posted by djslakor

What if you believe we're in another mini-bubble, and in a year or two, prices may be low again. Is that still lunacy to wait?

Yes it's lunacy, if you think we're in another mini-bubble don't go out and get a 6 bedroom 3618 sqft house for $250,000 on the border of summerlin...if you think that's a bad buy right now (which I don't), instead grab a 1400 sqft 3 bedroom for $90,000 in the SW, take on a $400 a month mortgage with 20% down and if things go to sh*t and you are correct on your bubble, rent it out for twice your mortgage payment and in due time you'll have your renters pay off your house.

[ScoopLV]

Originally Posted by aardogfsu

Yes it's lunacy, if you think we're in another mini-bubble don't go out and get a 6 bedroom 3618 sqft house for $250,000 on the border of summerlin...if you think that's a bad buy right now (which I don't), instead grab a 1400 sqft 3 bedroom for $90,000 in the SW, take on a $400 a month mortgage with 20% down and if things go to sh*t and you are correct on your bubble, rent it out for twice your mortgage payment and in due time you'll have your renters pay off your house.

Or you could do that anyway, and keep repeating until you don't have to work anymore... Just a thought...

"Sheeple" indeed. Harumph.