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Old 08-07-2012, 08:08 PM
 
36 posts, read 46,094 times
Reputation: 26

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Federal home loan giant Freddie Mac posted a 420 percent increase in its net income at the end of the second quarter in July.

Now, with its net worth at $1.1 billion, the Freddie and its sister company, Fannie Mae, were able to pay the US Department of Treasury $1.8 billion in dividends without any help from taxpayers.

The company credits gains in its incom to significant improvements in the housing market, as well as changes in its lending portfolio. Freddie Mac's portfolio took a hit during the housing crisis in the mid-2000's when stringent lending practices were abandoned by many large mortgage lenders.

Since 2008, however, the company says it has tightened standards for borrowers. This, coupled with an increase in the number of new housing starts in June, continues to help Freddie Mac post large gains.

Follow The USual: National Politics. World Economics. The Yooj.
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Old 08-08-2012, 08:49 AM
 
28,900 posts, read 49,113,668 times
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Well, it really remains to be seen whether or not home prices are coming back. I suspect they are, but there are pitfalls along the way. Some things to think about that might point to a resurgence in values.

1. A staggering number of builders and contractors have gone belly-up since 2007.
2. As a result, the bandwidth for home production is down considerably. Add to that the overcompensation when it comes to lending requirements, and new home construction is far, far harder to finance. That's not a completely bad thing, but Dodd Frank really did make it extraordinarily difficult for small businesses to get seed capital, which in turn made it much tougher to break ground.
3. New home inventory has dropped below the six-month level in terms of supply.
4. The buy/rent ratio is down to 1998 levels, about the time when the entire housing bubble began to inflate in the first place.
5. Interest rates remain absurdly low. In 2010, we refinanced the house. We might do it again.

Now some downside factors:

1. I don't think anybody has a good handle on how long the foreclosures will continue to leach into the market, driving down overall values of inventory.
2. Is the economy going to go bust again? Your guess is as good as mine.
3. The new uptick in home values, if it really does exist, is likely to be regional in nature. California's housing market (And economy) is a total basketcase at this point, as is Florida's and Arizona's, which means those states will lag behind the rest of the country. Meanwhile, places such as Texas and the Southeast (Outside of Atlanta) did not have the massive speculative run-up in home prices in the first place and had less prevalence of stunt mortgages, so they are more likely to benefit.

Just yesterday, Warren Buffett announced that he's getting into housing big time. I'm thinking he is likely to be right. Then again, he has billions of dollars to play with.
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Old 08-08-2012, 09:31 AM
 
19,337 posts, read 16,939,838 times
Reputation: 7515
The weak hands in this 4 year period are already finished. They have no equity or savings. When you see the net worth of the .01% gallop, much of that was in a wealth transfer from the middle class. If they succeed in paying down the debt, Americans will not be able to de-leverage. Lets not even talk about all the boomers who want to start unloading their houses. All this housing is floating on top of 3-3.5% long term rates.. This is just the end of the beginning until they do something about the FIRE sector. It was housing that created all the liquidity for 30 years in a Faustian contract with the FIRE sector. There is no where to go and as soon as the economy gets started it will hit the ceiling.

Housing has to go down, interest rates need to come up and banks need to fail which is what should have happened 4 years ago.
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Old 08-08-2012, 12:05 PM
 
19,337 posts, read 16,939,838 times
Reputation: 7515
Housing needs to go up eh?

Odd this then:
Compared with many large cities, home prices in Pittsburgh are refreshingly affordable. Recent surveys indicate an average home price in Pittsburgh of ranging from about $110,000 to $162,000 for a 3/4 bedroom, 2 bath home - about 40% below the national average. It is definitely possible to find nice homes, as well as fixer-uppers, for less than $100,000 within the Pittsburgh city limits, as well as in some of the outlying suburban communities. As with most major cities, however, there are also neighborhoods with home prices of $1 million or more. How Pittsburgh Home Prices Measure Up

The seven-county Pittsburgh region generally ranks among the top 50 most affordable housing markets in the country according to the National Association of Home

Pittsburgh Housing Market - Home Prices & Cost of Living in Pittsburgh, Pennsylvania


Could someone explain to me please how we can have two "good" things at once?

Home values rise for the first time in five years - Jul. 24, 2012
The results in those places, however, will be bumpy. Home price increases will cause some homeowners who have been patiently waiting for values to rebound to put their homes on the market. And those additional listings could cool prices for a while, resulting in a staircase effect with "price spikes followed by plateaus," said Humphries.
Wait what about "refreshingly affordable"? What happened to that?


Typical BS of the financial media playing one side of the equation off the other. Lets take a look at the two "investment" strategies.


#1 housing:
patiently waiting for values to rebound

That translates to waiting around until other people do something to make their property valuable. They sit, wait, like a good little renter doing jack squat.


Once these leeches can't seem to get anything for their bloated asset guess what happens?

#2 Industry:

Pittsburgh reinvents itself as the new Hollywood for film - Yahoo! Finance
Once known for its steel mills and smog, Pittsburgh is fast becoming the Tinseltown of the East. A generous film tax credit, coupled with the region's diverse landscape and skilled labor unions, have made the city a hot destination for recent productions -- and the firms that cater to them.
Translate that as big city benefits at bargain prices.

Why in the hell does nobody figure out what is going on? Disney did.

http://www.gather.com/viewArticle.ac...81474976719796
But how does Walt Disney go and buy up thousands of acres of land without the landowners holding out for exorbitant prices? He doesn't. Sort of. Walt Disney set up dozens of "dummy" corporations, with names like "M.T. Lott" (get it? Empty Lot?), the "Latin-American Development and Managers Corporation" and the "Reedy Creek Ranch Corporation" to purchase seemingly worthless parcels of land ranging from swampland to cattle pastures. By May of 1965, there had been major land purchases recorded in Osceola and Orange Counties (just southwest of Orlando), although no one realized (or suspected at first) that Disney had anything to do with it. One of the earliest purchases included 8,500 acres owned by Florida state senator Irlo Bronson.
Why do you think Disney bought land on the sly? So that the leeches would not make a cheap buck like they did in California.
Regrettably, Walt Disney did not buy enough land surrounding Disneyland, and soon after the park opened it was surrounded by tacky hotels, tourist gift shops and restaurants. His dream of a completely contained theme park for families was now tainted with views of billboards and fast-food restaurants. Walt vowed that if he ever built another theme park, he would not make the same mistake twice. He would be sure that they could control the surroundings, which would include campgrounds, and first-class facilities for recreation and accommodation.
What really ticked him off I am sure was the value of those establishments leeched off Disney. But lets hope those housing prices keep going up because someone else does all the work. And who will be waiting to collect the benefits? The mortgage and finance industry who will loan as much money as it takes to bloat asset prices and increase interest payments all on the backs of industry.
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Old 08-08-2012, 03:21 PM
 
48,508 posts, read 88,470,926 times
Reputation: 18187
Roars back? By that standard the stock markets have come roaroig back monthly.
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Old 08-08-2012, 04:05 PM
 
577 posts, read 933,841 times
Reputation: 629
We have a very tightly controlled inventory with a decrease in the amount of distressed inventory on the market during the usual seasonal increase in demand. This is a little too early to proclaim that the housing market is roaring back. Overall housing is much more affordable for the average person as gwynedd1 pointed out. This is better for them than home prices increasing again, and a return of the GSE profits by buying up the loans and providing more credit to the market.
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Old 08-08-2012, 08:48 PM
 
5,507 posts, read 9,679,050 times
Reputation: 2294
Certainly a positive sign.
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Old 08-09-2012, 11:07 AM
 
Location: WA
5,538 posts, read 22,582,519 times
Reputation: 6288
This is another right pocket left pocket story from our incompetent federal government. They have taken huge amounts and are now spinning a dividend...

'Since the third quarter of 2008, FHFA, as conservator of the GSEs, has asked Treasury for a total
of $116.1 billion to increase Fannie Mae’s assets to offset its liabilities and a total of $71.3 billion
for Freddie Mac. '
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Old 08-09-2012, 10:16 PM
 
Location: Baltimore
1,759 posts, read 4,682,226 times
Reputation: 1195
Quote:
Originally Posted by gwynedd1 View Post
Housing needs to go up eh?

Odd this then:
Compared with many large cities, home prices in Pittsburgh are refreshingly affordable. Recent surveys indicate an average home price in Pittsburgh of ranging from about $110,000 to $162,000 for a 3/4 bedroom, 2 bath home - about 40% below the national average. It is definitely possible to find nice homes, as well as fixer-uppers, for less than $100,000 within the Pittsburgh city limits, as well as in some of the outlying suburban communities. As with most major cities, however, there are also neighborhoods with home prices of $1 million or more. How Pittsburgh Home Prices Measure Up

The seven-county Pittsburgh region generally ranks among the top 50 most affordable housing markets in the country according to the National Association of Home

Pittsburgh Housing Market - Home Prices & Cost of Living in Pittsburgh, Pennsylvania


Could someone explain to me please how we can have two "good" things at once?

Home values rise for the first time in five years - Jul. 24, 2012
The results in those places, however, will be bumpy. Home price increases will cause some homeowners who have been patiently waiting for values to rebound to put their homes on the market. And those additional listings could cool prices for a while, resulting in a staircase effect with "price spikes followed by plateaus," said Humphries.
Wait what about "refreshingly affordable"? What happened to that?


Typical BS of the financial media playing one side of the equation off the other. Lets take a look at the two "investment" strategies.


#1 housing:
patiently waiting for values to rebound

That translates to waiting around until other people do something to make their property valuable. They sit, wait, like a good little renter doing jack squat.


Once these leeches can't seem to get anything for their bloated asset guess what happens?

#2 Industry:

Pittsburgh reinvents itself as the new Hollywood for film - Yahoo! Finance
Once known for its steel mills and smog, Pittsburgh is fast becoming the Tinseltown of the East. A generous film tax credit, coupled with the region's diverse landscape and skilled labor unions, have made the city a hot destination for recent productions -- and the firms that cater to them.
Translate that as big city benefits at bargain prices.

Why in the hell does nobody figure out what is going on? Disney did.

Walt Disney World History 101 - How to buy 27... | Gather
But how does Walt Disney go and buy up thousands of acres of land without the landowners holding out for exorbitant prices? He doesn't. Sort of. Walt Disney set up dozens of "dummy" corporations, with names like "M.T. Lott" (get it? Empty Lot?), the "Latin-American Development and Managers Corporation" and the "Reedy Creek Ranch Corporation" to purchase seemingly worthless parcels of land ranging from swampland to cattle pastures. By May of 1965, there had been major land purchases recorded in Osceola and Orange Counties (just southwest of Orlando), although no one realized (or suspected at first) that Disney had anything to do with it. One of the earliest purchases included 8,500 acres owned by Florida state senator Irlo Bronson.
Why do you think Disney bought land on the sly? So that the leeches would not make a cheap buck like they did in California.
Regrettably, Walt Disney did not buy enough land surrounding Disneyland, and soon after the park opened it was surrounded by tacky hotels, tourist gift shops and restaurants. His dream of a completely contained theme park for families was now tainted with views of billboards and fast-food restaurants. Walt vowed that if he ever built another theme park, he would not make the same mistake twice. He would be sure that they could control the surroundings, which would include campgrounds, and first-class facilities for recreation and accommodation.
What really ticked him off I am sure was the value of those establishments leeched off Disney. But lets hope those housing prices keep going up because someone else does all the work. And who will be waiting to collect the benefits? The mortgage and finance industry who will loan as much money as it takes to bloat asset prices and increase interest payments all on the backs of industry.

That's all well and great but at the end of the day you're living in Pittsburgh.
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Old 08-09-2012, 10:38 PM
 
19,337 posts, read 16,939,838 times
Reputation: 7515
Quote:
Originally Posted by davecj View Post
That's all well and great but at the end of the day you're living in Pittsburgh.
What's your answer to a french fry sammich? *throws the gauntlet with chubby fingers*




oops, I think I hit the puck in my own goal....
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