patrick.net

Reader says

1) low interest rates
2) rising rents
3) unemployment, although high, has stabilized.
4) pent up demand
5) manipulation of housing stock.

2,3, 4, +5 aren't real. Nice try to make a commercial.

I have observed rising rents in my city. I think if you compare rents to 2007 they are broadly higher now.

Unemployment does seem to have stabilized.

I think pent up demand is very real, at least for me.

Don't know about 5.

Call it Crazy says

Are you listening to NAR again???

Ever hear of the blind leading the blind?

NOTHING will help. This is a physical law what goes up must go down. It is a direct result of the force of fraud and greed.

Raw says

Even the NAR does not bullshit so much.

You just exposed yourself with that line.

War says

If you think 28 MILLION excess empty housing units is high, you'll be stunned over the coming years when an addition 35 MILLION housing units hit the market as boomers die off.

THEY DONT WANT TO FACE THOSE FACTS UNTIL THEY SCAM EVERYONE DRY WITH THE BULLSHITE.

bgamall4 says

War says

Housing Demand is at 1997 lows and falling. This is another reality you seem to run from.

There is a mortgage depression at about 2.4 million per year. There are an additional 2 million homes purchased by cash, mostly by Wall Street.

Watch out, it is a scam of a bubble. I don't think it is sustainable, but they are keeping inventory off the market and potential rentals off the market. They don't give a damn about main street.

Gary Anderson strategicdefaultbooks.com

Demand for homes is rising along with the prices. Cash buying means housing is developing strong foundations going forward, because cash buyers cannot end up in foreclosure.

War says

4. Housing Demand at 1997 rate is directly from NAR's own data sets.
5. If you think 28 MILLION excess empty housing units is high, you'll be stunned over the coming years when an addition 35 MILLION housing units hit the market as boomers die off.

You believe the NAR? Even politicians are more honest.
The baby boomers who kick the bucket will sell to the next generation. With a rising population it should not be too difficult. Infact I think there will be a housing shortage down the road.

bgamall4 says

Watch out, it is a scam of a bubble.

We see it. They need to watch out because again history has seen this all before and the results are far from pretty.

War says

Raw says

Demand for homes is rising along with the prices. Cash buying means housing is developing strong foundations going forward, because cash buyers cannot end up in foreclosure.

Demand is at 1997 levels and currently falling.

Raw says

With a rising population it should not be too difficult.

Pop growth in the US is the lowest in US history per 2010 Census.

"housing shortage"? BWHAHAHAHAHAHAHA. Not with 25 MILLION excess empty houses currently in inventory.

Demand will only continue to fall. This is only the beginning of the final result of their sinister greed coming back to crush them.

War says

1. No. Buy when rates have bottomed.

2. Rents are falling. That's long since been established.

3. Employment has nothing to do with it. Housing formation does. And household formation is at pre-WW2 lows.

4. Housing demand is at 1997 levels. That too has long been established.

5. 28 MILLION excess empty houses is a reality. You better get used to it.

Hmm housing demand at 1997 levels? Sounds good to me, housing skyrocketed from 1997 to 2006... Plenty of demand.

War says

Raw says

Demand for homes is rising along with the prices. Cash buying means housing is developing strong foundations going forward, because cash buyers cannot end up in foreclosure.

Demand is at 1997 levels and currently falling.

Raw says

With a rising population it should not be too difficult.

Pop growth in the US is the lowest in US history per 2010 Census.

"housing shortage"? BWHAHAHAHAHAHAHA. Not with 25 MILLION excess empty houses currently in inventory.

Those 25 million excess empty houses must all be within walking distance of your home, because I sure as hell don't see any.

It's important not to confuse "rents are rising" with "rents have risen." In fact, a statement like "rents are rising" must be filled with so many qualifications to be helpful, it's probably confusing and confusingly suggests knowledge of the future. Same with "prices", "falling", "stocks", "housing," "the market" and so on.

What about PMI tripping since Oct 2011 and home Insurance doubling?

Look at the costs of say Sink hole insurance in Florida or flood insurance etc.... double and triple again

Pent up demand .....lol With what credit and which job to support it?
Rent are fluctuating mainly downward

There was always manipulation of the housing market!

Until jobs spectacularly return in the USA so will real estate prices.

So I DISAGREE, strongly.

Histrionically the right time to buy is when interest rates go UP

So you can see where we are headed with this.

0.25 rate increase = $1 TRILLION in increased debt the government will owe

It's not happening anytime soon.

I have seen this graph before and agree with it. However the bottom was described around 2015/2017

The recovering end of this graph is over a 10 year period through 2025/2027 quite some time away.

As you can see we are "Just" entering the years of "DEPENDENCY"

Politicofact says

I have seen this graph before and agree with it. However the bottom was described around 2015/2017

The recovering end of this graph is over a 10 year period through 2025/2027 quite some time away.

We are at the hope stage.
Old British saying - "While there is life, there is hope"

Raw. I was just outbid by a FHA backed couple. I really want the house. Should I start killing or wait until their offer gets blown out by the appraisal?

Goran_K says

Raw. I was just outbid by a FHA backed couple. I really want the house. Should I start killing or wait until their offer gets blown out by the appraisal?

hmmmmm...There is no chance that home will appraise for an FHA loan if they were the highest bidders. This home will be back on the market within 2 to 4 weeks. Go back up, and keep pestering the listing agent.
You can go ahead and kill if the back up offer does not work. Remember, you only want to kill as a last resort, because when you bury them it only puts an upward pressure on land prices.

Raw says

because when you bury them it only puts an upward pressure on land prices.

That's an excellent point. I never considered the impact of dead bodies on land prices...

bgamall4 says

Raw says

Cash buying means housing is developing strong foundations going forward, because cash buyers cannot end up in foreclosure.

I disagree. They won't end up in foreclosure, but they won't spur demand from the people who buy most of the homes, the people who take out a mortgage.

My view is this: the 30 year fixed mortgage was evidence of a golden age in America. Cash buying and easy money mortgages are evidence of instability in the real estate market going forward. It could go up and it could go down. And the 3 percenters will default in large numbers.

Gary Anderson strategicdefaultbooks.com

As soon as they start loosening lending standards you will see another phase in the real estate boom. This time by the average person.
A 30 year mortgage rate at less than 3% can only be construed as the golden age of American real estate.
50 years from now granpa's will be telling their grand kids of 2.5% mortgage rates, and those kids will say "Wow, even the big bad wolf could have bought his own house"

Well, we as a nation have bigger problems. Some of them will and do impact housing, but it impacts all of us long term.

We have aging population. And it's not good for the nation when more people are old than young. That means more people using services than providing them. Next 10 years or so you'll see a lot of housing demand disappear simply through basic after death inheritance.

Our inability to deal with rising debts another problem. Something will have to give. Credit cards don't last forever. And it will cost dearly the longer we wait. Future generations are saddled with so much debt that they won't have any money after taxes to even have a lifestyle so many of us are used to today.

Sure doom and gloom, but I don't see an answer from either political party. There aren't any solutions government wants to attempt.

Raw says

50 years from now granpa's will be telling their grand kids of 2.5% mortgage rates, and those kids will say "Wow, even the big bad wolf could have bought his own house

In a market where price is held only by "how much a month" low interest rates are absolutely the worst case scenario. Government only pushing low rates to reduce number of strategic defaults and to let people refi into lower rates. It isn't for buyers. Prices soar when rates tumble, and wise versa.

FortWayne says

Well, we as a nation have bigger problems. Some of them will and do impact housing, but it impacts all of us long term.

We have aging population. And it's not good for the nation when more people are old than young. That means more people using services than providing them. Next 10 years or so you'll see a lot of housing demand disappear simply through basic after death inheritance.

Our inability to deal with rising debts another problem. Something will have to give. Credit cards don't last forever. And it will cost dearly the longer we wait. Future generations are saddled with so much debt that they won't have any money after taxes to even have a lifestyle so many of us are used to today.

Sure doom and gloom, but I don't see an answer from either political party. There aren't any solutions government wants to attempt.

Freedom 1789-2012

Cheer up! There is nothing America cannot handle.
If we can come out of the great depression, we can come out of anything.

FortWayne says

Raw says

50 years from now granpa's will be telling their grand kids of 2.5% mortgage rates, and those kids will say "Wow, even the big bad wolf could have bought his own house

In a market where price is held only by "how much a month" low interest rates are absolutely the worst case scenario. Government only pushing low rates to reduce number of strategic defaults and to let people refi into lower rates. It isn't for buyers. Prices soar when rates tumble, and wise versa.

Freedom 1789-2012

Low rates are for anyone and everyone who can qualify. If you can't qualify now, you just have to wait.
Prices do soar when interest rates go down, which is exactly what is happening now.

Raw says

We are at the hope stage.
Old British saying - "While there is life, there is hope"

We are not in the hope stage. We are in the dependency stage.

Then comes despondency.

To be in "HOPE" would mean that we are out of depression, that's nowhere close to happing.

Also the British are in a recession. Very hopeful, not.

War says

2. Rents are falling. That's long since been established.

So long ago it isn't true any more? Where are you getting your rents are falling info.?

http://online.wsj.com/article/SB10001424052702303933404577505260835025948.html

Rents are falling, like the value of the property you live in.

Raw says

As soon as they start loosening lending standards you will see another phase in the real estate boom. This time by the average person.
A 30 year mortgage rate at less than 3% can only be construed as the golden age of American real estate.
50 years from now granpa's will be telling their grand kids of 2.5% mortgage rates, and those kids will say "Wow, even the big bad wolf could have bought his own house"

Raw says

Prices do soar when interest rates go down, which is exactly what is happening now.

So exactly who IS this a golden age for? Realtors? certainly!, Sellers? for sure!, County coffers? Perhaps., Buyers? Well lets just say the Big Bad Wolf's going to have a very rude awakening when he watches his home's value plummet if/when interest rates rise.

New Renter says

So exactly who IS this a golden age for? Realtors? certainly!, Sellers? for sure!, County coffers? Perhaps., Buyers? Well lets just say the Big Bad Wolf's going to have a very rude awakening when he watches his home's value plummet if/when interest rates rise.

The golden age is for anyone who wants a piece of the pie. Free money is a dream come true.
As far as the Big Bad Wolf is concerned, I think it is the 3 little pigs who had a rude awakening...
The first little pig had a house of straw, because he came in with no down payment, and then could not pay the mortgage. The big bad wolf had to come and foreclose on him.
The second little pig had a house of sticks, because he came in with a 3.5% loan. When he could not pay, the big bad wolf foreclosed on him too.
The third little pig paid all cash. When the big bad wolf came, he had to go back disappointed.
The first 2 little pigs then rented rooms from the third pig making him a rich capitalist pig everyone hates.
What is the moral of the story?

don't forget this graph

I live on the East Coast and the market is still very high in our area, it was actually lower in 2007/2008 and then shot back up. I watch the market very closely especially around town and there are many homes that are vacant. So last weekend I started to research several of them and what I found was the banks bought the homes back in 2008 and 2010 and these homes are just sitting vacant. The are still not on the current market. I've tried contacting the banks in order to put and offer in and I'm told I can't I have to wait until it's put back on the market with a realtor. After the savings and loans scandal, you could contact the bank and get a deal. Not any more, they are manipulating the inventory and as a result the prices. There were two condos / two condo until side by side near the beach, bank owned, they told all potential buyers they would not accept and offer under 300k a piece. The properties were distressed. They didn't get the offers they wanted so they pulled them off the market let them sit for 2 years. Tried contacting the bank to purchase one, was told I had to wait until it hit the market. They never hit the market again. Well, drove by one day and there were workers renovating both units. I was told later by my realtor, that a local bank purchased both units from BofA for 140k a piece. The game is rigged.

Oh and those condo's are now listed for about 475k a piece.

Raw says

The golden age is for anyone who wants a piece of the pie. Free money is a dream come true.
As far as the Big Bad Wolf is concerned, I think it is the 3 little pigs who had a rude awakening...
The first little pig had a house of straw, because he came in with no down payment, and then could not pay the mortgage. The big bad wolf had to come and foreclose on him.
The second little pig had a house of sticks, because he came in with a 3.5% loan. When he could not pay, the big bad wolf foreclosed on him too.
The third little pig paid all cash. When the big bad wolf came, he had to go back disappointed.
The first 2 little pigs then rented rooms from the third pig making him a rich capitalist pig everyone hates.
What is the moral of the story?

There is a shadow inventory of bacon that is being held back.

FortWayne says

Sure doom and gloom, but I don't see an answer from either political party. There aren't any solutions government wants to attempt

The answer is pay the appropriate rate of taxes to bring down the debt and deficit. But no one wants to do that, just take, take, take, and no political party has the guts to do what is right in this situation. Whatever happened to pay as you go?

I believe the main reason is LOW supply due to two reasons:

1. Banks foreclose in slow motion (my last investment sits empty for ~ 3 years before I bought it.)

2. Owner sellers cannot/do not want to sell for a loss. So, they keep the houses off from the buyers in one way or another.

Aunt Mildred says

Mobi says

I believe the main reason is LOW supply due to two reasons:

Who cares about "low supply"? Housing demand is non-existent at 1990's levels and still cratering.

Low demand+low supply= moribund market with sliding prices.

Not another name change.

Raw says

What is the moral of the story?

Ah but you are forgetting the prologue and the epilogue to the story:

Prologue: One day three little pigs decided to get into the housing market. The market was hot and the inventory was low. Thanks to criminally negligent lending standards by the wolf the first little piggy qualified for an enormous no-down loan. The second little piggy was not quite so fortunate but thanks to the same criminally negligent lending standards was able to land a 3.5% down no-doc loan. The third little piggy was hardworking and industrious and decided to pay all cash because ANY interest paid was money lost. They all went house shopping.

The first house they looked at was made of straw. The sellers realtor (who looked suspiciously wolflike) told the three pigs there were already man offers on the table so they had to bid 30% over asking just to be in the game. Thanks to the criminally negligent loans the first two pigs had plenty to bid with. A bidding war soon ensued and the first little piggy "won" his house of straw. The other two continued their search and came upon a house of wood. The two pigs again listened to the sellers agent (another wolf) and began bidding. Up and up the price went until the second pig with little skin in the game "won" his house of wood. The third pig continued to look for a house and found a house of brick. The sellers agent (yet another wolf) showed the third pig the comps in the neighborhood. The comps showed a huge spike in recent sales so the brick house was now "worth" many times the price it had been just a year before. The third pig fearing if he didn't buy that house would be forever priced out of the market spend every last cent he had on the house. But he was happy because housing never depreciates, right?

Raw says

The golden age is for anyone who wants a piece of the pie. Free money is a dream come true.
As far as the Big Bad Wolf is concerned, I think it is the 3 little pigs who had a rude awakening...
The first little pig had a house of straw, because he came in with no down payment, and then could not pay the mortgage. The big bad wolf had to come and foreclose on him.
The second little pig had a house of sticks, because he came in with a 3.5% loan. When he could not pay, the big bad wolf foreclosed on him too.
The third little pig paid all cash. When the big bad wolf came, he had to go back disappointed.
The first 2 little pigs then rented rooms from the third pig making him a rich capitalist pig everyone hates.

Epilogue: The two renters lived in the brick house with their landlord. For a while they paid rent This made the third pig greedy for more. He decided to become rich in RE. The third pig took a HELOC to buy another brick house at a grossly inflated price thanks to the high comps. The wolves collected the commission, while their banking brothers collected fees. The third pig rented out his second brick house to tenants who paid rent on time and in full. For a while life was good.

A while later the rent checks stopped coming. The pig had to evict the deadbeats who then vanished into the night. The pig then found out his tenants had been running a meth lab which had contaminated the entire area. He was now obligated to clean up the mess. The other two pigs read the news of the meth lab and decided the neighborhood had gone to Hell in a hand basket. The two pigs left as did many, many others. Rents plummeted as did housing prices. The third pig now had two nearly worthless brick houses a massive cleanup bill and a gynormous HELOC loan. The wolf came to visit. The pig declared bankruptcy and was now penniless while the wolf got a bailout.

What is the moral of the story? Its good to be the wolf!

(and to rent)

rubyrae says

I watch the market very closely especially around town and there are many homes that are vacant.

+1
I too am amazed at how many homes in my price range (the lower tier of the market) are vacant. Heck even some listed with photos of a "lived" in house are just recycled from the prior (short sale) listing, and once you actually see the place, you realize that its been bare ass empty for at least six months. (Not to mention at least this summer, you could smell if they had mold issues almost immediately upon entrance. But, the bigger banks won't move them unless they get "their price" or have an inside deal lined up based on a bulk purchase of multiple properties.

Seems that when you can borrow money overnight at near zero from the fed, holding vacant houses indefinitely IS an option.