patrick.net

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.