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It looks like the housing market isn’t going to get any worse.
Five years into the worst housing depression since the 1930s, the latest monthly data from the Census Bureau indicate that the homebuilding industry is slowly coming back to life. Housing starts jumped 9.3 percent in November to an annual rate of 685,000, the highest reading in 19 months. Starts were up in the Northeast, South and West but were down in the Midwest. New housing permits, which offer a fairly reliable forecast of future building activity, jumped 5.7 percent to the highest level in 20 months.
Much of the construction activity and new permit volume was for multifamily housing, as the heavy pace of foreclosures sends displaced households looking for homes to rent. Rental vacancy rates have been falling and rental prices rising, spurring investors to break ground on more multifamily units.
"The single-family market is finally getting off the mat,” said Patrick Newport, a housing economist at IHS Global Insight. “The multifamily segment is continuing to make small strides, and we should expect good housing starts numbers in the upcoming months.”
The November data follow a series of reports showing gradual but steady improvement in new home construction. Record low mortgage rates have made those homes more affordable. And a slow improvement in the job market has created more paychecks to cover those mortgage payments.
Home builders – those that survived the housing bust – have reported in surveys that they’re getting more optimistic about the market. A survey released Monday found that builder sentiment edged up in December for the third month in a row to the highest level in a year and a half.
“The (housing starts) increase, coupled with the improvement in home builder sentiment over the past few months, suggests the housing market may finally be breaking out of the ‘bounce along the bottom’ environment that housing has been stuck in since early 2009,” said Nomura Ellen Zentner.
But that bottom was so deep the housing industry has years of rebuilding ahead of it.
After peaking at 2.3 million in January 2006, the annual pace of housing starts crashed to less than 500,000 in April 2009. By way of comparison, housing starts had averaged roughly 1.6 million a year during the five decades before the housing bubble burst in 2007. Even if the current recovery holds, housing starts won’t cross the 1 million mark before 2015, according to housing economist Paul Diggle at Capital Economics.
There are multiple, strong headwinds that will hold back that recovery. The biggest is the long pipeline of housing foreclosures glutting the market with houses owned by banks looking to unload them at bargain prices. The steady pace of new foreclosures feeds that pipeline. And historically high rates of mortgage defaults and delinquencies, precursors to future foreclosures, have created a “shadow inventory” of homes that have yet to hit the market.
“There are more than four million vacant or soon to be foreclosed homes that will come onto the market over the next few years,” said Diggle. “Although foreclosures are not perfect substitutes for new builds, home builders will continue to struggle to compete on price with forced foreclosed sales.”
Those foreclosures continue to push home prices lower.
After leveling off this summer, prices began falling again this fall – down 7.5 percent, on average, in the third quarter. Even if those prices begin to stabilize again soon, it will be many years before buyers begin to see the kind of price appreciation usually associated with a healthy housing market.
In the US, housing starts increased 1.1 percent to a 10- month high of 635000 at an annual rate in November, with CNBC's Rick Santelli.
Though low mortgage rates and better job prospects have helped, several forces continue to depress demand for housing. Falling prices have left some buyers waiting for convincing signs of a price floor.
Falling prices have also sidelined an estimated 15 million homeowners who now owe more on their mortgage than their home is worth. Unless they can get their lender to agree to forgive the difference, they’re unable to move up or move out without turning over a large chunk of savings to the bank.
The housing bust and weak economy have also put a big dent in the pace of new household formations, which slowed to a crawl in 2008, according to Census data. High levels of unemployment have forced some families to double up; younger potential home buyers have postponed forming new households.
After peaking above 7 million in 2005, the annual rate of existing home sales remains stuck below 5 million, according to the National Association of Realtors. It remains to be seen just how far below that level the pace has fallen. Some 10 months after housing industry analysts challenged the trade groups numbers, the NAR conceded that its data was flawed and had overstated the pace of sales since 2007.
The NAR is set to release revised data on Wednesday.
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if frank,dodd, geitner, and barry would have put some guidance into the 60 billion they gave the banks instead of just writing the check, a lot of foreclosures could have been prevented
http://money.cnn.com/2011/12/19/news/fannie_freddie/index.htm?iid=HP_LN
Subprime mortgages have existed for decades. But they were a small percentage of the mortgage market (well under 10%), until Fannie and Freddie reduced credit standards to increase market share and meet low-income and minority home ownership targets mandated by Congress. By 2007, nearly 50% of all mortgages that originated in the U.S. were subprime, with Fannie, Freddie and other agencies guaranteeing about 70%.
Without these government guarantees, the subprime bubble and the resulting financial crisis would never have happened. Bank regulators and industry experts warned Congress for decades about Fannie and Freddie and their increasingly large and risky portfolios.
Because Congress failed to act, nearly the entire developed world is suffering from the mortgage-induced recession. Taxpayers are on the hook for hundreds of billions of dollars of losses at Fannie and Freddie -- dwarfing the losses from banks, Wall Street, auto companies, insurance companies and all other bailouts combined.
Our tax dollars were used to prop up the failure of a banking system that has run amuck. You can use all the numbers or names you wish--it's just the greedy aspect of this so called capitalism that failed.
Many of these lending institutions are having record setting profits--now that our tax dollars have propped up illegal activities by lenders.
Dodd and Frank didn't start the fire. The political establishment on both sides of the aisle cheered the economy on, when the reality is---it was a sham perpetrated by the private sector on the American taxpayer.
Eat a banker. Might not taste good but I bet it would be gratifying.
The housing market downturn was only 4% of the total financial system collapse.
It was banking deregulation that allowed for massive frauds in the derivatives and credit-default-swap markets. These frauds totalled hundred of trillions of dollars and dwarfed anything happening in the housing market. The downturn in the housing market was all that was needed to act as a catalyst that caused the collapse of the derivatives and credit-default-swaps house-of-cards. Brooksley Born had warned Greenspan and the Congress that this was going to happen back in the mid-1990's and their reaction was to strip her of her power. They should have listened to her.
.
You heard it here first: Multi-family housing will be a bubble after all these units are built and then people start moving back into houses as the economy gets better.
I don't like living wall to wall with somebody else and I'm sure a lot of other folks feel the same way. We overproduced in single unit homes and now we'll overproduce in multi-units as well.
I hope somebody learned their lesson the last go-around.
You are so correct and yet its almost a repeat of the 1920's and no one would listen to those who were telling the truth about deregulation and securitization. Bottom line--Greed ruled the day for almost a decade and we will pay for decades to come.
Tiggle
We had over produced multi family and Condo units prior to the crash as well. Florida and Arizona were full of projects half completed or less because they could not find buyers or renters to fill the space. Over building was a byproduct of government interference in the housing markets.
Gee seaHawks fan I said the exact same thing 3 yrs ago when it all began and I got pounded on here like the side of a brick sh it house.
My My how times have changed!
By the way I think this housing news is a crock of sh it!But hey that's just me, what do I know!
Gee Sh it seems to be the Buzz word today!
Who speaks for the common interests of all Americans? While the wealthiest have only one vote, they buy millions with their smear tactics and obstructionism.
Wall Street has turned on President Obama because he supports regulation of the financial sector to not allow this sort of economic meltdown again. The Wall Street money has shifted to the right. They line up to buy the reinvented man--Newt Romney.
President Obama invited the swine to the White House many times for gatherings and to seek common ground. His reward? A copy if Grover Norquist's treason based "Taxpayer Protection Pledge." No closing of the tax loopholes nor increases in tax. There's something remarkably un-American about the vast majority of the GOP leaders taking a pledge to a Super Pac that grovels at the feet of wealthy industrialists.
We have become a nation that has based it's economy's future on the making of weapons and the support of never ending wars.
A vote for the GOP is a vote against the 99%. Vote progressive. Liberalism set us free from The Crown, it abolished slavery, it gave women the right to own land and vote and it passed meaningful legislation to stop the persecution of American citizens by passing Civil Rights legislation. We have a long way to go. Let's not kick the $14T, and growing, bar tab to the younger generation.
Builders build. That's what they do. If they build smaller units in higher density housing and sell them at lower prices, more housing starts of this type will only reduce the dollars chasing the next level up.
What's up with reporting an increase in housing starts the same week when all other houses, particularly those hit by the elimination of the temporary increase to jumbo mortgages, are down?
Yep, but it had nothing to do with helping Americans.....it only had to do with making sure people didn't yank all their money out of the banks.....the Feds nor the Banks give a crap about the mortgage holders.
Sandtrich
Obama raised over 12mill for Dems from Wall Street and that was back in Oct. not to mention Liberalism supported capitalism in alot of the previous things you were talking about. But that was all classic liberalism something that is far from what a liberal is today. Same as you could say the Repubs freed the slaves.
please include in your ignorant rant that under President Obama we made a profit and will get our money back bush and paulson just gave the money away when they did the initial bailout no strings attached.
Question: Was Barney Franks in charge of the United States government in January 2006 when the wheels came flying off the cart?
Answer: The Republican Party had control of the Presidency, the US Senate, and the House of Representatives in 2006.
Kste--
Individual Contributions
- Small Individual Contributions
- Large Individual Contributions
$63,574,083
41,183,326 (48%)
23,775,177 (28%)
(74%)
PAC Contributions
$0
(0%)
Candidate self-financing
$0
(0%)
Federal Funds
$0
(0%)
Other
$22,198,177
(26%)
Transparency rating of 90%
http://www.opensecrets.org/pres12/sectorall.php?cycle=2012
Check the financial sector donations and you'll find that you are wrong. By in far, they are forking the bucks over to GOP candidates.
Foreclosures would come to a halt if everyone who is being foreclosed on would ask the bank to give them a copy of the original loan contract. Getting the bank to give you a copy would be a fight in itself. But if you can get it, check to see if the bank signed it or not. If not, then the contract is no good. A contract is only binding if both parties sign it, the one borrowing the money, and the corporation loaning it. Chances are, they will not give you a copy. But have your lawyer demand that one be made available when it goes to court.
By John W. Schoen, Senior Producer
It looks like the housing market isn’t going to get any worse.
Oh... well shoot.. I feel better already ... pffttttttt
Everybodys house or soon to be forcloused house has a MAZDA,HONDA,or TOYOTA parked in frot of it ,with a house full of made in CHINA things in it so I don't see a problem here.
you wanna really how the banking system work to it's very core? check this out!
Search Youtube for, "THE AMERICAN DREAM Cartoon"
here's the url
The American Dream is slowly fading into oblivion.
As the housing numbers highlight, what was once an achievable goal is no longer a possibility for many Americans. Despite the glaring happiness this article tries to convey what it omits is that housing starts may end the year at about 610,000 units. That will be the third-worst performance since the government started collecting starts data in 1959. The once cherished opportunity to own a home is being replaced with the probability that you’ll end up in an apartment. Most of the gain for starts and permits came in multifamily construction, up 32.2% from October and up 181% from November 2010. The reason is that many people are choosing to rent is either because they don't want the risk of homeownership or can't qualify for a mortgage.
Unfortunately this was inevitable. As Progressivism creeped in over the past century our government has become a bloated bureaucracy out of control, manipulated by politics rather than policy. Massive inefficiency with unsustainable waste, fraud and abuse has stripped Americans of valuable income that is irrationally redistributed by a government so corrupt they can’t even agree on a pathetic 2 month extension of useless tax cuts. Even if this is passed, so what? What do we do at the end on February 29th of 2012? Legislate another 2 month wonder bill? Maybe we need another “Super Committee” to guide us through this stormy 2 month period of confusion. Maybe another “Gang-of Six” can rescue us from the perils of 2 months of economic malfeasance.
The standoff is creating confusion in business, running out of days to adapt to any new payroll tax regimen. Even the Senate's proposed two-month extension was creating headaches because it contained a two-tiered system geared to ensuring that higher-income earners paid a higher rate on some of their wages. Pete A. Isberg, president of the National Payroll Reporting Consortium, a trade group stated, "There's not time enough to do that in an orderly fashion, we're two weeks away from 2012." He wrote a letter to congressional leaders this week warning that the Senate bill "could create substantial problems, confusion and costs."
The simplest solution the House Republicans will probably propose is just sending the Senate proposal back with one change. Change the date of the expiration of the tax cuts, to December 31, 2012 instead of February 29, 2012. Dare the Democrats, Senate and Obama to reject this on any grounds other than partisan politics.
Game over.
Do not forget too that our demographics are changing too with a large part of the American population close to or are retiring in numbers we have never seen before.Many do not want to take care of houses anymore,a lot want to just up and sell it,either move into an elderly housing complex or buy an rv and travel the countryside if they are able.We are entering a new era filled with a lot of uncertainty because the people that were supposed to exist post baby boomer era are not there in the numbers that were forecast in the 50's when the Republicans then under Eisenhower voted to cover the nation in superhighways.Guess what,thos superhighways and bridges are in desperate need of repair.I dont see any $$ in the coffers to cover that,nor any willing Americans that will take a shovel to dirt for food do you?
Funny to read the idiots that want to blame the guys in office in 2006, when the cause of the downturn began far earlier, and these same dimwits want to blame Bush for what happened during Obama's tenure.
The lack of iq and reasoning is absolutely stunning.
Building a new house at a time like this sounds crazy to me. Yes, new is nice but that house drops 10-20% in value the second you drive it off the lot. Am I missing something?
Most likely closer to the 20% since you have the value and you have the cost to sell it which is almost 10% by itself.
The builders were as guilty as all the rest in the house price run up. When you look at the cost of a house you have labor and materials. Although these are slightly down how can a builder now charge less than half what they did 5 years ago for the exact same house.
They made excessive profits in the good days and paid out huge "finders fees" to lots of disreputable people just to get a warm body to sign the papers so they could run with their profit and let the bank deal with non payment and a house price based on builder profit rather than value.
Good comment, fan. I would add, what buyer would pay full price for a new house, when you can buy a slightly used house for or below its actual market (foreclosure) price?
Drive it off the lot? Are you talking about Casa del Doublewide? :)
It might be cheaper to build depending on where you live. In fact, in some areas, homes appreciated so much that even at a 50% decrease they are still 50% over-valued.
Plus, I sure wouldn't buy anything built in the last 10 years. Most of these homes were rushed to make demand and were shoddy in craftsmanship and materials.
Buying a home at or below replace cost (ie. cost of land plus construction cost) in a neighborhood with strong demographic trends will always be a good investment. The 2007/8 problem was that homes were being acquired at well in excess of replacement cost.
Obviously what you're "missing" is the fact that most likely we are at the bottom, or at least very close to it. New home prices and certainly mortgage interest rates are at historic lows that will only go higher as things get better. Did you not understand that this is how it works? We are in a buyer's market. If you have the means, NOW is the time to buy a new house.
"Much of the construction activity and new permit volume was for multifamily housing,"
Don't worry people aren't actually saddling themselves with overpriced debt in this economy... smart people are keeping their assets liquid and remaining mobile.
Single-family home sales are going nowhere.
John
Building materials were the biggest contributor to the price run up. Greater demand without an increase in supplies drove prices up. The greater demand wasn't only do to builders however, remember we had hurricane Katrina and other storms that ravaged the south east which increased demands for things like plywood and drywall to repair as well as rebuild severely damaged sections of the country. Add to that catastrophes in other sections of the globe, like Japan and you'll see why prices skyrocketed. Wages in the home building sector have risen, but not so much as to cause the huge price increases. Also, if you research the demand for amenities and square footage today, you'll find that these newer housing units supply much more expensive appointments than those of only 15 years ago. Green construction is also partly to blame as the move toward higher energy efficiency adds up front costs to the process but saves the owner money in the long run. Increased insulation, solar options, geothermal heating/cooling plants, the move to in floor heating systems all add dollars to the bottom line pricing.
I'm building a new house right now. Mortgage rates are at historic lows, material costs are down, labor costs are down, laborers aren't rushing from job to job like they were in the boom, so I get higher quality work. I'll get the home I want to live in the rest of my life and start paying down the balance, while you guys keep paying rent in perpetuity.
Land is never worth zero - the potential downside on my home value is minimal at this point, and besides, it's not an investment for me - it's a place to raise my family. Now is a great time to build if you can get the financing.
This I understand. Also within the article was: “There are more than four million vacant or soon to be foreclosed homes that will come onto the market over the next few years,”....
If one factors interest rates with inflation, the rate of borrowing money is almost, in not, free. With a triple A rating what are the reasons not to borrow a million or ten from your local banker? Almost free money on loan, easy speculation, and with this new sense in America that failure is rewarded, where are the draw-backs?
For every home foreclosed on there is a vulture out there circling ready to buy.
This reminds me a lot of post WWII. Then there was a housing shortage, the demand was met by an increase of apartment buildings.
Within this article are they not factoring, as new homes, the number of apartment units?
Is this not another bs report that happens to come at just the right time, election day, to show a skewed view of improvement? That was done recently with the number of unemployed.
I would just like to say, particularly to john-98241 : I don't know what kind of builders you've had experience with in the past, but I am married to a builder of integrity who does not operate that way. Building a house is not just the cost of labor and materials. You pay for the expertise and time of the contractor, just as you would any other expert in any other industry. A good contractor will charge what that is worth. My husband has made an honest living with a modest income, providing excellent quality homes to buyers over the last 35 years. He has never paid one finders fee or priced a house based on profit. If anything he hasn't charged enough over the course of his career, and he does all he can to continue to provide support and assistance to anyone who buys his homes. So please be careful with your blanket statements because it is offensive to the honest people out here.
Much of the housing problem can be addressed with simple uncostly measures. For example, requiring lenders to allow mortgage assumptions will swell the number of buyers in the market and home values will rise. Here is how it would work. Assume a home today had an appraised valiue of $200,000 and a mortgage of $210,000. If a buyer with strong credit wanted the home and was willing to acquire the property for $210,000. he would have to have a $50,000 downpayment (The lender would only lend 80% of $200,000 or $160,000). But if the existing mortgage lender was required to allow the buyer to assume the mortgage, the buyer would be able to acquire the home with no money down. Of course, the buyer would have to have equal or better credit than the seller. The lender is no worse off and may in fact be better off having an owner who wants to be in the home rather than one who does not
Why would any buyer want to take on a $210,000 mortgage for a property valued at $200,000? Also, mortgage rates today are likely lower than the original mortgage was. No bank is going to transfer a mortgage over with >100% loan-to-value ratio. And the appraised value is pretty much always greater than a real selling price.
In your scenario, the buyer would have to be stupid, so it's unlikely such a buyer would have better credit than the seller.
Nobody is fool enough to assume a loan for a house that is not worth the value. Few houses actual foreclose that have any equity in them. Houses that have loans less than the true market value are not all that hard to sell.
You can if you have great credit still get loans for 10% down. This pretty much is a assumption since that 10% really covered all the fees and commissions. Who is going to pay the Realtor, title company, appraisers etc etc if you just allow a assumption. Only works if you just happen to know someone who wants to get rid of their house. The rest you need to pay someone to market the house and insure all the paper work is legal.
But why would a buyer pay $210K for a house that is "worth" only $200K. Buyers are in control here. Someone has to eat that $10K and it won't be buyers. Survive!
This is what happened to my newphew. He wanted to buy a home that the seller was asking $210,000 for and wrote a contract for that amount. The home was recently rehabbed. The backnk appraiser siad it was worth $200,000 so they wouldnt lend him the $170,000 he needed ...only $160,000. So he couldn't buy the home unless he came up with another $10,000. The appraiser used comps from foreclosure homes and homes that were not rehabbed. This happens a lot.
In my neighborhood, there are many people renting homes and paying higher rent than what they would pay on a mortgage if they owned the home even if they fianced 100% and paid the extra $10,000. They don't have the $40,000 to $50,000 down.
Construction companies have to start construction or pay taxes on the money they've squirreled away. Now they can reserve all that money and not pay taxes. That's why this always happens in December.
proamerica: The money they've "squirreled away"??? LOL!! Oh that's rich!! And I guess those bank loans for construction were "squirreled" too??
Darn...yup, and the rate of return buying a "new" car is even worse.
But dig it man... homes use to be where you rest your head, find comfort and solace from the maddening world. (Home is where the heart is.) It was never meant to be an investment tool, but a place to live, raise a family, and die.
Then came the speculators, the turn-key investors, "FLIPPERS." Heck, I'm stuck in mine (glad it's finally paid off)..but to even consider selling considering the loss in value ...even though I have refurbished and put in nice counter tops, hardwood floors...new roof, appliances...the property value still goes south. Would be financial suicide to sell.
I'm hanging onto my home. The realtors I talked with tried talking me into selling at a loss. They said things are going to get worse. Scare tactics. Homes in my area are actually increasing in price as there are few foreclosures none on the market.
But, Beev, the house you buy could be similarly upgraded and discounted. If your house is paid for, go where you want to. Don't wait. It could take many years for this situation to resolve.
Congratulations Beev!
Hope your employment remains stable, too. That is the real deciding factor (for me) to "have to move." I've got quite a few years to go on a very modest "shack." The house is located where I love to live, job (also love) is 1.4 miles away, some acreage...it would be my success story to "pass away" in it. Best you and yours.
I call nonsense on this article. Where are the jobs that justify buying new homes? Can we expect NAR to revise this data downward in another 5 years????
"Justify"?? Some people want new. Will always want new. Even if the better deal is existing. Then again, it's kind of common sense...just like the notion that the vast majority of people ARE working...even with unemployment at 8.9%.
You CAN get some good deals from builders nowadays.
"Much of the construction activity and new permit volume was for multifamily housing,"
Read the article, nobody is buying, they are renting.
They intentionally do not get specific in the headlines in order to mislead home buyers.
If you look at the chart at the beginning of this article, you will see we are not building single family home at the rate that has beeen historically required to meet demand. If the low pace of home construction continues, a housing shortage will develop and housing prices will rise. This may be happening already in some markets such as Washington DC and areas of California where the job market is good. The good news is for home owners is that falling rises may be a thing of the past.
Tom
The reason for not building new is the surplus of existing homes some of them only a couple of years old. The demand is not there.
And archangel that demand will not be there for a very long time to come,a lot longer than 2016.
Close your eyes, click your heels three times and repeat after me............
Please give me a break come February all the season jobs will have dried up unemployment will be back up and foreclosures will go through the roof. People who are still paying their mortgage now but find because of housing prices have no or very little equity will start to walk away. But don't worry the Teapublicans will still refuse to raise taxes on corporate America or the 1%.
The rich pay the same income tax that you and I pay assuming you pay taxes.
No they dont. The pay a lot less as they managed to get a lot of their income classified as capital gain so they get it taxed at the lower rate. Republicans would love for you to believe that the 1% pays the same rates, but in reality they do not.
Thats what drives the economy you dope!
They have been lying about the housing numbers for years but they are telling the truth now, sure they are.
I used to build custom homes for a living. The last one I finished, a year and a half ago, was 3200' and I built it for $75 per square foot. That included the utilities, permits, all costs of construction including labor and material and my fee. The best insulation, granite counter tops, cherry cabinets, hardwood floors, tile showers, covered top-of-the line decks and upgraded components throughout. In short, a very nice house. The appraisal was so low that I, and every contractor who worked on the house, would have had to do his job for the cost of materials only, with no charge for any labor or profit, for the house to have come in at the appraisal.
It does not pay to build a house in this economy. With the glut of foreclosures on the market, who knows how long, if ever, it will take for the market to recover. I have done my best to give my customers the best value for their dollar for 40 years, and I fear that I will never be anything more than a glorified handyman from this day forward. I doubt I will see anymore custom homes in my lifetime. The banks refuse to lend money for custom homes. With very few exceptions, if you don't have cash, you don't get a custom home.
finally, a post from someone who knows what they are talking about! great post, Luc. it is cheaper to buy now than to build, and i am a licensed contractor. hope you come out okay...i absorbed $80k in personal debt to keep from bankrupting my company...got a paycheck job and now working for the same money i made over 20 years ago, but at least i don't have to build any more houses for people i know can't afford what they want!!!
And on top of that I look around and I don't see anyone doing anything to improve their homes, other than repairs. It has been years since I saw anyone in my neighborhood get a new roof or new windows. Nada. Contractors are hurting too.
Vote out our Marxist president who will not even salute our flag. Then maybe you will experience business conditions that allow prosperity.
Ref:
http://www.youtube.com/watch?v=hU9iCANi02o
Luc...you are correct sir. All the contractors I know of have morphed into home improvement specialists.
"Home improvement specialist". That's a nice way of saying "handyman". I am now working for less money that I made in the '80s (and I wasn't getting rich then). And gas, material, vehicles and every other cost has gone up at least four fold.
Other than myself, I don't know a single contractor who hasn't lost his license, his home, his business and all of his toys. They only reason I have not is that I am willing to do almost anything legal to earn money. I have cut grass, trimmed trees, shoveled snow and done all manner of things to hold onto my home and license. It's not a good time to be in construction, or any industry related to construction.
With the banks not lending, we will continue to have these problems. Another poster had it right. Let's go back to assumable mortgages. There are still lots of people looking for houses. The banks could take this glut of homes and just let people assume them with little to no money down. Instead of having a bunch of empty, decaying homes on the market, we could have living neighborhoods devoid of shuttered homes. The worse case scenario is that the banks might have to repo them again, and then let someone else assume the note. It's time the banks started sharing some of the money that we all gave them.
Oh, and don't believe the stories that remodeling is cheap right now. Labor prices are way down, but material costs are waaaaaay up. I can't explain why, but the cost of virtually every kind of construction material has gone up since the market has crashed.
MSNBC is will try to bury this article once they discover that the Realtors Association cooked the books on new home sales this year. Too funny MSNBC.
Focus on a way to to get underwater homeowners above float and watch the economy soar with jobs.
Couple of simple shovel ready solutions:
1. Change bankruptcy laws to allow a decrease in principle on the home;
2. If a bank approves a short sale, allow the home owners to find a loan for that exact same amount.
Key reason short sales don't get approved are the bank makes more foreclosing. Many houses that are in foreclosure were 100% finance. The way they did that was with 2 loans 80% and 20%. These loans are now held by 2 different banks in many cases. So the bank with the first 80% loan forecloses and it wipes out the 20% one.... instant 20% profit. On top of that most houses in trouble have all kinds of things like liens from HOA or mechanics liens. All get wiped by foreclosure, a short sale all need to be negotiated.
Yes, but in most cases around the country property value has already depreciated by more the 20%. So there is definitely no profit in foreclosing and letting the house sit on the market for 6-12 months.
Of course if your mortgage is up to date the bank feels no pressure to offer a short sale since they are getting paid in full and it looks good on their balance sheet. But if an upside-down mortgage is in risk of foreclosure the bank is more than willing to work out the short sale.
Problem: banks only offer help as a last resort, normally when its to late.
Kind of like showing up to the ER room with a preventable ailment if only you had earlier access to primary care physician.
All this while Obama takes another $4,000,000 vacation in Hawaii.
How many vacations have you taken in three years?
How many jobs could be created with the $4,000,000 in tax dollars Obama is using for his vacation?
$4,000,000 = 80 $50,000 year jobs!!!! or 160 $25,000/year jobs!!!!
I guess the stimulus plan only stimulated the Obama's. It's ok though. The rules don't apply to our Marxist president.
Ref:
http://blogs.telegraph.co.uk/news/nilegardiner/100124892/barack-obama%E2%80%99s-big-government-vacation-the-president-adds-nearly-4-million-to-the-national-debt-with-his-lavish-hawaiian-holiday/
If you can't do better than the heritage foundation to get your talking points from don't bother. Just because one of Rupert's minions picked it up and repeated it doesn't give it any credence. If you're going to be a good troll you'll need to work a little harder.
These are my talking points and they are true. Keep drinking the Marxist kool aid.
You wouldn't know a Marxist if one was standing in front of you. Quit trolling.
Are you standing in front of him??
Still screwing us on gas prices, food, electricity, water and any other thing we need to live and you wonder why there is a problem.
Hey you all idiots; if the President didn't fix the banking system first we wouldn't be writing about what they should or shouldn't have done. In a free market system like what most western countries have in place you need the banks to be at full functionality. You all should thank God that he did and didn't leave it like some of the European countries did and they're still struggling; all you all do is smell @!$%# and hear @!$%# then repeat @!$%#. We all know what the problem is and you all will be a lot better off if you all just get over it! He is President of these United States and that will never change because it already written down in history.
Interesting to hear that housing situation getting a little better. From the start of this problem back in 2008 - seen alot on both sites like this/on news programs. Seems that mortgage finacial sector got into lending/borrowing money they didn't have to increase sales/profits - and also too may families/couples were persuaded/decided to borrow more than could really afford. Whatever happened to the concept of family/couple with good/decent credit and (actual $) down payment getting home loan, get a house to just live in. Suppose just way it is last 20-30 years, borrow to live beyond your means.
Sure not improving in Nevada. Paid 100K for my townhouse 15 years ago, went up to 235K in the boom and now down to 68K. Tons of foreclosures here in Nevada, great time to buy, but NO JOBS available. Purely an investors market.
And you Nevadans still re-elected Harry Reid, the biggest obstructionist in the Senate.
my home is in forclosure. dont have a court date but I know it will be soon. to people that think leaving your home and not paying your mortgage is some sort of moral issue, I have some things to say. in 2008 my mortgage was purchased by gmac( Im not afraid to say who) after a refi with a local lender. within 3 months they claimed there was a big escrow shortage and our house payment would increase 400.00 per month. In 3yrs they did that 2 more times, to the point where we couldnt make our payments. tried modifications 3 times. they were no help. the last one, one week after we got the modifacation they said there was another escrow shortage and we were right back were we started. morality has nothing to do with it. us leaving was a matter of survival!
You need a better attorney.
the housing market is not getting better there are many more forclosures to come for several more years you think it is bad now wait 5 more tears your home will be worth about 1/5 of what it is now ,the Great Depression will continue your net worth will continue to fall AND FALL so get use to it
New housing starts are just not needed by the public...The demand for new housing is down and I would not support building more. There is a lot of housing on the market..for the lowest prices in yrs and until that glut is absorbed, there is no reason to put a lot more new housing on the market. This is the cycle and this is the only normal time that there has been for quite a few yrs. The housing market is adjusting to normal demand....GOVERNMENT...Leave that market time to correct itself... Dont cause greater problems with government planned economy....Make sane banking rules and dont try to influence the public to go on a financing binge again...and again...
The financial and housing markets will be in the toilet until the next scam/ponzi scheme comes along. Do not expect the SEC to warn anybody because they are absolutely clueless when it comes to recognizing ponzi schemes.
Frank and Dodd sure have been quiet. Kinda fell off the radar huh?
Most of the things that got us into this mess is still around. Acorn was a big promoter of sub prime loans and still are. The government was also behind most of this, wanting anyone to own a home, even if they couldnt afford it and we are still in that same situtation. Obama was a big part of Acorn, now is a big part of the government, go figure.
MmmK, Acorn exists no more, they declared bankruptcy in Nov. 2010. Just more right wing lies
Obama never worked for Acorn. Just more right wing lies.
I'll simplify this for the right wing mind. The government told banks to quit using zip codes and neighborhood locations when deciding if someone was qualified for a loan. In short they told them to quit profiling. NO ONE told banks to give loans to people without checking to see if they had a job or means to pay the loans back. Banks did this to themselves because crooked people on Wall Street enabled them to package those loans and sell them to unsuspecting investors that had no idea that the loans they were buying had been given to people who were never going to be able to repay them. Great for the bank, total risk elimination there was no need to vet the borrower. Then the people who sold those loans to the investors, shorted them, or bet against them ever being repaid. They won on both fronts and left those investors holding the bag. The housing bubble didn't cause the economic collapse. Wall Street did with unregulated gambling and the sale of "creative" financial instruments
It's sad that so many on the right only choose to get their information from one source instead of say, reading a book or two. You'll never be able to do anything but spread right wing lies until you do.
Amused...You should quit being amused and try to look at things with a little reality....What do you suppose happened to all those ACORN people and their advisors and trainers(community organizers)??? I think that you would see that they are still operating on some level, using the money diverted to them by the likes of people like Obama and Bill Ayers and radical organizations... I have heard that many of them have just changed the names of their group and have tried to operate with a little lower profile.
The banking industry was threatened many times and ways to make those stupid loans and Obama, ACORN and liberal democrats played their role in it....
Because of the lies of the left, I expect to see the liberals again(within ten yrs) try to implement the same criminal ponzi scheme....and they will do it by getting the media to put out the message to cry about unfairness and helping the poor....How were the poor helped this time by their criminal efforts to kill our economy??
Why does Uncle Sam want higher home prices? Is it wrong if people can actually save to buy a home cash down? Why do they allow mortgage interest deduction from tax? Was housing bubble intentional? Was sub-prime intentional? Google for "housing bubble kondratieff wave" to dig for the answers.
Amused, I agree with much of what you stated in your post. However -- you knew there'd be a "however", right? -- failure to issue a lot of mortgages in these zip codes was often viewed as prima facie evidence of discrimination. There was
significant govt pressure to raise the numbers in certain zip codes. Thus CRA was indeed part of the problem, but hardly the largest part. Certainly the CRA cannot be implicated in the foreclosure of $700K homes. There were many causes of this colossal mess, most of which I have seen mentioned on Newsvine numerous times. There is plenty of blame to go around.
Dude, don't choke on that kool-aid.
I know where you can get yourself a cheep tin hat. You're going to need one if you don't want those cosmic rays to finish off any gray matter that may still be present. It just cracks me up when one of you kool-aid addicts gets on here and spews their "liberal conspiracy" nonsense.
If you ever get a clue and some information that didn't come from some right wing conspiracy site come back and we can talk.
What? You are selling your extra tin hats??