Posted on 08/09/2013 1:36:15 PM PDT by whitedog57
Home sales from Los Angeles to Charleston, South Carolina that are priced at more than $1 million are gaining at triple the pace of the broader market, according to real estate research firm DataQuick Inc.
According to Susan Wachter, a professor of real estate and finance at the University of Pennsylvanias Wharton School and an architect of Clintons housing policy (The National Homeownership Strategy: Partners in the American Dream), wealthy purchasers, helped by gains in equities, are diving into real estate a year after a recovery began in the housing market when less-well-heeled buyers rushed to take advantage of record-low interest rates, said Susan Wachter, a professor of real estate and finance at the University of Pennsylvanias Wharton School.
The real estate recovery has been built on purchases by middle-class families, even though they havent been the ones to flourish during the recovery, she said. Now, the economy is getting a vote of confidence from wealthy homebuyers.
Really Susan? Less-well-heeled buyers rushed to take advantage of record-low interest rates? That is odd. Mortgage purchases applications, a measure of middle-class purchases, are flat as a board and back to 1996 levels.
mbapurcch080713
Hedge fund and foreign investors have been the builders of the real estate recovery. Apparently, Professor Wachter missed the buy to rent boom where investors and hedge funds buy distressed properties and rent them to the middle class.
And flippers, those who purchase a home for resale within 6 months, has made a tremendous rebound (reminiscent of the housing bubble during the last decade). Recently, flippers have made an average of $18,391 flipping homes.
True, house prices are soaring, delinquencies are dropping and the upper-class are buying expensive homes again. But as Amity Shaes wrote in The Forgotten Man, the growth of the entitlement state has not been kind to the middle class.
Stated differently, it is hard to buy a million dollar home with a part-time job when 7 out of 10 jobs created under President Obamas reign have been low-paying, part-time jobs.
If wonder if the part-time workers can flip their way into a million dollar home in Malibu or on Russian Hill in San Francisco?
billydiner
It’s called “Socialism”.
Karl Marx HATED the middle class. Trying to use his ideas to help the middle class is like trying to use Hitler’s ideas to help the Jews.
But the middle class keeps voting for it, so what do you want me to say?
The average home sales price in San Jose/Silicon Valley, California is now over $1,000,000 (see news articles of this date). Same for San Francisco (see news articles of about 2 or 3 weeks ago). For this, you can get a very average 3 bedroom used tract house built in about 1960 or so, with nothing special about it, in a decent but certainly not upscale neighborhood. It takes 2 million dineros to get anything “nice” (but again, still a modest old tract house, just somewhat more attractive or better situated is all). The prices in the more upscale communities go up from about that level. A long ways up.
A very top-selling local realtor advises that about 3/4 of all sales are to overseas buyers. This is confirmed by all other real estate people, brokers/agents/and lenders of our acquaintance. In cheaper districts, a large fraction of the sales are to the few remaining hedge funds or investment pools that still see diffused residential housing as an attractive rental business. So, as has been pointed out by others, this is mostly a foreign- and investment bank- driven housing market.
“Average working Americans” are not buying many of the houses today, both because they can’t possibly afford million-dollar-plus price tags (bid up mostly by all the foreign money flooding into the market) and because many “Average working Americans” are now part-time workers, anyway, due to WashingtonDC’s current economics policies. You can’t support any kind of genuine “housing recovery” with part-time wages.
Conclusion: a lot of mass-media (and politician) hooplah.
Very little in it for normal American citizens and workers.
A largely “non-participatory recovery” to the extent we can say there is really any at all.
This is why most Americans are not very excited about all the “housing market news” today. They understand quite clearly that it mostly does not involve (or benefit) them.
Well billydiner right back at you, you self-promoting chart-stealing no-HTML writing blogpimp you!
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