Posted on 09/30/2016 7:52:34 PM PDT by Lorianne
Whether you think there has been a housing “recovery” or not is a matter of perspective. Sales are indeed up 117% since the 2010 low, but that low was literally the worst level in the history of this data (since 1963) as a percentage of population growth. It was the Great Depression of Housing, the only possible result of the greatest housing bubble since the 1920s, if not in history. While sales have rebounded since that low, the current sales rate has barely recovered to the levels seen at the recession lows of 1991 and 1982. This rebound is little more than a dead cat bounce after 6 years of recovery, and now it may be faltering.
Mainstream economists give the Fed credit for stimulating this “recovery.” But, in fact the Fed has created a Catch 22 with no way out. The only thing the Fed has stimulated is house price inflation while destroying interest income on savings for millions of ordinary Americans, especially former middle class retirees. With mortgage rates pushed down to all time lows, house prices have consequently inflated at a rate that offsets the buyer’s savings in the interest component of the mortgage. Meanwhile American savers have lost not only massive purchasing power, but also have been forced to consume principal. The Fed has not stimulated sales but it has succeeded in transferring wealth away from those who can least afford it to those who least deserve it.
During and after the 2007-2010 crash, homeownership fell due to the massive increase in foreclosures. The foreclosure crisis began to recede in 2012. Since then the drop in the homeownership rate has not been because of people losing their homes, it has been because fewer people can afford to purchase, even in spite of the world’s central banks subsidizing buyers with absurdly low interest rates. As we’ve shown, the subsidy is self defeating. It does not benefit buyers.
Meanwhile, the only US regions that have seen any rebound at all in new home sales have been the West and Southwest. The Northeast and the Midwest remain absolutely dead in the water. In the Northeast, sales are down 60% relative to the 1991 recession low. Let that sink in for a moment–not versus the bubble peak, but since the low of a recession 25 years ago, when the US population was 25% less than today. Sales in the Midwest are down 12.5% since the 1991 low.
SNIP
This is a good article. The author overlooks something, though. The post-2008 bank bailout and the low mortgage interest rates aren’t aimed at subsidizing the housing market. They’re aimed at propping up the value of existing mortgages on those homes just so the securitized mortgage bonds created with them will hold their value. They can still prop up those mortgages even if home sales fall to zero.
Pardon, what does that gif have to do with the article?
Housing recovery? Perhaps in the suburbs of a few large cities. But not in the rest of the country. I live in a city of 250,000 people. And I just sold my house. But, I put it up for sale 46 months ago, and I took a huge loss when I finally got an offer. Cute house, on a golf course, very desirable area, and the house was well staged by three different realtors. But, I despaired in 2012 when Obama won re-election, because I knew that the economy would stagnate and that my house would not sell. Well, after 46 months it finally did by the grace of God, but with no thanks to Obama. And I took a huge hit. Housing recovery? You’ve got to be kidding!
Thank you.
Yeah, I live in Denver and it is one of the housing markets of strength. It is bizarre to compare Denver to Athens, Ga. Or Oconnee County near Athens, Ga. The Denver real estate market is sky high compared to Athens, Ga. Hey! Sell in Denver and move to Athens. Then again why not Cedartown, Ga. Just get cable T V and never leave the neighborhood. A nice place to live.
Saw that film -
Talk about hot babes!
Crucial point you emphasized.
Bankster real estate house-of-cards must be protected at all costs.
Also, the main reason why CA / Western real estate has boomed is because the Chinese have spent THREE HUNDRED BILLION dollars on US property.
The US State department has a special Visa program for foreign investors who spend 500k+ on US property.
Hordes of Communist Chinese transplants using US real estate as a Swiss bank account can surely be counted on to understand, appreciate and safeguard American liberty, our Constitution and best long term interests...right?
Chinese investment in US real estate tops $300 billion: study - Reuters
www.reuters.com/article/us-usa-china-realestate-idUSK... Proxy Highlight
May 16, 2016 ... Chinese investment in the U.S. real estate market has surpassed $300 ... China’s economic weakness and increased currency controls, the ... Despite those eye- popping numbers, foreign direct investment from China still only ...
RE: “This is a good article. The author overlooks something, though. The post-2008 bank bailout and the low mortgage interest rates aren’t aimed at subsidizing the housing market. They’re aimed at propping up the value of existing mortgages on those homes just so the securitized mortgage bonds created with them will hold their value. They can still prop up those mortgages even if home sales fall to zero.”
There was another Freeper, can’t remember who, mentioned a family member worked in the housing industry and said that another bubble is coming, probably in about 2 years.
I recall that post, too.
I’m not seeing it either. No recovery.
But they keep telling us things are great.
Sort of like “There’s no inflation.” Been to the grocery store lately?
The last thing the U.S. government ever wants to do is have foreign investors who finance our debt sitting on hundreds of billions of dollars in collateralized mortgage bonds backed by "collateral" of uncertain value.
Our home price in the metro Atlanta area is now back to where it was in 2006. We are fixing it up for sale before the bubble bursts again.
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