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Where Have All Our Houses Gone
Townhall.com ^ | February 3, 2013 | Fritz Pfister

Posted on 02/03/2013 7:18:30 AM PST by Kaslin

Did you read the story home prices are up due to falling inventory? Case-Shiller just reported home prices were up in their 20 city index 5.5% in November all the way back to 2003 levels.

Regarding these price increases one must put them into perspective. As reported at the BusinessInsider, Quinn Eddins at RadarLogic argue the recent rise in home prices reflects the weakness in 2011 home prices more than the strength of 2012 home prices. I concur.

The reason for prices rising? According to the WSJ: “Economists see the report as a sign of the housing market gaining strength. “The house price rally still has a long way to go. The most important driver will be the dwindling supply of new homes. Thanks to a combination of an extended period of under construction … and a fewer foreclosures, the inventory-to-sales ratio fell in December to the lowest level since May 2005,” said Harm Bandholz of UniCredit Research.”

This is a mystery when just in July of 2012 Bloomberg reported the following:

“The shadow inventory of homes – those in foreclosure plus those 90 days late on mortgage payments – is on the rise again, a further indication that the supply side has not yet healed. According to RealtyTrac, foreclosure starts jumped 6 percent on a year ago basis in the second quarter, the first year-over-year increase since 2009. There are roughly 4.16 million homes that could begin to flow to market.

Once one takes the number of homeowners 30- to 90-days late on their mortgage payments and includes the likely default of those that have negative equity on their homes, there is a strong possibility more than 6.5 million additional foreclosures will enter the pipeline. The addition of homes that banks may be holding back suggests a much larger number. Laurie Goodman of Amherst Securities Group has testified before Congress that it could be as high as between 8 and 10 million.”

The Bloomberg report came four months before the FHA announced conveniently the week after the election that they have 789,000 homes in foreclosure or coming soon.

Where have all the houses gone? Not to be a conspiracy theorist, but do you think the big banks who were the recipients of government largesse with bail outs, or the risk free money making turnstile between the Fed loaning them money at near zero to buy treasuries returning 2.5% provided the capital necessary to hold foreclosed properties off the market?

Inventory will be one of the keys to how housing prices perform in 2013, however the three biggest factors remains jobs, jobs, and jobs. Followed by interest rates. Pent up demand drove sales in 2012 because it sure wasn’t due to job growth not able to even match new entrants into the job market. Investors also added to demand accounting for an estimated 28% of all home sales.

The stage is now set for the 2013 housing market and it remains cloaked behind a curtain not yet raised. Will millions of foreclosures mysteriously begin to appear? Will the phantom job market miraculously begin to add to demand?

Release of more foreclosed homes is more probable than job creation adding to demand.

As bad as Q4 GDP falling into negative territory was the collapse in Consumer Confidence. The media wants to blame falling confidence on the expiration of the payroll tax holiday. That is certainly a part of the reason, however that doesn’t give consumers enough credit.

Is it possible the collective wisdom of the consumer after listening to Obama’s inaugural dead left progressive edicts, including Climate Change that has driven up their costs of necessities could have contributed to a crisis in confidence? Could dysfunctional government be a cause?

Sure that’s possibly part of the decline in confidence, but in my opinion they are simply scared. People don’t see or are living any recovery. They see Washington DC and Wall Street thriving while they languish. What a better boost to confidence could there be if main street actually saw jobs being created?

Since jobs are the key to housing sales my outlook is for more of the same. The media will continue to report a non-recovery as recovery, banks will withhold inventory, jobs will languish, and confidence will remain low.

Why? Because only liberal pundits, academia, economists, media, and the new Collectivist Party, formerly known as Democratic, could possibly say that what Obama is doing is working.


TOPICS: Business/Economy; Culture/Society; Editorial; Government
KEYWORDS: housing; realestate

1 posted on 02/03/2013 7:18:31 AM PST by Kaslin
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To: Kaslin
Case-Shiller just reported home prices were up

Isn't this the group that admitted they had been inflating their numbers for years?

2 posted on 02/03/2013 7:21:28 AM PST by oldbrowser (They are marxists, don't call them democrats)
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To: Kaslin

I’m a Realtor in VA and have 8 to 10 eager buyers but no inventory. Every time a home comes on the market (priced well, good schools) it gets multiple offers. I think a lot of people are still “under water” and can’t or haven’t recovered from the 2008-2009 dip in prices. Better to hang on than go to foreclosure.


3 posted on 02/03/2013 7:31:27 AM PST by albie
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To: Kaslin

http://www.doctorhousingbubble.com/housing-inventory-back-to-2001-levels-real-estate-inventory-for-sale/


4 posted on 02/03/2013 7:33:29 AM PST by johnny reb (When in the course of human events.....)
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To: Kaslin

These foreclosed houses will be used by the Collectivist to infiltrate all suburbia with those needing housing vouchers. This will distribute those ChiCongo crime rates right to your middleclass front door. Better wake up and fight die-versity and the anti-white ghouls of government.


5 posted on 02/03/2013 7:34:04 AM PST by iopscusa (El Vaquero. (SC Lowcountry Cowboy))
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To: Kaslin

What I’m hearing in Florida is that investors are snapping up many of the foreclosures at sheriff sales so they never hit the market for individual buyers to take a crack at. I believe they’re hoping to flip them at some point or rent them out if they can’t flip.


6 posted on 02/03/2013 7:36:32 AM PST by sunshine state
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To: Kaslin

Things are about to get really ugly.


7 posted on 02/03/2013 7:38:30 AM PST by Hoodat ("As for God, His way is perfect" - Psalm 18:30)
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To: albie

I think “home” prices being up probably reflects this. It’s not that prices for a particular size, quality, and location of home are up. Rather, the particular homes going on the market are probably up in value. Low end homes are easiest to move and easiest to move into, so this gradual recovery will work its way slowly from the entry-level homes over several slow and gradual steps. As people hunker down in jobs that they would leave in a better economy, desirable homes will be slow to enter the market, and housing liquidity will work up to mid-range homes very slowly.


8 posted on 02/03/2013 7:40:16 AM PST by Pollster1
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To: Hoodat
Things are about to get really ugly.

I think that's true, but I have to admit to being pretty confused. Things are going in the wrong direction and have been doing so for a long time. Japan, Europe, the US, even China -- it all looks like a house of cards. And the can keeps getting kicked down the road.

People say Inflation will destroy us. People say Deflation will destroy us. And the can keeps getting kicked down the road.

We are right on the edge. About to fall over. We have been for a very long time. And all the "experts" seem filled with happy talk -- things are looking up! And we're not falling off the edge, and the "experts" aren't being laughed off stage.

I do think we're in trouble. But I don't know why the world isn't falling down around my ears right this very moment. Apparently the game can keep going on and on and on.

9 posted on 02/03/2013 7:57:56 AM PST by ClearCase_guy (Nothing will change until after the war.)
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To: Kaslin

I’ve kept an eye on the local market with the thought of getting out from under my mortgage and more mobile when the time is right.

The absolute bottom here in my observation actually was 2011. There were decent, maintained older brick ranches with basement and garage on an acre, 3/2, about 1800 sq ft, going for $110,000, in OK locations. Best school district never got that cheap, more like twice that for similar if you could find it, bad school district or crime problem areas were cheaper still, in the eighties.

Unemployment is still not good locally, pushing 9%, so something else is moving houses. It wasn’t unusual to see quite a few houses with a sheriff’s notice posted on the door and the yard gone to seed, now there aren’t many or they’re not so obvious if there are.

Some poor sap inherited a thirties brick two story cottage near me, then went on a remodeling spree to transform it into a craftsman, adding porches, stuccoed the exterior, new top of the line roof, top of the line windows and doors, the works. Don’t like the color myself, but it’s nice, what is finished is nice at least. An architect clearly had a hand in it. The detail and proportion are right.

He went bust, lost his job, lost his savings, apparently financed the remodel with a renovation/perm note. Foreclosed, unfinished interior, much landscaping needs to be done. $65,000 and it’s yours, might be less than that by now, haven’t checked in a while. If I were unencumbered and certain of my financial future, I’d seriously consider taking it on.

It’s the cheap interest rates that have pulled prices off rock bottom. They’re still nowhere near 2007 highs. I don’t trust it at all.


10 posted on 02/03/2013 8:07:17 AM PST by RegulatorCountry
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To: albie

We live in a bubble in NoVA. It is far from being representative of the rest of the country.


11 posted on 02/03/2013 8:08:39 AM PST by kabar
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To: Kaslin
Another reason there seems to be a "shortage" of homes is that there isn't an OVER ABUNDANCE of homes.

Let me explain.

Home building is way down.

Before the bubble burst, there were homes being built everywhere. Financing was cheap and very easy. Not just the buyer, but the builder too.

Builders are leary to build, plus they can't get the financing to build like they once could.

12 posted on 02/03/2013 8:11:06 AM PST by mountn man (ATTITUDE- The Pleasure You Get From Life, Is Equal To The Attitude You Put Into It.)
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To: Kaslin

I don’t believe this crap is over, by a long shot. The banks get away with holding the houses at their old (i.e., higher) values as long as they actually don’t sell them. This makes their balance sheets look respectable. But once sold, the loss has to be taken.

There’s no reason to put them on the market until one of two things happen - people get a lot wealthier, or a lot more people get interested in buy houses (i.e., Amnesty).


13 posted on 02/03/2013 8:12:40 AM PST by BobL
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To: albie
I’m a Realtor in VA and have 8 to 10 eager buyers but no inventory.
If you're anywhere within 50 miles of DC I can believe it.
The ever growing population of government employees needs a place to lay their weary heads.
Spending our tax dollars is quite the arduous task.
14 posted on 02/03/2013 8:24:58 AM PST by oh8eleven (RVN '67-'68)
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To: oh8eleven

I visited DC and NoVa last spring.
It looked like America used to look, before Baraq.

You didn’t see 50% of the commercial buildings with a “for lease” sign on them.


15 posted on 02/03/2013 8:28:12 AM PST by nascarnation (Baraq's economic policy: trickle up poverty)
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To: kabar

I’m from NoVa and Richmond is a far cry from it. I have friends who are agents up there and they’re making a fortune. Eventually, this will all catch up with them as well.


16 posted on 02/03/2013 8:42:59 AM PST by albie
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To: albie
I live in NoVA and have, on and off, for over 40 years. Here in Fairfax County, the unemployment rate is about 4%. Seven out of the ten richest counties in America are located in the DC metro area. Federal employees, government contractors, lobbyists, and think tanks make this place Recession-proof. According to Hannity and Steve Bannon, 15% of all the money the government spends each year, $3.7 trillion, stays in this area.

If this catches up with us, it will mean the rest of the country is already down the toliet.

17 posted on 02/03/2013 8:53:17 AM PST by kabar
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To: albie

There are places where home prices are good at all times...I think that there are probably more good places now than there were several years ago...but, I would not call real estate a safe bet by any means nor would I suggest that the downturn for real estate is over.


18 posted on 02/03/2013 9:01:17 AM PST by Wpin ("I Have Sworn Upon the Altar of God eternal hostility against every form of tyranny...")
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To: Kaslin

All I know is that in my home town in Tennessee I can get a mortgage on a decent house that costs less that what I’m paying for a couple of small storage spaces here in the big city. I’m thinking that it’s about time for “Marco Polo” to find his way back to Venice!


19 posted on 02/03/2013 9:01:36 AM PST by The Duke
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To: ClearCase_guy
Just remember the words attributed to Herbert Hoover-- "prosperity is just around the corner"--in 1932.

When it comes to economics the "experts" are expert at only one thing, telling you what they want you to believe. Reality goes its own way.

20 posted on 02/03/2013 9:08:13 AM PST by hinckley buzzard
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To: mountn man

I agree...but let me add a few things. In many areas, there are ‘good parts of town’ and ‘bad parts of town’, as far as housing is concerned. Crime, school district, whatever has made some areas the preferred place to buy.

These ‘good parts of town’ areas were sprawling away from the city center, extending utilities like sewer and water as they went.

When the bubble burst, we were left with a zone of failed development, on the edge of the city. There are bare lots, possibly with only pavement but no utilities like power and gas installed. The lots are burdened with developer mortgages, as well as high special assessments to pay for the street. They are poison...nobody is going to buy them.

This band of failed development serves as a giant moat, preventing additional development. Its too expensive to build utilities through these areas, to start new developments further out, on land that isn’t poison.

This all equates to alot less development and building.

Also, most of the developers still standing in my city are now doing very small phases...so as not to become too leaveraged. These small phases can’t keep up with demand; but, they and th banks will not do larger phases for now. I’m talking 16 lot developments.


21 posted on 02/03/2013 9:16:24 AM PST by lacrew (Mr. Soetoro, we regret to inform you that your race card is over the credit limit.)
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To: kabar
We live in a bubble in NoVA. It is far from being representative of the rest of the country.

Whatever happens, it is already popping. Defense spending has already started to decline and it will be reduced tremendously in March.

22 posted on 02/03/2013 9:32:14 AM PST by MinorityRepublican
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To: RegulatorCountry

If anyone is interested, that incomplete remodel in foreclosure appears to have sold as of yesterday for $54,900.00. Needs climate control system, interior finishing, much landscaping work. Nice house though, if you only need two bedrooms and two baths.

http://www.realtor.com/realestateandhomes-detail/9451-Gideon-Grove-Church-Rd_Stokesdale_NC_27357_M58079-06166


23 posted on 02/03/2013 9:38:27 AM PST by RegulatorCountry
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To: RegulatorCountry

Wow, what a steal. $50k to finish it off? Looks like a very nice home.


24 posted on 02/03/2013 10:02:09 AM PST by ProtectOurFreedom
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To: ProtectOurFreedom

I have been admiring it for a while. I’d seriously consider taking it on myself, if I were in a position to do so, as I mentioned. Those are Jeld-Wen windows and doors, the doors are clear fir. A lot of recent stone work, great fireplace. The pool’s a disaster though, I’d probably take it out.


25 posted on 02/03/2013 10:06:41 AM PST by RegulatorCountry
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To: albie
I think a lot of people are still “under water” and can’t or haven’t recovered from the 2008-2009 dip in prices. Better to hang on than go to foreclosure.

If they don't HAVE to move, they're likely hanging on, especially if they bought their homes at the height of the market. They don't want to give their homes away.

26 posted on 02/03/2013 11:01:02 AM PST by SuziQ
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To: ClearCase_guy
I do think we're in trouble. But I don't know why the world isn't falling down around my ears right this very moment. Apparently the game can keep going on and on and on.

You're right. there is an unspoken effort to "keep the show Going" by those that have the MOST to lose if it stops.

As usually happens, the END GAME will occur when we least expect it.

All you and I can do is realize that the best we can do is be prepared for the INEVITABLE.

27 posted on 02/03/2013 11:01:51 AM PST by VideoDoctor
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To: mountn man
Before the bubble burst, there were homes being built everywhere. Financing was cheap and very easy.

Austrian economic theory explains this quite readily. Artificially low interest rates lead to malinvestment, that is, investment in things that would be uneconomical at real market interest rates. So we had over-investment in housing. Then the bubble burst. Lots of unwanted housing, and housing people realized they couldn't afford.

I'll give Rudyard Kipling the last word:

And that after this is accomplished, and the brave new world begins

When all men are paid for existing and no man must pay for his sins,

As surely as Water will wet us, as surely as Fire will burn,

The Gods of the Copybook Headings with terror and slaughter return!

28 posted on 02/03/2013 11:41:20 AM PST by JoeFromSidney ( New book: RESISTANCE TO TYRANNY. Buy from Amazon.)
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To: kabar

Once the Marylander imports succeed in raising NoVa taxes to Montgomery County, MD levels, the bubble will burst. Fairfax County won’t be attractive any more.


29 posted on 02/03/2013 11:52:00 AM PST by Hoodat ("As for God, His way is perfect" - Psalm 18:30)
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To: ClearCase_guy

Every possible trick is being used to forestall the ultimate collapse and I agree that it has worked longer than I ever thought it possibly could but there is also the huge effort to keep the truth covered up. We have no news media willing to tell the truth. If we had real investigative reporting on TV and in newspapers we would not be in the shape we are in and that shape is far worse than is being reported.


30 posted on 02/03/2013 12:45:03 PM PST by RipSawyer (I was born on Earth, what planet is this?)
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To: MinorityRepublican
Whatever happens, it is already popping. Defense spending has already started to decline and it will be reduced tremendously in March.

Never happen. Both parties don't want to cut spending. There will be a deal on sequestration "postponing" cuts to out years and increasing revenue thru cutting loopholes. We are just watching another kubuki dance.

"Of course, as Brad Plumer notes in the Washington Post's Wonkblog today, defense spending always trails off in the fourth quarter, because the department, like other federal agencies, tends to squeeze a lot of spending into the third quarter because it's when the fiscal year ends. But a drop that breaks a 40-year record is another thing entirely.

And it's worth remembering that these cuts took place before Defense agencies recently went public with the news that they are slowing procurement spending, cutting contract workers and preparing for civilian employee furloughs in anticipation that a sequester will kick in at the end of February."

31 posted on 02/03/2013 2:15:49 PM PST by kabar
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To: Hoodat

Dream on. The GOP still controls the governorship and the House of Delegates by a wide margin. It is a deadlock in the Senate.


32 posted on 02/03/2013 2:18:47 PM PST by kabar
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To: Kaslin

Question: what is a slick (and possibly illegal) way to keep property taxes high, when houses won’t sell at all?


33 posted on 02/03/2013 2:34:39 PM PST by familyop (We Baby Boomers are croaking in an avalanche of rotten politics smelled around the planet.)
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To: JoeFromSidney
I had heard a story one time, that when the JC Penney company was first thinking about extending credit, James Cash himself told the board that credit might actually increase company sales and profits, but that credit would ultimately hurt their customers, as it would encourage them to buy things they really didn't need with money they really didn't have.

The board won out.

Our entire society is a credit based economy. And though there are places for credit, JC's words ring very true today.

34 posted on 02/03/2013 3:19:45 PM PST by mountn man (ATTITUDE- The Pleasure You Get From Life, Is Equal To The Attitude You Put Into It.)
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To: The Duke

Where is your “hometown”? We’re seriously looking into moving to Tennessee. IF we can sell our house. And that’s a big IF.


35 posted on 02/03/2013 8:49:39 PM PST by Terry Mross (Who long before America is no more?)
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To: Hoodat

I feel that too.


36 posted on 02/03/2013 8:53:43 PM PST by riri (Plannedopolis-look it up. It's how the elites plan for US to live.)
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To: ClearCase_guy

Things keep going until God says otherwise. The Bible says that God raises the nations up and brings them down. When God says “go!”, the rug will be pulled out from under!


37 posted on 02/04/2013 4:33:16 AM PST by mdmathis6 ("Barry" Xmas to all and have a rapaciously taxable New Year!)
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To: Terry Mross

You should have a detailed email reply from me in your Freeper mailbox. Glad to help!


38 posted on 02/05/2013 7:32:48 PM PST by The Duke
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