Posted on 03/26/2013 6:57:07 AM PDT by whitedog57
The economy is improving (at long last). Durable goods order surprised to the upside with a print of 5.7% SA. But the YoY NSA durable goods orders seems to be in a decline.
And the housing market continues to exhibit price increases.
The S&P Case-Shiller house price index rose 1.02% in January on a seasonally adjusted basis (SA). On a non seasonally adjusted basis, house prices rose only 0.1%.
When we remove the seasonal adjustment, house prices nationally seem to be flat since the end of 2008 with some undulations.
The big winners in January? The sand states where investors have been flocking like Las Vegas, Los Angeles, Phoenix and Tampa. Atlanta is showing positive gains as well.
The losers? Detroit,Chicago and Washington DC.
Mortgage purchase applications remain at relatively low levels following the government and Fed-induced housing and credit bubble despite mortgage rates being pushed to near historic lows. This is another indication that the housing recovery is being fueled by investors and not the traditional household owner-occupied borrowers.
Nick Timiraos of the Wall Street Journal has a nice piece entitled “Investors Pile Into Housing, This Time as Landlords.” Cash buyers—largely investors—make up about 32% of sales nationally, according to the National Association of Realtors.
The investors are US corporations, hedge funds and REITs. Foreign investors come from Latin America, China, Russia and Canada.
Of course, the government housing finance combine has raised credit standards since the last experiment in (housing) terror. So despite improved housing affordability and a decline in the homeownership rate, traditional borrowers are not competing effectively with investors for the reduced inventory.
Tomorrow, the Mortgage Bankers Association releases their weekly mortgage application indices. Stay tuned.
On the European front (which impact US Treasury and Mortgage rates), it looks like Carter-era Stagflation.
I, for one, welcome our new foreign landlords!
This article is all over the place. Is he saying thing are good, bad, really bad, or unbelievably bad?
He’s saying, with considerable sarcasm, that folks like you and me are still not in a home buying mood.
Investors ARE buying homes.
Dirt cheap money going into tangible assets.
My daughter just sold hers to a California outfit that is buying thousands of homes.
America is changing, only the upper class will “own” homes in the future.
A hedge fund manager will just love being called up to plunger a section 8 tenant’s toilet.
This is the brain playing tricks on us, as I see it. The ramp in uptake plus the rise in prices is, once again, fooling us into thinking that we want to frontrun a smallish bump in the road, mistaking it for a secular runup. “Buy now or be priced out forever”. In other words, we see a larval trend and forecast it out to infinity, Happens with home prices and with stocks. It is amazing that so many have forgotten the lessons of only a few years ago. It is true that homes in very nice areas are showing strength and I believe this is what is responsible for the uptick in median prices paid. We’re into the traditional homebuying season and this is to be expected.
I’m especially not happy about the idea of plopping yourself down and opening up your throat to vicious, incessant taxation from the local authorities.
I’ve had good experiences owning and later selling, profitably, real estate. I’m not liking it here. Call me skeptical.
Traditional home-buyers still can’t get loans, so the investor class, both foreign and domestic, is buying foreclosed and short sale homes to rent to the taxpaying peons who can’t get loans.
One of these days, Joe Blow might step away from his TV and realize he’s been financially destroyed by the Federal Reserve and the D.C. elites. He’ll head for the frig for another beer.
The banks are keeping repos off the market. Why you ask? Because if all the repos were on the market housing prices would plummet.
We bought a foreclosure and fixed it up...as far as appraisal value, it’s up about 40% compared to what we bought it for combined with what we put into it to fix it up.
But in our situation it was not bought to flip, but to rent. Rental prices have not declined, while the price of foreclosures and house prices have.
We’re not investors in real estate (in the true sense) but in our area the bigger investors are buying to use as rental income, not to flip.
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