John Preston

Why House Prices Will Resume Their Fall

OP

You are one of the few who are active on this site who continually needs the support of profanity to make an argument..why is that?

Anyway, Your blast at RE agents demonstrates a really narrow vision of the free market and rational/responsible behavior.

Bad RE agents are no worse than any "bad" service provider or product perveyor. Attorneys...CPA's....s... owners...taxi cab drivers... all aspects of commerce, have bad apples, who push their product or service for a buck.

Anyone who touts a point of view is shilling for themselves...me and you included.....

Rational are reasonable behavior,on the part of market participants, is the goal of a free market, not the reality of its observed behavior.

Businessmen and market participants do not appear to be striving for sainthood.....so lets keep the bar the same level for all.....and let's keep it clean...


On Jul 31 12:58 PM OptimizedPrime wrote:

> @User 464204 -- Finally, an honest real estate agent, or at least
> one that "gets it".
>
> These days there are two kinds of agents:
>
> 1. Agents that will do anything, lie any lie, join any and every
> fantasy of a Seller in order to get the listing. Whereas other agents
> offer the Truth, they offer Hope. They get the listing and the honest/realistic
> agent goes begging.
>
> Then they join the Seller in waiting until hell freezes over for
> somebody to come buy their home at the 2007 price, possibly dropping
> the price by the odd 1-2% to "adjust" to the market.
>
> 2. Agents that are honest and want the sale to CLOSE, not just sit
> on the market for months/years. Agents that show sellers the literature
> that informed people here on the Internet read every day about the
> direction of the market. Agents who will tell sellers that NOW is
> the best time to sell because their losing investment is just going
> to LOSE EVEN MORE if you wait.
>
> In other words, agents who will SCARE THE SHIT out of a seller to
> get them to move.
>
> You don't need to make anything up to scare somebody in this market.
> Just show them the facts and trends and they'll sign whatever you
> want.
>
> Agents, try this with me:
>
> "There have been many better times to sell, but those days are gone
> forever. I'm very sorry you missed the rocket to riches. Now it's
> time to be realistic. NOW is the best time to sell for the next 10
> years and possibly forever. Profits are not going to happen. Cut
> your losses before you lose everything."
>
>
> OP

Reading Rates: MBA Application Survey

Actually quite on point.....the comments at least, by Mr. Mouch....I always felt that MBA stood for "More Bad Advice".....

Jim the Realtor: Touring the Housing Problem

Did Jim take any video of the shadow buyers...you know they are there....shadows work both sides of real estate...there is in reality a sizeable shadow market to be analyzed and understood....

I actaully met with 3 new first time buyers this week in my area of North Central AZ.....they're not wanting to miss the tax credit....

Before housing really hit the fan, I saw jobs being shed in construction in the fall of 2006.....and while the related aspects of housing...foreclosures and inventory issues are real...the story all along has been jobs and declining household income...

One of our local Safeways cut all employees to half time a while bback...they still had jobs....just for half value...but no direct layoffs...

50% cuts in wages makes life tough for the entire economy...not just housing...

SO, the shadow inventory will be out there, as will the shadow buyers....maybe we can find some shadow jobs......

I gave John Galt a thumbs up for his assesment....this is a very serious, but also a very repairable, problem...but it must be worked on in a positive and proactive manner, and not left to its own demise.......we need real, workable solutions....not simple reports and anecdotal rhetoric.

More Misleading Median Home Prices

I have a question.....why is it the attitude of so many that only RE agents and mortgage lenders must tell the truth, while others can "shill" their way to glory????????

There was a study years ago, asking professionals in various industries if they in fact believed the advice and pitch they gave to customers.

Attorney's, CPA's and tax accountants scored poorly...essentially these groups lied to their clients.

The highest rated professions: Used car salesmen.

Go figure.


On Jul 17 05:41 AM Moon Kil Woong wrote:

> Tim Iacono, thanks for stating the facts so succinctly. If only professionals
> were intelligent and honest enough to state the truth perhaps we
> wouldn't have ever had the bubble in the first place.

A 21st Century Lend-Lease Plan

If housing stability and the feel-good result, leads to prudent stimulation of consumption, and this leads to positive jobs growth, isn't this and other programs which share similar objectives worthy of consideration and implementaion

Conspicuous Correlation: Retail Sales, June 2009 and Shrinking Home Values

I think this is what Robert Shiller and othhers have been saying for sometime, Shiller, since 2004...others since then...

.....that there was a connection between housing and consumption.....and that door swings both ways.....

The battering that housing has absorbed has manifested itself in obvious bruises to the general economy....

The Housing Bubble: Greenspan's Wayward Son

If low rate policies lead to bubbles, then we should see one developing now.....at least in the mortgage markets...which are the long end of the spectrum.

No, Mr. Schiff, like many who observe and comment on mortgages and housing from the bleechers, the credit underwriting process was the evil issue...not interest rates.......the UW process was in effect a "dialing-for-demand" as in supply/demand....the UW process simply created too many potential buyers ....

There may be other low rate issues the Mr. Greenspan may need to deal with, but the housing bubble was a result of the credit underwriting process.....

A Bimodal, Metrocensual Model of Foreclosures

So, maybe the bulk of the problem is not "stupid" home buyers who were delusional or liars....maybe something else is at hand....like falling household income....thanks, Ira!

Mortgage lending offered, and borrowers accepted, too much monthly mortgage debt...income was over-leveraged...by ALL lenders, distorting the housing market.

The decline in household income, which is at the heart of much of the current crisis, was exacerbated by the over-leveraged lending practices of the recent past, and left the American household no wiggle room...and, byh extension, the economy had no wiggle room!



Ira wrote: More than half of all HAMP borrowers will become delinquent again if the private sector cannot create real jobs with higher pay before the temporary teasers expire - after the next Presidential election.

Having demonized the financiers, our elected representatives must quickly abandon their bullying and figure out how they can best encourage private industry to create real jobs paying real wages. That will be the best way to prevent foreclosures. Then maybe we’ll all be able to sleep at night.

The Case for Higher Interest Rates and Lower Home Prices

First, we have a math problem....

a 1% change in rates ... using your example....is an 8.5% change in payment...for purposes of easy calculation...1% change in rates affects the the cost of housing by a (rounded) factor of 10%....

so, using your example, and doing the math....the housing cost would change 10.8%.....Not 18.2%

Take a $300,000 home mortgage at 4.5%, that pays $1,520.06 monthly...

And the same payment at 5.5% (41,520.06) generates a mortgage amount of $267,715.65......not $246,000

I agree that rates do not need to go down to stimulate houing....low rates reflect a corpse of an economy....market driven increasing rates indicates health and vibrance....

We need to get back to a true market in houisng...if possible.....one where buyers and sellers make deals...

For 15+ years, the lending community (frrom the top...GSE's/Congress/R... Street... manipulated the credit process and distorted housing values.....

Now the same group is manipulating the market value of housing by dumping and running away from the scene of the crime....

Would lenders, without bailout money, be so quick to discount REO's ....

Would lenders, without bailout money to pay bills...run from their primary business of LENDING MONEY?????

Housing Solution: Crashing Home Prices or Cheaper Mortgages?

Why is that the most commonly discussed solution is a "negative"...lowering prices...or rates....??

Mortgage rates, currently in the mid-5% range, are really quite nice....prices are certainly lower than 2006....

Why is it that no one ever talks about raising income levels...????

Income drives purchasing power and value.

One of the little discussed apects of the credit expansion over the past 15 years is that employees were able to "improve" their lives through borrowing...and employers may have gotten a hall pass on wage growth....

It will be interesting to see how employee / employer salary discussions work out in the future....

Housing Bubble: Two-Thirds of the Way Back to 2000

actually, if you review the HPI from OFHEO, housing prices since the early 1960's have out paced inflation by around 50%....

ave inflation = +/-4.25%...

ave housing appreciation - +/- 6.25%

BTW...the market dynamics were screwed up...beginning the mid-1990's...and continuing up to today....there is no real housing market because the credit guidelines keep changing....for a true market to exist, there needs to be stable credit parameters....there was a credit manipulation on the way up...for 15 years....and there is a credit manipulation today....on the way down..

This is not a market...