BlueFire

Real Estate: Rentals and Sales Prices Out of Sync

Or, we can raise rents by 20%. Rents are on the rise in many markets.

Wall Street Continues to Misunderstand Housing

"Real Estate as an investment is dead for the next 10 years."

All due respect, but are you out of your mind? Real estate is the easiest money making opportunity on the planet right now. We are able to generate a 30% return in six month's time right now. And the work on the buying side has become easier than ever since we can buy directly from the banks that are now finally bleeding enough to properly price their REOs.

All I can say is that the gloom that you guys keep spreading is awesome for me. Please don't get positive any time soon. The only problem right now is coming up with enough capital fast enough to take advantage. The capital is being scared off by the gloom with private loan investors waiting for things to get better before they buy in. Well, when they get better, you have missed the bottom!

People are buying properly priced houses. With an 8% tax credit from the feds, if you put a property on the market at 10% below current value, it sells. It is a great deal for a non-speculator first time home buyer. Glad to see the speculators too burned to get back in and bid prices up in a crazy fashion.

When you bought it from the bank for 60 cents on the dollar and sell it for 90 cents on the dollar... well it does not sound like waiting 10 years is a good investment plan to me. I'm buying.

Obama's Homeowner Stability Plan: How Helpful Will It Be?

Stop the madness!

Foreclose.

Use the government bailout to purchase the foreclosed properties at auction.

Evict everyone and move them into affordable rentals.

TEAR DOWN EVERY SINGLE VACANT PROPERTY. That is the jobs program. Train them in building trades as the reverse engineer each teardown.

Now we have vacant land in urban, suburban and exurban communities that can be redeveloped with appropriate oversite.

This is a fair solution. We don't need to bail out banks. The foreclosure system works just fine. Take the pain up front and on the chin and let's get on with an honest rebuilding of our housing system and our economy!

Niall Ferguson Dismisses Moral Hazard of Fixing Housing Mess

The so called regulators walked away from their responsibilities because they were afraid to speak the truth. They did not "put their faith in market forces" so much as fear having to be the voice of reason. Greenspan basically said that he did not bother trying to confront congress about the housing bubble because he assumed that no on would want to take on the responsibility for intentionally bursting the bubble and then be responsible for higher unemployment and higher interest rates. Well, nice job shirking your responsibility and allowing the insanity to grow to cancerous proportions.

If regulation and monitoring is put back into play, then Ferguson is right that this current version of moral hazard cannot repeat itself. If an institution has to hold the paper that it issues, you can be pretty certain that they would have no interest in no-doc trick interest payment loans. They have to make money off the paper instead of the sale of the paper to the next level up in a sick chain.

This crisis was caused by the flood of global capital that was seeking a good investment. The lack of oversight opened the flood gates to "creative" Wall Street types placing downward pressure on the front line mortgage origination industry to churn out as much crap as fast as possible. And no one cared because at each link of the chain, the crap had been pre-sold. Fiscal hot potato with everyone making sure that they would not be the last one holding the junk. And at each level a new layer of obfuscation and deception was added - so the end buyer of the CDO was left feeling that something too complicated to understand being sold by such a nice well dressed man from Wall Street who surely understands what he is doing must be a good investment. After all it says it is AAA rated and that it is a "structured security." Such nice words. That sounds pretty safe. Let me bet my entire nation's well being on it because it sure sounds like a good deal. Please, Sir, may I have another?

Thanks SEC. Thanks FTC. Thanks Greenspan. Who could hold you accountable for not wanting to speak truth to power? We don't need a police force because surely the citizenry will act in their own mutual best interests. What planet are you guys from?

Denial: Collective Housing Delusions

How to solve the housing crisis:

Stop all current bailout actions and replace with the following 2 steps:

1) Use bailout money to purchase all foreclosing properties at absolute rock bottom prices.

2) Create a public works program to hire the unemployed to tear down every single foreclosed property in the nation. Every single one, no exceptions.

Kill the cancer, and increase demand for housing by eliminating the supply. Suddenly there is open land to develop with more modern, energy efficient structures.

Those who gained experience on the public dollar learning how to tear down houses can now be hired by private developers to build new houses.

Oh, and all mortgages must be held by the secondary mortgage market with no securitization permitted.

All those who foolishly bought crap just because some idiot stamped AAA on it - well, that is what is meant by caveat emptor!

Housing Data Shows Downturn Could Be Prolonged

The thing of it is that we are creating a huge inventory of properties being sold off at bargain basement prices either to investors at the preforeclosure stage as banks are forced to sell short, or as REOs as banks are forced to sell off this huge backlog. As a result, the housing values we are seeing are artificially low. These properties are being sold BELOW value. As a result, they pull down the comperable values of entire neighborhoods.

Now the inventory that needs to clear is still huge. But, anyone willing to buy and hold for a minimum of 3-5 years is going to make a killing in real estate. When that inventory does clear, there will be a significant uptick in real estate values as real buyers start paying real prices.

Patience, people. Everyone thinks in quarters. It's time to be making five year plans here.

Examining The Fed’s New Mortgage Loan Rules

Thank God for the distinction for investors. We ARE smart enough to not need "consumer protection" AKA government interference!

Lender-Abandoned, Non-REO Foreclosures

Music to my ears. We investors are going to be buying up some awesome deals in the next 12 months!

Bill Gross: If Housing Prices Decline Further, So Does the Economy

Amen to TommyG. Real estate investors are not speculators. No one in their right mind buys property counting on it rising in value. An investor would never buy a property unless it were at a minumum 20% below market value and preferrably 30%. Why? Look around. Profit is made at the time of purchase. If the property rises in value that is a bonus. Let the blood letting continue as it must. Slow it down and you will only prolong it and force the innocent to pay for the guilty. What nonsense. The only people losing their homes are those who need to be losing their homes. Cold but true. And when enough of us feel the bottom, there will be a real estate buying frenzy. This is the great housing shuffle. At the end of the day, most will have a roof over their heads. For many it will be a rented roof over a home that is probably not 5000 sq/ft plus.

Housing: A Government Solution Is Likely to Be Necessary

Please, please, please do NOT let the government get involved. Too little too late. Prices have to come back into sync with median incomes. A one time $600 raise from the government is not going to do it. And what ever happened to personal responsibility and caveat emptor? Home buyers are grown ups who entered into contracts to borrow money. Live with it. Upside down? Who cares... stay in the home you bought at a prices you felt willing to pay at the time you signed the dotted line. In ten years or so, you will no longer be upside down. It's your house, not your ATM!

How Far Will House Prices Fall? Implications From the Latest WSJ Survey

What he said!

Injecting Accountability into the Credit Crisis

Some great nuggets in this article, but here is another angle. At the local, state and fed level, government should immediately condemn as much vacant property as possible. The bailout funding should go to a massive demolition enterprise to clear out as much dead wood as humanly possible in urban, suburban and ex-urban regions. Builders will keep building based on the tastes of consumers. But there is so much dead wood to be cleared out which would bring builders back into blighted regions. Yes, it will create gentrification. So what? It's not like these neighborhoods are actually going to pull themselves up by their bootstraps.