Why Does The Housing Market Still Suck?

Discussion in 'Politics' started by The Rabbi, Oct 29, 2010.

  1. The Rabbi
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    The Rabbi Diamond Member

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    Over two years into this recession and the housing market shows little sign of recovery. Why? Maybe because the gov'ts programs to "save homeowners" is only forestalling the inevitable and artificially keeping prices high. Get rid of all that, foreclose on people who can't pay, sell the foreclosures and let the market clear. Worked wonders back in 1990.
    Holman Jenkins, Jr.: The Foreclosure Crisis and the Future of American Communities - WSJ.com

    more at the source.
     
  2. 8537
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    8537 Senior Member

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    So the answer to collapsing home prices and record foreclosures is to....

    Encourage faster collapsing prices and more foreclosures? Brilliant!
     
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  3. blu
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    blu Senior Member

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    the problem is that the foreclosures won't sell. too many people are unemployed to keep up with high buying volume, investors aren't buying homes like they used to, and the government broke the market for years to come with their 8k tax break on house buying which artificially jumped the market for a short time, but ensured that it would prolong any real recovery of that market. same as cash for clunkers did
     
  4. Toro
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    Toro Diamond Member

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    Too many houses. Too much supply. Simple as that.

    Supply/demand won't be back into balance for at least another two years, maybe longer.
     
  5. Revere
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    Revere BANNED

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    The bailouts were targeted at future political donors, not necessarily the parties who incurred the losses.
     
  6. blu
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    blu Senior Member

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    its a pretty sick cycle, people had to buy overvalued houses due to investors taking too much risk buying property, artificially inflating the prices, followed by banks and other company's (employers of people with mortgages) investing into this high risk situation, and once it all came tumbling down everyone got screwed b/c investors lost their money, companies had to fire people due to losses, and the people couldn't pay their mortgage because they got fired due to incompetency and greed from people at the top of the chain. all of this over houses that are now worth a 1/5 of its old value because of greed and incompetence
     
  7. The Rabbi
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    The Rabbi Diamond Member

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    That's called "clearing the market." What is your alternative? Bail out homeowners who can't pay anyway? That's been a proven failure.
    No, get the process over with, let prices fall so people who actually saved money and can afford the houses can buy them.
     
  8. G.T.
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    The prices are preeeeeeeeeeetty fuckin low, dude.
     
  9. The Rabbi
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    The Rabbi Diamond Member

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    No, "dude" they aren't. They are historically high. Get your fucking facts straight, "dude" before you sound like more of an idiot than you already do.
    The Housing Chart That's Worth 1000 Words
     
  10. 8537
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    No, that's called ruining people's lives, rendering them homeless and impairing the ability of their neighbors to sell their own home.

    Markets for peanut butter "clear". markets for beer "clear". There's no market-clearing price for the housing market short of financial collapse for millions of Americans and hundreds of financial institutions.

    But that's the liquidationist answer to everything. Things haven't changed much in that regard since 1931.

    Steps to prevent reduce foreclosures, incent banks to refinance and keep people in their homes so they don't make their neighbors home worth less.
     
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