Why Does The Housing Market Still Suck?

[The Rabbi]

No one's life is ruined by being foreclosed on. No one is rendered homeless by being foreclosed on. That is a liberal myth. Most foreclosed people end up renting for less money. Ever hear of "jingle mail"?

Lol, you're right Rabbi. No one is ruined by being foreclosed upon.

In related Rightwing news, no neighbors lose home value when someone is foreclosed upon. That's why homes in Detroit are selling for less than cars!

The gov't has already tried keeping people in their homes. The result has been no recovery in the housing market and a continuing economic stagnation.
Bush Sr did exactly what I wrote in 1990 after the S&L collapse. It worked fine and within 2 years the housing market was back on track.

Are you honestly attempting to compare the S&L crisis to our current situation?

Seriously?

So your proposal to keep neighbors' home values high is to artificially prop up the price of homes? Seriously? Are you serious?
And no, no one's life is ruined by being foreclosed on. Show me one person. Their credit might be shot for several years but plenty of people live with no credit.
And please, genius, tell us why this housing oversupply is different from 1990s.

 

[8537]

About 91% of the public has a job.

What the heck are you talking about? There are 300M members of "the public"

There are about 139M people employed.

That means that about 46% of the public has a job.

 

[The Rabbi]

In Europe, some are seriously recommending destroying real capital (homes) in order to reduce supply and improve the lot of financial capital.

Only an economist who works in a cave could come up with such a plan with a straight face.

That's actually being considered in places like AZ where you have ghost suburbs of unoccupied houses. Remind me why they are unoccupied. Remind me why destroying them is a bad idea.

If I really have to explain why destroying real capital in order to prop up financial capital is a dumb idea, hope for you is already lost.

if there are homes that were never occupied etc...one could make an argument for gutting them and selling off the inventory - but that's quite a different thing than foreclosing on people in order to destroy their homes (real capital)

Translation: I can't explain it but it just seems that way to me.
I'll bet you supported cash for clunkers, where viable assets were junked prematurely too.
No one is proposing foreclosing on people in order to destroy their homes. I don't know where you dreamed that up. They are two separate issues.

 

[8537]

That's actually being considered in places like AZ where you have ghost suburbs of unoccupied houses. Remind me why they are unoccupied. Remind me why destroying them is a bad idea.

If I really have to explain why destroying real capital in order to prop up financial capital is a dumb idea, hope for you is already lost.

if there are homes that were never occupied etc...one could make an argument for gutting them and selling off the inventory - but that's quite a different thing than foreclosing on people in order to destroy their homes (real capital)

As opposed to destroying lenders stake in them?

Who is destroying the lenders stake in a home?

 

[JWBooth]

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.

In Europe, some are seriously recommending destroying real capital (homes) in order to reduce supply and improve the lot of financial capital.

Only an economist who works in a cave could come up with such a plan with a straight face.

Like FDR's agriculture department destroying grain, livestock, and milk in the '30s in an effort to increase commodity prices.

 

[G.T.]

Federal Housing Finance Agency - House Price Index

yea, "dude," they are. And interest rates make them even lower. It's a buyer's market right now.

So, "dude" why aren't they selling? About 91% of the public has a job.

For one, yea you were wrong about the prices and now are deflecting.

But I'll answer.

Several factors.

-It's harder now to get a loan, and the 91% of the public who "have a job," don't all have that credit score required.

-most middle-class families live paycheck to paycheck, and "no down payment" mortgages are just about wiped from existence.

-it's a lot of red-tape, reading, etc required to buy a foreclosure. It's not as simple as people presume.

-the economy is still shaky, and so people tend to be weary about their investments.

-several thousand other fucking factors.

 

[The Rabbi]

About 91% of the public has a job.

What the heck are you talking about? There are 300M members of "the public"

There are about 139M people employed.

That means that about 46% of the public has a job.

I should have specified working public. With 9.6% unemployment, the rest are working.

 

[8537]

Translation: I can't explain it but it just seems that way to me.

yes, apparently you don't understand why it's economic stupidity gone wild to destroy actual capital in order to prop up impaired financial capital.

I'll bet you supported cash for clunkers, where viable assets were junked prematurely too.

No, that was almost as absurd.

No one is proposing foreclosing on people in order to destroy their homes.

lol.

 

[The Rabbi]

Federal Housing Finance Agency - House Price Index

yea, "dude," they are. And interest rates make them even lower. It's a buyer's market right now.

So, "dude" why aren't they selling? About 91% of the public has a job.

For one, yea you were wrong about the prices and now are deflecting.

But I'll answer.

Several factors.

-It's harder now to get a loan, and the 91% of the public who "have a job," don't all have that credit score required.

-most middle-class families live paycheck to paycheck, and "no down payment" mortgages are just about wiped from existence.

-it's a lot of red-tape, reading, etc required to buy a foreclosure. It's not as simple as people presume.

-the economy is still shaky, and so people tend to be weary about their investments.

-several thousand other fucking factors.

Make them cheap enough and people will buy. Remember the cash for home buyers program? Plenty of takers there. In that case the gov't artificially lowered the price of homes. Why spend taxpayer money to do something the market ought to do anyway?
And no I was not wrong about home prices, which have not declined nearly enough.

 

[The Rabbi]

Translation: I can't explain it but it just seems that way to me.

yes, apparently you don't understand why it's economic stupidity gone wild to destroy actual capital in order to prop up impaired financial capital.

No one is proposing foreclosing on people in order to destroy their homes.

lol.

Apparently you don't understand what "actual capital" means.
"lol"=I was wrong but can't admit it.

 

[Revere]

If I really have to explain why destroying real capital in order to prop up financial capital is a dumb idea, hope for you is already lost.

if there are homes that were never occupied etc...one could make an argument for gutting them and selling off the inventory - but that's quite a different thing than foreclosing on people in order to destroy their homes (real capital)

As opposed to destroying lenders stake in them?

Who is destroying the lenders stake in a home?

You are, if you force them to accept less for debt service.

 

[rightwinger]

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

Encourage faster collapsing prices and more foreclosures? Brilliant!

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.

Hey..

It worked in the Depression....Right Mr Potter?

 

[G.T.]

So, "dude" why aren't they selling? About 91% of the public has a job.

For one, yea you were wrong about the prices and now are deflecting.

But I'll answer.

Several factors.

-It's harder now to get a loan, and the 91% of the public who "have a job," don't all have that credit score required.

-most middle-class families live paycheck to paycheck, and "no down payment" mortgages are just about wiped from existence.

-it's a lot of red-tape, reading, etc required to buy a foreclosure. It's not as simple as people presume.

-the economy is still shaky, and so people tend to be weary about their investments.

-several thousand other fucking factors.

Make them cheap enough and people will buy. Remember the cash for home buyers program? Plenty of takers there. In that case the gov't artificially lowered the price of homes. Why spend taxpayer money to do something the market ought to do anyway?
And no I was not wrong about home prices, which have not declined nearly enough.

Yes, yes you were. Homes are dirt cheap right now. Right now is historically one of the best times EVER to buy a house, price-wise and interest-rate wise.

Why people aren't, like my previous post, is a very involved equation. You can't ignore that coming off the Economic Recession, Creditors have tightened the fuck out of their Regulations. Credit's not "bad credit! No credit! No problem!!!" any more like it was under Bush.

Also, people fear the values are going to continue their downward trend because anxieties about the economy in this country are running high. Do you spend over a Hundred Grand for something you feel is about to depreciate in value? It's not THAT hard to see why people aren't buying en masse.

 

[8537]

So your proposal to keep neighbors' home values high is to artificially prop up the price of homes? Seriously? Are you serious?

In the short term? Yes, of course.

And please, genius, tell us why this housing oversupply is different from 1990s.

Well, let's see: in 1990, housing was overvalued relative to historical trend by about 23% and financing such a home would come at about 10.4%.

In 2009, housing was overvalued by almost 100% and financing such a home would come at about 4.5%.

 

[Revere]

I guess the solution to pretending someone's creditworthiness is something it was not is to then pretend their houses are worth something they are not.

 

[8537]

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.

In Europe, some are seriously recommending destroying real capital (homes) in order to reduce supply and improve the lot of financial capital.

Only an economist who works in a cave could come up with such a plan with a straight face.

Like FDR's agriculture department destroying grain, livestock, and milk in the '30s in an effort to increase commodity prices.

Just like that! It's almost like we should have learned something between 1932 and 2010. Alas, the liquidationists still rule.

 

[8537]

Make them cheap enough and people will buy.

They are cheaper than cars in Detroit.

Are you of the opinion that the problem there is that prices haven't fallen enough?

 

[Revere]

Make them cheap enough and people will buy.

They are cheaper than cars in Detroit.

Are you of the opinion that the problem there is that prices haven't fallen enough?

That, and banks are gaming the real market by holding back on foreclosures.

 

[8537]

As opposed to destroying lenders stake in them?

Who is destroying the lenders stake in a home?

You are, if you force them to accept less for debt service.

and where did I suggest they should be forced to accept less for debt service?

 

[Revere]

Who is destroying the lenders stake in a home?

You are, if you force them to accept less for debt service.

and where did I suggest they should be forced to accept less for debt service?

If homeowners refinance on more favorable terms, who eats the difference?