Housing Market Hype -- Are We Really Expected to Believe That Prices Will Rise with High Unemployment?
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The "housing has hit bottom" trope is the biggest bunch of public relations horseshit since WMD.
Do you really think housing is going to rebound with 23 million people underemployed, manufacturing contracting, durable goods plummeting, corporate earnings on the ropes, wages shrinking, and China, Japan, and Europe in the toilet?
Dream on, my friend.
Sure, housing prices are going up....temporarily. That's what happens when the banks stop listing their foreclosures. The cheap options disappear and the average price goes up. But that's all just smoke and mirrors. The banks still have zillions of these dogs in their stockpile, they just don't want you and me to get our grubby little mits on them and push down prices further. That's what they're really worried about, the damage plunging prices will do to their balance sheets. So they play this stupid cat and mouse game like no one can figure out what the heck is going on. It's irritating. Meanwhile the cheeseball media provides the backround noise to lure more swimmers into the sharktank. It's all one big scam.
By now you've probably heard that existing home sales beat expectations in August soaring 7.8 percent from July and "rising to the highest level since May of 2010." That's pretty impressive, eh? But how many of those sales were the result of Obama's new foreclosure-to-rental program? Are you familiar with the program? Here's a clip from Businessweek that will bring you up to snuff:
"Private-equity investors including Blackstone Group LP (BX) and GTIS Partners are buying foreclosed houses to take advantage of prices that have fallen 34 percent from their July 2006 peak.....
The Federal Housing Finance Agency, which has overseen Fannie Mae since a September 2008 takeover of the Washington-based company, announced on July 3 that it had chosen winning bidders without disclosing the names of the companies or terms of the sale because the deals hadn’t been completed." (“Colony Said to Win Foreclosed Homes Sold by Fannie Mae”, Businessweek)
Well, how do you like them apples? It's all hush-hush so schlubs like you and me can't see how we're getting reamed again. Here's more from the same article:
"The 2,490 properties up for auction encompassed portfolios of 775 homes in Florida, 572 in Atlanta, 484 in Southern California, 341 in Phoenix, 219 in Las Vegas and 99 in Chicago, according to an offering document by Credit Suisse Group AG (CSGN), which managed the sale. About 85 percent of the properties already are operating as rentals, according to the document."
So all the hot properties that everyone wants are being sold to the big money guys at a hefty discount. Nice. And, not only that, but "85 percent of the properties already are operating as rentals", so Obama lied about that, too. He said the foreclosures would be converted into rentals. But, as you can see, they already ARE rentals. That means this is just more corporate welfare dolled up as aid to the struggling housing market. What a crock! The banks are just trying to ditch their loser homes without pushing down prices. That's what's really going on.
And, there's more, too:
"The winning bids in the Fannie Mae auction were at least 90 percent of the homes’ estimated value, said five people with knowledge of the auction, who asked not to be named because they signed confidentiality agreements. The FHFA offered bidders“synthetic financing” to reduce the up-front capital required if they agreed to form a joint venture with Fannie Mae and share proceeds from the rental or sale of properties, the people said."