Financial News

[Balta1701]

Now, I think we're going to see a much bigger snap back. I see a situation here where the powder is being overloaded in the gun. Prices continue to plummet... foreclosures are coming off the books pretty nicely... new housing is underperforming, so less supply going on... rental market is very hot, to the point where rent levels are way higher than equivalent mortgage costs in many places. Add it all up, and really, the buyers are waiting on just one thing - easier lending. Once lending loosens significantly, I think you see not a slow recovery, but a pretty quick one.

 

So the question THEN is... when will lending loosen?

Swiping a graph.

If you project forwards along a line, we'll be through the glut of distressed sales sometime in the range of 2020.

[southsider2k5]

Swiping a graph.

If you project forwards along a line, we'll be through the glut of distressed sales sometime in the range of 2020.

 

Assuming that the government doesn't swoop in and delay things another few years again.

[Balta1701]

Assuming that the government doesn't swoop in and delay things another few years again.

Although the government delayed the "bottom" of the housing prices clearly...I'm not sure how the federal tax credits could possibly have served to delay the processing of the foreclosure bump. In the case of this data, the federal tax credits probably did help clear some of the inventory by bringing borderline buyers back into the market.

 

The government has clearly exacerbated the situation by allowing the rise of these unaccountable foreclosure mills, and the government could have had a chance to actually fix the situation much sooner by effective policy, but effective policies would have been unfair and provoked a rash of people complaining about "Paying their neighbor's mortgage" so we decided that the best thing to do was have it last 15 years.

[NorthSideSox72]

Swiping a graph.

If you project forwards along a line, we'll be through the glut of distressed sales sometime in the range of 2020.

Looks more like 2015 to me, to get back to a 2007-ish or early 2008-ish level, which is what I'd consider "normal" levels. But yeah, its a few years off to get to that point. Just keep in mind that they don't necessarily need to be all the way back to normal for my predicted events to occur. With the huge drops in new homes being built, and continued population increase, the level at which the surplus becomes very low can come pretty quickly, and the demand side will increase as I noted earlier.

 

The uptick I mentioned likely won't happen this year or next, but some time in the couple years after that I think the likelihood starts to go up pretty quickly.

 

[StrangeSox]

My [soon-to-be] in-laws have zero prospect of selling their relatively cheap condo soon. Thanks to all of the foreclosures, they'd have to take probably a $50k hit on a condo they paid $80k for. So instead it sits empty because the HOA won't let you rent.

[Balta1701]

Looks more like 2015 to me, to get back to a 2007-ish or early 2008-ish level, which is what I'd consider "normal" levels. But yeah, its a few years off to get to that point. Just keep in mind that they don't necessarily need to be all the way back to normal for my predicted events to occur. With the huge drops in new homes being built, and continued population increase, the level at which the surplus becomes very low can come pretty quickly, and the demand side will increase as I noted earlier.

 

The uptick I mentioned likely won't happen this year or next, but some time in the couple years after that I think the likelihood starts to go up pretty quickly.

-Assuming that nothing else goes wrong.

[NorthSideSox72]

-Assuming that nothing else goes wrong.

Assuming certain specific things, yes. Some things can and will go wrong. But even if the economy in general starts to tank in a big way again, that still only briefly delays what I see as the inevitable. The only thing that makes it go out a decade is a depression-level collapse, which I do not anticipate happening.

 

[StrangeSox]

Looks more like 2015 to me, to get back to a 2007-ish or early 2008-ish level, which is what I'd consider "normal" levels. But yeah, its a few years off to get to that point. Just keep in mind that they don't necessarily need to be all the way back to normal for my predicted events to occur. With the huge drops in new homes being built, and continued population increase, the level at which the surplus becomes very low can come pretty quickly, and the demand side will increase as I noted earlier.

 

The uptick I mentioned likely won't happen this year or next, but some time in the couple years after that I think the likelihood starts to go up pretty quickly.

 

This is more or less what the realtor we were working with late last year said.

[southsider2k5]

Although the government delayed the "bottom" of the housing prices clearly...I'm not sure how the federal tax credits could possibly have served to delay the processing of the foreclosure bump. In the case of this data, the federal tax credits probably did help clear some of the inventory by bringing borderline buyers back into the market.

 

The government has clearly exacerbated the situation by allowing the rise of these unaccountable foreclosure mills, and the government could have had a chance to actually fix the situation much sooner by effective policy, but effective policies would have been unfair and provoked a rash of people complaining about "Paying their neighbor's mortgage" so we decided that the best thing to do was have it last 15 years.

 

Forestalling the fall of prices by years has us where we should have been in 2009, right now.

 

[Balta1701]

Forestalling the fall of prices by years has us where we should have been in 2009, right now.

But that has nothing at all to do with the rate at which foreclosures were processed through the system. Relative to distressed sales, the tax credits had the exact same effect that price erosion would have had...bringing low-level buyers into the market.

 

I'm impressed here...you're so desperate to blame the government for everything that you've actually got me defending the Housing Tax credit, which was a terrible program and a bad waste of government money.

[southsider2k5]

But that has nothing at all to do with the rate at which foreclosures were processed through the system. Relative to distressed sales, the tax credits had the exact same effect that price erosion would have had...bringing low-level buyers into the market.

 

I'm impressed here...you're so desperate to blame the government for everything that you've actually got me defending the Housing Tax credit, which was a terrible program and a bad waste of government money.

 

Prices have nothing to do with foreclosures? Geesh.

[Balta1701]

Prices have nothing to do with foreclosures? Geesh.

We can both hypothesize 2nd and 3rd order effects here where the housing tax credit would have caused fewer foreclosures or more buyers, but man, people go into foreclosure mostly because they can't afford the payment, not strategically because the value of their house has dropped.

[NorthSideSox72]

But that has nothing at all to do with the rate at which foreclosures were processed through the system. Relative to distressed sales, the tax credits had the exact same effect that price erosion would have had...bringing low-level buyers into the market.

 

I'm impressed here...you're so desperate to blame the government for everything that you've actually got me defending the Housing Tax credit, which was a terrible program and a bad waste of government money.

I still think that, if we were going to use taxpayer dollars at all to stimulate the housing market... that instead of using those tax credits and temporary construction jobs, the government should have just flat out bought property directly in a targeted way, with a pass-off and sell-off for various purposes.

 

[Steve9347]

Depressing thread is depressing.

[Balta1701]

I still think that, if we were going to use taxpayer dollars at all to stimulate the housing market... that instead of using those tax credits and temporary construction jobs, the government should have just flat out bought property directly in a targeted way, with a pass-off and sell-off for various purposes.

God yes.

 

But that would have had the government "Paying your neighbors' mortgage" though. And we can't do that, people who screwed up have to suffer.

[StrangeSox]

Depressing thread is depressing.

 

Can a mod please add this as the sub-headline for this thread?

[StrangeSox]

I still think that, if we were going to use taxpayer dollars at all to stimulate the housing market... that instead of using those tax credits and temporary construction jobs, the government should have just flat out bought property directly in a targeted way, nationalizing housing for the proles.

 

[NorthSideSox72]

LOL at that being nationalizing. Its business. Scrape up cheap assets to re-sell later, grant some to private or public use which takes surplus out of circulation... its much more stimulative with better multipliers than the other garbage we did, not to mention that like TARP, the government could make some of the money back and be out of the business over a period of like a decade.

 

[Balta1701]

LOL at that being nationalizing. Its business. Scrape up cheap assets to re-sell later, grant some to private or public use which takes surplus out of circulation... its much more stimulative with better multipliers than the other garbage we did, not to mention that like TARP, the government could make some of the money back and be out of the business over a period of like a decade.

Your comparison to TARP is supposed to convince the vocal minority that it isn't the Communist Fascist Kenyan taking over more of the economy?

[NorthSideSox72]

Your comparison to TARP is supposed to convince the vocal minority that it isn't the Communist Fascist Kenyan taking over more of the economy?

No, its supposed to show that the government can take smart action that benefits itself AND the economy if it is open to taking some chances.

 

[StrangeSox]

LOL at that being nationalizing. Its business. Scrape up cheap assets to re-sell later, grant some to private or public use which takes surplus out of circulation... its much more stimulative with better multipliers than the other garbage we did, not to mention that like TARP, the government could make some of the money back and be out of the business over a period of like a decade.

 

It was a joke mocking both Socialist sloganeers and right-wing "ZOMG OBAMMA IS A SOCIALIST COMMIE-NAZI!" reactionaries, I wasn't trying to make fun of your point or what you said.

[Steve9347]

I propose a national debt forgiveness day for completely greedy reasons as to get out from under this upside down mortgage.

 

Note to past Steve, buying that house in 2007 was a bad idea. Value go bye-bye.

[Balta1701]

No, its supposed to show that the government can take smart action that benefits itself AND the economy if it is open to taking some chances.

Smart, effective policy has very little impact on this discussion.

[Jenksismyhero]

I propose a national debt forgiveness day for completely greedy reasons as to get out from under this upside down mortgage.

 

Note to past Steve, buying that house in 2007 was a bad idea. Value go bye-bye.

 

I've advocated a one year freeze on obligations to pay back student loan debt held by the federal gov't. Think of all that extra capital that people would have to spend. Spending=better business performance=job hiring=economy back on track.

 

Instead, we'll waste billions on GM to save "300 million" jobs.

[StrangeSox]

I've advocated a one year freeze on obligations to pay back student loan debt held by the federal gov't. Think of all that extra capital that people would have to spend. Spending=better business performance=job hiring=economy back on track.

 

Instead, we'll waste billions on GM to save "300 million" jobs.

 

What would stopping those payments do to the deficit, and how much more would we have to cut social services to finance it?