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'Fannie and Freddie Were Lenders': U.S. Real Estate Bubble Nears Its End
Executive Intelligence Review. ^
| 6/21/02
| Richard Freeman
Posted on 07/15/2002 9:25:42 AM PDT by AdamSelene235
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This article is borderline hysterical (understandably)and positioning for yet another political power grab. However, the arguments presented are accurate, IMO.
To: b4its2late
Or you could live in the Southern Tier of NY and see your homes value decline faster than you can lower the sales price to finally get someone to buy it.
To: AdamSelene235
What's going to happen to EIR when Lyndon LaRouche shuffles off this mortal coil? Are they still going to charge $500 a year for a subscription?
3
posted on
07/15/2002 9:27:52 AM PDT
by
Poohbah
To: AdamSelene235
It's a bubble alright. Can it burst? We're just sitting here waiting.
To: AdamSelene235
Millions of families are spending 35 to 50% of their annual income on mortgage or rent payments. Thats funny, the Freddie and Fannie "Debt to Income" guideline is 28% for the mortgage payment (including property tax, hazard insurance, and private mortgage insurance if required) and 36% on the "back end". Back end is the total monthly debt including the mortgage.
Go to the bank and apply to purchase a home where the mortgage payment will be 50% of your gross income and see how quick your application is turned down.
Now, with 'sub-prime' lending its another story, but even they shy away from front end ratios of 50%
To: AdamSelene235
Hmmm... This article definately has some food for thought. We are going to be purchasing one of these hyper inflated homes in Southern California very soon. Maybe we should sell our home and then wait it out a year...
To: AdamSelene235
'Fannie and Freddie Were Lenders'. . .I thought this was going to be a Doug from Upland parody set to "Frankie and Johnny."
7
posted on
07/15/2002 9:38:57 AM PDT
by
mombonn
To: oc-flyfish
Or you could get the hell out of California and get a lot more home for far less money.
To: AdamSelene235
To: AdamSelene235
Money people invest like fish in a school. All turning the same direction at the same time. For the last decade or so, they've gone the Wall Street route, and as long as they all went that way, the Street exploded. But they've turned direction now, the market is tanking, and all noises from the investment clique say they're moving to Real Estate because of its safety.
And Larouche thinks its the real estate market that's about bust? Who's he kidding?
10
posted on
07/15/2002 9:41:38 AM PDT
by
narby
To: AdamSelene235
Well I don't know about the rest of the country, but I can tell you, here in Southern California there is no leveling off or price adjustments down, in sight.
Example: On Wednesday, a neighbor put his home on the market, and yesterday, Sunday, it has a sold sign on it.
They continue to sell for record prices in record time. The available homes for sale, or the inventory is almost non existent.
When a home goes on the market, it's like a feeding frenzy and the homes are getting full price offers!
Realtors are fighting for listings, as very few are selling, as buyers are lined up. Again, no inventory. Supply and demand.
I am not saying at some point they wont level out, but I can tell all, that at this point, it is one hot housing market in So. Cal.
To: AdamSelene235
The U.S. financial system is now dependent to an unprecedented degree upon one prop: the greatest housing-real estate bubble in human history. A hyperinflationary spiral has sent home prices shooting up by 10-40% annually in recent years?depending on the region of the country?and artificially pushed the price of millions of homes into the $400,000 to $1 million range or above. Three words explain this phenomenon: Sustainable Development and Immigration. It is all a function of housing inelasticity.
If anyone wants to know why, the answer is banks want the reserves to lend against. People borrow against their houses and supply liquidity to the economy.
It's a bubble all righty, but it is driven by the marginal unit cost of house construction. Sustainable Development addresses that too with the continuing outrage of $50,000 building permits, environmental costs on materials (having nothing to do with the environment, most of it is paperwork), and of course the squeeze on buildable land.
It is simply corruption. It is a system that closes itself to competition through purchased political favors.
To: narby
But they've turned direction now, the market is tanking, and all noises from the investment clique say they're moving to Real Estate because of its safety.And Larouche thinks its the real estate market that's about bust? Who's he kidding?
LOL! Bingo....
To: AdamSelene235
Mr. Chicken Little, pick up the red courtesy phone. Mr. Little, the red phone, please.
To: AdamSelene235
I was skimming it with some interest until he quoted Lyndon LaRouche as an authority. Life is too short to wade through any more ....
15
posted on
07/15/2002 9:44:25 AM PDT
by
sphinx
To: Joe Hadenuf
Pretty much the same story here in the SF Bay area. We just bought a home a couple of weeks ago. The seller was stalling on accepting or rejecting our bid, our real estate broker pushed the issue as time was up, seller accepted. Within 1/2 hour after accepting our bid, two more bids came in. Supply and demand.
16
posted on
07/15/2002 9:45:01 AM PDT
by
.38sw
To: AdamSelene235
Bookmarked for further review.
To: .38sw
You bet, our long time realtor friend told us he had like 30 listing this time last year. He told us last week that he only has 2 listing. Supply and demand is right...
To: Joe Hadenuf
In my upscale Seattle suburb, homes are selling at full price. Which is way down from a couple of years ago when buyers were bidding and buying at far above list price.
My sis just bought a lovely house in Houston, Woodlands area, and there wasn't much on the market there. Her RE agent can hardly keep up with the sales he's making day after day and is urging her to join Coldwell Banker and sell houses, which she once did in SoCal. He says prices haven't taken the expected dip after Enron, etc.
To: Joe Hadenuf
I am not saying at some point they wont level out, but I can tell all, that at this point, it is one hot housing market in So. Cal.Well, if we keep doubling the population every 40 years ....
Oh, never mind. I know you're one of the good guys on immigration. Similar situation here, though. In the DC area, the suburbanites are spending two to four hours a day in their cars, and it's only going to get worse. Close-in properties should do well over time.
20
posted on
07/15/2002 9:50:04 AM PDT
by
sphinx
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