Archive for August, 2014

Lenders reflated the housing bubble to pass their bad loans to new bagholders. Current forecasts show lenders must complete the task by 2016 before prices peak. How can you tell whether a market is overvalued, undervalued, or fairly valued? It's more than an academic concern today because lenders, realtors, and even government officials push average families to buy houses ostensibly to gain the financial benefits of home ownership. Unfortunately, as the housing bubble rudely slapped an entire generation, most potential homebuyers today realize the housing market is volatile and manipulated, and it may not be the investment opportunity it once was. Realistically, the only way potential homebuyers will gain peace-of-mind from their purchase is to either buy on blind faith…[READ MORE]

Federal reserve policy designed to stimulate housing and housing employment is having mixed results. The job market for real estate professionals is weak. Today's post is about a personal journey of mine to find employment in the land development field in Southern California. Most of the posts on this site cover macroeconomic issues facing housing, but macroeconomic data is merely an aggregation of individual actions taken by people much like me responding to conditions and opportunities. Most recent macroeconomic policy was intended reflate the housing bubble with the hoped-for side benefit of increasing construction and thereby increasing construction-related employment -- employment for people like me. My story is a microcosm of the spotty results these policies yielded so far. The…[READ MORE]

US policymakers want to increase home prices and maximize the home ownership rate. Prices are up, but the home ownership rates continues to drop. Declines in the home ownership rate were inevitable when the housing bubble popped. Foreclosures pushed people out of their homes and into rentals at an unprecedented rate. While policymakers have managed to manipulate supply to cause a rise in home prices, demand still hasn't picked up, and the home ownership rate continues to slide. It shouldn't be too surprising the home ownership rate isn't rising. New home sales are weak, and so are pending home sales, recently slipping 1.1%. Further, new multi-family construction is up, so many more rental units are coming to market. For the…[READ MORE]

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