Of all the people who’ve played a role in the housing bubble and its aftermath, the one who continually impresses me is Edward DeMarco, conservator for the GSEs. He is a career bureaocrat who was placed in charge of the GSEs when they were taken into conservatorship in 2008. He has steadfastly protected the interests of taxpayers much to the chagrin of politicians on both the left and the right. The left hates him because he refuses to give loanowners free money through principal reductions. The politicians on the right who’ve sold their souls to banking interests don’t like him because he pursues buyback claims against the major lenders who underwrote shoddy loans. The one commonality in all his decisions has been protecting the interests of taxpayers and preventing the GSEs from becoming a cash cow politicians can loot for their political constituents.
From DeMarco’s actions, it’s clear that he really understands the current role the GSEs play in the housing market, and he has a vision for how they should be scaled down and ultimately eliminated.
Fannie, Freddie to hand securitization business to new firm
Mon Mar 4, 2013 8:08pm EST – By Margaret Chadbourn
* Could lead to closing of Fannie, Freddie
* Fannie, Freddie to abandon current securitization systems
* New company could be privatized or merged into government
WASHINGTON, March 4 (Reuters) – Fannie Mae and Freddie Mac will form a joint venture for securitizing home loans that could end up replacing the two government-controlled mortgage finance giants, their regulator said on Monday.
“The overarching goal is to create something of value that could either be sold or used by policymakers as a foundational element of the mortgage market of the future,” Edward DeMarco, acting director of the Federal Housing Finance Agency, told the National Association for Business Economics.
Some level of government support will likely always be with us. Even if we eliminated all government programs, if the market got in trouble again, political pressures from both sides would result in government creating a new one to respond to the crisis. Like the false promises of no government backing for the GSEs, any promises to stay out of the housing market would be broken at the first sign of trouble.
The FHA has been around since the Great Depression, and it has served as a lender of last resort when other credit sources evaporate. Despite the huge losses being racked up at the FHA, it’s widely considered a successful program as a lender of last resort. It’s market share shrinks when times are good and grows when times are tough. That’s how an emergency backstop should work.
Given that some form of government backstop will always be in place, the question becomes how do we structure it.
When the GSEs were formed in the late 60s and early 70s, the government’s intent was to create a more vibrant secondary mortgage money to improve the distribution of capital across the country. Prior to the GSEs formation, it was common for banks to be short on available capital in hot markets while money sat idle in slow markets (we didn’t have the too-big-to-fail behemoths back then). The secondary mortgage market allowed the capital to more easily flow to where it was most needed.
The government chose not to expand the role of the FHA at the time the GSEs were formed. Increasing the size and scope of a government bureaucracy is never popular, and the hybrid government-private solution was a compromise that avoided expanding the role of government directly. The only reasons two entities, Fannie Mae and Freddie Mac, were formed is because the government wanted to see competition between the two in order to keep costs down and operational efficiencies high. Creating a monopoly would have been a worse solution. Obviously, the idea failed. No matter how much politicians denied the implicit backing of the GSEs, it was always there. And without proper government oversight, the taxpayers were exposed to enormous liabilities as the supposedly private institutions took on excessive risks to chase profits. The result was the conservatorship of 2008.
Fannie Mae and Freddie Mac, which help finance about two-thirds of new U.S. homes loans, were seized by the government in 2008 as mortgage losses mounted. They have drawn nearly $190 billion from the U.S. Treasury to stay afloat.
DeMarco said the goal was to build a single infrastructure to support the mortgage credit business that could be privatized, merged into the government or function as a utility. The two companies would have to abandon their separate systems.
“We are on a path to replace the outdated proprietary operational systems of Fannie and Freddie,” DeMarco told reporters on a conference call ahead of his speech. “It could be turned to some form of a market utility.”
This is a brilliant move. We no longer need two entities now that these are not competing private companies. By consolidating their functions, DeMarco is creating a bureaucracy and function similar to the FHA. This gives the government the options to later (1) merge this entity with the FHA, (2) keep it as a separate insurance entity, or (3) sell it to the private market as an insurance company. Each option has its pluses and minuses, and Congress will have to chose which way to go. Creating this new infrastructure is a necessary first step.
Further, once the insurance and securitization function is separated from the two companies, what’s left over are two holding companies with vast portfolios of mortgages. These holding companies could be (1) sold as a business unit to the private sector, (2) the securities could be sold individually to the private sector, or (3) the entities could be slowly allowed to die as mortgages are paid off and no new mortgages are added.
Democrats and Republicans on Capitol Hill agree that Fannie Mae and Freddie Mac should eventually be wound down, but have failed to find common ground on what should replace them. DeMarco’s plan provides an interim structure for some of their business, but the ultimate decision remains in Congress’ hands.
The new company will be structured as a joint venture that is owned by Fannie Mae and Freddie Mac, DeMarco told reporters as he laid out FHFA’s plans for 2013.
He said the new venture was not expected to begin securitizing loans this year. Instead, the focus will be on creating the business and hiring staff. The company will have its own chief executive and board.
“It can achieve some economies of scale to hopefully reduce the cost to the taxpayers,” said Mark Calabria, director of financial regulation studies at the Cato Institute. DeMarco “is trying merge the two companies, lay the groundwork for something different and ultimately nudge Congress to work on reform.” …
And DeMarco’s actions should prompt Congress to act. By moving forward the way he has, he can make some decisions for Congress that they may not want to make on their own. His actions provide political cover for what might otherwise be unpopular decisions. Over time, the momentum DeMarco is creating will push Congress toward the options I outlined above.
DeMarco also said Fannie Mae and Freddie Mac would have to shrink their multifamily home loan business by 10 percent.In addition, they will have to try and complete transactions that do not rely on a full government backstop. FHFA will require the companies to sell at least $30 billion in mortgage-backed securities in 2013 in which the private sector would bear some of the risk of losses.
“What we’re looking for is to have some portion of the risk sold off to private owners and that way reduce the exposure of the taxpayer,” DeMarco said.
The companies will also be required to reduce the less liquid portion of their mortgage portfolios by 5 percent next year on top of an existing mandate that requires them to shrink their overall portfolios by 15 percent each year.
The rate of liquidations could increase once the entities become holding companies. Everyone will soon realize the government has no need to own mortgage holding companies, and liquidation is a relatively easy task.
Even though the loans they have backed recently are performing well, DeMarco noted that the market was still “reliant on federal support, with very little private capital standing in front of the federal government’s risk exposure.”
The truth is that private lending is simply not willing to underwrite loans at current interest rates without government backing. The jumbo market demonstrates where private money feels comfortable. Currently, the premium for a jumbo loan is about 0.25%, and lenders are only willing to make loans with such a low premium spread if the down payments are 25% or more. Any reduction in the support from the GSEs transitioning to a private market will drive up interest rates and increase down payment requirements, something that will not help reflate the housing bubble and restore collateral behind the $1 trillion in unsecured mortgage debt held by the banks.
DeMarco is doing the right things to protect the US taxpayer, and the framework he is putting in place gives politicians viable options for winding down the GSEs while maintaining some level of government support for the housing market.
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Proprietary OC Housing News home purchase analysis
2840 MADONNA Dr Fullerton, CA 92835
$719,900 …….. Asking Price
$1,038,000 ………. Purchase Price
11/4/2005 ………. Purchase Date
($318,100) ………. Gross Gain (Loss)
($57,592) ………… Commissions and Costs at 8%
============================================
($375,692) ………. Net Gain (Loss)
============================================
-30.6% ………. Gross Percent Change
-36.2% ………. Net Percent Change
-4.8% ………… Annual Appreciation
Cost of Home Ownership
——————————————————————————
$719,900 …….. Asking Price
$143,980 ………… 20% Down Conventional
3.56% …………. Mortgage Interest Rate
30 ……………… Number of Years
$575,920 …….. Mortgage
$131,975 ………. Income Requirement
$2,605 ………… Monthly Mortgage Payment
$624 ………… Property Tax at 1.04%
$0 ………… Mello Roos & Special Taxes
$180 ………… Homeowners Insurance at 0.3%
$0 ………… Private Mortgage Insurance
$0 ………… Homeowners Association Fees
============================================
$3,409 ………. Monthly Cash Outlays
($408) ………. Tax Savings
($897) ………. Equity Hidden in Payment
$165 ………….. Lost Income to Down Payment
$200 ………….. Maintenance and Replacement Reserves
============================================
$2,469 ………. Monthly Cost of Ownership
Cash Acquisition Demands
——————————————————————————
$8,699 ………… Furnishing and Move In at 1% + $1,500
$8,699 ………… Closing Costs at 1% + $1,500
$5,759 ………… Interest Points
$143,980 ………… Down Payment
============================================
$167,137 ………. Total Cash Costs
$37,800 ………. Emergency Cash Reserves
============================================
$204,937 ………. Total Savings Needed
The property above is available for sale on the MLS.
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25 Responses to “DeMarco prepares for final shutdown of GSEs”
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“(3) sell it to the private market as an insurance company. ”
I think that is the best long term solution is to transfer this agency into the private business. Fannie and Freddie were used in the past to score political points which lead to poor business decisions. And as you stated above it was partly the reason it cost the taxpayers a $190 billion bailout. Once politicians figured out away to do this they will try it again. They love using our money (or anyone else) for political gain.
On a side note I wonder what the 10 year Note yield will do today. The mortgages rates will pressure home values again
The main problem with converting it to a private business is whether or not people believe it’s a private business. Freddie and Fannie were supposed to be private businesses, but we all saw how that turned out. I question whether any private enterprise set up to perform this function would really be treated as a private business with no government guarantees.
Don’t worry, there will be a Bernanke Backstop of all mortgages, or Bernanke will crash stocks and congress will be brought to its knees.
QE’s fate questioned as jobs situation improves
By Kerri Ann Panchuk March 8, 2013 • 8:30am
The U.S. unemployment rate edged down to a four-year low of 7.7% on Friday, creating buzz about an improving economy and discussions about whether the Fed could soon put the breaks on quantitative easing.
Fed Chairman Ben Bernanke has long said the Fed’s rounds of mortgage-backed securities purchases and dedication to low borrowing rates are initiatives launched to lower unemployment. He made those statements with unemployment near 8%, and it’s still just below that level.
With the U.S. adding 236,000 jobs in February and unemployment falling to 7.7%, economists are asking “are we there yet?”
“Overall, the latest jobs report was notably positive. This is good news for the economy,” said analysts with Econoday. “The only negative is that it may boost chatter of the possibility of the Fed ending quantitative easing sooner than earlier believed. However, the Fed almost certainly is not going to turn policy on one month’s data.”
Still, unemployment remains well above 6% and as of February 12 million people remained without jobs.
Bernanke’s dedication to QE has countless critics, including Federal Reserve Bank of Dallas CEO Richard Fisher, who recently noted how addicted markets have become to MBS purchases.
“But now that we have them in place, and the fixed-income and stock markets are hooked on the monetary Ritalin that we have dispensed in ever-larger doses, it would, in my opinion, do great harm to force a sudden withdrawal,” Fisher said.
Still record 89,304,000 not in workforce
Rates to rise on jobs report
By Polyana da Costa · Bankrate.com Friday, March 8, 2013
The economy added jobs at a faster pace in February, and the unemployment rate fell to the lowest level in four years, according to the just-released employment report by the Labor Department.
Even with the budget crisis in Washington, D.C., U.S. employers managed to add 236,000 jobs in February. That’s much better than the 160,000 jobs that economists had expected and a significant improvement from the revised 119,000 jobs created in January. The unemployment rate inched down to 7.7 percent.
That’s great news for the economy. Not so good for mortgage rates.
The yields, or rates of return, on mortgage bonds and the 10-year Treasury note jumped immediately after the jobs report was released this morning. Mortgage rates tend to follow the same direction as those yields.
The report pushed the yield on Fannie Mae’s 30-day note to 3.22 percent from 3.13. The yield on the 10-year Treasury note jumped to an 11-month high of 2.08 percent from 1.97 percent.
Yields on these safer investments normally rise when investors feel like the economy is strong enough for them to dump safe investments to bet on riskier assets such as stock.
That’s what’s happening now. Unless investors get some sort of bad economic news in coming days, expect mortgage rates to keep rising.
Should you lock now or wait for lower rates? A bird in the hand is worth two in the bush. Rates are still near record lows. I wouldn’t take a chance.
What is old is new again. What will be the value of their homes when mortgage rates hit 5%?
Buyers camp out for Bolsa Chica homes
March 04th, 2013, 6:31 pm ·
A dozen home shoppers, or their surrogates, spent a week camping in a Huntington Beach neighborhood, vying for dibs on 35 new homes that will be coming on the market in the coming months.
The developers of Brightwater, a project overlooking the Bolsa Chica wetlands, announced they would start taking names on Saturday from buyers seeking homes in the Capri neighborhood.
Buyers at the top of the list get first pick of each new phase of the development. Some shoppers said they wanted to be among the first in line because they worry prices will rise with future releases.
“We’ve been looking for a long time, and this is where we want to be,” Mark Gallagher, 51, said while standing around a campfire last week. He was fifth in line.
Five homes were released for sale Saturday, with six more homes expected to become available in a few weeks, said Todd Cunningham, president of Woodbridge Pacific Group, the firm developing the project on behalf of its owners.
In addition to the campers who spent last week waiting in line, at least 15 others signed up to buy homes in the development Saturday.
The Capri models, which feature homes selling from $860,000 to $962,000, is the first revamped product line to hit the market since the stalled project’s owner, California Coastal Communities, emerged from bankruptcy.
The project’s new owners, a New York investment group, selected Woodbridge, a Mission Viejo builder, to redesign the homes and resume sales about two years ago.
Woodbridge announced a month ago that it would start taking names for its “eligibility list” on a first-come, first-served basis.
Each buyer at the top of the list has the option of picking a home from each new release or passing until the next release. The buyers maintain their places by showing up for each new release, said company spokeswoman Karen Spargo.
Campouts, which had been common during the height of the housing boom a decade ago, disappeared when the housing market crashed and new-home sales dropped to record lows.
Last week’s campout was Woodbridge’s second in recent months. Another occurred outside the company’s Valinda development in San Juan Capistrano in April, Cunningham said.
Woodbridge drew about 75 people to a “dusty-shoe walk through” of its unfinished Capri model homes on Feb. 23 – a week before Saturday’s signup. By 6 a.m. Feb. 24, the first two buyers turned up and pitched their tents, Cunningham said.
Buyers began arriving throughout the day, some with tents and some planning to sleep in their cars. At least two of the campers said they were surrogates holding a place in line for friends.
Gallagher, who lives in Lakewood, decided to haul his trailer-home to the site after calling the sales office and learning that other buyers already had arrived.
The campouts are just the latest indication of renewed interest in new home buying amid low numbers of homes for sale, said Irvine housing consultant John Burns.
“If you want to buy a home in Huntington Beach right now, there’s not a lot of options,” Burns said.
In order to purchase a home in Orange County (California);
I would recommend 10% down if it is going to be a long term investment property.
Creditors require 20%+ down on investment properties. You’re not coming here suggesting that a house you purchase to live in is an investment, are you?
Yes, I am what is it to you? Have you met me in person?
Do you think I am some kind of crazy person who would want to be on a show
Like the. ” Real Housewives of Orange County”.
In my opinion that gives people the wrong impression of Orange County, California, just my 2 cents worth of a “free” opinion. Regards, SC
Forgot one detail,
To put 10% down payment:
You must have an excellent credit record/ report.
Free market has change to a free for all in the market. True well-run free markets require regulations. When I order 100 metric tons of wheat. I expect to get 100 Kg and not 90 short tons of wheat. I don’t expect the need nor expense to go to court to enforce the agreement nor a court to say that 90 short tons is close enough to 100 metric tons for the fullfill the contract.
When the government is essentially guaranty the loans, there needs to be strict govt oversight so the taxpayer does not keep being stuck holding the bag while the banksters cash in at each step of the process — origination, underwritting, secularization, collection and late payment, FC, and repeat with any fiduciary responsibility. Currently and a push to keep the system in place is give out a loan to someone who has little to no change of paying back — no worries, collect your fee and bonus for the govt will back stop the too big to fail. Shareholders in public corporation beware.
Government regulations need to be in place to ensure a level playing field. Unfortunately, these rules get made by politicians who are bought off by special interests, so we end up with a slanted playing field tilted toward the too-big-too-fail banks.
When I was writing about regulation, it was referring to good regulation and not the current regulations that protects and rewards the underwriterd with government backed (tax payers’) funds when issuing bad loans (borrower doesn’t have a chance to payback without a Ponzi scheme).
We have the best government that money can buy. Too bad it’s was purchased by those that are acting against the public good and interest.
Does this sound like recovery to you?
Americans are withdrawing the last piggyback….the 401K
El Segundo, Calif. (March 7, 2013) By Michael Cohn
Fewer corporate workers have sufficient cash flow and emergency funds on hand, according to a new survey.
The survey, by Financial Finesse, a provider of workplace financial wellness programs, found that the proportion of employees who said they have a handle on their cash flow fell to 68 percent in 2012 from 72 percent in 2011. Fewer employees also reported having an emergency fund in 2012, at 51 percent in 2012 versus 56 percent in 2011. In 2012, 32 percent of employees reported having taken a loan or hardship withdrawal from their 401k versus 25 percent in 2011.
Only 56 percent of employees reported regularly paying off their credit card balances in full each month, a drop from 62 percent in 2011. Twenty-three percent of employees reported being charged late fees in 2012, compared to 19 percent in 2011.
Many employees turned to their retirement savings last year to pay for demanding, short-term expenses.
Financial Finesse CEO Liz Davidson saw good reason for employees to turn to their retirement accounts instead of other sources of funding last year. “More emphasis is being placed on retirement planning in general, as employers and the overall media have been communicating and stressing the importance of retirement planning, and providing more transparent retirement plan information as a result of Department of Labor legislation last summer around fee disclosures,” she said.
Davidson sees more concern from employers and the government about the future of retirement planning for younger generations, providing an explanation for increases in account balances and annual contributions. “Because retirement has become a key issue, more employees are participating in their retirement plans, and more are tapping these same accounts when they encounter short-term financial problems,” she added.
“Ninety-one percent of employees in 2012 said they contribute to their 401(k) plan at work,” Davidson said. “That’s an incredibly encouraging number of employees participating. At the same time, however, only 51 percent of employees say they have an emergency fund in place to cover unexpected expenses. That leaves 49 percent of the employee population vulnerable to tapping their retirement savings because they can’t afford expenses outside of the norm.”
Another reason why Davidson says employees are tapping into their retirement savings is they are less inclined to use credit cards or have less home equity available than they did prior to the recession. “Inflation is outpacing income growth, and the job market remains weak, so there are still people out there struggling,” she said. “As a result, some see their retirement plans as the only practical resource available to them.”
This is largely the reason Davidson believes the backslide has hit lower-income employees the hardest. “This group naturally has less to work with,” she said. “When someone making $100,000 a year takes a hit because inflation grows faster than their paycheck, it might impact the type of car they can drive or how often they can eat out. But when someone earning $40,000 a year takes a hit, they feel it much more because it could impact their living situation or other serious life decisions.”
Despite the increasing number of issues faced by employees in managing their daily finances, they appear to be unfazed. The number of employees who faced high or overwhelming stress remained low at 18 percent in 2012 (down from 19 percent in 2011) and still significantly lower than 2010 and 2009, at 32 percent and 33 percent respectively.
This will increase the pressure on social security if the baby boomers get there and they have no savings left because they raided their 401Ks to pay their mortgages.
They are in for a huge lifestyle shock and I mean a big one. I think most people’s ego in that generation won’t be able to take it.
from yesterday’s Wall Street Journal….
Peter Wallison: How to Repeat the Mortgage Mess
Look out, here comes another ‘bipartisan’ plan for federal housing guarantees.
By PETER J. WALLISON
In September 2008, amid the financial panic and collapse of the housing market, the federal government bailed out and took control of Fannie Mae and Freddie Mac, two government-sponsored enterprises that dominated the mortgage market. After four years and $180 billion of taxpayer funds to keep them afloat, they are beginning to make profits from their near monopoly. This week, the head of the federal agency that supervises Fannie and Freddie, Edward DeMarco, outlined a sensible plan that would prepare the companies—which remain the dominant players in housing finance—for either full privatization or government ownership.
These are the obvious alternatives, but there is a third idea in the mix, one that is as seductive as it is dangerous: a private system but with an explicit government mechanism for future bailouts when they prove necessary. The rationale? If there’s a problem in housing finance, the government will inevitably step in as it did in 2008. So why not create a government insurance program now, compensating taxpayers for the burdens they will have to shoulder eventually anyway?
This argument has been advanced many times since Fannie and Freddie went under, most recently by the Bipartisan Policy Center, a Washington think tank. The center’s plan, released to the public late last month, is already getting some favorable media attention. It is likely to get increasing attention in Washington, since it is headlined by two former Housing and Urban Development secretaries (Mel Martinez and Henry Cisneros) and two former senators (Democrat George Mitchell and Republican Kit Bond).
A system for private housing finance with a government insurance backstop may sound reasonable, even sophisticated. But it is seriously flawed.
First, such a system cannot logically be contained. There is nothing special about housing. Lest we forget, the government also stepped in to rescue the domestic auto makers five years ago. Why not a backstop now for Detroit? At the end of this road is bailout nation: a government insurance backstop for every industry.
Second, taxpayers never get compensated by establishing insurance funds. Congress, when it passed the Hurricane Sandy aid bill, bailed out the National Flood Insurance Program to the tune of $9.7 billion. That program had collected insurance over many years to protect against events like Hurricane Sandy—but it wasn’t enough.
Other federal insurance systems that have gone or are going broke include the Federal Housing Administration, the Pension Benefit Guaranty Corporation and the Federal Savings and Loan Insurance Corporation. To stave off insolvency, the Federal Deposit Insurance Corporation in 2009 ordered banks to pay three years of insurance premiums in advance.
Congress lacks the incentives of private insurers to charge risk-based rates or to create and maintain the large funds necessary to deal with catastrophic losses. There is always an incentive to keep rates down to placate interest groups, or to say the fund is large enough—until disaster strikes and the country learns it isn’t.
Third, federal insurance encourages careless behavior by those who know that if things go bad, someone will be there with a bailout.
Consider the Bipartisan Policy Commission’s plan, “Housing America’s Future.” The government’s role would be to backstop a private system of mortgage insurance. The backstop will only come into play if private insurers can’t meet their obligations.
The downside? Investors in mortgages or mortgage-backed securities created under the plan would have little incentive to care about the quality of the loans—precisely because they would ultimately be protected from losses by the government. Nor would the creditors of the private mortgage-insurance companies care about the quality of the mortgages or the companies’ capital positions. The government would bail them out too if the insurers failed.
This would make it all the more likely that mortgage insurers wouldn’t be able to cover low-quality mortgages that the government backing induced investors to buy.
Fourth, Congress will do what it always does—expand the program so that it covers more and more mortgages of lower and lower quality. This is what happened after affordable housing goals were imposed on Fannie and Freddie in 1992, and when the Clinton administration made the Community Reinvestment Act into a quota system in 1995. Congress has also authorized increases in the size of mortgages that Fannie, Freddie and the Federal Housing Administration could acquire, most recently by raising the maximum for FHA mortgages to $729,000 (from $625,000) in 2012.
These changes were strongly backed by a variety of interest groups, including community activists, real-estate agents and home builders. The pressures from these groups, beginning in 1992, succeeded in degrading mortgage underwriting standards, causing the mortgage meltdown that triggered the 2008 financial crisis.
If an insurance backstop program such as the one proposed by the Bipartisan Policy Center is put in place, the same dismal process will be repeated. Congress loves programs that deliver financial benefits today with the inevitable catastrophes put off into the future. These programs are even better when lawmakers themselves can tell their constituents—and may even believe—that this is merely a federal backstop to a private system.
Once a fund of any size is created to back a particular industry, the arguments against a bailout virtually disappear. After all, what is the program for? Aren’t the funds already there to cover the losses? In reality, sufficient funds are not going to be there. In a perpetual-deficit world, the money also has to be borrowed, adding to the national debt.
Since Fannie and Freddie were bailed out, there has been no end of plans to maintain the government’s role as guarantor of mortgages for housing and other real estate. They will all end up putting the country back on the road to another crisis. The only way to ensure a stable mortgage market is to get the government out, and keep it out.
Mr. Wallison is a senior fellow at the American Enterprise Institute.
This market is crazy! A second 1,600 sq ft townhome sold for $460k in my neighborhood. It makes sense now why the listing from a day ago is $480k. It’ll probably be sold this weekend with multiple offers. At this rate, I’ll be able to sell my townhouse for the price I paid within a few months!
It got back to almost $300 per square foot. I won’t blame you for selling it.
I’m telling you, we’re on track for LAST bubble pricing by late summer, if you extend the current appreciation (in asking prices, anyway). See here:
http://www.deptofnumbers.com/asking-prices/california/orange-county/
That could never happen though, right?
I was right with IR’s position for the last few years – believing that I’d never see my purchase price within the next couple decades. I didn’t strategically default for a lot of reasons, but is it possible I could be rewarded for that decision?
We’re still quite far away. If I listed it today, the asking price would be 10% below what we paid in May 2007; but considering the trajectory and momentum in this market, it’s not that far away. And we all know full well how these buying frenzies feed on themselves.
Prices are rising very rapidly right now. The low inventory is having the effect the banks were after.
There’s no way to dispute that prices and sales have been improving. Interest rate stimulus, inventory suppression, and unprecedented speculation have reversed the downward trend and lifted housing off the canvas. But it’s going to take more than that to produce a sustainable housing recovery. It’s going to take a strong economy where unemployment is low and wages are growing.
http://www.counterpunch.org/2013/03/08/us-housing-is-the-recovery-real/?utm_source=rss&utm_medium=rss&utm_campaign=us-housing-is-the-recovery-real
The Branches, a new development in Woodbridge has been “From the $900s” for months. Their grand opening is tomorrow, and their site now reads “From the Low $1 Millions.” I’m guessing the price sheet tomorrow will be a bit shocking.
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