HOME SALES CONTINUE TO PLUNGE AS HOME PRICES SURGE

8 comments

Posted on 22nd April 2014 by Administrator in Economy |Politics |Social Issues

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The National Association of Liars (Realtors) reported existing home sales this morning and they continue to blather about weather and a glorious future. Meanwhile, existing home sales have plunged by 7.5% in the last year and are now at a 21 month low. Does this chart show the housing recovery you hear so much about on the MSM? Existing home sales are at the same level they were in 1998, before the Federal Reserve induced bubble years from 1999 through 2006. A critical thinking individual might wonder how home prices have soared by double digits over the last two years as existing home sales have made no headway.

Home prices have soared by 7.9% in the last year, as sales have plunged. That makes sense. Right?

First time home buyers accounted for 30% of the sales, near a record low, and the same level as one year ago. In a healthy growing housing market they would make up 40% to 50% of buyers.

The irrational surge in home prices can be seen in the data supplied by the NAR. Here is the recipe:

  • Too Big To Trust Wall Street banks withholding foreclosures from the market to create an artificial shortage of inventory.
  • The Federal Reserve handing hedge funds (Blackrock) billions of free money to buy foreclosures at artificially high prices from the Too Big To Trust Wall Street banks in a buy to rent scheme designed to improve the balance sheets of the insolvent banks.
  • These two suppositions are confirmed by foreclosures plunging to only 14% of sales from 21% one year ago, despite millions of homes still in the foreclosure process and the fact that 50% of all sales were to investors. In the years before the banking oligarchs took complete control of our financial system, cash sales would be 10% of transactions.
  • Now that cable TV has ten flip that house shows on again, like 2006, you know every get rich quick moron who fell for the Dot.com boom and the previous housing boom have entered the market just as the next bust is about to occur.
  • You have Fannie, Freddie, and the FHA giving out 3% down mortgage loans to the delusional poor who deserve to own a home.

The entire housing recovery has been a financially engineered fraud. Blackrock and the other hedgies have made a killing and their Ivy league MBA created models are telling them to exit stage left. The propaganda spewing media and the lying realtors like Larry Yun will continue to mislead the muppets as the big swinging Wall Street dicks move onto their next scam. Home sales will continue downward, with prices not far behind.

8 Comments
  1. TPC says:

    “You have Fannie, Freddie, and the FHA giving out 3% down mortgage loans to the delusional poor who deserve to own a home.”

    A lot of people in the last two years have bought homes using FHA. These people cannot afford the homes they “bought” and will get crushed like a bug during the next bubble burst.

    22nd April 2014 at 12:13 pm

  2. Administrator says:

    Mortgage Standards Are Plunging – It’s Muppet Fleecing Time All Over Again

    Submitted by Mike Krieger of Liberty Blitzkrieg blog,

    In February, I highlighted the fact that subprime loans were about to make a return in my piece: Subprime Mortgages are Back…This Time Marketed as “Second Chance Purchase Programs.” In that article, I posited that with the “all cash” private equity shops and hedge funds no longer able to make good returns through buying new homes to rent, these investors would need some sucker to sell to in order to realize a return (Blackstone’s purchases have plunged 70% recently). That sucker, as always, will be the retail muppets, and those muppets will be lured in through subprime. This is now starting to happen in earnest.

    The following article from the Wall Street Journal is both depressing and disturbing. Rather than allowing home prices to reset at a lower level after the 2008 crash where normal buyers could afford a sane 20% mortgage, our central planners decided to do “whatever it takes” to re-inflate the housing bubble. This was achieved through wealthy investment pools buying properties for all cash. The trouble is, with home prices now inflated by these financial buyers and no real increase in wages, homes are simply unaffordable. So what do you do? You bring back subprime and get the peasants long real estate with essentially zero money down all over again. Truly remarkable.

    From the Wall Street Journal:

    While standards remain tight by historical measures, lenders have started to accept lower credit scores and to reduce down-payment requirements.

    One such lender is TD Bank, Toronto-Dominion Bank’s U.S. unit, which on Friday began accepting down payments as low as 3% through an initiative called “Right Step,” geared toward first-time buyers and low- and moderate-income buyers. TD initially launched the program last year with a 5% down payment. It keeps the product on its books and doesn’t charge for insurance. Borrowers also don’t need to put down any of their own cash if a family, state or nonprofit group provides a down-payment gift.

    So a measly 5% downpayment wasn’t good enough. They had to drop it to 3%. Frightening.

    The changes also are a recognition by lenders that the business of refinancing old mortgages, which had been a huge profit center for banks, is nearly tapped out. To generate future profits, banks will have to compete for borrowers who may not have perfect credit or large down payments.

    Valley National Bank, a community bank based in Wayne, N.J., lowered down-payment requirements to 5% from 25% this month on mortgages for certain buyers in New York, New Jersey and Pennsylvania. Next month, Arlington Community Federal Credit Union, based in Arlington, Va., will begin accepting 3% down payments on mortgages up to $417,000, down from 5%.

    Yes, you read that right, 25% to 5%. Holy fuck.

    Over the past year, however, more than one in six loans made outside of the FHA included down payments of less than 10%, the highest share since 2008, according to figures from data firm Black Knight Financial Services. That still is lower than the nearly 44% of the market they accounted for at the peak of the housing bubble in early 2007.

    While smaller lenders are trying to appeal to first-time buyers, larger lenders are gradually reducing down payments for jumbo loans—those too large for government backing—to woo wealthy customers. EverBank began accepting down payments of 10.1% for jumbo borrowers with strong credit this year, down from 20%, and Wells Fargo reduced to 15% from 20% its minimum down payment for jumbos last year. Bank of America made the same change for mortgages of up to $1 million.

    Any easing should give more options to first-time buyers like Nathan Davenport, 26, who purchased a one-bedroom condo for $195,000 in Atlanta this month with a 5% down payment. Mr. Davenport, who works for a phone-and-Internet services provider, says he has a high credit score but was worried that if he waited longer to save up for a larger down payment he would be priced out of the market.

    “Twenty percent of this price and only being out of college a handful of years would have been really hard to pull off,” Mr. Davenport said.

    I’m sorry, but on what sort of bizarro crackhead planet is putting 3% down toward an asset mean you are “buying it.”

    The Truman Show rolls on…

    22nd April 2014 at 12:29 pm

  3. TeresaE says:

    Caught an ad on tv, for some bank willing to lend veterans 120% of their equity.

    Deja vu

    We are living in the matrix. Up is down, day is night, and one day it will all come crashing down.

    22nd April 2014 at 1:17 pm

  4. Realestatepup says:

    I sell foreclosures. Mostly. With some short sales. The banks are definitely holding back inventory. I continue to see vacant, foreclosed homes rotting away, not being put back on the market. AND…banks are questioning the values we give for these places. They want to price them higher and higher. Example:…older home in very rural market, built in the 30′s. Missing flooring, freeze damage, old windows, bad roof. No clue if the septic is even viable. I recommended a list price of 89,900 in December. They said they didn’t believe it was that low. Put it on for 159,900. Months later, guess what? Cash buyer for 87K. Mind boggling.

    22nd April 2014 at 7:25 pm

  5. card802 says:

    Yup, the white trash finally moved out from behind me. Checked out the house now that it is for sale. No carpet, no vinyl floors, base missing, door casing missing, doors gouged from the dogs, window sills torn up from the dogs, walls with holes, needs a complete repaint, dust and dirt everywhere.
    1,900 sq foot basic three bedroom ranch, in west Michigan, needs about $25k in flooring and other needs.
    Listed for $159k, should be around $120k, without all the repairs.

    22nd April 2014 at 9:13 pm

  6. overthecliff says:

    …and this does`nt even include the retail commercial meltdown !

    22nd April 2014 at 10:57 pm

  7. I am a house says:

    Realestatepup

    Cunts like you who sell foreclosures are part of the problem, not to mention you are dumber than Joe Biden. Go fuck yourself.

    23rd April 2014 at 12:22 am

  8. wip says:

    Realestatepup doesn’t ever respond.

    23rd April 2014 at 10:09 am

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