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And I don’t approve, personally.
I’ve been watching the housing market since the pre-2008 pop. Poor people around here started being able to get perfectly good homes for $6-12K around 2005 in my neighborhood. (the same houses that were selling for $60K just a year before.) I guess it makes sense that bubbles pop in the hood first.
But now prices are skyrocketing again. I guess the bankster “hoard [houses...don't put them on the market...just hold onto them] to inflate prices” trick is working? Housing prices have about doubled over here in the past few months. And this is not a gentrifying neighborhood, or a hood targeted for “urban renewal”. Blight is actually increasing again after several years of refilling with owner occupants.
I’ve seen this trend start and fall back a few times over the past several years, but never this hard-core. Is this bank house hoarding combined with QE3 kicking in?
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It’s what was intended from the get go. To re-inflate the housing bubble to save the bank’s rear ends.
I hope this time it takes all these fuckers down when it pops.
Michael Hudson has been saying the whole point of all the QE has been to reinflate the housing bubble for years now.
Guess he was right.
Who’s buying and who’s selling?
Could reflect that people are earning just enough to buy them back from the banks or rich folk who bought them when they were $6K-$12K. Or it could mean a “bigger fool” scramble by investors expecting that to happen any day now. Or it could mean that the mortgage credit is flowing again like it did in the bubble days.
They’re just sitting there, boarded up. I’m pretty sure it’s the banks just taking them off the market.
http://realtormag.realtor.org/daily-news/2012/06/27/are-banks-hoarding-foreclosures
Or, it can mean they’re just playing another con game. Which they are. No way, no how, should housing cost more than people can realistically pay. Housing should be a right, not a privilege of the rich.
Touche’, oh master of Finnish bread. :)
mike whitney has been all over this on counterpunch:
The Mysterious New Housing Bubble: Housing Up, Home Ownership Down
http://www.counterpunch.org/2012/12/18/the-mysterious-new-housing-bubble/
Ha! I just went and grabbed the same link. I got pretty caught up in Whitney’s questions and answers. ;o)
Of course the game’s rigged. Criminals run the system with utter impunity now, and those who can’t see it simply don’t want to. Four more years! Pffffft.
I’m not sure it’s the banks holding onto homes waiting for prices to rise. For a bank, those homes are “non-performing assets” that are a drain on their bottom line. It’s possible that they are holding *some* houses for this reason, but then they’ve got to pay the taxes and deal with whatever upkeep is needed. Meanwhile, they’re getting no income and their investment is doing nothing to improve their financial condition.
A more likely answer to me is that they’ve been snapped up by investors, looking to make a killing on them. Investors can sit on houses as long as they like, and no one is going to look at their balance sheets the way banks get checked out.
By and large, banks don’t make money by playing the bubble — they make it by taking a slice of every time someone else plays the bubble and finances their bets.
Thanks for the link, JP Sottile. Here, pretty much is the money paragraph from a great piece by Michael Whitney:
I own a few properties and when the price of houses dropped through the floor I started putting in some bids around central Calif on various houses. Without fail, I was always mysteriously ‘outbid’ at the last minute. So I would go back in and rebid higher. Same result. As a test I started ramping up my bids WAY higher (I wasn’t going to pay it but I just wanted to see what happened.) Result? In almost all cases, the same. My theory was that banks and real estate professionals were colluding, waiting for the day that prices had risen and enough FED money was sloshing around and available to primary borrowers. THEN we would see houses starting to move, and fast. I presented my thoughts here at FDL and was summarily chuckled off the stage.
As it turns out, that is EXACTLY what was happening. Two- bit investors were not of interest to banks and RE pros. They were fixated on the big RE speculation syndicates, some from Canada who were poised to come in and buy large numbers of properties and in the process really filling the pockets of the realtors. And now, here we are. Ta-dahh.
Oh and Athena1 can you give us a clue as to where you could buy a home in the 6-12k range? Even in the depths of this crash that is unimaginably cheap. May I ask is it Detroit?
It costs the banks nothing to hold houses. They’ve foreclosed, the bond holders took the loss.
Even if they do have to pay interest on the money used to hold a house, they have a loan from the FED at 0.25%.
If they owe interest on $1,000,000, the annual interest payments are $2,500.
Memphis.
My mom’s going to try and buy this one, maybe:
http://www.crye-leike.com/3267-carnes-avenue/address-Carnes-mgrp-33-tid-memphis-mlsnum-3260886-ln-8
Memphis is the poorest city in the nation, btw:
http://www.commercialappeal.com/news/2011/sep/23/census-calls-city-poorest-in-nation/
I just sold my home near the water in long island one month before sandy.
I was thrilled with the price, a home in disrepair that went for about the same amount I could have gotten at the height of the market
sandy hit and while my old home was 5′ above water and only took 2″ of water, the rest of my community was under water and the area’s home value took a dive
but I was wondering how I did so well with my home as well
Thanks, Athena. I lived in Nashville for a summer. I had no idea that Memphis was so poor. We always hear about Detroit. Good luck to you and your family.