The NAR Is At It Again
From Jeffrey P. Snider's post What Home Sellers Know That Economist's Don't? : "Lawrence Yun, NAR chief economist, says although February sales showed modest improvement, there's been some stagnation in the market in recent months. "Insufficient supply appears to be hampering prospective buyers in several areas of the country and is hiking prices to near unsuitable levels," he said. "Stronger price growth is a boon for homeowners looking to build additional equity, but it continues to be an obstacle for current buyers looking to close before rates rise."
JPS laments: "I'm at a total loss to understand what that statement actually means in anything like a real economic circumstance. According to basic supply and demand, "strong price growth" should not in any way be a constraint upon supply of houses for sale, quite the opposite. Mr. Yun takes this to an extreme whereby he actually supposes that lack of supply is restraining buyers!
Again, there is no way that makes any sense whatsoever. The only way that rising prices would lead to restrained supply is if potential sellers realize they can no longer sell at those rising prices. In that sense, rising prices aren't really rising prices indicative of a healthy market but rather, unsurprisingly, unsustainable bubble mechanics. Further, it isn't, then, supply that is restraining but demand for resales."
The Nattering One muses... That paid liar from the NAR is at it again. For example, Blackstone (and they are not the only one) is sitting on thousands of REO ghost inventory homes they bought in huge blocks from the bailed out lenders. The public never had a chance to buy these homes at auction or otherwise.
Blackstone could not sell the homes, so they have been renting them out. i.e. in SoCal a Section 8 3/2/2 gets $2400 month from HUD. And therein lies the problem, another artificial life support mechanism from big brother. This is why $500K crap shacks exist in SoCal replete with day track hookers walking in front of them.
If DeBeers cartel released their inventory of diamonds onto the market, a very nice 1 carat diamond would cost a tenth of the current market price. Likewise, if these homes had been released onto the market, along with the rest of the ghost inventory, housing prices would have cratered even further than they did, and if left unadulterated by artificial guvmint ingredients, would still remain within reason through normal market price discovery mechanisms.
As Snider's excellent missive points out, income levels are not commensurate with pricing i.e. debt service ratios are out of whack. The reality is, there is no dearth of supply, its overcapacity being manipulated through artificial price support mechanisms (bailouts, block auctions to Wall Street hedge funds and HUD) to once again, take the public for everything they have. History repeats itself again, as in no happy ending.
See here for the debt service ratio problem.
See here for further elaboration as to what got us here.
JPS laments: "I'm at a total loss to understand what that statement actually means in anything like a real economic circumstance. According to basic supply and demand, "strong price growth" should not in any way be a constraint upon supply of houses for sale, quite the opposite. Mr. Yun takes this to an extreme whereby he actually supposes that lack of supply is restraining buyers!
Again, there is no way that makes any sense whatsoever. The only way that rising prices would lead to restrained supply is if potential sellers realize they can no longer sell at those rising prices. In that sense, rising prices aren't really rising prices indicative of a healthy market but rather, unsurprisingly, unsustainable bubble mechanics. Further, it isn't, then, supply that is restraining but demand for resales."
The Nattering One muses... That paid liar from the NAR is at it again. For example, Blackstone (and they are not the only one) is sitting on thousands of REO ghost inventory homes they bought in huge blocks from the bailed out lenders. The public never had a chance to buy these homes at auction or otherwise.
Blackstone could not sell the homes, so they have been renting them out. i.e. in SoCal a Section 8 3/2/2 gets $2400 month from HUD. And therein lies the problem, another artificial life support mechanism from big brother. This is why $500K crap shacks exist in SoCal replete with day track hookers walking in front of them.
If DeBeers cartel released their inventory of diamonds onto the market, a very nice 1 carat diamond would cost a tenth of the current market price. Likewise, if these homes had been released onto the market, along with the rest of the ghost inventory, housing prices would have cratered even further than they did, and if left unadulterated by artificial guvmint ingredients, would still remain within reason through normal market price discovery mechanisms.
As Snider's excellent missive points out, income levels are not commensurate with pricing i.e. debt service ratios are out of whack. The reality is, there is no dearth of supply, its overcapacity being manipulated through artificial price support mechanisms (bailouts, block auctions to Wall Street hedge funds and HUD) to once again, take the public for everything they have. History repeats itself again, as in no happy ending.
See here for the debt service ratio problem.
See here for further elaboration as to what got us here.
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