Excellent summation why housing market will be terrible for a long time

[ctr70]

This was from Barons…Mark Hanson is a well known mortgage industry guru…

“[Hanson] lists the many woes that afflict the industry. High up among them is “effective negative equity,” which he defines as the inability to pay off a mortgage, plus paying a real-estate broker 6% and coughing up 10% to 20% of the purchase price as down payment on a new purchase. Mark reckons that a majority of mortgages fall into that unenviable category rather than the 28% commonly estimated.He also cites a humongous default, foreclosure and short-sale backlog overhanging the market. Since 2007, he relates, there have been only four million foreclosure completions and short-sale liquidations out of a probable 14 million to 18 million. That alone is enough to give you the willies.

Toss in unfavorable demographics, mounting energy costs, a miserable excuse for a mortgage market and inexorably declining home prices…well, you get the point. Housing is one of those festering sores on the economy that will be with us for quite a spell. And so long as it is, or until jobs grow more abundant and consumer income muscles up, the likelihood of a decent and sustained rebound for the industry seems a good piece off. And, we’re afraid, the economy’s recovery is apt to maintain its desultory pace.”

[urbanrealtor]

I agree.
I suspect that one or several of the following things is going to happen in the next several years.

A: Housing (or more generally, debt) focused inflation (increases in aggregate nominal effective demand) such that it undermines savers and put borrowers on a better footing. Hopefully more of the latter than the former.

B: Statutory relief from debt. In other words, a rollback of the regressive BK laws of the early 2000’s and probably some new laws that dramatically limit lender recourse on a national scale.

C: Some government-originated debt purchasing entity with a broader mandate and (at least initially) tighter controls on risk.

Barring some combination of these, I see this credit crunch continuing half as long as the economic expansion (which has been continuing since the 40’s).

[urbanrealtor]

I agree.
I suspect that one or several of the following things is going to happen in the next several years.

A: Housing (or more generally, debt) focused inflation (increases in aggregate nominal effective demand) such that it undermines savers and put borrowers on a better footing. Hopefully more of the latter than the former.

B: Statutory relief from debt. In other words, a rollback of the regressive BK laws of the early 2000’s and probably some new laws that dramatically limit lender recourse on a national scale.

C: Some government-originated debt purchasing entity with a broader mandate and (at least initially) tighter controls on risk.

Barring some combination of these, I see this credit crunch continuing half as long as the economic expansion (which has been continuing since the 40’s).

[urbanrealtor]

I agree.
I suspect that one or several of the following things is going to happen in the next several years.

A: Housing (or more generally, debt) focused inflation (increases in aggregate nominal effective demand) such that it undermines savers and put borrowers on a better footing. Hopefully more of the latter than the former.

B: Statutory relief from debt. In other words, a rollback of the regressive BK laws of the early 2000’s and probably some new laws that dramatically limit lender recourse on a national scale.

C: Some government-originated debt purchasing entity with a broader mandate and (at least initially) tighter controls on risk.

Barring some combination of these, I see this credit crunch continuing half as long as the economic expansion (which has been continuing since the 40’s).

[urbanrealtor]

I agree.
I suspect that one or several of the following things is going to happen in the next several years.

A: Housing (or more generally, debt) focused inflation (increases in aggregate nominal effective demand) such that it undermines savers and put borrowers on a better footing. Hopefully more of the latter than the former.

B: Statutory relief from debt. In other words, a rollback of the regressive BK laws of the early 2000’s and probably some new laws that dramatically limit lender recourse on a national scale.

C: Some government-originated debt purchasing entity with a broader mandate and (at least initially) tighter controls on risk.

Barring some combination of these, I see this credit crunch continuing half as long as the economic expansion (which has been continuing since the 40’s).

[urbanrealtor]

I agree.
I suspect that one or several of the following things is going to happen in the next several years.

A: Housing (or more generally, debt) focused inflation (increases in aggregate nominal effective demand) such that it undermines savers and put borrowers on a better footing. Hopefully more of the latter than the former.

B: Statutory relief from debt. In other words, a rollback of the regressive BK laws of the early 2000’s and probably some new laws that dramatically limit lender recourse on a national scale.

C: Some government-originated debt purchasing entity with a broader mandate and (at least initially) tighter controls on risk.

Barring some combination of these, I see this credit crunch continuing half as long as the economic expansion (which has been continuing since the 40’s).

[paramount]

So in general this is a less than favorable time to buy a house.

[paramount]

So in general this is a less than favorable time to buy a house.

[paramount]

So in general this is a less than favorable time to buy a house.

[paramount]

So in general this is a less than favorable time to buy a house.

[paramount]

So in general this is a less than favorable time to buy a house.

[TexasLine]

[quote=paramount]So in general this is a less than favorable time to buy a house.[/quote]

cynical thoughts aside…I think the OP topic should be interpreted as – this is a great time to buy…It just might be however, that it will be better to buy in the future…;) This assumes you have your ducks in a row and you don’t live in New York City, where certain part of the duck have been banned – Nor an actual duck residing on a pond in North Dakota….unless you envy the pond…it might be a good time to “pull the trigger” then.

Cynically speaking, of course.

cyn·i·cal Expressing jaded or scornful skepticism or negativity

🙂

[TexasLine]

[quote=paramount]So in general this is a less than favorable time to buy a house.[/quote]

cynical thoughts aside…I think the OP topic should be interpreted as – this is a great time to buy…It just might be however, that it will be better to buy in the future…;) This assumes you have your ducks in a row and you don’t live in New York City, where certain part of the duck have been banned – Nor an actual duck residing on a pond in North Dakota….unless you envy the pond…it might be a good time to “pull the trigger” then.

Cynically speaking, of course.

cyn·i·cal Expressing jaded or scornful skepticism or negativity

🙂

[TexasLine]

[quote=paramount]So in general this is a less than favorable time to buy a house.[/quote]

cynical thoughts aside…I think the OP topic should be interpreted as – this is a great time to buy…It just might be however, that it will be better to buy in the future…;) This assumes you have your ducks in a row and you don’t live in New York City, where certain part of the duck have been banned – Nor an actual duck residing on a pond in North Dakota….unless you envy the pond…it might be a good time to “pull the trigger” then.

Cynically speaking, of course.

cyn·i·cal Expressing jaded or scornful skepticism or negativity

🙂

[TexasLine]

[quote=paramount]So in general this is a less than favorable time to buy a house.[/quote]

cynical thoughts aside…I think the OP topic should be interpreted as – this is a great time to buy…It just might be however, that it will be better to buy in the future…;) This assumes you have your ducks in a row and you don’t live in New York City, where certain part of the duck have been banned – Nor an actual duck residing on a pond in North Dakota….unless you envy the pond…it might be a good time to “pull the trigger” then.

Cynically speaking, of course.

cyn·i·cal Expressing jaded or scornful skepticism or negativity

🙂

[Author]

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