[powayseller]

Lenient lending standards allow poor people to buy and then LOSE their home.

So the home ownership rate has been increased, but at the expense of great suffering. Because that increased home ownership rate is only temporary.

If we really want to help the poor, give them some free credit counseling, help them raise their credit score, and then put them into a loan product which allows them to buy and KEEP a house.

Lenient lending standards are often accompanied by unscrupulous high lending costs. Broker commissions and prepayment penalties are highest on these loans.

The poor are the target of subprime loans. Subprime loans are concentrated in low income areas, not spread equally across the US, and they are a way to taking advantage of lower income borrowers. One study found that subprime borrowers who went to Wells Fargo’s subprime branch were put into a subprime loan, even when they qualified for a lower rate prime loan through Wells Fargo’s main banking division. Lenient lending standards are a way of taking advantage of the poor.

[powayseller]

NAR will say that zillow does not offer the consumer a fully informed service, since they do not have agents which educate the customer. They used a similar angle and succeeded in several states banning discount brokers, because they argued the discount broker does not provide the customer with the required level of service.
I wrote about it here

[powayseller]

Can you e-mail me at [email protected]? Thanks 🙂

I contacted Brio, and she charges $50/hr, 4 hr minimum, plus groceries. Kind of pricey.

[powayseller]

After the credit bubble bursts, and folks have to live off their paychecks, instead off the money created by the Fed printing presses and recycled from overseas, could we see a change in lifestyle?

Frivolous services will disappear
* nail salons
* half the coffee shops (can’t people pour a pot of water into a carafe – is that so difficult?)
* hiring gardeners or cleaning people because the man and woman of the house are too lazy; remember when it was the neighborhood teenager who mowed the lawn?
* car washes at every 1/2 mile (we used to always wash our own cars back in the days)

Work
* teenagers will work again, instead of indulging in activities, and enrichment and volunteer work just to look good on a resume
* maybe Americans will be sick and tired of the free trade which is causing our living standard to go down while “theirs” goes up; maybe “made in America” will be more important than getting something cheaper

The “big” things will be a turn-off. Think Suburbans, big houses, big ovens, big chairs like you pictured above, big grates on big Viking ranges (who really needs 6 burners?).

During the adjustment, look for more suicide, drug abuse, crime.

[powayseller]

The insiders are selling because they know this market is ready to take a nose dive. There are other indicators too. The Big Picture has some commentary lately about their leading indicators, which show that the market is ready to go down. Also something about the Dow Transports not going up with the Dow, and the bond market pricing in a recession. But there has been talk of manipulation too.

“There is no doubt that there is major manipulation going on holding this market up this high, so we are really fighting the house shorting this market.” – Chris Johnston’s blog, Monday.

Once the market starts to dive, I’m going to move more money into bear funds. My husband is going to put some into the inverse NASDAQ. In the short term, I think I can earn a better return on shorting the index funds, than on rising gold.

This market is a big fat bloated pig, as Don Harrold likes to say. I’m ready for the big drop – got my inverse index funds in place.

[powayseller]

I’m sure the NAR attorneys are working some all-nighters to figure out how to sue the zillow folks right into bankruptcy. I hope the Justice Department won’t let them get away with any more BS.

[powayseller]

Maybe just a computer glitch? Quick check – I get sales history info in San Diego and Los Angeles.

[powayseller]

Did you guys read Jim Klinge’s blog today – the darn MLS fined him $150 for putting a link to a YouTube home promotion video on his MLS listing. The video resulted in a New York couple coming out here to buy that house. I have never heard a single realtor say a good thing about the MLS. They are kind of crafty and cunning – they suck the life out of their members and keep regulators at bay. They are mean and nasty and powerful.

[powayseller]

Daniel, Bob C. does this type of analysis every month, but it is time consuming. You could contact him to find out more about his findings. Even when you break down the sales into those subcategories, you can still find prices increase, because the smaller the sample set becomes, the worse the data gets. I may have this mixed up, but it seems one month the 2200 sq ft homes increased in price, but upon closer inspection the reason was that it was the 4 bedroom homes that were selling and not the 3 bedrooms. In previous months, both types of homes sold equally, but now the 4 bedroom homes carried a premium. Or you could have a few homes with more money invested in remodels, or fewer facing a busy street, and all these things make the prices go up.

sdrealtor is right – you can’t know too much about this market unless you are either hitting the pavement every day, or talking with someone who is! The numbers are obviously flawed.

For those of you defending Case-Shiller, please explain why you think it is accurate of today’s conditions.

Perry, I agree with you. It comes down to doing the math. Too many people are brainwashed into thinking that buying a house is better than renting. People are not educated on housing market cycles or asset bubbles, and that is the problem.

[powayseller]

These people are too late. Maybe we should add this to the list of things that indicate a bubble top: major movie studios rush into the market.

[powayseller]

You’re right on track. I signed a 2 year lease in July, since housing cycles take 10-12 years: 5-6 years up and then 5-6 years down. I expect the largest declines in 2008. Hang in there!

[powayseller]

jg, in regard to your previous comment that “Please tell me why you don’t think those dollars will come out in into circulation, giving us big time inflation”, have I explained it well enough now to show you that this money is not on ice, but indeed in circulation and powering this credit bubble?

[powayseller]

This NYT follow-up tries to make sense of the statistics, and explains some of the biases in them. Still, I’m not satisfied with any of the answers given, because it doesn’t explain the big discrepancy between the index and actual valuations.

““Unfortunately, there are also a lot of families that took on huge mortgage debts based on the ephemeral peak values of their properties. In effect, they cashed in on the housing boom without cashing out. The withdrawals have been so big that the average household in Boston now has slightly less equity in its home than it did in 2000, according to an analysis by Moody’s that took inflation into account.”

“Most worrisome, growing numbers of these families are falling behind on their mortgage payments, and they won’t be able to bail themselves out by refinancing or selling their homes. ‘We’re now going to combine a high amount of debt with falling home values,’ said economist Mark Zandi.” ”

This is from one of the NYT stories. Soon, we can substitute San Diego for Boston.

BTW, those waiting for my website, I was advised that I should incorporate, but for tax reasons, to do so effective January 1. (Incorporating is for legal protection, esp. since I will have forecasts and someone could sue me.) So I can go live with my site right after the New Year. I will not be competing with piggington. I remain a piggingtonian, always, and owe my discovery of the housing bubble to Rich Toscano.

[powayseller]

Yeah, you do lose some special privileges when you leave your employer plan, like borrowing against your 401(k). I’m not expert, but we did the rollovers while my husband worked for the company.

What’s the ERISA bankruptcy remote protection? Isn’t your retirement money always safeguarded from bankruptcies?

[powayseller]

If the Treasuries are sold off or not renewed when they expire, then the interest rates on Treasuries will go higher. What else? Where will all those dollars go? The export countries won’t convert them into their own currencies. They could buy other currencies or gold or hard assets. oil is sold in dollars, so they could buy lots of it. Unless of course they think the price will come down, or they lack a large storage facility.

Imagine the worse problem when we actually pay down our debt, and there aren’t enough treasuries to absorb all the dollars. Then the FCBs have to buy ever more MBS and equities, and create bigger and bigger bubble! Now, isn’t that a conundrum? Paying down the national debt creates asset bubbles!

My brother thinks that China has a long term plan to attain all the US manufacturing and high tech industry knowledge, so they can learn it and copy it. Once they have what they want, they’ll discard their dollars and use their money to buy natural resources.

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