housing market

We’re rapidly getting to the point where everybody is going to have to decide whether to live as free men or exist as slaves to an all-powerful statist elite who, by force of arms or other coercion, control every aspect of our lives. Liberty isn’t cheap and it’s for damn sure freedom is anything but free.

Just stop and think about the government tentacles in your own lives. You can’t do virtually anything any more without somebody having something to say about it. That somebody, these days, is likely to be some local governmental representative waving some obscure permitting requirement or trying to cite you for pruning your own trees.

They are not educating our children… they are indoctrinating them. Our Government Indoctrination Centers are predating them by forcing them to be exposed to a lifestyle and its attendant practices that about 80% of the public find repugnant and many find immoral. Much of what they are teaching is garbage, with little or no academic value. The education system is rife with political correctness and the curriculum is often aimed at the lowest common denominator.

If you’re in business you know all about government. You know all about its mindless regulations, its endless red tape… layer upon layer of bureaucracy, from the local city halls and state house, to the gargantuan monster that is our federal government.

We see the worst housing industry since the depression, coupled to the worst job market since the great depression. The private sector generated a paltry 38,000 jobs last month… our growth is somewhere south of 1.5%. There are huge numbers of homes still going into default, and they’re not all marginal Barney Frank garbage loans either. There are people in heavily upside-down prime and jumbo loans who have just given up and walked away. Not a lightweight decision, since it absolutely destroys your credit for a minimum of seven years and maybe longer. It just highlights what a desperate situation people are finding themselves in.

I work in an industry which is only on the periphery of the foreclosure market, but I can tell you that there are a huge number of houses being held off the market by banks who don’t want the bad paper to show on their inventories yet. They’ve been releasing them for rehab and sale at bargain basement prices a few at a time.

Is this what you want for your kids? Is this what you’re willing to be satisfied with for yourself? This is what it’s coming to. You have to stand up and fight for freedom. Fortunately, in the civil society we can usually do this through discourse. I said ‘usually’. It’s when government becomes, as in America today, totally unresponsive to the will of its people and even the most very basic of its own laws, it’s time for you and I to take action. 2012 is right around the corner.

Semper Vigilans, Semper Fidelis

© Skip MacLure 2011

Home sales are moribund and home prices have been in a long decrease. People are not buying houses, however perhaps they would if they could. However it's a good time to purchase a house, in accordance with most of the individuals responding to a study released Wednesday. Source for this article - Housing market: most in U.S. think now is the time to buy a home by MoneyBlogNewz.

The buyer’s sector is clear

A lagging real estate market has been a drag on economic recovery, however a recent Gallup study found that when it comes to home buying, 67 percent of Americans feel that now is a good time. That isn’t really good news even though several study respondents believe it. The poll, taken earlier this month, involved a random sample of 1,018 adults. Just a year ago, this same poll of respondents had 72 percent thinking a buyer’s market was occurring. That was up from 1009 where it was 71 percent. Now the amount of homebuyers that are optimistic has gone down to 67 percent. The home values are declining as this happens too. Potential house buyers are waiting for home prices to bottom out.

The massive cut down in the price of a home

In 2007, home prices began to drop as they'll continue to do through 2011. In 2010 there were a record number of foreclosures shown by the real estate sector research firm Realty Trac. The homes have not even been marketed yet. That will occur leaving the home inventory bigger. That isn’t good. A report from Standard & Poor's said the average price of homes within the U.S. could fall by another 7 percent to 10 percent this year. Home prices will continue to go down in accordance with 27 percent of Gallup study respondents. Even more, 42 percent, are worried that their own homes will continue to lose value. Then there was the 21 percent that expected their community home values to go up. That was a bit surprising.

Seeking to what the real estate market will soon look like

To resuscitate the housing sector, the government pulled out all the stops last year. The government gave out a new house buyer tax credit. The mortgages got $8,000 in credit. Over $1 trillion in mortgage securities were bought by the Federal Reserve. That keeps mortgage prices low as well. But with joblessness still high, most American's believe the recession hasn't really ended. Fed chairman Ben Bernanke said last week that it could take at least three more years for employment to recover to pre-recession levels. It may be a good time to invest in a home since interest rates are so low right now though. Investing is not something Americans are willing to do today. Still, it's something they seem to think is a good idea.

Articles cited

MarketWatch

marketwatch.com/story/many-americans-say-its-a-good-time-to-buy-a-home-2011-01-18

24/7 Wall St.

247wallst.com/2011/01/17/americans-expect-home-prices-to-fall/

Seeking Alpha

seekingalpha.com/article/246909-housing-buyer-s-market-to-continue-for-now

Recently one of my friends complained that the whole economic crisis we're currently living through is all because of those bad old CEO's walking away with giant bonuses.

There's so much more going on here than some fat cat CEO's getting big bonuses and bad decisions made by giant corporations.

It all comes back to personal responsibility.  I worked in the new home industry in Southern California.  Let me tell you, there are some real shaky home loans out there.  For instance, one woman bought a house that she could only afford if she took out an interest only loan.  That means that she didn't have to pay back any of the principal on the loan for five years.  And even then, she had to rent out a room to make just the interest payment.  She had to take out a loan for the down payment on the house.  Her thought was that in five years when the loans came due, the house would be worth more and she'd be able to borrow against her equity to pay down the principal, then get a smaller loan.  She was basically counting her chickens before they hatched. 

It's now five years later and those chickens have come home to roost.  The loan market has tanked, home values have crashed and she's one of the millions of people that WE are being asked to bail out.  You and I are going to have to pay higher taxes because SHE took a chance with OUR money.

And she's not the only one.  There are so many people who got greedy, spent more than they could afford and now need to be bailed out so they don't lose their homes.

Take a step beyond them.  There are thousands of businesses out there that made these loans.  They stretched every fact given to them to make people eligible for loans.  Even beyond them, they were directed, as far up as the Federal Reserve, to count welfare and unemployment payments as income to get people to qualify for loans.  They knew that any ripple in the economy would cause those people to default on their loans.  But it was easy money.  So they made the loans.

Now you and I are being asked to help bail them out so they don't lose their businesses.

Every one of those people in every one of those circumstances had a chance to say "NO". 

The lenders had the ability to deny the loans.  They had the opportunity to use more conservative methods determining the amounts people were eligible to get.  They had the option to try to direct their customers into safer, smaller loans. 

The home buyers had the opportunity to only buy a house they could afford.  They had the ability to tell their lenders they wanted a more traditional payment plan that fit into their budgets.  They had the option to spend less, get less and plan to move up later.

But none of them took the road of responsibility.  They were all blinded by the Great American Dream of Easy Money.  They ignored the risks and jumped right in. 

Well, we've had that ripple in the economy.  And it's all crashing down now.  But instead of finally facing their responsibility, we're hearing a great cry of "Save us!" 
 

Let's bring it down to a very personal level.  Let's say your child spent all of his allowance on gum and candy.  Now it's Friday and time to buy a birthday present for a friend.  There's no money left.  As a parent, do you give him more money so he can buy the present?  Or do you let him go without, maybe even miss the party, because he was irresponsible and selfish with his money?  He's complaining that it's not fair that you have all that money and he has none.  He's saying it's not fair that the candy store was so enticing and let him spend all his money.  He says he deserves to buy that present and he deserves to go to the party and he shouldn't have any consequences at all.

As a parent, is that the path you're going to let him take?  Of course not.  You're going to make him take responsibility for his bad decisions and help him make better decisions next time.

Now, I'm not saying the government should be like a parent.  Although, at this point they're acting like a spoiling and overindulging parent by throwing money at the problem.  I'm saying that in this country founded on the principles of self reliance and America's "can do" attitude, we need to look at the reasons behind the failure and come up with some realistic steps to take to correct the problem and avoid it in the future.

That seems to be a novel approach.  We have a housing bubble that bursts roughly every 15-20 years.  We get really good at conservative lending practices for about 10 years, then get comfortable again and forget about the risks.  Each time the risk taking gets worse and worse, so the resulting crash is worse.  It's time to do some serious re-thinking or the whole thing before our next crash kills us.