Home prices near 2009 lows -- and may fall more (No Jobs = No Buyers for Homes)

[Yavin4]

It's really that simple. Folks cannot buy your house if they are unemployed/underemployed. Also, the article mentions that Freddie and Fannie--the entities that the right falsely blame for the entire financial collapse--are reducing their roles in buying mortgages which would also lower the value of housing. Read the article below for details:

Shiller cited a few reasons for his bearish stance. The government is expected to reduce the presence of Fannie Mae and Freddie Mac in the housing market. These agencies currently provide loan guarantees for about two-thirds of mortgages. If they fade away, private mortgage money will have to fill the gap and the cost of mortgage borrowing will surely rise. That will hurt home prices.

http://money.cnn.com/2011/02/22/real_estate/december_home_prices/index.htm


Finally, when you cut state workers pay, raise the cost for their health care and pensions, then you are taking money out of their pockets which would go towards buying a home.

[xchrom]

1. Recommend

[Stinky The Clown]

2. But but but but ..... we're ina strong recovery. DOW's nearly doubled.

Job growth for the last lotsa months.

How can this be??????


:sarcasm:

[Yavin4]

3. The Ridiculously Tepid Private Sector Job Growth

Has been killed by state worker layoffs.

[BeFree]

4. The economy depended upon...

...an ever increasing housing boom.

The fact that housing is going down means the foundation of our economy is cracked.

The best that could be done is for the federal reserve to take a second mortgage on all underwater home owners. That would stabilize the market over night. Why they give money directly to the bankrupt bankers and not loan it to the people, makes no sense.

[vi5]

5. The conversation I had with my mom.....

Mom: The house next door to us sold. That's great news. That probably means things are picking up!

Me: That house sold for a million dollars. That means nothing. That just solidifies what I already know and what you should know which is that the wealthy are still doing well. When the house next door to me sells, which is on the market for 25% of that amount then maybe I'll believe there's a recovery happening.


Mom means well and she's mostly a liberal. But her and my dad's success has definitely insulated them quite a bit from the reality on the ground, especially since it hasn't hit either of their kids or most of their immediate relatives.

[SoCalDem]

9. The house next door to ME, sold also

It sold in 2005 for $353,000, and again in June 2010, for $63,000.00.. It sat empty for MONTHS and was vandalized..

It;s now a rental where two young men have wild parties every weekend:grr:

The house down the block sold for $385,000.00 in 2008 (it has a pool) and it sat vacant for MONTHS until a dew weeks ago when it was snapped up for the princely sum of $145,000.00

[soryang]

6. Case says a major factor in decline is demographic

He specifically mentioned fall in household formation. He stated that household formation was effectively "zero."

Graduates from high school and college without jobs have to move in with others or parents. Many unemployed immigrants are returning home. My comments: In addition to this, people old enough to retire, and those older employees who can't find jobs, or find full time jobs, have to give up their homes because they can't afford them. Even older Americans who can afford to keep their homes can't maintain them and seek to rent apartments where maintenence obligations fall on the landowner.

Bloomberg immediately came up with some bogus anecdoctal data that more people were forming new households in the last reported quarter contradicting their expert guest's interview information.

[Yavin4]

7. We've Had A Net Zero New Jobs Created Since 1999

Unless you write "exotic" mortgages, folks cannot qualify for a mortgage given the shallow job market.

[soryang]

8. Even if it is true that new households are forming at a higher rate

...than in the previous two years, that data is more than offset by those other Americans, such as the aging, retired, underemployed and unemployed who need or needed to get out of their homes. Home construction is abysmally low and most of it is apartments.