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The End of Market Manipulation...

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May 01, 2009 – Comments (4)

So, you thought the past few months foreclosure numbers were bad?

They were nothing. The housing market manipulation engaged in by B.O., Timmay Geithner, and The Beard at the Fed has pushed hundreds of thousands of taxpayer-funded refis. That may have helped avoid some foreclosures (though everyone I know personally who's going through a refi could well afford their payments, and they're simply reaping a taxpayer-provided windfall...)

What also slowed down foreclosures was all the public pressure on banks and servicers to be nice. The gloves are coming off now, and the results, well, I think this is just the beginning.

Home prices are going to continue to drop at a pretty steep pace as all this inventory hits the markets. I advise anyone bidding on a house to check the S&P Case-Shiller numbers here, find the current market level, subtract 15% from that, and then find the date that corresponds to the last time houses in that area sold at that level.

The bidding starts there. Around DC, that means bidding on comp homes at prices roughly equivalent to 2002. Welcome to flavor country.

4 Comments – Post Your Own

#1) On May 01, 2009 at 9:41 AM, russiangambit (29.21) wrote:

> though everyone I know personally who's going through a refi could well afford their payments, and they're simply reaping a taxpayer-provided windfall

Yes, we just refinanced at 4.25% 15year fixed. When inflation hits they will be paying us interest.

Of course, the rates are so low due to FEDs intervention with our tax money.

And you are right, people who need to refinance can't because their credit is not good enough.

Even my credit rating is only 750 because of "too many inquiries" (I have no control over that) and balances are too high on my credit cards ( because we only use 2 vs. average of 10, but these balances are paid in full every month). So, I think those credit ratings are too sophisticated for their own good. If somebody has no debt, has good income, doesn't carry credit card balances, what do you find to knock 10% points from their credit score? I have no idea. So, if somebody has a few problems, then forget about a decent credit rating.

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#2) On May 01, 2009 at 10:24 AM, chk999 (99.97) wrote:

Looks like Mr. Market is going to be offering some bargains in real estate. I really wish there was an REIT that did single family.

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#3) On May 01, 2009 at 10:26 AM, devoish (98.62) wrote:

We took 4.75% but its a refi, not a sale. (congrats on the lower rate, russiangambit) We were not part of "hope now" though. Just low rates and good credit.

These people can be as optomistic as they want but Alstry is right. Nobody is talking about how many homes go up for sale because GM's Ford's and Xlers and so many other retirees are paying more for their healthcare and receiving less in pension and divis and suddenly cannot afford their taxes/oil bill/homeowners/electric/ etc.

And then there is the Master of Disaster Capitalism, Alan Greenspan, in Newsday today saying the US should enact badly needed immigration reforms to bring in more skilled and unskilled foreign workers.

Kind of like loosening credit and lowering rates at the same time.

 

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#4) On May 01, 2009 at 10:50 AM, lquadland10 (< 20) wrote:

Not to mention putting more Americans out of work. Less perches power Yep Mr Greenspan just cut our throat now and get it over with.

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