Saturday, February 23, 2013

Investors, Artificial Interest Rates And Inventory Skews The Market.

Bubblemania again! Isn't California grand! Not if you are wanting to buy a home at a "real" price. Anything to re inflate the market according to Ben Bernanke. Banks and corporations above all, just like before. And just like before, it will end badly. It is UNSUSTAINABLE. Check out what The RPX Monthly Housing Report has to say. Once again people are getting lulled into the market and it is being manipulated by hedge funds, investor groups, flippers and sub prime loans (FHA). The idea is to rent out all these homes at a profit, or flip them at a later date. The problem is, as prices rise, others wanting to get out of their ball and chain house will flood the market. The investors will be long gone and who is going to pay those outrageous rents to cover the mortgages? God forbid mortgages rates ever rise.

Most good paying jobs are on the decline and the stock market is now teetering on a precipice. Don't be fooled by the cheap government tricks to get you to bite. This ain't over yet folks. Not by a longshot.


Anonymous said...

what is the RPX monthly monitor? All I get when I click the link is a screen to log into Yahoo. said...

Sorry for the problem link. It has been fixed now. Pretty interesting perspective on what is really going on now.

Anonymous said...

Latesummer, thanks for hosting my favorite blog. It has been an exciting time. In my neighborhood, North of Montana, small 900 square foot houses cost only 300 thousand bucks back in 1983. Then they rocketed to 900k in 1989. Then fell back to 600k in 1995 then up to 2.1 million in 2007 only to bottom at 1.6 million in 2009 and today they are right back at 2.1 million.

Anonymous said...

past performance does not guarantee future results...

WarChestSM said...


It is indeed over. When will you admit it? What would make you change your mind? All I see is a slowly improving economy providing more and more support to housing. I think you should just say "I was wrong and I'm moving on with my life". said...

Warchest - You obviously think the housing market is back. When I see more good jobs created, an increase in organic sales, not flippers, FHA (subprime), restriction of mark to market and artificially low interest rates cease, then I'll believe it. You have been bullish for a year now, whuch coincides with your own purchase. Congratulations on your home in Culver City. As long as you plan on staying in that house for at least 10 years and don't rely on a major company for your employment, you should be fine.
Personally, I think we have had 2 false starts in housing already and this very well be another. 1 year is too small of a time horizon to declare "victory"
I guess time will tell, won't it.
Best of luck to you, now that you have left the housing blog business behind. Or have you?

WarChestSM said...

I ask myself if it is even worth debating. I think I try to argue to counteract what I view as negative and harmful advice put forth by people in your camp.

You cite wanting to see more good jobs created...really? Come on. The employment situation is not excellent but I think there are plenty of good jobs in LA. From the whole "silicon beach" to finance, entertainment, law, etc.

I don't think flippers are a big deal in prime areas. Flippers/investors are a big part of the harder hit (cheaper) areas but I see very few flips in the areas I track. In my hood I see young families who have worked hard and saved a chunk of cash putting down roots. Nobody sells here except the heirs of the deceased.

FHA is no longer such a huge portion of the market and with higher standards/fees it is becoming a smaller portion with every day that passes. Yet the market is doing just fine.

The mark to market restriction thing is a non issue. Things ain't changing. Banks are too big to fail. Deal with it, that is the new reality.

Low rates...yeah they are probably going to be here for a while. And they won't rise fast even when they creep up. Not going to crash the market.

So what I'm saying is there isn't really anything that should be able to move the market down much as everything is improving (economy, employment) and the credit cycle is still on the tight side. Ultimately buying is not something to take lightly and owning isn't for everyone but I think the idea that we are in the middle of another bubble or something is pretty ridiculous.

Matthew said...

LOL. Investors aren't a big part of the market? Who the hell is buying 35% of the houses in SoCal with cash?? That isn't limited to hard hit areas either.

Text book dead cat bounce. Same thing happened during the Great Depression. You can't fix asset prices or reinflate bubbles. It has never worked.