« December 2005 | | February 2006 »

FedWatch: Greenspan Takes The Long Walk

As a going away present on Judge Greenspan's final day, the Fed boosted the Federal funds rate for the nonce. This at a time when wages are seeing no increase, consumers are tapping the housing vein for money, and the savings rate is the lowest it's been since the Great Depression?

I'm absolutely certain there was "not a dry eye in the house," but I'm willing to suspect that it was definitely for different reasons than sheer joy and reverence.

And naturally, Greenspan is taking his retirement into the "Cursed Earth" of consulting. Maybe he'll run into Mike Brown at one of those $2,000-a-plate talking head schmoozefests. :)

As I was telling my fellow bloggers today, I really feel bad for good ol' "Helicopter Ben" Bernanke. He's inheriting a mountain of potential timebombs and problems that he simply isn't trained for. I think the key to the dilemma lies in the last paragraph of the aforementioned essay:

On the other hand, stocks should benefit from a slightly easier monetary policy. Deflation is death for stocks since falling output prices reduce profits and debt payments become far more burdensome. Deflation smashed worldwide stock markets in the 1930s and the Japanese stock market in the 1990s. Bernanke will be willing to risk a tad more inflation to ensure these grim outcomes never happen again. The bottom line: Stock investors should be all smiles with President Bush's new choice of Fed governor.

In other words, the stock market, which has been moribund for the past five years or so, is going to benefit at the expense of the housing market. This is potentially disastrous. You can lose your shirt in the market--I have, several times--but losing your home is a lot harder to recover from. And housing bubbles slide down a lot longer and bounce back a lot slower than market bubbles.

This ain't a zero-sum game, kids. If Judge Dredd could learn the law wasn't black and white, the Fed chair can remember that stocks and real estate can comfortably co-exist. Here's hoping he figures that out, and soon.

Posted at 07:40 PM | TrackBack

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Friday Housing News

There's a lot of interesting and important stuff swirling around today, so I'll take a page from Instapundit and just get right to it, only minus the knee-jerk conservatism. :)

A dramatic drop in GDP across the board. "Unexpected?" Please. Only to those who drink the Kool-Aid served at NAR parties. It's a simple equation...higher costs lead to less spending, which leads to less investment, which leads to lower profits. And yet people keep calling the housing market's part in this passion play moderation:

In total, we see price gains for homes in the Northeast and West as historically large, but not unprecedented, and prior boom periods have extended well beyond the emergence of public perception that prices in these markets are "too high." Though such an assessment is likely correct for some urban markets, calling the top won't be easy until we see signs that price declines are actually emerging, and any pop in the bubble may not occur until later in 2006, or even 2007, depending on the course for Fed policy and market interest rates.

Well, we're agreed on that at least. Then again, Business Week broke out the tissues for their glowing essay on the joys of ABN AMRO's outsourcing, perhaps forgetting the little matter of a $41 million settlement with HUD. Oh, and identity theft, too! :)

Behold, the face of economics as modern art:

That grimacing visage is none other than Alan Greenspan, whose face has become as elusive as his predictions.:

"His expressions were always very complex," she added. "There were different shadows in his face that were really hard to capture."

Unfortunately, the mess that Greenspan made is far easier to capture and document. And that pic just screams to be Photoshopped, doesn't it? :)

Posted at 03:20 PM | TrackBack

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Hurricane Housing: Bad News for Baker Bill

One reason why Sen. Mary Landrieu has come out against filibustering Alito is because she wants to focus on getting the Baker bill passed. Unfortunately, if the comments from Gulf Coast Recovery Chair (and Bush Ranger) Donald Powell are any indication, Landrieu is SOL.

My problem isn't necessarily that the Baker bill is perfect, but that the Bush administration is dismissing it out of hand, and for incredibly stupid reasons. I wasn't fond of the Baker bill because I disliked the idea of the government buying property at a loss and simply reselling it at a profit, or just demolishing the homes to make way for luxury condos and what not. It's foreclosure by another name. But some of Powell's reasoning is just asinine:

Powell was careful to say the emphasis on owner-occupied property is only a recommendation and that federal rules give states wide latitude in how they spend grant money. He said other programs are available for flood-damaged homeowners, such as Small Business Administration loans and up to $26,000 in assistance from the Federal Emergency Management Agency.

Did Powell forget that the Senate diverted FEMA money to the states directly, because FEMA is completely inept, I wonder? Or how about the fact that the big NOLA housing boom is a bust?

Don't forget all those misappropriated SBA loans that went out to "9/11 victims" that had nothing to do with the disaster. :)

Landrieu obviously realizes the importance of getting the Baker bill--in some form--on the books. Here's hoping she will get her priorities right and stop trying to play softball with an administration that is definitely swinging a corked bat.

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Wednesday Housing News: Operation S%^$! Storm

Here's yet another bell tolling for the housing market, complete with spin-doctoring from David Lereah. In the words of Chuck D, "Don't believe the hype." Check out this counterpoint from "Crash 2006." They also reference a chart showing Japan's steep decline, which I talked about some yesterday.

The true test if this has become a seller's market will come in the spring, when more people will be looking to buy property. Right now it's a lot of nail-biting and doom and gloom, and deservedly so. Patrick won't let Lereah slide any:

NAR is trying its best to dodge the bubble bursting by hiding the facts from stupid realtors and general public. I don’t think that their cheif economist Lereah will be able to do this as standing in front of a train which has already left the station will not do any good to you but only crush you.

Word.

Want some more depressing news? How about the fact that the White House is refusing to cooperate with the Katrina investigation, even though it seems that they had early warning of the potential disaster. Astonishing. If that doesn't get your dander up, this ought to: While FEMA has been helpful, Mike Brown -- the former FEMA director who resigned amid intense criticism of his agency's response -- has refused to answer even the simplest questions, Lieberman added.

"Indeed, at yesterday's staff interview of former FEMA Director Michael Brown, agency lawyers advised Mr. Brown not to say whether he spoke to the president or the vice president, or comment on the substance of conversations he had with any other high level White House officials," Lieberman said.

Of course, that isn't stopping Brownie from speaking upon it at paid engagements. "Operation Sierra Storm?" I guess being a fashion god means you have no tact. (Hat tip to Think Progress.)

Posted at 08:08 PM | TrackBack

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Housing Bubble: Around the world

One of the most keen measures of a global economy is how you can look at the developments in other economies and see how they mirror--or oppose--your own. In the case of our housing boom/bust/bubble, it's worth noting that the U.K. is experiencing a similar slowdown.

Man, I'd love to figure out the dollars-to-euro conversions for those interest rates. 4.4%? WOW. And note this quote in particular: "But the market may weaken in 2007. A slowdown in the US housing market will threaten world economic growth next year; this will have a knock-on effect here in the United Kingdom, and we expect this will take a further edge off our property market," Mr Said added.

It's worth noting that the same housing overvaluation took place in Japan, and it took them 10 years to recover, with a 60-80% drop in real estate pricing as the toll. The ultimate buyer's market, eh?

Read this excerpt from CFO Magazine in 2001 about Japan's bubble and its economic crises:

In Japan, housing prices are going down. Food prices are going down. The prices of goods are going down. Is that bad? No.

Japan had grossly overinflated prices because of its flawed system. I don't see this kind of deflation as unhealthy. In fact, I think it is fundamentally healthy. If the cost of doing business and the cost of living in Japan go down, people are going to end up investing more and buying more. This is the only way to get the economy growing again.

That's exactly what needs to happen in the U.S. to mitigate the bubble. But the problem is that we're so obssessed with keeping up with the Joneses and making sure we have bigger houses than all of our friends that we'll leverage ourselves into unmanageable debt just in the vague hope of appreciation down the line.

That's how subprime lenders like Ameriquest got away with their dirty deeds for so long, but luckily, the states came back to kick their tails.

We can but hope to see more headlines like that in the future. ;)

Posted at 07:12 PM | TrackBack

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Friday Housing News

The always on-point Holden Lewis comes correct yet again with a study of homeowners' knowledge gaps when it comes to their mortgages. I am reminded of the '80's FM staple that goes "I don't know much, but I know I love yoooooo....that may be all I need to know..."

Seriously, that lyric exemplifies the attitude young home buyers have been taking towards first-time financing, and predatory lenders and sale-driven brokers have been all too happy to take advantage of that. As the story points out, though it always benefits to consult with one's parents and other elders on the virtue of savings and thrift, the simple fact is that creative mortgage products are a very recent creation, and the truth is only now becoming apparent regarding the potential damage they've done to the economy.

I'm going to be downloading Manning's report and reading it with the fine-tooth comb and magnifying glass well in hand. I recommend all of you do the same.

Speaking of recommended reading, here's a lacerating essay that would make Derek Jacobi start stuttering again: I, Greenspan. Absolutely brutal stuff. Love it. Especially this market-relevant section: Since I joined the Fed, outstanding home-mortgage debt has jumped from $1.8 trillion to $8.2 trillion. Total consumer debt went from $2.7 trillion to $11 trillion. Household debt has quadrupled.

I think all the families mentioned in Manning's report as being "comfortable with debt" might be a little less so if they truly saw how fragile the balance is.

Or you could always roll with The Mess That Greenspan Made, particularly this entry about gold being the next housing boom. I put this right up there with people who watched the tech bubble burst and then decided that health care would be the next big thing. Y'know, like Steve Case. :)

Speaking of the next big thing, the mainstream media push to support the Midwest Housing Boom (now officially capitalized) has begun. Check out this fluff piece from MSNBC, found by the mighty Bubble Meter.

"Oh, gosh! Everything's so cheap and friendly here! I don't even worry that I had to use a negative-option ARM just to get my foot in the door! Housing rules!"

The more conspiratorially-minded (myself included) might wonder if this is part of a master plan to drain blue states of voters and resources. Hmmmm......

Thankfully, MSNBC's Bob Sullivan lays the smackdown. A bad loan is a bad loan no matter what part of the country you live in. One can only hope that the boom in the Midwest doesn't get all bubblicious, or people are gonna have to start investing in underwater domes for property...there simply won't be any land left.

Posted at 07:50 PM | TrackBack

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Housing Bubble: Mock The Stupid

The latest report from the Commerce Department shows a nearly 9 percent decline in new homes and apartments being built. Couple of interesting notes from the article:

Despite the tumble, "construction was started on 2.064 million single-family homes and apartments last year, the second-highest level on record, exceeded only by 2.356 million units built in 1972." I'll be getting a copy of the report to see if the construction stats match my theories about the Midwest housing boom.

He said he was looking for construction of new homes and apartments to drop by about 6.5 percent in 2006 with sales of new homes falling by a similar amount.

It'll be interesting to see if that estimate holds true for all of 2006. Thanks to the wonderful blogmistress at Housing Finance, we have a clue at how federal agencies are viewing the new construction focus of housing. Specifically, if this multi-agency report is any indication, they're quite worried about it:

In the past, weak CRE loan underwriting and depressed CRE markets
have contributed to significant bank failures and instability in the
banking system. While underwriting standards are generally stronger
than those during previous CRE cycles, the Agencies have observed high
concentrations in CRE loans at some institutions. The Agencies are
concerned that these concentrations may make the institutions more
vulnerable to cyclical CRE markets. Accordingly, institutions with such
CRE concentrations should have both heightened risk management
practices and levels of capital that are higher than the regulatory
minimums and appropriate to the risk in their CRE lending portfolios.

"CRE" stands for "Commercial Real Estate." Boy, where were these guys when condos actually sold for less than $300,000, eh?

Let's take a moment to visit Inman, and the future head of NAR, Steve Dexter:

If that is the only way to get yourself the best wealth generation tool in history, do it. I am more concerned about the lack of deferred gratification young homeowners can exhibit. The mature homeowner makes their house payment, even if they eat beans for dinner
Steve Dexter

From the old days:

"If you paid your mortgage off, it means you probably did not manage your funds efficiently over the years. It's as if you had 500,000 dollar bills stuffed in your mattress.... [It's] very unsophisticated.'
-- David Lereah, chief economist of the National Association of Realtors and author of "Are You Missing the Real Estate Boom?"

There's a part of me that wonders if Lereah and his ilk pay trolls to spam news sites and blogs with crap like Dexter's. Hey, if pay-to-play is good enough for Richard Scrushy...

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Wednesday Housing News: The World Is Flat...

and so is the housing market. How's that for a buzzkill of an opening line, eh?

An NAR report finds that more than 4 in 10 first-time homebuyers put no money down on mortgages, thanks almost solely to the usage of "creative" loan products. Unbelievable. The proliferation of desperation, eh?

What's worse are new NAR head Thomas Stevens' comments:

"I think that's just a reflection of what we've been seeing in terms of the options that first-time homebuyers have," Stevens said at a briefing on Tuesday.

"I think if the number was higher than that I would be concerned," he said. Stevens said he could not provide comparable data for previous periods, but said he suspected the number of first-time buyers putting no money down had risen.

So, would you start worrying at 50 percent, Tommy Boy? 60? What'll it take?

The potential for a housing crash will continue to grow as more and more families find themselves flipped like a sinking ocean liner, with houses not appreciating fast enough to outstrip the increases in ARM or negative option payments. I found a fascinating essay from Bankrate on
how banks' financing of mortgages is really working--or NOT working--these days. I think the end is a little too Pollyanna for my taste, but the mechanics are essential reading for anyone who wants to start saving up to buy a home.

And as a commenter from Ben Jones' blog points out, saving is still possible, but much harder than people claim it is:

It is easy to accumulate $10,000 in your savings account -- if you earn $75,000 per year, your income tax refund will get you halfway there -- but it's hard to keep that amount over a period of years.

Most middle class people who buckle down and save for a house can't realistically save much. $10,000 is doable for almost everyone over 2-3 years. The very responsible ones will sock away $20,000. Only the top 5-10% (if that!) can save $50,000.

And once you penetrate all the arcane Fedspeak about the increases in the consumer price index, the picture grows bleaker. It's tough enough to exercise financial discipline when things are going well, but when gas prices average $2.50 a gallon and heating bills soar by 300 percent, one can only "buckle down" so much before your breathing gets severely restricted.

But that's ok, because according to Ohio State University, all you have to do is get married and have babies, and everything will be ok. Obviously the author of this article hasn't gone shopping for an XBox 360 lately. :)

Posted at 07:38 PM | TrackBack

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News from FEMAVille

The Gulf Coast will need more money for reconstruction. Shocker of the hour, I tell you. I really wanted to be wrong about the fact that all the rosy business forecasts post-Katrina really weren't taking the scope of the damage into consideration. This is HUGE, folks. It CAN be done, but it's gonna take a lot longer than anyone's willing to commit to, in terms of time, resources, and most of all, money.

Thankfully, Trent Lott is here to save us. I wonder if this has anything to do with his suing State Farm for not providing flood coverage, eh? :)

Back to the Gulf Coast debate--it troubles me that Powell's priorities are debris removal and temporary housing. While those are both absolutely essential, people also want to look at the long-term. Jobs. Homes. Businesses. Clean water. Development. Will Powell be able to address these issues effectively?

And of course, since no mention of the Gulf Coast can be complete without a mandatory FEMA dis, here's the latest from Oklahoma City. A-mazing. The whole agency should be gutted and rebuilt from the Cabinet level up. If you turn an agency into a rubber-stamp okidoke refuge, you'll get rubber-stamp okidoke service.

Just sayin'. :)

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Sunday Housing News: Grab Bag

The Times had a great article the other day about the trickiness of the home office deduction. The telling thing here is the contradictory information Sigal got from different accountants as to how much he would owe and how much he could write off. Much like brokers and agents, everyone's gonna have their proverbial "unified field theory" regarding what works and what doesn't, and we certainly can't depend on a Byzantine--nay, Gilliamesque--agency like the I.R.S to give us the straight scoop any more than we can the NAR. :) (Free registration required for the Times article.)

Here are some beautiful and heartbreaking images of the Katrina aftermath and recovery. Art enables us to face tragedy and catharsize our ability to deal with it, and there are few tragedies of recent years (at least in America) that can truly encompass the word as much as Katrina. Never forget.

Of course, the best response Bush could manage was to talk about how N'awlins is a heckuva place to bring your family, while not really doing much else. I try to stay as apolitical in this blog as possible, but stuff like this just makes my blood boil--and I can't imagine how it infuriated people at the heart of the devastation.

Didn't the deadline for registering for Wilma aid already pass? I could swear that it did. This is getting like those silly color-coded terrorism alerts. You have no idea what they really mean--it's all psychological brinkmanship and miscommunication.

Heckuva job, I tell ya.

Posted at 09:30 PM | TrackBack

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Wednesday Housing News: What Is A Home?

The debate over rebuilding New Orleans will be a major touchpoint for schools of thought on housing, economics, financing, and development for years to come. At its core is this issue....do we let people rebuild in a devastated, flood-prone area, or do we risk eviscerating a city with hundreds of years of history and heritage.

The simple truth is that disasters can happen anywhere, any time. California has earthquakes. Arizona has wildfires. The Midwest has tornadoes. Nowhere can ever be considered "safe," truly. So then we get into the question of why people build where they do. In New Orleans' case--indeed, for the whole Gulf Coast--this is about culture and tradition, rather than economics. Those are factors that HAVE to be thought of when discussing the rebuilding and what form (if any) it will take.

A home is about more than its resale value, its equity, or its appreciation. It's about raising your family, owning your property, mowing your lawn, and having the world you want for yourself. Even as recently as two years ago, you'd have thought I was speaking Esperanto in the frothy, frenzied, speculative-centered market if I'd said this. But now I think people are getting it.

This challenge to the eminent domain ruling is a good example of what I mean. Money quote:

"When the municipalities and the people that have lots of money decide they want what you have, you don't own it," Gamble said. "You bought it, you paid for it, you kept the taxes up, you kept the appearance up, but it wasn't yours."

Indeed. Words to remember in the next few months when all of those interest-only and adjustable-rate mortgages go belly up and the foreclosers come calling.

Posted at 06:56 PM | TrackBack

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Housing Bubble: The Predator

"There's somethin' out there in the jungle waitin' for us...and it ain't human..."

I reference this pillar of classic '80's action movies in discussing the current effort by Congress to weaken state anti-predatory lending laws in favor of lame federal laws that're bought and paid for by the mortgage industry.

Look, everyone knows by know that housing is driving the economy. That's why we're all on pins and needles about a bubble deflation. That's why companies like ABN AMRO were able to get away with defrauding HUD, because the government was willing to look the other way as long as deals kept getting closed and houses kept getting sold. However, ABN AMRO overreached itself, and the collapse was inevitable.

The states (and D.C.) have been much more stringent and consumer-friendly when it comes to challenging subprime lending, as evinced by the Ameriquest settlement. You can't say that it doesn't benefit the states to keep a housing boom, but they're also the first ones to feel the pinch from foreclosures, defaults, bankruptcies, etc. It's in their best interest to keep the market safe and their economies humming.

Seriously, would you trust a guy like Bob Ney--Mr. "I eat Freedom Fries with Jack Abramoff"--to craft lending laws that'll benefit the buyers?

Here's an absolutely blistering essay on the current market. It's worth reading. I'm not quite as strident about this as the Health Ranger, but I am completely with him when it comes to the basic truth of today's market: If you can't balance your checkbook, you shouldn't be buying a house. Corollary to that: A commission-based system is going to push the sale, regardless of whether or not it's good for the buyer.

The apex predator in our system will be the informed consumer. Someone who comes to any housing market armed with the most knowledge and research will be--to get back to the movie--"one ugly motherf^&%er" who "ain't got time to bleed."

Posted at 05:23 PM | TrackBack

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Housing News: From ABN AMRO to the Gulf Coast

I keep trying to come up with a funny counterpoint to "ABN AMRO," but it's just not happening. You'd think something like that would be begging to made fun of.

Anyway, here's an interesting column from the the National Mortgage News that discusses ABN AMRO a bit more. The upshot of Muolo's column is that HUD lacks the experienced field agents and advisors to get out there and investigate fraudulent claims. I'd love to find some statistics for HUD and FHA's hiring and firing circa, oh, say, 2000, and see if it compares with the increase in housing sales due to low- or no-document loans.

COULD IT BEEEE....SATAN?????

Another challenge to Kelo vs. New London, this time in Denver. I find it fascinating that the Court would pass a law like Kelo, and yet contain an injunction saying that states can block it at their leisure. Another example of how checks and balances are supposed to work, something I think Samuel Alito would do well to keep in mind.

Here's some more about what the prime mover, Colorado Citizens for Property Rights, is up to in this struggle. If you look a bit more closely at the Free Colorado site, they're all up in libertarianism. Hard to tell, actually. :)

FreeColorado also has this absolutely heartbreaking essay about conditions in the Gulf Coast. I think people are so desperate to forget the enormity of the tragedy--and the media is only too willing to assist them--that they're pushing any news that isn't good square out of their minds. But you can't do that. These are real people, with real lives, who are really suffering. You need to pay attention and not forget how terrible it is down there.

Here's another story about the invisible coast. You need to have this burned in your mind and find some way--any way--to contribute. Even if you can give Just One Book, it's a start.

Posted at 08:24 PM | TrackBack

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Saturday Housing News: ABN AMRO Been Rolled

With all the scandal and corruption in the news of late, one very interesting bit of business got the short shrift, that being HUD extracting a a $41million settlement from the ABN AMRO mortgage group.

According to the settlement, ABN AMRO employees basically rubber-stamped 28,000 loans to offer to FHA as insurable, when they didn't qualify, or the underwriters in question didn't even bother checking. See, this is yet another example of the dangers of the frenzied housing market--all those wacky no-document loans with no one properly fact-checking to make sure the people can qualify for assistance. Here's more about it from ABN AMRO's own press release, as well as articles from ABC News and USA Today.

Money quote from the ABC News article: It also came amid a housing boom that led many lenders to skip steps to boost loan volume, and HUD's general counsel said he expects many other lenders took short cuts as well.

HUD's Office of Inspector General is working on other cases of false certification, HUD said.

You can expect to see a lot more cases like these as the market slows down and more people start checking into the volumes of cheesy loans banks handed out like cotton candy at the fair.

The ever-marvelous Housing Finance blogerati has some additional investigating on this. Given that the Bush administration's record on prosecuting corporate crime and oversight is anything but stellar, one has to wonder if their zealousness about this is more in line with their desire to privatize more and more of the government housing industry.

And at this point, it's almost par for the course that Bush would hire yet another crony to handle this job--after all, being a bank president somehow made Donald Powell qualified to run the Gulf Coast recovery effort.

Still, it's not like ABN AMRO's hands are somehow pristine. After all, if they couldn't keep track of where their customer data went, would you trust them to handle your mortgage underwriting?

(OK, it's really more DHL's fault, but still...)

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Wednesday Housing News: FEMA, Lame as Ever

Another casualty of Katrina, in its way: FEMA inspector crippled by bullet. I'm sure there're a lot of people crowing about how he got what he deserved and such, but that's just infantile. The poor guy was probably like hundreds of other FEMA employees just trying to do their jobs and getting screwed by incompetent management. I wouldn't even put a bullet to Mike Brown, because he deserves no sympathy whatsoever.

If you're a Hurricane Wilma survivor and need aid from FEMA, the deadline for aid applications is tomorrow. Of course, even applying for aid has perils of its own, as condo owners in Florida found out. Money quote:

It turned out that associations couldn't get assistance because they technically are corporations and FEMA has a rule against assisting corporations.

"It didn't matter that the unit owners owned the corporations, which aren't for profit," Rizzo said. "FEMA just saw them as corporations that they couldn't aid. I explained that in order to help the people they must help the corporations."

You gotta read through A Legacy of Waste to see who FEMA is aiding, and the level of stupidity they exhibit throughout. Just nuts. But as I said, that's what happens when you hire or contract out inexperienced people, give 'em no training, and expect them to follow confused directives issued by the agency that thought grooming Arabian horses was the perfect training for disaster management.

Posted at 07:22 PM | TrackBack

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Hurricane Housing: A Bright Spot?

The New York Times is all up in some interesting real estate articles of late. Particularly worth reading is this piece on the surprising strength of home sales in New Orleans. (Free--registration required.)

As I'd suspected, the bulk of buyers in the Big Easy are speculators--flippers looking to take wrecked homes and make quick profits off the fix-em-up. It's this kind of behavior that will continue the Midwest housing boom, which will in turn propagate bubble conditions overall. Still, after some of the crap I've reported on this blog regarding the sad state of post-Katrina N'Awlins, ANYTHING that's good news is worth pushing...if only for a while.

FSBO isn't an acronym for some kinky online ad description (though it should be!), but the shorthand for what the Times calls the largest Web-based discount brokerage around. This is a feel-good story if ever there was one. Money quote:

"The majority of residential transactions are very simple: 99 percent can be done without a broker. And the 1 percent screwed up - the broker couldn't have prevented it."

If anyone can slap a badge on their lapel and say they're a broker, why do you even need one anymore? Pocket that 6% yourself and cut the middleman out once and for all. Remember, these guys got sued for a reason. (Hat tip to the FSBO Blog. :))

When it comes to the wall of silence the NAR maintains regarding their MLS listings, they could teach the Soprano crew a thing about "omerta." And speaking of which, peep this piece about Lorraine Bracco's love for real estate.

Don't get me wrong--Lorraine's a very talented actress and intelligent woman (not to mention easy on the eyes in that MILF-esque way), but I'm not gonna trust my real estate picks to anyone that deep in debt to the Feds. Then again, the next time your property taxes bum you out, just look at those stats and pat yourself on the back!

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Housing News: Annnnnd....We're Back!

Hope everyone had a pleasant and appropriately debauched New Year's Eve. I'd talk about mine, but the arrest warrants just got issued the other day, so my lawyer advised me to stay silent. Moving on...

The Wired article I mentioned earlier about the coolness of new-tech prefab houses is online. Well worth reading, just for the geek factor alone.

The New York Times had a fairly good look at whether or not homes are more affordable now. The conclusion seems mixed--you can get a lot more home for your buck, but you also need both the husband and the wife out there winning bread to get it done. And not only that, but the house is being used not only as a dwelling, but as an ATM--a "bank" to pull money out of for expenses both necessary and luxurious. Money quote:

In a nationwide New York Times/CBS News poll conducted this month, 75 percent of respondents said they thought most families in their community spent a larger share of their income on housing now than in the 1980's. Only 5 percent said the share was smaller.

This has caused mortgage payments to rise over the last generation - especially among high-income families, according to Federal Reserve data - for reasons besides the cost of housing.

Bankruptcy expert and Harvard professor Elizabeth Warren provides some much-needed contextual analysis over at TPM Cafe. Actually, the most telling bit of news isn't in Warren's article, but one of the comments, specifically this one. Granted, Orange County is one of the richest regions in America, where $300,000 a year is middle income, but California has always been a prophetess of the housing market, for good and ill. What happens there on the microscale may be what we can look forward to on the macro scale.

Of course, then you have guys like Ed Glaeser, who insist that Boston's own slowdown isn't due to insane prices, lack of land, or consumers' dwindling appetites, but those pesky environmental regulations. Never mind that those regulations are responsible for, say, the air we breathe.

This is another example of the housing boom battle in microcosm--the NIMBY attitude of suburban homeowners who want space and luxury, versus the "grow at any cost" developers and builders who want to erect junk condo after junk condo. It's a lose-lose situation, especially since the real losers are first-time homebuyers and renters who simply can't pull together the funds to meet the astronomical demands of the market. The slowdown is going to force everyone to reevaluate their stances on housing, and hopefully will produce better results than all this bitching.

Of course, if you want to bitch about the housing market, read this absolutely merciless essay on how Greenspan skewered America. Bernanke would do well to check this out--it's a look into his own future if he doesn't get things back on track.

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