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Monday, May 23, 2011

Cock-a-doodle-doo!


Cock-a-doodle-doo!!

Rise N' Shine!...    Wakey wakey!...    Up n' At'em!..

~bangs on pots & pans

Time to start waking up if you're not already-- there is No recovery and will not be one for quite some time.  Time to get very angry and start targeting the men and women in public office of both parties who are destroying your future while they play the blame-game.

Two years ago, the politicians and media pushed forth a big lie with a clever sounding name.. 'Jobless Recovery'.  This meant that everyone in the know, knew that unemployment would be terrible for a long, long time but to temper the mood of panic and despair, they promised a recovery based on other factors.  And the biggest 'nail' to hang it on, was housing.

Well in case you didn't know by know, housing is officially in a 'double dip, and I don't mean chocolate ice cream with whipped creme and jimmies.. and its getting worse.   The following article is from New York Times printed yesterday, May 22 in blue font and gives some context to how bad things really are:  

As Lenders Hold Homes in Foreclosure, Sales Are Hurt

"The nation’s biggest banks and mortgage lenders have steadily amassed real estate empires, acquiring a glut of foreclosed homes that threatens to deepen the housing slump and create a further drag on the economic recovery.... they own more than 872,000 homes as a result of the groundswell in foreclosures, almost twice as many as when the financial crisis began in 2007... In addition, they are in the process of foreclosing on an additional one million homes and are poised to take possession of several million more in the years ahead."

~ Simple math:  872,000 + 1,000,000 = 1.872 million homes simply by year's end.  These are or will be bank-owned homes.  Not new homes held by developers and yet to be  sold... Or homes that people have lived in an need to or wish to sell for various reasons..


continuing..

"Five years after the housing market started teetering, economists now worry that the rise in lender-owned homes could create another vicious circle, in which the growing inventory of distressed property further depresses home values and leads to even more distressed sales. With the spring home-selling season under way, real estate prices have been declining across the country in recent months.


Over all, economists project that it would take about three years for lenders to sell their backlog of foreclosed homes. As a result, home values nationally could fall 5 percent by the end of 2011, according to Moody’s, and rise only modestly over the following year. Regions that were hardest hit by the housing collapse and recession could take even longer to recover — dealing yet another blow to a still-struggling economy."

~  OK- First, what does it mean to lose 5% value of your home is basic math?  Let's say you have a home that Dec 31, 2010 was worth $225k.. and by Dec 31, 2011, you will have lost 5% value.. That means a loss to you of $11,250 in Real money based on that example.  And if your home is worth more, you will lose more.   Think of it this way- if you make a yearly salary of $50k, it would take you about 3 months of working to generate enough paychecks to equal $11,250... and the real estate market wiped it away... Poof~  How do you recoup the loss?

Second, notice how the Times expresses the problem.. "yet another blow to a still-struggling economy".  Yes, an economy that is struggling and Still continues to struggle is NOT recovering.   When a national economy that is Both jobless and real estate-less, it is NOT even beginning to 'recover'.  

"Banks and other lenders remain overwhelmed by the wave of foreclosures. In Atlanta, lenders are repossessing eight homes for each distressed home they sell... In Minneapolis, they are bringing in at least six foreclosed homes for each they sell... Before the housing implosion, the inflow and outflow figures were typically one-to-one...


The major lenders say they are not deliberately holding back any foreclosed homes. They say that a long sales process can stigmatize a property and ratchet up maintenance and other costs. But they also do not want to unload properties in a fire sale.  “If we are out there undercutting prices, we are contributing to the downward spiral in market values,” said Eric Will, who oversees distressed home sales for Freddie Mac. “We want to make sure we are helping stabilize communities.”"

It is government manipulation of the real estate markets via Freddie and Fannie Mae which have played a major role in the instability of prices and nothing is going to alter it.  Its basic law of supply and demand.. unless a home is exceptional or in a very desirable location, the buyer has the upper hand in the real estate transaction and he/she can wait a very long time if need be to get their price point.

Then again, that's assuming there's plenty of buyers around for sellers to negotiate with.   To be a home buyer you have to have great credit, a good paying, secure job and enough money in the bank to make the down payment.  In order for there to be a true buy/sell market free from manipulation, there has to be people with jobs and savings stashed away.

When official unemployment is at 9% (its really at 17% unofficially), its hard to create the same pool of buyers as you had pre-crisis.  And without pool competing with one another, prices would have to continue dropping precipitously until that larger pool of buyers was created which could be able to purchase the distressed homes and decrease the overall glut in available properties.

So you see, this housing market is not improving any time soon.   And employment is not increasing any time soon.   And without either, what do you base a so-called economic 'recovery' on?

Cock-a-doodle-doo!

Wake up dear readers.. you're being lied to and not Even for your benefit.

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