Abigail Field | Bankers Are Still Wrecking Housing Market Fundamentals

Bankers Are Still Wrecking Housing Market Fundamentals

Regardless of the recent bullish stories on the housing market (examples here, here, here and here), housing market fundamentals are lousy. Demand in the last decade was wildly distorted by banker abandonment of underwriting and appraisals. Now bankers are worsening the crash they created. As a result, prices will just keep falling, and foreclosures cannot lead to clearing the market (regardless of what some say). Foreclosures can only make the problems worse.

Market Distortion From Excess Demand in Bubble Years

As a first step to seeing the problems, let’s get real about how profoundly market-distorting that lender-inflated bubble was. People who could not afford to buy homes, period, were nonetheless given loans, artificially expanding the number of people expressing demand. In addition, people who could have afforded a house, if not the house they purchased, expressed their natural demand in the ‘wrong’ segment of the market. Both distortions combined to spike prices far higher than natural demand would have driven them.

To see the price spike, consider the median and average home prices, nationally, in 1976, 1986, 1996, and 2006, using August values in each year, in constant 2006 dollars:

Rest here…

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4closureFraud.org

Comments
4 Responses to “Abigail Field | Bankers Are Still Wrecking Housing Market Fundamentals”
  1. Ali says:

    What is so hard to understand that there must be a clear title and complete legal chain of title to transfer real property, buy property, foreclose on property, and for any transations including loan modifications of REAL propert as defined in the Contitution of the United States of America. Oh and there’s a little matter of the Uniform Commercial Codes as applied per state. We laymen get it, how come the people put in positions of power, Judges, Lawyers (Officers of the court) clerks and Recorders offices. Seems everyone is getting a piece of the homeowners REAL property but the homeowner. For god’s sake, even the clerks who handle the paperwork have to take an oath of office. If a home owner wants to access the equity in their own property it should be no ones buisiness but their own. Corporations file bankrupsy all time, and it seems to me they are the biggest “Deatbeats”, around. They haven’t even paid back the money that us taxpayers have lent them, why should the investor be bankrupsy remote? Now they are above the law, too. This is a travesty and don’t forget it is an election year and there are millions upon million of citizens who are very angry! There will be no econonic recovery without a housing recovery. Reinsate Glass-Stegal, give back what was stolen, and maybe the economy will start to recover. Who ever thought (and they know who they are, so do we) that making peoples homes a trading tool the casino called wall street were well, quite frankly, assholes. What genuses!

  2. Th banks have to much power no one will do the right thing in order to fix the home crisis, and as long as the hosing crisis is not resolved the recession will persist, First we we need to fire Ed Demarco

    http://www.newbottomline.com/fire_fhfa_director_ed_demarco?utm_campaign=demarco_4_s&recruiter_id=6420&utm_medium=email&utm_source=bac

  3. Ron Moss says:

    Ron Paul understands the need for a change with thre unfederal reserve

  4. Pamela Edwards says:

    At some point in time lets hope someone gets a clue about where this is going,seems like ssdd.Foreclosures are on the rise once again and still you havethe sheeple who believe it will always effect someone else not them.People are not learning they are simply repeating whats already happened.Until this changes foreclosures and under water home ownership will continue to reign supremeIMHO.

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