Time to Buy a House? Not on Your Life!


Time to Buy a House? Not on Your Life!

Soon the Foreclosure Floodgates Will Open and Prices Will Plunge

Anyone who buys a house in today’s market should be aware of the risks. They should know that current prices are not supported by fundamentals, but by unprecedented manipulation by the Fed, the Obama administration, Wall Street Private Equity investors, and the nation’s biggest banks. If any of these main-players withdraws or even reduces their support for the market (in other words, if the banks release more of their distressed inventory, if rates rise, if PE firms buy fewer homes, or if the Congress curtails current mortgage modification programs), housing prices will fall. Given the increasing volatility in global stock and bond markets in recent weeks–which is likely to intensify as the Fed  implements its exit strategy from QE– interest rates will continue to fluctuate putting downward pressure on housing sales and prices. The impact the Fed’s policy will have on markets and the economy is unknown. The Central Bank is in uncharted water. That makes it a particularly bad time to buy a home. Caveat emptor.

When we say that fundamentals are weak, it means that the factors that typically drive the market are not strong enough to boost sales or push up prices. In a normal market, “first-time homebuyers” and “move up” buyers would represent the vast majority of sales. In today’s market, these two “demand cohorts” are actually quite weak, which is to say that current prices are not sustainable. Consider this: According to Lender Processing Services (LPS) Mortgage Monitor for April, there are  “4,699,000, or 9.76% of home loans delinquent or in foreclosure as of April 30th”…” (“Mortgage Delinquencies Down….But a Record 843 Days to Foreclose“, Naked Capitalism)

So, nearly 5 million homes are either seriously delinquent or in some stage of foreclosure. This unseen backlog of distressed homes makes up the so called “shadow inventory” which is still big enough to send prices plunging if even a small portion was released onto the market.   In other words, supply vastly exceeds demand in real terms. Now check this out from Zillow:

Rest from Counter Punch here…



5 Responses to “Time to Buy a House? Not on Your Life!”
  1. BUT in some area’s where the market is below the cost of a new home, they will stay the same or rise

  2. Sarah says:

    Great advice. The economy has so many serious problems and the Banks are still being supported by sacrificing what’s left of decaying middle America. Never again you crooks!

  3. BOBBI SWANN says:

    Being in the mortgage origination business I can relate more easily to the facts of this posting. I agree that the forecast, as it stands, is more than likely to bring about another recession and devaluation of properties but more so in certain areas of the country. Here in the state of Florida we have not yet recovered from the financial disaster of 2007 and another hit to the market will throw us into total economical collapse. I do believe, however, that there are remedies that can be implemented to eleviate some of the economic recklessness of the banks,etc. What we really need is principal forgiveness on some of these underwater homes so that homeowners can continue to own their homes and keep the market in a stable condition. We also need the judicial system to be rectified to the point that judges act accordingly to due process and for those foreclosures that are fraudulent should be dismissed with prejudice. Let the banks take the loss rather than an illegal foreclosure where they continue to hold the property out of the market in a means to manipulate prices. I’ve been in two foreclosures thus far since 2007. One was dismissed and eventually the mortgage was discharged and the other is still ongoing. That’s 6 years and counting!!! The first 5 1/2 I represented myself as pro se and more recently in the last 6 months I retained an attorney. My main defense is no standing but there are other infractions like robo signing and out right fraud. To have to fight in the courts this long is unforgivable on the court system (judges) who tend to lean towards the bankers each and every time. I will not give up. I will not walk away. We must move together towards voting in new representatives, new senators, new congress people and a new president. We must continue to band together for financial reform and adherence to the penalties imposed by law for ALL parties for crimes committed. If we allow these entities to continue control, we all face what consequences this posting outlines. That is financial disaster and the ultimate demise of The United States of America!

    • marilyn lane says:

      Among other frauds Astoria Federal S & L successor in interest to Fidelity NY FSB perpetrated in order to steal my two NYC condos was they hid two mortgage checks on each property thereby never being able to send compliant acceleration letters without putting the cart before the horse
      NO PROBLEM for Astoria. They solved all obstacles to foreclosure by using void ab initio judgments signed in state court while the case was under Federal JURISDICTION.


      I BROUGHT two MOTIONS TO SHOW CA– USE TO NYSC pursuant to the US Supreme Elliot v. Piersol AND JUDGE Schlesinger ruled it wouldn’t be right to evict the parties who had the Forged Deeds especially since Thomas Malone Attorney from Fidelity National Title and David K Fiveson of a sham title company he called Coronet Title told judge Schlesinger they have ‘EQUITY”and she ruled against Elliot v. Piersol

      After many Appellate motions including a direct appeal to the Court of Appeals
      Chief judge Jonathan Lippman”s decision stated
      ” motion for leave to Appeal dismissed upon the ground that the order sought to be appealed from does not finally determine the action within the meaning of the Constitution”
      and the first dept of ny appellate refused to give me a final decision so it remains in limbo.

    • genefl says:

      Robbi I have to gently disagree with your conclusions. If the status quo continues, foreclosures will continue without protections (judicial, administrative, political) for those facing foreclosure, no entities will be held accountable for the collapse or post collapse frauds, and very few homeowners facing foreclosure will receive assistance such as principle reduction. The injustice will unfortunately continue. The masterminds in power will continue to wield that power and influence to ensure the continuance of past and present policies. The illusion that is the US economy, the world economy will continue with artificial pumping of monetary supply to big institutions, money that never trickles down to the masses but nonetheless keeps these false economies going.

      The premise of the article is that we are in an artificial housing market, that current valuations are inflated, and that the bubble will pop when the shadow inventory hits the market. I believe the powers that be have a game plan for the influx of the shadow inventory that include just letting the houses rot, bull-dozing them, and/or selling them in bulk to investors at pennies on the dollar. After a foreclosure and after insurance pays the claim, servicers could care less about what happens to the property. I’m not disagreeing that it is a big risk to buy a home in an artificially inflated market. My point is when has the housing market (and the economy in general) NOT been artificially inflated and that there is always risk when buying something.

Leave a Reply