Real estate market slow to respond to gov't plan

[inanna]

Source: AP

KANSAS CITY, Kansas (AP) -- By late Saturday afternoon, only three prospective homebuyers had visited the open house Valerie Morrill was hosting. The Prudential real estate agent recalled a year ago, she'd see 10 to 15 people during an open house in this midtown Kansas City neighborhood.

She said the government's efforts to bring stability back to the economy and the credit markets may help but she's seen no immediate improvement.

"It's just the buyer pool is so low," she lamented. "Eighteen months ago, you needed $500 to buy a house." Now, all the special rates and government programs are gone, leaving buyers facing a 10 percent down payment. "You have to have money and nobody has money."

<snip>

Despite the Bush administration's historic and head-spinning $700 billion rescue of the financial industry, it will do little to ease lending standards so more homebuyers can qualify for loans, nor has it had much affect on mortgage interest rates so far.


Read more: http://hosted.ap.org/dynamic/stories/F/FINANCIAL_MELTDOWN_HOUSING?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2008-09-21-17-40-25

[bemildred]

1. Oh heck, why isn't everyone out buying houses now?

The government said it was going to be OK!

[johnnyrocket]

2. Yeah, you mental recessionist, get off your ass and buy a house you can't afford..

...it's your damn patriotic duty to keep these investment firms fat, rich, and happy.

/end of snark.

[2Design]

3. prices are more than 2 1/2 times annual salary - that is the problem - change that n/t

[PSPS]

4. You hit the nail on the head

Houses aren't selling because they're priced way too high, still sometimes five or six times median income for an area. In a normal healthy market, it should be two to three times median income, as you pointed out.

The only way people could afford to buy before the bubble burst was to get a toxic mortgage, usually a liar's loan with no proof of income and exotic payment options. One of these options, the zero payment one, was the one usually chosen. When these option arms get recast between now and 2012, virtually all of them will result in foreclosure because the buyer can't qualify for a real mortgage and the real value of the house is far less than the amount owed on it.

In my area, the housing inventory (houses on the market in MLS) is well over two years big. In a normal healthy market, it would be 90 days to six months big. People are still asking insane prices for houses, either because they can't sell for less (the bank won't do a short sale) or they still think those granite/uranium countertops really did add $300K in value to their one-story 900SF bungalow.

This pending trillion dollar theft for bush cronies won't do anything at all to solve this aspect of "The Problem." But, of course, it isn't really meant to. All it is intended to do is "buy up" the markets through the election. Think of it like this: The market is going down because nobody wants to buy, say, stocks. They know they're overpriced. So to keep prices from falling, you send someone with a checkbook on a trillion-dollar account and he's given instructions to "buy everything." Well, there you go. It's like the housing bubble -- an irrational pumping up of prices because there's no obstacle to getting credit. In this case, the markets get priced pumped up because there's no obstacle to getting a buyer at any price because there's this guy with a trillion dollars in his pocket and he's buying anything and everything regardless of the asking price.

[2Design]

6. wall street were part of this ponzi scheme of housing and help perpetrated further

with the bundled loans - they created this ponzi scheme - they cheered it on and they want to take even more money - then they will say we can't afford health care, social security, education - they tried to get the money by privatizing ss and trying to break the unions for education and every thing else they have done to fleece america - and they will make it about the dem congress - they are robbers and goons - this money will not solve the problem and it will come back to roost on our watch - this is my thought - if the dems vote for this bail out BS they can stick it - they voted for the rest of the fear factors and they have played the same game multiple times and these idiots say they are against the war and then give more money to be wasted -

[radfringe]

5. McCain only has 7 or 8 houses,,, why doesn't he buy a couple of more

boost the economy! be patriotic - go shopping!