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All Of These Real Estate Markets Have Something In Common

A report from The Naples News in Florida. “Has it become a buyers’ market? Zillow, indeed, has declared it just that, now officially designating both the Collier and Lee County areas as cold markets. As of July, its freshest data, Zillow shows listed Collier real estate lingering on its site for an average of 142 days ⁠— the fourth highest peak in six years in a market full of crests and valleys. Lee has stayed more consistent recently, with listings staying within 100 and 115 days, since 2017.”

“Jeff Jones, president of NABOR and broker at Keller Williams Naples, noted that owners of almost a third of homes in his market dropped their prices in August. ‘There were 1,443 price reductions made during August, which is important for buyers as this is an indication that many sellers are eager to sell,’ Jones said. Developers, such as Neal Communities, which is building nine Southwest Florida housing projects, are also providing incentives on their homes, cutting prices on some by as much as $30,000 and offering to cover closing costs.”

From NTD on New York. “For years, Chinese money has been the darling of the real estate industry, but that has been changing. U.S. home sales to Chinese buyers are likely to drop to an eight-year low. The $13.4 billion investment for the year ending in March is down more than 50 percent compared with more than $30 billion in both 2017 and 2018. And that decline has hit hard on the luxury apartment market in Manhattan, according to real estate broker Jason Haber at Warburg Realty. ‘Every other article in the news today and real estate is ‘high-end market struggling,’ ‘luxury market struggling.’ A lot of that is because of the decline of the Chinese buyers.'”

The New Jersey Hills. “The local real estate market continues to ebb and flow, with developers pushing for more rental housing, sales of million-dollar estates still struggling, but homes priced under $1 million selling well, according to local Realtors. The sluggish sales pace of million-dollar homes dates back to the economic downturn in 2008, said John Turpin, president of Turpin Realtors of Far Hills.”

“‘On the face of it, it’s a lack of confidence’ in that market,’ he said. ‘It does not necessarily mean people don’t have the money. It’s (a matter of) being uncertain as to whether it’s a smart move.'”

The Chicago Tribune in Illinois. “Homebuilder Jerry James, president of Glenview-based Edward R. James Partners, doesn’t need to study statistics to grasp the sluggishness of the local housing market. He lives it. ‘This is the toughest I’ve seen it, and I’ve been in the business since 1985,’ James says. ‘Whether you own a home in Carpentersville or Hinsdale, the value of your home is being hit hard,’ James says. ‘For the middle class, that’s their nest egg. This is not just an upper-class problem. It’s anyone who owns a piece of property.'”

“Catering to empty nesters, James sees the investment losses homeowners are experiencing when they downsize. Why is it happening? ‘Increasing taxes on property as a result of the pension situation is it in a nutshell. People’s homes aren’t appreciating, and tax bills are going up. It’s a bad combination that doesn’t feel good to anybody.'”

The Nashville Post in Tennessee. “Anthony Hitt, CEO of Engel & Völkers Americas, said Nashville is ‘ripe for buyers’ thanks to its increasing housing inventory and tech startups.”

From WREG in Tennessee. “People in a Midtown neighborhood are fed up after they say squatters moved into a five-bedroom house on North Parkway. Neighbors say the home at 1716 North Parkway had been empty for months after the former owners moved out earlier this year. With the home now in foreclosure, residents say squatters have taken over and they feel there’s nothing being done about it. ‘We started paying a little more attention and realized somebody’s squatting in this house,’ said Taylor Capocaccia. ‘The fact that somebody would come and go so easily at a house at one of the busiest intersections in Midtown is kind of shocking.'”

“Since the home is listed as foreclosed, Capocaccia said there’s no one to kick the new residents out. Several people we spoke with say the trash on the property has made this once-beautiful home an eyesore. The company foreclosing on the property, BSI Financial Services, said they are aware of the issue and they plan to deal with it within the next 48 hours.”

The Las Cruces Sun in New Mexico. “While median home prices in the greater Las Cruces area continue to appreciate, the median price in Picacho Hills is struggling to keep pace. According to the MLS data, the median price of the single-family homes sold in Picacho Hills between 2015 and 2016 rose by $84,500, or 34.1 percent. The median prices in 2015 and 2016 were $248,000 and $332,500, respectively. Beginning in 2017 and continuing through 2018 and 2019, the median price declined each year.”

“During the first eight months of 2017 the median price declined by $7,500, to $325,000. Between 2017 and 2018 the median price dropped by another $14,500, to $310,500. This year, the median price fell by an additional $21,500, to $289,000. On the bright side, the time it takes to sell a Picacho Hills home has steadily declined over the past three years, dropping to 139 days this year from a high of 277 days in 2016.”

The San Francisco Chronicle in California. “The price of living in a San Francisco icon just got a few million dollars cheaper. The penthouse of the famed Clock Tower building on Second and Bryant streets came to market in 2016 asking $8.5 million. It later went off the market without a sale. But now it’s back — and asking a mere $6 million.”

The Home Buying Institute on California. “There are plenty of U.S. cities where values are actually dropping right now. And in some cities, they are falling fast. Today, we’ll be taking a look at some of the California cities where home prices are dropping in 2019 (and could continue to drop into 2020). Draw a big, imaginary circle just to the south of San Francisco. Make sure it includes most of the South Bay and East Bay regions, along with all of Santa Clara County. That’s where prices are dropping.”

“As of fall 2019, home values were falling in places like Cupertino, Mountain View, Palo Alto, San Jose and Sunnyvale. All of these real estate markets have something in common. They’ve all experienced rapid (and unsustainable) home-price gains over the past few years. In most of these markets, severe inventory shortages have created a kind of frenzy among buyers that causes them to make offers above the asking price. This in turn has caused home values to skyrocket.”

“But those days seem to be in the past, for the most part. Now the trend has reversed. Instead of skyrocketing, home prices are now plummeting in some of these California cities. The biggest price drops seem to be occurring in the South Bay / Santa Clara Valley region of the state. In some of those cities — like Cupertino and Milpitas — median home values have dropped by more than 10% over the past year.”

From KITV on Hawaii. “Oahu’s shortage and higher costs of housing have been partially blamed on illegal short term rentals, but market researcher Ricky Cassiday said that has not been the case on Oahu. ‘This is a good economy. For our rent not to go up, it had to be there was plenty of supply or no real demand for long term rental units…like in Waikiki,’ stated Cassiday. In Kakaako, where many new condos went in, rents were even found to have dropped. ‘The reason why the average rent is going down is more listings, there is extra supply,’ stated Cassiday.”

The Wall Street Journal. “For years, WeWork’s parent company was defined by big spending as it relentlessly pursued rapid growth. Now, in the aftermath of a botched initial public offering attempt and the ouster of co-founder and chief executive Adam Neumann, it is facing a different reality: It needs to stop bleeding cash. We Co. had $2.5 billion of cash as of June 30. At its current rate of cash burn—about $700 million a quarter—it would run out of money some time after the first quarter of 2020, according to Chris Lane, an analyst at Sanford C. Bernstein & Co. He and his colleagues projected in a recent note to clients that We would burn through nearly $10 billion in cash between 2019 and 2022, assuming it keeps growing.”

“‘Something is wrong,’ said Nori Gerardo Lietz, a lecturer on real estate and venture capital at Harvard Business School ‘They’re not managing their growth—they’re spending money like drunken sailors,’ and their general and administrative costs are growing too fast, she said.”

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  1. ‘the median price of the single-family homes sold in Picacho Hills between 2015 and 2016 rose by $84,500, or 34.1 percent. The median prices in 2015 and 2016 were $248,000 and $332,500, respectively. Beginning in 2017 and continuing through 2018 and 2019, the median price declined each year’

    Maybe shack prices can go up too fast?

    ‘As of fall 2019, home values were falling in places like Cupertino, Mountain View, Palo Alto, San Jose and Sunnyvale. All of these real estate markets have something in common. They’ve all experienced rapid (and unsustainable) home-price gains over the past few years…But those days seem to be in the past, for the most part. Now the trend has reversed. Instead of skyrocketing, home prices are now plummeting in some of these California cities’

    Eat yer crowz Thornberg!

  2. ‘Something is wrong,’ said Nori Gerardo Lietz, a lecturer on real estate and venture capital at Harvard Business School ‘They’re not managing their growth—they’re spending money like drunken sailors’

    Harvard, the last fools to get a clue.

    1. With the median downpayment under 10%, the median buyer of 2018 is now underwater from the Bay Area to Seattle. Coming soon to SoCal. Would be interesting to see if there is a study that analyzed how far, and for how long, people have to be underwater before they give up and stop making payments. Might provide some predictability for the next stage of the bubble: foreclosures.

      1. http://www.foreclosureforum.com/stats.html

        For San Diego, it looks like peak notices of default hit in spring of 2009 and prices peaked in 2005/early 2006. Guessing the average default notice took six months to a year to get sent out. So the average person probably stopped making payments in 2008 at which point prices were about 25% off the peak.

  4. Whether NJ or Illinois, your nest egg is a target for ever rising proprty taxes to pay insane public union pensions.

    “‘For the middle class, that’s their nest egg. This is not just an upper-class problem. It’s anyone who owns a piece of property.’”

  6. “Now, in the aftermath of a botched initial public offering attempt”

    Equals…

    Make no money and burns through all cash within a few months and default on bonds and default on signed leases…

    Some botching!!!!

  7. I hate that quote.

    Drunken sailors spend cash on beer, liquor and women. Until the cash runs out. And then they stop spending. And go back to the ship and work until the next paycheck.

    I only wish government and dot.comv2.0 businesses were so prudent.

    “they’re spending money like drunken sailors,”

    1. The kitchen seems ok, but you’re right, it looks like a cheap flip. Brown rugs in all the bedrooms? Mismatched engineered wood flooring? A fireplace in the bathroom? And those bookcases next to the fireplace in the living room… for a $1.5M house, those should be high-end built-ins.

        1. It was difficult to see materials from the picture.

          There’s one trend in kitchens that I HATE HATE HATE. That is a cooktop out in the middle of the island, exposed with no barriers whatsoever. ESPECIALLY if it’s a gas cooktop. Imagine the kiddies doing homework in the kitchen with mommy — which always seems to show up as one of those common fantasies of suburbia — and mommy fires up some hot cocoa on the gas stove. Or kiddie reaches out to touch something near the electric smoothtop. It’s a massive safety hazard, and should be a dealbreaker.

          1. a massive safety hazard

            Kids are not stupid, just inexperienced. I remember my son reaching out to touch a waffle iron (old school) and I softly said “it’s hot”. He still remembers too.

    2. I find it absurd that a $1.6M house would have the dining room crammed behind the living room couch, yet it has what appears to be a spacious laundry room.

      1. I’ll report back if/when it sells, which it probably will for the lot, $62K solar and well that stains the driveway and curb.

        1. Probably has high iron and manganese in the water which they treat for the whole house but not the irrigation.

    4. Looking at the aerial pic is that a pg/chicken farm in the upper right hand corner set in the dusty pile of brown dirt?

      1. 15410 Harrow Ln is in a gated community with $100/mo HOA; I doubt they allow livestock. The community, however, abuts the High Valley neighborhood of Poway, which typically has much larger lots. A handful of livestock out there wouldn’t be surprising but a pig or chicken farm would be.

  9. WeWork should be called WeDON’TWork. What a blatant SCAM that whole Ponzi is. I’m so glad to see that IPO fail. A lot of people should go to prison for that Enron type fiasco!

    Happy to see Softbank take a nice bath on it, though.

    1. SoftBank-Backed Real Estate Broker Compass Hit by High-Level Exits

      Startup fueled by investment from Japanese tech fund faces scrutiny following wave of executive departures

      ‘The seven-year old New York-based brokerage is known for its slick digital listing platform and for wooing agents from rivals with stock options and some of the industry’s most generous commission splits. Fueled with $1.5 billion from SoftBank and other investors, Compass has gone on an acquisition spree and dangled the prospect of an initial public offering. “It’s unfortunate for [Compass] that these departures are happening at a time when they’re under increased scrutiny because of what’s happening with WeWork,” said Clelia Warburg Peters, co-founder of MetaProp, a real-estate tech startup accelerator and the president of brokerage Warburg Realty.’

      “Generally speaking, people join these companies in large part for the wealth creation that an IPO brings,” said Jack Micenko, a senior analyst at trading and tech firm Susquehanna International Group. “To the extent that anyone in a senior position at one of these startups leaves prior to an IPO, [it] is somewhat unusual.”

      ‘Mr. Reffkin has said that near-term profitability isn’t a priority. “Investors now have an incredible long-term view—20, 30, 40 years…They’re saying, ‘Who can build something that people love?’” he said in an April interview with The Wall Street Journal. In that same interview, Ms. Gavet said the company didn’t have a clear strategy to monetize the business. “We just know that there’s definitely going to be a business model behind these things given how much money is in this industry,” she said.’

      https://www.wsj.com/articles/softbank-backed-real-estate-broker-compass-hit-by-high-level-exits-11569439433

      1. A wee bit of Ben Jones’ Monday Morning Humor …

        “In that same interview, Ms. Gavet said the company didn’t have a clear strategy to monetize the business. ‘We just know that there’s definitely going to be a business model behind these things given how much money is in this industry,’ she said.’”

        (again, Ben, you really need to look into adding a laugh track)

        1. “…We just know that there’s definitely going to be a business model behind these things given how much money is in this industry…”

          Wasn’t that the exact pitch line from the sock puppet @pets.com?

          Remember, there is an unlimited amount of money to be made delivering dog food.

          2. “Over its life, Pets.com chewed through just over $200 million of investor capital,” Einhorn wrote. “CHWY has burned $1.6 billion and counting.”

            I assume that 90s money was somebody’s real money and not just Greenspanbucks swimming upstream to spawn and die and clog up the river?

          4. I finally figured this BS about the Yellenbucks. Yellen et al dropped interest rates so much that banks borrowed the money FIRST, figuring to make enough return to pay back the loan, the interest, and make a profit. Then they looked around and invested in a bunch of stuff and found that *nothing* gave that high of a return.

            The obvious solution, of course, is to say “just say no” to loans the same way regular people say no to drugs. Of course, that would crash everything.

          5. Let’s take a business model that failed in the past and try it again!

            If it made money for the original scam…err…entrepreneurs and they were able to get out with it, then it was a successful business model.

          7. Chewey has lost 8 times as much money as Pets.com ever did.

            I logged into my Airbnb portal this morning and found out that Airbnb has a new feature: animals. From what I can tell it is basically having experiences with animals (e.g. hiking with goats in the desert, running with a rescue dog, drinking tea with a sheep, going horseback riding.). I don’t know what to make of this. People do love their pets and they spend billions every year, but I don’t know if there is enough money to scale up “animal tourism”.

      3. 20, 30, 40 years…something that people love

        If you think you know what people will “love” in 20 years, you are insane.

        We just know that there’s definitely going to be a business model behind these things given how much money is in this industry

        OK, you are crazy.

        1. “…If you think you know what people will “love” in 20 years, you are insane….”

          In our instant gratification society, peoples attention spans are closer to 20 minutes, if that.

        2. I am willing to bet that the same things drunken sailors spend their money on now will be in fashion twenty years from now.

      4. I’m doing a start up that will harvest revenue from a global social media phenomenon by creating creating a one stop cybershop for prosecutors of the art..
        WeTwerk
        https://m.youtube.com/watch?v=tuutxhz6P_w
        We have already assured our angel investor group that Miley Cyrus videos will violate our community guidelines/terms of service agreement.

          2. Take out a 90% LTV HELOC and invest in WeTwerk. You’ll triple your money on the IPO and buy that dream house Poway with a well. It’s a no brainer.

    2. We work doesn’t seem to work on a large scale but smaller shared office/incubator stuff like “hackerspace” does.

      Lawyers used to do this a lot rent floors the sub lease the rooms with a common back office staff

      1. When I was in grad school I left the area before my rental lease was up, so I placed a want-ad in the local paper and sub-rented the place for a couple months.

        We-work is novel and “disruptive” HOW, again?

  12. “Drunken sailors spend cash on beer liquor, and women.”

    So unlike government, they do not waste money.

  13. Back in the old days people use to buy shelter as a long term investment. Little dips in the market was no big concern for the long term holder.

    But these days I have never seen so many short term speculator buying or equity loan refinance ATM use of the home.

    It was all about paying off the lender by the time you retire as a retirement plan.

    People were not being priced out of the market. Of course that’s when job stability was common.But, shelter prices tracked with wages.

    So, I always go back to stable long term decent paying jobs as being the factor that created the shelter market to begin with. People qualified also, so the foreclosure rates were low.

    That was a much better World than the current shelter market.

    It’s the same with the price fixing medical monopoly prices that are at least 50% higher than they should be. This is not solved by Medicare for All.

    Why should the government take over the medical industry just to be able to tax you whatever they want to pay for it. That takes away any freedom to choose how much you want to put toward health care.

    Obamacare was charging based on income, not based on risk. What if they charged you on your car insurance based on your income and not on your driving risk.?

    The thought of the government taxing to pay for health care is just scary especially when you look at the monkey lawmakers we have today who are puppets of special interest groups.

    It would be far. cheaper anyway for the government to just supplement the poor to get some basic health care. We can’t afford paying for ilegals, but the Government of California already passed that to go into effect next year. California was already doing it in regards to ilegals.

    I live in California, but I’m starting to want to move, but than I’m too old to make big changes like that.

    1. “…equity loan refinance ATM use of the home….”

      Computer and software technology made the concept of an HELOC possible on a mass scale.

      IMO, it was the beginning of the end.

      The hard life reality is that too many households just don’t have the financial discipline / common sense to make proper use of HELOC cash.

      HELOC’s have turned out to be the financial equivalent of opioids.

      1. software technology made the concept of an HELOC possible

        I think you could do this quite easily with a pen and paper.

      2. People use to maybe take out a equity loan to maybe put a new roof on their shelter and stuff like that.

        To many debt slaves by this easy credit.

        1. My understanding that in the olden days of 50 years ago (pre-HELOC), a homeowner who wanted to put on a new roof would take out a 2nd TD.

          The kicker was that the bank actually checked up on the homeowner to make sure he was actually using 2 TD money correctly.

          Those days are long gone.

          Kinda like having to dress up to go out to dinner or go see a movie.

    2. HW, if you are going to stay in California, it is better for your wellbeing to focus on things other than where your tax dollars are being spent and will be spent in the future. California is a lost cause. But it will take a few more decades for politicians to completely ruin it and make life utterly intolerable. In the interim, there is still some quality of life that can be derived from it. Especially, if you like outdoor activities like gardening that can be pursued year round.

      1. California is a lost cause.

        I think Illinois shows that they can extend and pretend for at least another decade or two.

      2. I like the weather in California. I also think about the fact that I might move somewhere else and it might get crazy also.

        I really hope there isn’t Aliens because they will be just one more special interest group, besides I don’t like them because they say they abduct humans.

        just joking

        1. Want to Protect Earth from Aliens? NASA Is Hiring

          “If you’ve always dreamed of helping keep Earth safe from alien invaders, your ship may have just come in.

          “NASA is looking to hire a planetary protection officer, a person who will lead the agency’s efforts to keep its spacecraft and astronauts from contaminating worlds with life-forms that don’t belong there.”

          Want to Protect Earth from Aliens? NASA Is Hiring | Space
          https://www.space.com/37700-nasa-hiring-planetary-protection-officer.html

          1. Ooooops, too late, the position has been filled …

            “INDIANA UNIVERSITY ASTROBIOLOGIST HIRED BY NASA TO PROTECT EARTH FROM ALIENS

            “Last year we told you that NASA was hiring someone to be its real-life guardian of the planet. Well, they’ve filled the position, and we now have an Indiana University astrobiologist to rely on to protect us from aliens.”

            So far he seems to be doing a fine job in that no aliens have been spotted. Yet.

            If a report of an alien comes in it will be used as proof that his staff of one must be expanded to a staff of many along with a huge budget increase (and, of course, a hefty raise).

            Indiana University astrobiologist hired by NASA to protect earth from aliens
            https://www.wthitv.com/content/news/Indiana-University-astrobiologist-hired-by-NASA-to-protect-earth-from-aliens-471672314.html

          2. Honestly given the level of productivity we have achieved as a species it is probably reasonable to have one of us worrying full time about defending ourselves from aliens. We certainly don’t need another Uber driver.

        2. Will Californians EVER shut up about “the weather” already? Yes, the weather is nice 90% of the time. And then the other 10% of the time it’s mudslides and fires and drought, and I guess earthquakes count too. Y’all like livin life on the edge.

          1. Just about every US region has a natural disaster. It boils down to whether or not you want to see it coming. Nice weather also helps us feel a little bit better about being heavily taxed. We call it the “sunshine tax.”

          2. To be fair, having lived there, it is the state’s one saving grace, especially in SoCal. But it doesn’t even come close to compensating for all of the other problems.

          3. it is the state’s one saving grace

            That plus being able to day trip to skiing or the beach and everything in between.

          4. California has the critical mass in most activities to support business investment, e.g., hang glider schools and world-class flying sites, skydiving schools and drop zones with fast climbing turbine aircraft, a coastline that enables scuba diving, cross-country bicycling tour services with a chase van, etc., whereas most flyover places tout their churches, hog-fest barbecues and tractor-pulls, gummers 50-yr marriage vows renewal, etc., so life is uninspiring.

          5. whereas most flyover places tout their churches, hog-fest barbecues and tractor-pulls, gummers 50-yr marriage vows renewal, etc., so life is uninspiring.

            I enjoy life in Rocky Mountain flyover. But yeah, most silicon valley types don’t. Not a lot of opportunity to get rich quick.

          6. “I enjoy life in Rocky Mountain flyover.”

            This is the best time of the year to enjoy the outdoors around the Columbia Basin as the summer mid 90s heat gives way to cool 50s Fall weather, but our evenings are below freezing already. We have about two or three good weeks left before it get really cold. 🙁

            I just returned from a road bike ride to my favorite hilltop, a steady 2% grade for 7-miles gets the heart thumping so hard others could hear it if they were near; as usual didn’t see another rider the entire route. It’s probably our rough chip seal road surface as they’ve been too cheap to pave with asphalt the last few years.

    4. Obamacare was charging based on income, not based on risk.

      You are exactly right. The age-band limit makes it so that seniors can only be charged 3x the highest plan. This is way too low as they are some of the highest utilizers and have the most expensive interventions. As a result, it forces younger, healthier individuals to subsidize older, sicker individuals with pricey knee surgeries. If you want to adjust the ACA marketplace, you are going to have to charge the elderly more.

  15. Kanye West has started conducting Sunday Services for his own Jesus Is King album. He recently said he will only record gospel music now, told everybody to get off Instagram, and said that Hollywood is run by Satan. End Times are here…

    1. Kanye West has started conducting Sunday Services

      Yeah, he bought a ranch in my hometown a couple months ago and did one of his Sunday Services there a couple of weeks ago. The cowboys are confused.

    2. well so many people are in FB jail today for replying to comments that….:dont meet community standards” eg Truth… like Eric Garner had 30 arrests and was deathly ill, and allegedly has Dr. appt to see if part of his leg needed to be amputated because of his severe diabetes among other illnesses.

  16. THIS IS A PUBLIC NOTICE.

    If any of you followers of Ben Jones’s blog feel shut out by the Big Boys with the Big Bucks from being able to participate in the rush to invest in negative interest rate bonds your feelings of being shut out have now been alleviated. For a limited time only my bank will be offering to a select few the opportunity to do what the Big Boys are doing which is to sign up for savings accounts at my bank that will pay out NEGATIVE INTEREST RATES!

    Yes, you too are permitted to lose your mind, er, to reap the rewards a negative interest rate savings account will bestow upon you. Do not delay; Visit my bank the first thing in the mourning, er, morning.

    1. So when are you going to issue a negative interest rate credit card? I might be interested in one of those. Or a dozen.

  17. ‘A 5-bedroom home on 13 acres near The Plains in Northern Fauquier sold last week for $1.55 million. Built in 1987, the 6,100-square-foot, three-story, fieldstone home has six fireplaces, pine floors, a swimming pool and a garage.’

    ‘The Landmark Road property went on the market in June with and asking price of $1.85 million, according to Realtor.com. The price dropped to $1.65 million in July.’

    https://www.fauquiernow.com/fauquier_news/article/fauquier-the-plains-home-13-acres-sell-for-1.55-million-2019

  20. Sounds like a step in the right direction! Getting the gubmint out of housing finance would be a great first step towards achieving their elusive, long-sought affordable housing goal.

    Economy
    Trump Plan For Home Loans Rattles Watchdogs
    September 6, 2019
    7:14 AM ET
    Chris Arnold 2016 square
    The mortgage giants Fannie Mae and Freddie Mac guarantee about half of all home loans in the U.S.
    J. David Ake/AP

    At its heart, the new Trump administration plan for the home loan market aims to change the rules for the mortgage giants Fannie Mae and Freddie Mac. The two companies are the bedrock foundation for home mortgages in the U.S.

    The government created them decades ago to provide a federally backed guarantee on loans to ensure that money would always be available for responsible, qualified homebuyers to get mortgages. They later became largely private companies but have been under government control since the financial crisis.

    Now the Trump administration says it wants to make Fannie and Freddie private companies again, make changes to the backstop they provide to the mortgage market, and introduce more competition from other private companies as well.
    …

    1. Whatever happens next, it appears unlikely it will happen quickly. Parts of the plan would require approval by a divided Congress, and Democrats will probably not embrace the administration’s housing vision as a top priority.

      In other words, it has a snowball’s chance in Hell of happening.

      Next year: 2% (or lower) 30 year FHA loans.

      1. Why are the Democrats so keen to mire their low-income constituents in a quagmire of mortgage debt that they can never reasonably hope to be able to repay?

      2. When it comes time for bail outs after crashes the government won’t separate the government backed loans from the private loans IMO.

        In general I don’t know if the public knows they are backing the gamblers.

      3. @PBear,
        because the Democratics true constituents are Wall Street, not Main Street.

        Also, I was ROTFL about those companies existing for “responsible, qualified homebuyers”. Maybe that was the cause 40 years ago, but Ben has provided ample documentation that it isn’t the case now.

    2. “For working class Americans who want to buy a house this could make it much more difficult to get a mortgage and make the mortgage much more expensive,” Calhoun says.

      Just like Oedipus, Mike Calhoun “can’t see” the obvious. Due to changing market forces, house prices would simply drop to compensate for the additional protection policies. It’s not the end of the world.

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