Monday, August 9, 2010

If You Build It, They Will Foreclose

If You Build It, They Will Foreclose On It

Oh hey, what do you know - the housing crisis is over.. Home buildings increased in April!

Home building rose in April, government figures showed on Tuesday, as activity was possibly spurred by an $8,000 government tax credit for new buyers. But the data suggested that builders might also be slowing their future construction plans.

The Commerce Department said work started on 672,000 homes in April, up 5.8 percent from March. It was the highest number of housing starts since October 2008 and slightly ahead of analysts’ expectations. It also showed a 40.9 percent gain compared with April 2009, when housing starts were 477,000.

Building of single-family homes also went up, rising 10.2 percent in April from March, the department said.

The end of the tax credit for first-time homebuyers, which had been extended from November through April for sales of houses that close by the end of June, might have had an effect on the numbers, economists said.

I just have to ask who the fuck is paying for the building these track homes?!? I guess the answer to that is the federal reserve. I suppose if demand relaxes for more than a few breaths the entire house of cards collapses in on itself and it doesn't matter who's paying for it. I mean, why do I hate the American dream? That whole concept that everyone in America should own a home. Even though when you go across the pond and you'll see the desire to own a home goes down compared to the states.

I know the back and forth. Building houses creates jobs. Jobs creates demand for said houses. We just need to get immigration reform going so once we let people naturalize, they can shoot to buy a house which will lead to a sharp drop in inventory and another spike in home values. Though if only home equity loans were actually regulated, people would have to stop fueling their consumption with debt and realize how truly fucked they've really been in the last 20 years.

On the bright side, things have never looked better if you're a squatter.

Maybe the Banks should probably give out sub-prime loans so people can afford all those houses they are building, right....... oh wait, we've been down this road before. I wonder what's going to happen when Americans finally face the reality that they cannot live on debt for all their life.

Back before the Obama home buying tax breaks ended there was all this talk about how there's this mini-boom in housing buys from people rushing to get in the tax breaks. This was by no means a fix to the economy

I know so many people who rant on about how this is the best time to buy a home. BUY BUY BUY! BUY NOW! These are the best home prices we'll ever see! Though they've been saying that continually from 1990 onward. They will say that tomorrow, next year and five years from now. Your wife will believe them and you'll be in debt for $600k for a 900 square foot tiny box with granite counter tops and a dying yard because it is an area with "nice schools"

Let's put it this way, we have an infinite supply of houses. No one wants the houses... okay, correction.. No one can afford these houses and yet the only thing we can think of is to build more houses. More house! We need more houses!

I bet the home prices will drop 10k after government cheese for buying a house goes away. We're going to be like Ireland where there are so many houses you can give one to every family and still have too many

If you want to laugh, realize that a huge number of commercial adjustable rate mortgages are going to default within the next few months. Some this year and some next year with a huge amount in 2012 right before the Mayan apocalypse. Though I'd be more surprised if people don't look so confused and ask how this could ever happen and who could have predicted this?

Reading this whole PDF should basically confirm the idea that you should never own a house ever. Just going out to the Santa Clarita or Inland Empire, you'll see full areas of tract housing developments. Most of the model homes are boarded up, the houses are all vacant where they're completed. They haven't seen any traffic since the economy shit itself. Whenever I'm out in those areas they're still busily plowing fields under to build brand new ones.

Then there's the whole surplus of homes. There's over 1 million homes in shadow inventory that aren't even on the market because allowing them in would completely collapse the housing market and with it the world economy and they're still building homes. If that doesn't make you laugh, you're not into morbid humor.

Do you remember all those TLC shows about flipping homes? It's just so funny. I liked watching House Hunters now. It's like watching yuppies get slaughtered for their organ transplant value. It gave a lot of people that false hope that they could buy any piece of shit property and just put a few thousand dollars into it and flip it a month later for five times the amount they paid for it.

Maybe I missed out. Maybe everyone who didn't buy an overpriced home, default, and then get a free year's worth of rent squatting is just a sucker. Though the risk out weights to reward. Just imagine living with the crippling fear that you'll come home to a locked door with a big "FORECLOSED" sign on it and all of your possessions gone or on the sidewalk. That isn't exactly something that most of those people would count themselves as lucky to experience.

I like to claim I'm revolutionary. That I take a stab at the system but then I realize that hundreds of thousands of average Americans burying themselves in debt and then dying before a cent of it is ever repaid is striking a greater blow to the system than anything I will ever do.

Remember when this ad used to be funny?

Now it's just sort of sad.. Still funny, but more sad because more people realize it was so true and it was them that they were laughing at and not realizing it till now. Just look at the news. It's depression all around. There was a record number of foreclosures in 2010, record to be broken again in 2011 and you might as well swallow that bullet in 2012.
NEW YORK (Reuters) – Foreclosures rose in 3 of every four large U.S. metro areas in this year's first half, likely ruling out sustained home price gains until 2013, real estate data company RealtyTrac said on Thursday.

Unemployment was the main culprit driving foreclosure actions on more than 1.6 million properties, the company said.

"We're not going to see meaningful, sustainable home price appreciation while we're seeing 75 percent of the markets have increases in foreclosures," RealtyTrac senior vice president Rick Sharga said in an interview.

Foreclosure actions -- which include notice of default, scheduled auction and repossession -- in the first half rose in 154 of the 206 metro areas with populations 200,000 or more.

"We're not going to see real price appreciation probably until 2013," said Sharga. "We don't see a double dip in housing but we think it's going to be a long painful recovery for the next three years."

Nine of the 10 areas slammed hardest by the foreclosure tidal wave improved from the first half of 2009, suggesting a peak at rates that are still up to five times the national average, RealtyTrac said in its midyear 2010 metropolitan foreclosure report.

Cities with the 20 highest foreclosure rates were all in Florida, California, Nevada and Arizona.
It's almost as if housing costs too much and people are paid too little for their work! But hey, at least people know who to blame for this housing and economic crisis;
Well, it would appear that all of the stimulus money spent, and the jobs bills created, and the bullsh-t rehtoric from the liberal socialists in Washington are really paying dividends. This is old, but. HOW IS THAT HOPEY AND CHANGEY THING WORKING OUT FOR YOU DUMBA-S LIBERAL SOCIALISTS NOW??
But maybe that commenter isn't totally off the mark. The fact that Obama managed to spend a trillion dollars without even putting a dent in foreclosures is pretty shameful. Maybe this is just showing that Capitalism is so terrible that not even a trillion dollars can save us from its collapse.

A little fun fact, Banks currently own more houses than people do. The wonderful thing is that since the "financial reform" bill passed, when the economy goes into a free fall again it'll be blamed on too much regulation.

I'm still not sure and don't fully understand why it's better for a bank to let a house go into foreclosure rather than attempt a short sale or a loan modification. There's some banks that are doing the short sale or modifications. Then again, when that stuff eventually makes its way back to the balance sheet, huge losses are going to be posted and we have liquidity crisis round 2.

I read some piece but couldn't find it that banks were paying foreclosed home owners to leave without damaging the property. That's pretty hard core when you have to pay off the people who couldn't pay back their loan to leave without being spiteful.

If you want to see a prime example on how society has gone to shit and the good ol' days are behind us, here's a little tidbit of the good ol' days
The Great Depression plus harsh drought conditions were hard on farmers in the 1920s and early 1930s. Many could not make enough money to pay the mortgage. As a result, banks would foreclose on the property. They would then sell the farms at public auctions.

Farmers resented the foreclosures. When they would hear about an upcoming auction, they would gather on the day of the auction and make it clear to officials and potential bidders that bids from outside the farm community were not welcome.

"When the bidding commenced, someone in the crowd would start it off at fifteen cents or so, and it rarely got beyond a few dollars before the bidding stopped and the auctioneer would close the sale. If anyone in the farmyard might be so ignorant of what was going on as to put in a serious bid, a suitably burly man would be likely to step up and put a hand on his shoulder with the words, 'That bid's a little high, ain't it?'"
But you know what? Nothing like that will ever happen again, EVER! Besides that, you're probably better off burning down the house. It gets you in the news at worst. I would toss out the idea of burning down the bank itself, but that gets you tossed in jail.

2008 foreclosures

So perhaps that should teach all of you who are constantly told that you should buy a house to NOT make that fool's errand. At work I constantly hear people suggest other folks that they should buy a house. It's like a misery loves company sort of thing.

Yeah... buy a house, it's a great thing to incur a mother load of expenses, root yourself to one place for years on end, and submit yourself to indentured servitude for decades. Besides that, American homes are built like total shit and everything they're constructed of is made out of flammable cancer.

2009 foreclosures

Besides that, a single family living in one home is a relatively new phenomenon anyway. You'd have to be the world's dumbest moron to buy a house. The whole idea that renting is throwing money away shouldn't even enter your mind. Guess what, you're still going to be spending money regardless if you rent or buy. At the end of the day if you can't afford your mortgage, you'll be left with the same thing you would have by renting... Nothing.

And the idea that it can only go up in value has been disproved over the last few years with the prices of homes dipping at below what they were bought for at the peak of the bubble. Perhaps buying a condo in the city is a better investment. Then you can just rent it out if you want to move somewhere else. The city isn't going to move away and will still remain a hot spot.

2010 foreclosures

Yeah, there's nothing wrong with buying a house if you can afford it and you're where you want to be and have a family and such, but trying to force some sort of hollow stability on society by encouraging home ownership for everyone is pretty clearly complete shit.

The worse place for all this shit is Las Vegas. I wonder if Las Vegas home prices drop include its quasi-suburb Henderson. I remember hearing during my last outing there that condos were going for one-quarter their asking price three years ago. That's not even factoring in all the foreclosures sales.

But then again, Vegas is the worst possible town for home ownership. If you take any given city and make it worse, eventually you'll get something that looks like Vegas. But at least Vegas has reasons for existence. Henderson is a total shit hole because its population almost ripled in the periods between 1980-1990 and 90-2000. Then it went from 175,000 to 265,000 in 2009. This despite being a sprawly, sun-blasted desert shitland with no manufacturing or industry or economic base outside of the housing bubble itself.

If the 265,000 people who live in Henderson disappeared tonight, not a single soul would notice their absence. You might as well go outside and salt the fuck out of the yard there. No one's going to give a shit.

Everyone likes to compare America to the Roman Empire because of wars and military largess, but the consolidation of land by the aristocracy and the latinfundia system is a much more apt. comparison.

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