July pendings fall from June, but up from last year

Posted on August 30, 2011 by grim

From Bloomberg:

Pending Sales of Previously Owned U.S. Homes Fell in July

The number of contracts to purchase previously owned U.S. homes fell in July for the first time in three months, a sign that lower prices and borrowing costs aren’t luring in buyers.

The 1.3 percent decrease in the index of pending home sales followed a 2.4 percent gain the previous month, the National Association of Realtors said today in Washington. Economists forecast a 1 percent drop, according to the median of 40 estimates in a Bloomberg News survey.

Unemployment at 9.1 percent and the prospect of more foreclosures in the pipeline mean it may take years to clear the oversupply of houses, a sign the market is struggling to stabilize. The prospect of contract cancellations due to stricter underwriting standards and low appraisals means some signings may not translate into closings.

“Housing is still on the ropes,” Ian Shepherdson, chief U.S. economist at High Frequency Economics in Valhalla, New York, said in a note to clients. Shepherdson said he was concerned that “the chaos in the stock markets might have persuaded a greater proportion of buyers to walk away after signing contracts,” leaving sales short of the level implied by the pending data.

From MarketWatch:

Pending Home Sales Slip in July but Up Strongly From One Year Ago

Pending home sales declined in July but remain well above year-ago levels, according to the National Association of Realtors(R). All regions show monthly declines except for the West, which continues to show the highest level of sales contract activity.

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, slipped 1.3 percent to 89.7 in July from 90.9 in June but is 14.4 percent above the 78.4 index in July 2010. The data reflects contracts but not closings.

The PHSI in the Northeast declined 2.0 percent to 67.5 in July but is 9.7 percent above July 2010. In the Midwest the index slipped 0.8 percent to 79.1 in July but is 18.8 percent above a year ago. Pending home sales in the South fell 4.8 percent to an index of 94.4 but are 9.5 percent higher than July 2010. In the West the index rose 3.6 percent to 110.8 in July and is 20.6 percent above a year ago.

Posted in Economics, Housing Recovery, National Real Estate | 74 Comments

“Feeling the pains of an old-fashioned recession”

Posted on August 29, 2011 by grim

From the Record:

Bad loans continue to rise for NJ banks

Toxic loans held by New Jersey-based banks continued to climb in the second quarter even as bad loans at U.S. banks declined, according to new government data.

The Federal Deposit Insurance Corp. said Tuesday in its quarterly industry profile that loans more than 90 days past due or no longer accruing interest at New Jersey’s 117 banks and thrifts rose to 3.61 percent of total loans as of June 30, up from 2.91 percent a year earlier. Those banks’ combined seriously delinquent debt climbed in each of the past four quarters.

Meanwhile, the combined bad loans at the nation’s 7,513 banks fell to about 4.4 percent of the total, down from 5.2 percent a year earlier, the fifth straight quarter of declines.

Paramus-based Hudson City Savings Bank, the largest thrift based in New Jersey and a high-end residential mortgage lender, had 123 foreclosed properties on its books at the end of June, up from 52 a year earlier.

A weak economy, persistent high unemployment and a slow foreclosure process have all contributed to the recent rise in bad loans throughout the state, said Bill Brewer, partner at the Livingston office of Crowe Horwath LLP, a community bank auditor. “Banks have had a hard time moving this stuff off the books,” he said. “The banks have the capital to withstand this, but it is a continuing problem.”

Increased delinquencies have been across the board with weakness in residential mortgages, commercial real estate loans and other types of business and consumer loans, Brewer said.

Kevin Cummings, chief executive officer of Short Hills-based Investors Savings Bank, said New Jersey is “feeling the pains of an old-fashioned recession.”

Posted in Economics, New Jersey Real Estate, Risky Lending | 116 Comments

Hurricane Irene Open Discussion

Posted on August 26, 2011 by grim

From the Record: Hurricane warning issued for NJ; Irene weakens slightly to Category 2

From the Star Ledger: N.J. braces for Hurricane Irene’s wrath as officials warn of high winds, heavy flooding and possible power outages

From the APP: Shore’s long run of missing direct hits could end this time

From the Star Ledger: Hurricane Irene could be ‘most devastating storm to ever hit’ N.J., climatologist says

From NPR: ‘Nightmare’ Scenario: Hurricane Menaces East Coast

From the Philly Inquirer: As N.J. shore braces for Irene, some wrestle urge to ride it out

From Bloomberg: New York Buildings Face Storm Damage as Property Managers Plan for Irene

From the NY Times: Alert Extends Up the East Coast as Hurricane Irene Closes In

From the ABC: NJ shore visitors flee Irene amid major evacuation

From CNN: Hurricane Irene weakens, stalks U.S. coast

Posted in General | 341 Comments

Distressed homes are the market

Posted on August 25, 2011 by grim

From the Record:

A third of homes sold in second quarter were in foreclosure

Almost one in three homes sold in the U.S. in the second quarter were owned by banks or in some stage of foreclosure, RealtyTrac reported today. In New Jersey, where foreclosure activity has been stalled for most of this year, about one in seven homes sold was either owned by a bank or in the foreclosure process.

Because these properties sell for deep discounts, they offer opportunities for bargain hunters, said RealtyTrac’s CEO, James J. Saccacio.

“This report is clearly good news for well-positioned buyers and investors looking for bargain real estate that will build them wealth in the long term and often cash flow as rental real estate in the short term,” Saccacio said. RealtyTrac follows the foreclosure market nationwide.

Distressed sales were most common in the troubled real estate markets of Nevada, Arizona and California, RealtyTrac said. In Nevada, for example, foreclosure-related sales accounted for 65 percent of all sales.

The average sale price of a home in foreclosure or owned by a bank was 32 percent lower than the average sale price of homes not in foreclosure. In New Jersey, the discounts were even bigger, ranging from about 31 percent for homes sold as short sales — when a bank allows a home to be sold for less than the amount owed on the mortgage — up to 53 percent for bank-owned homes.

RealtyTrac also found that short sales took on average 245 days in the second quarter, down from 256 in the first quarter. Sacaccio called that a sign that the housing market is “starting to focus on more efficiently clearing distressed inventory, at least in some areas.”

Real estate agents and prospective buyers have complained that lenders have been slow to approve short sales, often leading buyers to give up in frustration.

Posted in Employment, Housing Bubble, New Jersey Real Estate | 198 Comments

Pleas to “hit the number” largely ignored

Posted on August 24, 2011 by grim

From Reuters:

U.S. housing faces extra drag – low appraisals

When Sean McGowan signed a contract to buy a New Jersey home in November, he didn’t expect he’d still be living with his parents nearly a year later.

The deal fell through after two appraisals came in tens of thousands of dollars below the contract price, part of a wider trend of differences over property valuations that is compounding the U.S. housing crisis.

“It was very frustrating. We really wanted to move in,” said McGowan, a 31-year-old real estate lawyer.

Many housing experts say low appraisals are yet another headwind for a housing market already suffering from a plunge in prices, high unemployment and tight credit.

Lenders are forced to cap their mortgage loans at the value set by appraisers and buyers and sellers often can’t agree on how to make up the difference with an original deal price.

“It’s hard to talk about any recovery of the housing market and home prices until the appraisal issue is squared away, and that is a broad issue,” said Guy Cecala, publisher of Inside Mortgage Finance, a Maryland-based trade publication.

Sixteen percent of Realtors reported contract cancellations in July, matching June’s level, which was the highest since March 2010, when the National Association of Realtors began collecting data.

Nine percent reported contract delays due to low appraisals, and 13 percent reported a contract was renegotiated to a lower price because an appraisal came in below the original price in the last three months, the NAR said.

Posted in Economics, National Real Estate, New Jersey Real Estate, Risky Lending | 115 Comments

Bye bye PMI

Posted on August 23, 2011 by grim

From HousingWire:

PMI Group units forced to stop writing new insurance

The PMI Group’s market share “is going to be eaten up by competitors” in the aftermath of Arizona regulators placing the mortgage insurer under state supervision and curtailing the writing of new business, according to Rob Haines, insurance analyst with CreditSights.

The Arizona Department of Insurance, the primary regulator for PMI, instructed The PMI Group to cease issuing new mortgage insurance commitments in any state. The move was largely expected with the insurer warning investors earlier this month in filings with the Securities and Exchange Commission.

Based on the state’s supervisory order, PMI can issue new mortgage insurance through pending commitments until Sept. 16, but must stop making interest payments on $285 million of surplus notes the company issued.

The company also cannot enter any new contracts, mergers, and acquisitions nor withdraw from any bank accounts. Arizona regulators said executives must submit a plan for rebuilding The PMI Group’s financial condition within 60 days.

The next step, Haines said, is a potential regulatory seizure of the insurer.

“The regulatory seizure might not happen, but that depends on the company’s success trying to execute some type of recapitalization,” Haines said.

The company warned if Arizona appoints a receiver and begins liquidating the insurer, roughly $735 million of outstanding debt would become due. PMI said it doesn’t have enough capital to meet those obligations. The company hired Willis Capital Markets & Advisory and Evercore Partners as advisers to help find options.

The PMI Group is still facing a difficult situation with other mortgage insurers not facing the same restrictions on new business — a key tool in any type of recapitalization plan.

“They are all facing the same headwinds, but they went into this storm in different conditions,” Haines said when discussing all private mortgage insurers. He said the problem for The PMI Group is the firm does not “have the same capital resources that these other companies had” heading into the volatile period.

Posted in Housing Bubble, National Real Estate, Risky Lending | 121 Comments

“Buyers are beginning to think that if they wait, they’re going to get a better deal in a few months.”

Posted on August 22, 2011 by grim

From Bloomberg:

Homebuyers Hunker Down as Real Estate’s Drag on U.S. Economy May Worsen

Sanjay Jain called his real estate broker four days ago to cancel a deal to buy a three-bedroom home in Folsom, California, unnerved by another plunge in the most volatile equities market on record.

“Seeing what’s happening on the stock market made me think that it’s not a good time to be buying a home,” Jain said. “I’m going to wait and see.”

As the U.S. economy shows signs of sputtering, instability on Wall Street is sapping the confidence of would-be property buyers, said Karl Case, co-founder of the S&P/Case-Shiller home- price index. That means housing, which aided every recovery except one before the most recent recession, may deepen its five-year drag on growth.

“There’s a dramatic effect on an economy when a major sector is flat out,” said Case, professor emeritus of economics at Wellesley College in Massachusetts. “If housing takes another leg down, it’s an accelerator. It’s going to make a recession happen faster and deeper.”
…
“A lot of people have seen their down payments for a home disappear in the stock market,” said Keith Gumbinger, vice president of HSH Associates, a loan-data firm in Pompton Plains, New Jersey. “It served as a reinforcement to the hunker-down mentality that a lot of homebuyers already had.”
…
“The typical homebuyer gets rattled when confronted with economic turmoil,” said Stan Humphries, chief economist of Zillow.com, an online real estate information service in Seattle. “The type of fear we’re seeing could substantially worsen the housing market.”
…
“Low mortgage rates are only helpful to homebuyers who aren’t paralyzed with fear after watching their 401(k) disappear,” said Mark Goldman, a lecturer at the Corky McMillin Center for Real Estate at San Diego State University. “For now, people see the stock market as a casino table.”
…
Jim Hamilton, Jain’s agent at Lyon Real Estate in Folsom, said he is seeing more buyers hold back on purchases because they expect home prices to fall.

“People are watching the stock market as a major indicator of what’s going on in the economy,” he said. “Buyers are beginning to think that if they wait, they’re going to get a better deal in a few months.”

Posted in Employment, Housing Bubble, National Real Estate | 92 Comments

Ease doesn’t mean easy, the majority of short sales are a waste of time

Posted on August 20, 2011 by grim

From the NY Times:

Banks Ease Stance on Short Sales

STANDING by while her mother was evicted from her home in Tinton Falls for the few thousand dollars she owed in mortgage payments in the 1990s had a big influence on Kim Hale and her career choices. A new nursing school graduate at the time, Ms. Hale said she had had no idea how to help her mother, who was “too embarrassed to reach out to anyone.”

“If I knew then what I know now, she would have fought, and she’d probably still be in that house,” said Ms. Hale, 45, who is now a real estate agent with Exit Realty in West Long Branch, specializing in short sales. She says she focuses on short sales — they are about 70 percent of her work — because she wants to offer distressed homeowners the best possible outcome.

Ms. Hale is one of many brokers who have positioned themselves as short-sale experts. Which makes sense, as nearly 4.3 million American homeowners are delinquent on their mortgage payments, 124,910 of them in New Jersey, according to data released last month from LPS Applied Analytics. An additional 121,258 New Jersey homes are in foreclosure, which makes New Jersey the state with the fourth-highest percentage of delinquent loans.
…
These days it is even starting to dawn on long-reluctant banks that there is value in short sales, which promise higher returns than foreclosures (not to mention the benefit of keeping a house from abandonment). In fact, in states like New Jersey and New York — where the foreclosure process has halted in the 11 months since a court order forced banks to restructure their mortgage procedures — the short sale has for the time being become practically the only alternative.

As a result, it is now banks themselves that, in growing numbers, are indirectly providing brokers with leads on potential short sales.

“The banks are definitely becoming friendlier to deal with, especially as they realize there’s so much shadow inventory out there that hasn’t even reached the market yet,” said Bill Flagg, a broker with ERA Queen City in Scotch Plains, referring to the very institutions that once made the process difficult. Today, half his office’s business is in short sales or foreclosures, he said.

J. K. Huey, who heads up Wells Fargo Bank’s short-sale and foreclosure division, affirmed the recent thaw between the real estate and banking communities on short sales, noting that “most agree that foreclosure is not the best alternative for anyone.”
…
Brokers are also becoming more personally proactive, advertising their short-sale expertise or, in the case of Susanne Rhame of the Woodward Realty Group in Middletown, blogging and tweeting about short selling. But when all else fails, eavesdropping can sometimes prove helpful in turning up clients. Ms. Hale described a recent shopping expedition on which she heard another customer talking about a neighbor who had been forced to leave her home.

“I’m not shy,” she said. Upon reaching the homeowner, “I say, ‘Look, could you use $3,000? That’s what they might pay you to not just walk away from your home.’ With a short sale, you can control the way you leave.”

Posted in Housing Bubble, New Jersey Real Estate | 74 Comments

NY Fed to Jersey: No jobs, no housing recovery

Posted on August 19, 2011 by grim

From HousingWire:

One in 10 NJ homeowners stuggle with mortgage payments: NY Fed

The workforce in New Jersey is one of the nation’s most educated, but residents remain entangled in a web of financial troubles with the state’s delinquent mortgage rate sitting at 10% percent.

Federal Reserve Bank of New York president William Dudley made that assessment while speaking to a New Jersey crowd Thursday. By Fed estimates, the unemployment rate in Jersey stands at 9.5%, while the number of mortgages 90 days or more past due or in foreclosure hit 10% back in March.

During the Great Recession, the state lost 250,000 jobs. The population of New Jersey is 8.8 million and 40% of its citizens are college graduates.

Dudley calls the jobs recovery in New Jersey “sluggish,” with the private sector experiencing only “moderate gains.” When you add state budget cuts and a reduction in state government jobs, the employment situation continues to look grim.

“Because the jobs recovery has been weak, there has been little progress in reducing unemployment,” Dudley said.

The median household income in New Jersey sits at about $68,000, with 9% of the state’s residents living below the federal poverty line.

While home prices have firmed in the past few months, borrowers are still carrying substantial debt levels. The average debt per person in New Jersey stands at $60,400, the Fed said.

Dudley said without job growth, the state’s housing and debt situation is unlikely to experience significant improvement.

Posted in Economics, Housing Recovery, New Jersey Real Estate | 90 Comments

The vicious housing cycle

Posted on August 18, 2011 by grim

From the Atlantic:

Home Sales Are Falling: Will Consumers Force a Double Dip?

As the bad news continues to pile on, Americans appear to be taking note by closing their wallets. The latest brutal report indicates that home buying demand is likely falling to even lower levels. Mortgage applications for purchases were the weakest in more than a year, according to the Mortgage Bankers Association. In fact, its index last week was second lowest that we’ve seen since 1997. This period includes the huge drop that sales experienced after the home buyer credit expired last year. Consumers are clearly nervous.
…
Mortgage purchase applications have been slowly declining since early April, but last week they dropped 9.1%. This data doesn’t account for all potential home sales — some all-cash transactions also occur. But cash purchases primarily occur with investors, so mortgage purchase applications should provide a fairly clear picture on how consumer demand for home buying is changing. At last week’s level, demand was extremely weak.
…
The MBA’s report is a useful for two reasons. First, it provides a very early indicator for home buying demand. For example, the National Association of Realtor’s existing home sales report that comes out on Thursday provides sales that closed in July, which means it really provides buying demand for as far back as May and June. The MBA report shows us how consumer demand for homes looked just last week.

Second, the report provides a way to gauge consumer confidence on a weekly basis. Big sentiment declines don’t always translate into big drops in consumer spending on a whole, because a fair amount of spending isn’t discretionary. But most home buying can be delayed until consumers are more comfortable with the economic situation. Assuming that no housing market specific shocks are playing a role, a big decline in mortgage purchase applications implies a big drop in consumer sentiment.
…
This wasn’t just any week during which mortgage applications for purchases plummeted. It occurred during a week when mortgage interest rates hit a new record low, according to Freddie Mac. As a result, mortgage applications for refinancing are experiencing a mini-boom. But those ultra low rates weren’t enough to convince more consumers to purchase homes; indeed, we saw the opposite. Sentiment must have been so low that even the benefit of ridiculously low mortgage interest rates couldn’t prevent a big 9.1% drop in purchase applications.
…
So what we’re seeing here is a sort of tragic cycle. The nation isn’t seeing the unemployment rate decline, because consumers aren’t comfortable spending freely. But one of the chief reasons that they aren’t comfortable spending freely is because unemployment is so high. As long as consumers see a huge number of Americans out of work, they won’t feel that the nation’s economy is completely stable. That’s why we have been seeing such sluggish job growth, even when the unemployment rate appeared to be declining a little.

But if sentiment drops and remains low, then even that anemic job growth will disappear. At that time, the chances of double dip become much greater. If consumers pull back in a meaningful way, then it’s hard to see how firms will be able to resist additional layoffs, which of course would result in sentiment and spending to decline even more.

Posted in Employment, Housing Bubble, Housing Recovery, National Real Estate | 137 Comments

Stu and Gator single-handedly trigger Montclair reval

Posted on August 17, 2011 by grim

From the Montclair Times:

Montclair reassessment will impact all property values

All Montclair property owners can expect their property tax assessments to change following a reassessment that’s now in progress, some more than others, the company doing the work told the Township Council Tuesday night.

Steven Rubenstein of Realty Appraisal Co., himself a Montclair resident, did a presentation to the council at its pre-meeting discussion session. His company will working off of a land and building database created during a township reevaluation five years ago.

“We will be revising all of the values from that 2006 reevaluation, including the thousands of properties that have been changed since that time,” Rubenstein said, later adding, “This is a downward reassessment.”

Under questioning by 2nd Ward Councilman Cary Africk, Rubenstein said that even Montclair residents who had successful tax appeals will have updated assessments.

“All assessments will change,” Rubenstein said. “Every single assessment will change. Some will change a lot more than others.”
…
The point of the reassessment is to adjust the property values throughout Montclair so they reflect current market values. Real estate prices plummeted after Montclair’s reevaluation was done, prompting Montclair residents to file tax appeals that reflected the decreased value of their homes. Those successful appeals have proven to be a huge financial burden on the township, with $2.1 million in tax refunds required last year and as much as $4 million being projected this year by Township Attorney Ira Karasick.

In addition, there’s a need to level the playing field in Montclair, so that property owners who never filed appeals, but whose home values declined, are not shouldering an unfair burden in terms of local taxes.

“The assessment seeks to restore the uniformity that’s been severely eroded by five years of tax appeals that have plagued the township,” Rubenstein said. “The taxpayers who have filed appeals over the last five years have gotten reductions. Their assessments are not going to change as much as some of the other assessments in town. Their new reassessment value may not be much lower than what they’re at now. For the thousands of property owners that have not filed tax appeals over the last five years, and whose assessments are therefore the same now as they were in 2007, those are the properties that are going to see the most percentage change in their new value.”

Posted in New Jersey Real Estate, Property Taxes | 91 Comments

And they’re off! (again)

Posted on August 16, 2011 by grim

From the APP:

4 banks given OK to resume foreclosures in N.J.

Four lenders can resume foreclosing on homeowners who have defaulted on their mortgages after a state judge ruled Monday that she was confident the companies will no longer engage in so-called robo-signing.

General Equity Judge Mary C. Jacobson said Bank of America, Citibank, JPMorgan Chase and Wells Fargo have upgraded their foreclosure procedures enough to ensure that their customers will get a fair shake.

The companies were found in compliance seven months after state Supreme Court Chief Justice Stuart Rabner essentially placed a moratorium on foreclosures until it was clear that lenders weren’t robo-signing documents — a process in which company employees or contractors, inundated with foreclosures, sign off on documents so fast that they don’t know what they are signing.

Judges overseeing the foreclosure process said the practice meant there was no way for them to know if an affidavit or certification was, in fact, true.

Rabner’s order gave homeowners some breathing room; the number of foreclosures filed in New Jersey fell from 58,000 in 2010 to 6,000 through July 2011, said Winnie Comfort, a spokeswoman for the New Jersey judiciary.

But observers have said the latest ruling threatens to contribute to the slumping real estate market. Thousands of foreclosed homes could come on the market at a time when home prices continue to fall.
…
When the company can’t modify the homeowner’s mortgage, “it is important for the surrounding community that banks move forward with foreclosure sales to prevent problems with vacant and unkempt homes,” Friedlander said. “Now that the New Jersey court has validated Wells Fargo’s foreclosure processes, we will resume these practices for the benefit of New Jersey’s communities.”

Posted in Economics, Foreclosures, New Jersey Real Estate | 80 Comments

JP Morgan: Bottom only 5% away

Posted on August 15, 2011 by grim

From HousingWire:

Home prices still poised to drop 5% by early 2012, say JPMorgan analysts

JPMorgan Chase stuck to their outlook Friday, forecasting home prices in the U.S. could plunge another 4% to 5%, before reaching a bottom in early 2012.

Analysts at the bank originally lowered their prediction on future home prices in June. If prices continue to fall at this rate, they will be down 37% from their peak when they finally reach a bottom.

JPMorgan Chase analysts said a drop in distressed home sales activity buoyed prices a bit in the past few months, with the CoreLogic home price index rising for the third straight month in June, edging up 0.7%. Tighter underwriting standards across the board remain a challenge, with many borrowers unable to qualify for loans.

“Without a fundamental improvement in the demand-supply imbalance, both seasonality and distressed sales may turn against us in the coming winter and push home prices lower,” Chase analysts said.
…
Even though more consumers are turning to rental properties, JPMorgan said rising rental prices could eventually push potential homeowners off the fence, encouraging them to buy properties.

Posted in Employment, Housing Bubble, Housing Recovery, National Real Estate | 85 Comments

What? Fraud here? Can’t be!

Posted on August 13, 2011 by grim

From the NY Daily News:

Mortgage fraud hits New York City hard as economy tanks and home scams rise

With the U.S. housing market down, mortgage fraud is up – and New York is near the top of the heap when it comes to getting fleeced, a new FBI report said.

Mortgage fraud schemes were on the rise in 2010, the last year for which data is available, as a sputtering economy, high unemployment, increasing delinquencies and foreclosures and limited credit availability created a breeding ground for scammers to take advantage of harried homeowners and the system, according to the bureau’s Mortgage Fraud Report.

“The current and continuing depressed housing market will likely remain an attractive environment for mortgage fraud perpetrators, who will continue to seek new methods to circumvent loopholes and gaps in the mortgage lending market,” said the report, which was released yesterday.

“Mortgage fraud enables perpetrators to earn high profits through illicit activity that poses a relative low risk for discovery,” the report said.

The number of pending investigations for mortgage fraud was 3,129 in 2010, a 12% increase from 2009 – and a 90% spike from 2008.

Although total dollar losses attributed to mortgage fraud is unknown, the FBI said 71%, or 2,222 of all pending cases last year, involved dollar losses totaling more than $1 million.

New York and New Jersey were among the top 10 states with the most fraud cases, and New York City was third in pending FBI investigations last year with 185, behind Las Vegas (292) and Los Angeles (195).

Posted in National Real Estate, New Jersey Real Estate | 89 Comments

Can investors fix the housing market?

Posted on August 12, 2011 by grim

From the Atlantic:

Dear Treasury, Investors Can Fix the Housing Market

Dear Treasury Secretary Geithner,

First, kudos on your decision to stay on for the rest of your boss’s term. I know Goldman is aching to get you on board, but you’ll have plenty of time to make money when you’re in your 50s. Now that you’ve committed to another year, let’s talk for a minute about one of the most important problems you face: how to fix the housing market.

I’m glad to see that the Treasury has recognized two key facts about the housing market. For starters, the economic recovery won’t take off until housing has hit bottom and begun to rebound. And as far as what Washington has done to try to fix the market up to now, none of it’s working.

What Isn’t Helping

Let’s learn from those lessons, shall we?

Lesson #1: Be Aggressive — Little Carrots Don’t Work
Lesson #2: Stop Trying to Prevent Foreclosures — Mortgage Modifications Aren’t Working
Lesson #3: Ignore Consumers — They Can’t Fix This Problem
Lesson #4: Stop Pretending You Control Fannie and Freddie — You Don’t
…
Help the Private Market to Work

Idea #1: No Taxes on Rental Income for Five Years
Idea #2: Allow Crazy Flexibility with Rental Property Improvement Tax Deduction
Idea #3: Exempt These Investors from Real Estate Taxes through 2015

Posted in Economics, Housing Recovery, National Real Estate | 146 Comments