I really wonder who dresses these people. We have another unexpected announcement about the economy, this week it’s the housing sector. Again. Last week we had reports of new lows in the price of resale homes and they were shocked. This week it’s a new low in new housing starts. Actually, the news is really about both January and February, from the Wall St. Journal.
WASHINGTON (MarketWatch) — New construction of U.S. housing units plunged in February, erasing a sharp gain in January and coming close to an all-time-low level.
Bottom line, he lives in a cave.
Now I’ll be the first to admit that it’s a very nice cave, but it’s a cave nonetheless.
One of the indicators of just how tough things are out in the real world is the real estate market. It’s in the tank, but I didn’t have to tell you that, we don’t have readers from DC. Not only is it in the tank, it’s not turning around anytime soon, and in the opinion of your humble correspondent, there’s probably another 25% downside in major real estate markets and nothing good will happen for at least five years AFTER the feds quit trying to manipulate the market. Let me quickly cite some reasons for my opinion.
- In major markets around the country the inventory of homes for sale on MLS is about 16 months. That’s homes currently listed for sale. A stable inventory, historically, is about 5 months.
- In those same markets, servicing banks are holding inventories of “real estate owned” (REO) on their books that are NOT listed on MLS in numbers that range from about 50% to 100% of the MLS listings. Those properties are called “shadow inventory”.
- If you are unable to make your mortgage payments and your home goes into default, in “normal” times the foreclosure process – which varies somewhat by state – takes about seven months from the time you miss your first payment until the “trustee sale” of the property and eviction. Right now, it’s not at all unusual for people to live in a house for two years or more without making a payment. Bottom line, banks don’t want more inventory but those loans will not “cure”, eventually they will go through the process and should be considered part of the “shadow inventory”. I’m guessing, but those numbers are probably about equal to the lenders’ current REO.
- Based on current lending rules, people with a foreclosure or bankruptcy are off the market in terms of being able to get a new mortgage for about five years.
- At least 25% of current homeowners are upside-down on their homes, they owe more than the home is worth. That means those homes are non-salable and those homeowners are off the market – probably indefinitely – in terms of being able to either “move up” or “downsize”. They are also handcuffed if they are thinking about a career move that would require relocation.
- Potential buyers who are unable to document their income via a W2 or their 1040s are now off the market without regard to their credit score.
- If you haven’t had a job for a while – like maybe 99 weeks – even if you manage to find one, you’re not likely to get a mortgage any time soon for a whole raft of reasons.
Bottom line to all of this is the real inventory of available housing is probably two-and-one-half to three times the apparent inventory and the pool of qualified buyers is shrinking.
So, what does that have to do with Obama’s understanding of the economy? Well, yesterday’s Washington Post had this interesting little snippet…
By Dina ElBoghdady
Washington Post Staff Writer
Wednesday, December 29, 2010; 12:56 AM
The Washington region posted the highest year-over-year home price gains in the nation this fall, as real estate values slumped in nearly every other metropolitan area, a key housing report said Tuesday.
A healthy job market, particularly for high-salaried workers, buoyed demand and prices for housing in the D.C. area, local economists said. Home values climbed 3.7 percent in Washington in October from a year earlier, making it one of only four regions nationally to avoid a dip in prices, the Standard & Poor’s Case-Shiller home-price index said.
But hopefully that’s likely to change. (See how cleverly I put in the “hope & change” reference?)
It is unclear how long the region will be able to buck the national trend. One of the anchors of the local job market – private government contractors – may face significant cutbacks over the next several years as the Obama administration has vowed to rein in defense spending. But many economists expect that the local housing market is strong enough to weather layoffs now that prices appear to have stabilized.
“Economists expect…” Heh. Given that every report issued by the government’s economists for the last two years have contained the word “unexpected” I’m not putting money down on this guess. Hey Barack. Welcome to the real world.
- Housing market’s bumpy ride isn’t over (seattletimes.nwsource.com)
- Price drops eyed for pricier homes in ’11 (lansner.ocregister.com)
- Pending Home Sales Slump Further In September (realestateradiousa.com)
- ‘Shadow inventory’ of homes tops 2 million, says data aggregator (seattletimes.nwsource.com)
- O.C. home sales taking 58% longer (lansner.ocregister.com)
You betcha Nancy.
And the Washington Post makes just of the million or so points relative to that stupid statement that underlines why you are about to be the “former” Speaker of the House. And Ms. Pelosi, you know you’re in deep doo-doo when the Washington Post calls you out, even when they do it circumspectly. The really amazing thing to me is that when you made that idiotic statement I believe that you actually didn’t see anything amiss with it.
Oh well, anyway, gee, we’ve seemed to find all kinds of stuff in that bill that you and President Obama told us wasn’t there. Like DeathPanels. Again. I’d produce a short – no, actually a long – list of “unexpected” stuff but our readers already know about most of it which is why a whole bunch of your colleagues are looking for lobbying jobs (heaven knows they can’t go back to their districts and get real jobs). So, I’ll just pounce on the latest one. Call it taking advantage of low-hanging fruit by a lazy old guy.
One of the first parts of the new health care law ready for consumers – special health plans devoted to the insurance industry’s rejects – is attracting only a fraction of the predicted customers… At the same time, since the plans opened for business in the late summer and early fall, the medical bills so far are, in at least a few states, much higher than anticipated, raising the question of whether $5 billion that Congress has devoted to the program could run out even if relatively few people join.
Hence the inclusion of this story in the “Unexpected Stuff” category. Your involvement in the legislation is what put it in the “Criminal Legislative Action” category. But we digress.
Last spring, the Medicare program’s chief actuary predicted that 375,000 people would sign up by the end of 2010. In early November, the Health and Human Services Department reported that just 8,000 people had enrolled.
Montana is one of a few states in which the medical bills from those who have joined are huge. New Hampshire’s plan has only about 80 members, but they already have spent nearly double the $650,000 the state was allotted in federal money to help run the program…
Feel free to read the rest of the article. It’s full of pap and smears from government bureaucrats and fools. Oops there’s a redundancy. Anyway, let’s get to the bottom line. Big government program offered up to “help the helpless”. We’re told there’s a bazillion of them. Gee, a couple of them show up to get their FREE!!!! MONEY!!!!! And it turns out that the couple that show up will probably cost more than the bazillion were going to cost. Well gosh, that sure was unexpected.
Now then gentle reader, please remember that these folks who screwed up this little computation are the same ones who are handing out twenty year projections showing how much of your money they are going to save with this albatross.
At this point, I just have two pieces of simple advice:
- Vote Republican. Down the line.
- Buy ammunition in case lots.
- A Lost Cause If Ever There Was One (nicedeb.wordpress.com)
- A selection of gaffes from the 2010 campaign that we should forgive. (slate.com)
- Congress Again Postpones Medicare Pay Cuts for Doctors (dailyfinance.com)
At least I hope in New Jersey…
We noted earlier the problems faced by the idiots who run California with their little $25B or so budget shortfall. Well, actually it’s a revenue shortfall. And today we find out that Moonbeam, etal aren’t alone from an article in the Boston Globe. And they’ve been doing the same thing in Massachusetts that the fools in California have been up to, basically avoidance and accounting games.
For months, Governor Deval Patrick has repeatedly sidestepped questions about how he intends to close a massive budget hole next year, saying that rising tax collections suggest that the gap is shrinking.
But his generalities and wait-and-see approach will give way to stark assessments today when administration officials, economists, and state lawmakers gather at the State House to begin confronting the budget for the fiscal year that begins in July.
They say that even though the state has collected about $500 million more in taxes than was expected so far this year, that gain is being completely absorbed by increasing demand for health insurance for the poor, homeless shelters, and public defenders. In addition, about $1.5 billion in federal stimulus money that the state used to avert deeper cuts this year is gone, leaving the state with few options to paper over its problems.
“It’s a $2 billion gap, and the difference between that and the past is, that’s a real gap,’’ said Steven C. Panagiotakos, the Senate’s outgoing budget chief. “So that $2 billion is going to really mean huge cuts in services and in employees. Let’s face it: It’s government services across the board.’’
I absolutely love this. States are busy going absolutely broke and last time around the BoyMarxist™ was there with federal money so they didn’t have to deal with the reality of life on the Left. And gosh, the money has done run out. I’m guessing the probability of the Republican House tossing a new pile of cash to places like California and Massachusetts so they don’t have to deal with their pubic employee unions is about zip. Nada. Bupkis. Not gonna happen.
Oh, and just what is the major cause of the problem? Well, there’s the economy thingy. And then there’s the RomneyCare problem. Take note folks. That’s not even the tip of the tip of the iceburg.
Ahhh, I’d love to be a fly on the wall in Chris Christie’s office when Moonbeam and Deval call him to get some tips on dealing with unions. Or on the wall in the Oval Office when Deval calls his buddy RexO™ about the health care thingy. Heh.
I was originally gonna list a bunch of stuff that the One-Party-Media was forced to print that contained the concept “unexpected”. There are waaaaaaaaaaaay over 100,000 hits on Bing so I’m not gonna bother. If you need a list – and if you need one, you’re a cave dweller – just type “unexpected, obama” into your search engine of choice. It’ll be a real treat.
Off topic: I think historians will record this Administration as the “Unexpected Presidency”. Not so much that a black Marxist could get elected, but that the results of his policies are “unexpected” by people who promote themselves as well-educated and intelligent.
Anyway, in keeping with all of his other policies, ObamaCare is having “unexpected” results. As reported in the Drooling Whitish Chick…
WASHINGTON — When Congress passed the health care law, it envisioned doctors and hospitals joining forces, coordinating care and holding down costs, with the prospect of earning government bonuses for controlling costs.
First of all, I’d like to know just how the hell Congress could have “envisioned” all that from a 2,000+ page bill nobody had read. Is Chriss Angel on somebody’s staff or something? Yeah, he probably is, come to think of it.
Now, eight months into the new law there is a growing frenzy of mergers involving hospitals, clinics and doctor groups eager to share costs and savings, and cash in on the incentives. They, in turn, have deployed a small army of lawyers and lobbyists trying to persuade the Obama administration to relax or waive a body of older laws intended to thwart health care monopolies, and to protect against shoddy care and fraudulent billing of patients or Medicare.
Consumer advocates fear that the health care law could worsen some of the very problems it was meant to solve — by reducing competition, driving up costs and creating incentives for doctors and hospitals to stint on care, in order to retain their cost-saving bonuses.
I’m actually kinda grasping at straws to add something to the stupidity of the highlighted sentence.
The bottom line here is really that the people of the United States, in 2008, proceeded to elect what they thought was intellectualism, intelligence and clarity to the highest office in the land. They just forgot about the fact that Bozo the Candidate had actually accomplished less than every 18 or 19 year old young man who completed and graduated from the US Marine Recruit Training program. Hopefully we can begin to set some of this foolishness right in 2011 and throw the Arrogant Louis out onto the street so he can rescue Jimmy Carter from the being the worst ex-President as effectively as he rescued Jimmy from the worst President award.
With respect to the NYT and the collective known as “consumer advocates”, there is no hope for them.