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overtheedge
Member since May 2012
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Fed Wonders "Why Are Housing Inventories Low?"; More Than Meets the Fed's Eye - Mish - Global Economic Analysis

Oh and I suppose inventory held off the market by banks that is "marked to model" has no effect. Put em on the market and see where price discovery and inventory goes.
Then should we discount the effects of the MERS fiasco? Where have all the titles gone?
What effect could the CDO mess have on the trade? Who actually holds the existing mortgage?

It would appear that your vision is just about as tunneled out as the Fed's, except you did catch the big one:
Who can afford to buy?
I just don't see that many folks that can actually afford to buy even if housing prices dropped by 50%.
The general public has no savings to speak of. Job security is questionable at all levels. Personal debt is pervasive and for the most part far beyond being manageable.
And lest we forget, the general public is effectively a bunch of idiot savants, one-trick ponies, mono-vocational. Worse of all, they are functionally illiterate with roughly half the public reading at no better than an 8th grade level. The average IQ in the US is estimated at 98*. Just remember, half are below and half are above the average.

Without jobs requiring consistent, monotonous repetition requiring little hard physical labor, unemployment will continue to be ubiquitous.
The general public lacks the skill-set and train-ability to gain and hold long-term employment.

Which brings us full-circle back to "Who can afford to buy real estate?" Inventory availability will be carefully managed to maintain the inflated pricing and as a consequent, asset valuation for the books. Mark to market would destroy the financials. They may have liquidity thanks to the Fed, but they still lack solvency due to extreme fractionality.

* Lest any sanctimonious commenter brings it up to support their questionable argument, IQ is NOT a predictor of financial success. The are Mensa members who are indigent and I would bet that there is a "Forrest Gump" story out there too. IQ is a valid indicator of learning potential in a limited time-frame. Koko did learn to sign.

Commented 3838 days ago

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Beginning of the headline :Inquiring minds are reading the San Francisco Fed Economic Letter "Why Are Housing Inventories Low?" Inventories of homes for sale have been slow to bounce back since the 2007–09 recession, despite steady house price appreciation since January 2012. One probable reason why many homeowners are not putting their homes on the market is that their properties may still be worth less than the value of their mortgages, which would leave them owing additional money after a sale. In other cases, homeow... Read More

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