Is This Home Buying Spree Just Another Bubble? Let me start by saying this is my opinion & I have learned more in the last years about markets than I did my first 33 years. You must be tired of hearing the ‘experts’ saying that NOW is the best time ever to get into the buying spree. And I must tell you that the statistics generally tend to support this statement. Just by looking at the rise in short sales and foreclosures it’s obvious that investors have more opportunities flowing in as loan delinquencies increase. Let’s check the stats for the first two quarters of this year. A Federal Housing Finance Agency report suggests that short sales rose by 45 percent between April and June 2009. In 2008, the total number of short sales was reported at 15,704. In just the first two quarters of 2009 the number of short sales has reached to 19,759, an increase of about 25 percent. The causes are easy to identify. The rise in short sales is primarily because of the rise in unpaid mortgage loans. The one month delinquent loans increased by 11 percent while the over two month delinquent loans saw a rise of 21 percent in the second quarter of 2009. In addition, foreclosures increased by 23 percent in the second quarter of 2009 with a rise in over three month unpaid loans. A logical conclusion would be that the numbers mentioned in the Federal Housing Finance Agency report clearly indicate that buyers will be flooded with opportunities from short sales and foreclosures. But there are many skeptical people that are describing these phenomena as ‘just another bubble’ and frankly speaking the previous period has taught us to be at least more cautious. Why do I still think that indeed it is the best time to buy? The answer is simple: merely because the processes of short sales have been accelerated. And that is not shown only by their increased number but also by the average period that is nowadays required to close the process and also by the increased level of authority for servicers to participate in short sales. You see, homes on the verge of foreclosure seem to be everywhere and I agree that it looks like another bubble ready to burst if there’s not a strong base to facilitate and accelerate the process of moving these properties from the market to the buyer. And in my perspective the release of the official failing of our banking system followed by the relsease of the shadow inventory will be the perfect storm to truely be the buyers market we’ve all hoped for. Look the $8000 buyers credit was not designed to give homebuyers an oppurtunity to buy homes it was designed to create another bubble giving banks who we’ve already bailed out more money for homes & create a buying frenzy. When Obama was elected he said he wanted to keep home prices stable, however government involvement in free market is a recipe for desaster. You think homebuyers are upset now, wait until all this inventory is released & the home they just closed on after months of searching drops by 20%. For this along with our Treasurers support by propping up failed banks we will be in recession longer as opposed to shorter time period. Washington is Wall Street & Wall Street is Washington, if you really want to know who runs our country check out how many ex- Goldman Sacs employees sit in high ranking governement jobs. When this round od fraud by our government & Wall Street is done expect there to be quite a few of these people serving time for fraud ala Bernie Madoff. Our political system, monetary system, social security, medical & economy are all Ponzi Schemes. In a few months the stock, credit card & real estate markets (residential & commercial) will fall, have you noticed the raising prices of Gold & Silver? As these go up the value of the dollar decreases & so does your buying power, think $7 to $8 for a gallon of gas is far fecthed in a few short years you’ll be wishing for the days of $3.50 a gallon gas. Also this will all come to a head when the Fed (another croked agency privatley owned that supplies our money) is forced to increase interest rates which ar currently at 0%. Currently the Fed loans its owners Citibank, Bank of America, Wells Fargo, Goldman Sacs & Chase money at 0%, they intern put a trillion dollars of our tax money into a London bank making 5% then loan it back to us at 10%. You be the judge, in my opinion sometime in 2011 or 2012 this house of cards will all come tumbling down. Historically salaries go up 1% yearly & so did housing, however in the last bubble homes when up lets say 35% & salaries went up 5%, so in order for our market to truely be corrected housing must com down another 25 to 30%. So all the talk about stabalizing the housing prices is just holding off the enevitable of eventual market correction, if your house was worth $200,000 in 2002 today its true value is $205,0000 to $215,000 max. Will housing every rebound & did you lose equity from 2005 to now, no becasue the money never exsisted unless you sold your home. Mark my words your home won’t be worth the 2005 values for another 25 to 30 years, regardless of how much government intervention & printing of money they do. Current trend produce future results, read alternative media to form a true opinion of the markets, not the government make you feel good by leaving out portions of statistics to make you consume. The economy will not stabalize until jobs stabalize no new jobs no stable economy. Governments job is to grow government, however as Americans we need to remember the famous words of Ronald Reagan”Government is not the solution. Government is the problem”. Until next time seasons greetings. P.S. Most homes if they quailify for a modification are being lost after the modifications are done, because people are still unable to make their payments. P.S.S. If you have any questions about the FED an how they’ve manipulated our markets & enslave us contact me, this is a long conversation. P.S.S.S. Borrowing money to get out of debt just gets you in more debt.