From the CNBC interview:
Although the foreclosure freeze is stabilizing the housing market for the time being, it will trigger further housing price declines two to four quarters out, Joseph Murin, former president of the Government National Mortgage Association [Ginnie Mae] told CNBC on Monday.
"What it will cause is a more eroding of confidence in the American people," he said. "And when the American people aren't confident, they're not going to respond, which means the housing market is going to remain sluggish."
Foreclosure stalling is necessary for institutions to reassess whether they are processing correctly, Murin went on to say.
"There's no fraud involved in this," he said. "It's process inadequacy that's causing the problem. Behind the scenes, we're dealing with technology and experience that's probably a decade old. It's not kept up with the huge push [in mortgage debt]."
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I hate these generalized comments "prices will come down" without any idea of how much we are talking about.
ReplyDeleteFor example, if prices drop 25%, we break through the early 2009 lows, and waiting was a good idea. However, if prices only drop 10% then early 2009 was indeed the bottom and waiting wasnt so great after all.
I'm seeing at or below 2005 prices in my local area. Another drop of "only" 10% would be welcomed.
ReplyDeleteIf Obama decides to freeze foreclosures across the board, homeowners may be saved but the real estate investment industry may grin to a halt. In the long run, its better to just let the system work itself out.
ReplyDeleteIm also seeing 2005 prices. Problem is last year, I was seeing 2003-2004 prices.
ReplyDelete10% off wouldnt get me back to bottom pricing. I would need 15% IMO.
We are trying our very best to become another Japan. Last year residential real estate was selling at 1975 prices over there. I don't have newer numbers.
ReplyDeleteThe sooner we let the market work things out as painful as that will be the better we will be in the end.
And it will be painful. I work in a low income health clinic and two or three new patients a day come in telling how they just have or are about to lose their homes. Didn't see this in other downturns.
Un freaking believable! How the hell are people still occasionally getting 100K over list price in Lyon Village???
ReplyDeletehttp://franklymls.com/AR7439058
"How the hell are people still occasionally getting 100K over list price in Lyon Village???"
ReplyDeleteI dont know where Lyon Village is, but I find it hillarious that every picture in the gallery you posted is a fisheye lense shot to make things look bigger than they are!
I also like how the neighbors house, 3 inches to the left in the photo looks like a freaking skyscrapper next to that home!
So here are some professionals breaking down the DC metro area numbers - http://blog.redfin.com/washingtondc/
ReplyDelete"There's no fraud involved in this,"
ReplyDeleteOh no, absolutely not ,Mr Mozillo said so.