Foreclosure/distressed properties continue to make up a significant chunk of the volume of sales. Because of the effect of those sales, one legislator has an idea of how to prop up the housing market: Tell the appraisers to lie.
The sale of foreclosed properties has an unspoken effect in places where property taxes are based on the last arms-length transaction for that parcel. A property that was valued (and taxed at), say, $400,000 might now be valued at $150,000. If that happens enough times in a town, then the town government has to cut services to adjust for the falling revenue.[1]
Meanwhile, Paul Krugman believes that this recession is so deep and will last so long that it will be another depression. He wonders why nobody in the Congress or the Administration seems to give a shit about it.
I wonder that as well. We have a massive unemployment rate that I believe is far more severe than the statistics say that it is. People are out of work for a very long time and have fallen between the cracks. The Republicans and, yes, Our Esteemed President [/sarcasm] are tying themselves in knots arguing about long-term problems while they both willingly turn their backs on the current situation.
To put it another way, if the economy was an airliner, it would be as though the engines have quit, the airliner is gliding down to a crash and the crew hasn't noticed because they are too busy arguing about where they will go to eat and drink after arriving at the destination.
This is why my reaction to the results of the special election for NY-26 is a loud and hearty "Meh!"
Meanwhile, the Re-Elect Barry Campaign sent me a fundraising appeal. I think I'm going to send them a check for a buck-fifty, which should be more insulting than just ripping it up.
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[1] And then there is a new scam called "short sale fraud". It should come as no shock to see who is tangled up in that.
That’s A Lot Of (Rude) Words For “I’m An Idiot”
24 minutes ago
3 comments:
I guess it depends on your local market. In my local market, I went out looking for homes to buy. I found two kinds of entry-level homes for sale -- short sales, and foreclosures. No "regular" sales. My broker told me don't even look at the foreclosures, because the banks were accepting cash only, no financing, because houses would not appraise due to all the other foreclosures selling for cash only, no financing. So unless I had $300K sitting around, forget about the foreclosures (note that the few homes in this market that *are* managing to close via conventional loans as vs. cash are closing for around $400K). The short sales were a possibility, but it took an average of 8 months to close on a short sale, and 60% of all short sales did not go through because 2nd mortgage holders refused to release their lien even though if foreclosure happened they'd get nothing because there was no equity in the home.
In short, the situation is FUBAR. I want to buy a house and I can't buy one because they won't appraise because the banks are afraid they won't appraise so will only sell foreclosed homes for cash (which automatically chops 25%+ off the market value because only investors can afford that kind of cash). This Nevada law probably isn't the right way to address the situation, but *something* has to be done to address the situation, because we're otherwise pretty much at a standstill, by chopping most homebuyers out of the marketplace (because we don't have $300k to put into a home), you *guarantee* that the price will go down due to simple supply and demand -- too many foreclosed homes, but the majority of people (who must finance their homes) cannot get financing to purchase them, meaning a small minority (the investor class) gets to bid the price *down*.
Of course, maybe transferring ownership of most homes to the investor class and making the rest of us renters subject to the whims of our owners *is* the plan...
- Badtux the Paranoid Penguin
I think you done broke the code, BadTux.
It sucks, and the ruling class gives not a shit about it. While it is true that the Obama crew has done what look/sound like great things, it also seems to be true that they are scared to death of rich people and republicans.
Krugman? fuck him.
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