FHA calls real estate market’s future “incredible” – overstatement?

I suspect Stevens was talking about the future 5-10 years out. By then we should have [hopefully] sorted out much of the mess we’re in now, and the demographic trends will have an opportunity to take over.

I have no need to respond to this type of parsed blog manipulating, but I will. If antigenious would prefer to script a message of pessimism, he/she can feel free to do so, but as one who has spent 3 decades in this industry, I am a firm believer in the fact that markets recover and rally’s re-emerge. We have a great future ahead. It’s my message and I am sticking with it. Being a naysayer I guess is a good place for those who look for reasons to find the negative message for the story. If you had quoted the whole speech, you’d know I also said that we have a long way to go, that the markets are ill, and that work needs to be done. Taking a line at the end of a speech about the future, without presenting the full story of my speech, is just bad journalism.

My 2 cents on Steven’s BS:

There are presently 3 primary solutions to stability in the housing industry. Unfortunately only one of them has a proven track record. History has proven the others to be nothing more than a temporary ruse. I’m sure each can figure it out for themselves.

1) Continue in the direction of the socialistic agenda that is spewing out of the White House like bad breath from a homeless wino. Unfortunately, in a socialist state, those who feel disadvantaged are given ample opportunity to take advantage of the system and drag the rest of us down with them.

2) Give the court system “police state” power to create cramdown loan modifications to stem the tide of impending foreclosures. Don’t sprain your arms patting yourselves on the back folks. It ain’t nearly over yet.

3) Let the free enterprise system do it’s thing. It is the most successful economic system in the history of mankind. It is intensely painful to stand by and watch it systematically destroyed by those with small greedy minds.

Before the relaxation of lending standards required to ensure the success of the idiotic Washington proposed agenda of raising home ownership from the 40 year standard of 65% +/-, to a ridiculously optimistic 85%, the qualifying guideline for mortgages was 3 times the gross household annual income. It worked well, but we all know Washington’s historic tendency to take anything that works well and “fix” it. The only way to get there from here was to relax lending standards. And of course, here we are today.

Years into this mess our so called leaders have created, afloat in a hurricane tormented sea, hanging on every microscopic positive change in an economic index indicator as if it were a life raft appearing; looking for ways to fix the newest mess created by the sleight of hand big government so called solutions (more properly called smoke and mirrors.) The problem with FHA is it that it made too many sub-prime loans in the last few years as part of this market correction farce. Defaults are cropping up like weeds and FHA is collapsing, hence the hike in up front mortgage insurance premiums and the sure to come increase in monthly MI. Deja Vu all over again.

The housing market has not yet hit bottom. Skeptical? Take an economic pulse in your own neighborhood folks. Is the average (not median!) house value (not sale price!) equal to 3 times the average (not median!) household income? That’s where we need to be to earn the right to say we have recovered. If not, what are you going to do about it? Create more transactions like an account churning wall street stock broker? I suppose attempting to line your own pockets in an attempt to avoid the equalizing effects of a socialist regime will keep you occupied , like a hamster in a wheel, for a time. What then? Your agenda should be to take whatever steps necessary to ensure that we reach true recovery, not that we line our pockets by creating transactions that will result in more foreclosures so big government can come to the so-called rescue and buy more of America for pennies on the dollar.

Human greed, that was the root of this problem in the first place. I dare say that human greed is the root of every problem known to mankind, but I digress. The coupling of a democratically ruled republic living within the bounds of a free enterprise economic system has historically been the only long term solution I am aware of. Have a better solution?

Bring back the Republic! Support free enterprise!

“incredible,” don’t u really mean “uncertain”? @agentgenius https://bit.ly/bHnAgb

I agree with Stevens that the demographics, in favor of a long-term housing increase are “incredible”. Gen Y is a HUGE market and they are perfect home buyers. GenY are “solid citizen” types, more like their grandparents (WW2 generation) than their parents (Baby Boomers). They generally prefer safety over risk taking and see themselves as the optimistic answer to today’s problems. You really can’t find a better bunch of home buyers than that.

Lani, here is another reason why I’m optimistic on real estate (take this the right way); you, and others aren’t. I’m a contrarian. I watched agents and originators touting real estate while I was cautioning of the skewed price/income ratio (2005-6). Because of that unbridled exuberance, I knew we were in for a decline; I had no idea it would be as severe as it has been.

Agents and originators are shell-shocked and scared to hang onto anything positive. We could very well be in a short-term pickle, with a possible currency collapse but, long-term, Commissioner Stevens’ comment is on the money.

Now, if that really was Commissioner Stevens, I’d advise him to craft more measured blog comments (rather than calling this blog “anti-genius”). That sort of comment reveals frustration, not confidence. You’re better than that, David.