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housing stimulus plan: CNN Confirms The "Real" Unemployment Rate - 06/08/09 12:30 PM
For the past couple of months I have been writing about the "real" unemployment rate, the U-6 rate, the rate that no major media outlet seems to know about or wants to write about.
This past month, the U-6 unemployment rate surged to 16.4%. The rate includes:
1.) Marginally attached workers - people that want a full time job, have looked for one in the past, but are no longer looking for work.
2.) Discouraged workers - those that have given a job market reason for not looking for a job.
3.) Persons employed part time for economic reasons - in other … (7 comments)
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housing stimulus plan: Housing affordability reaches a new record high - 03/04/09 09:22 AM
The NAR is reporting that housing affordability as measured by mortgage rates, median income, and median home values, has reached a new record high as of January of 2009.
The composite index increased from 153.2 in December to 166.8 in January. Historically, the highest affordability index was in 1973 when it was 147.9, the first year that the NAR began tracking this indicator.
In other words, in theory, never before has there been a better time to buy a home. Yet despite this, existing home sales are the weakest they have been in 12 years and new home sales are the lowest … (2 comments)
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housing stimulus plan: Where is the bottom? - 02/20/09 10:52 AM
I think the question on every American's mind is, where is the bottom, when are property values going to stop falling?
Of course, there is no easy answer because all real estate is local, but the truth is, all local markets are exposed to a lot of the same headwinds like tight credit, job losses, weak consumer confidence, and foreclosures. Every market is up against these forces to some degree and as we are seeing, each of these forces is intertwined.
As Americans lose their homes to foreclosures, property values fall. As property values fall consumer confidence and consumption declines and credit contracts. … (1 comments)
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housing stimulus plan: CNBC's Diana Olick on Real Estate Investors - 02/19/09 12:40 PM
I have written before about the difference between real estate investors and speculators. But every now and then it is nice to have your opinion vindicated by somebody else. In this case it is CNBC's Diana Olick when she made a recent blog post about real estate investors. The title was, "Not all real estate investors are irresponsible". It was written in response to President Obama's speech yesterday when he said about his housing program, "It will not help speculators who took risky bets on a rising market and bought homes not to live in but to sell."
First of all, to set … (4 comments)
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housing stimulus plan: Obama's Housing Plan? - 02/18/09 03:42 PM
According to a Reuters report, the details of Obama's housing plan are to help 9 million homeowners at a cost of approximately $275 billion. Here is a link to the four page document. It is estimated that $75 billion will be spent in "subsidizing" mortgage payments while another $200 billion will be allocated to the Treasury to purchase preferred stock in both Fannie and Freddie, doubling their stake in each, which will presumably allow the government to modify a greater number of loans.
The big question however, is how is what Obama is proposing actually any different than from what has already been attempted on … (7 comments)
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housing stimulus plan: Mortgage purchase applications rebound, but still near recent lows - 02/18/09 12:01 PM
According to the mortgage bankers association, after hitting an eight year low last week and dipping -9.8%, mortgage purchase applications rebounded 9.1% this week from 235.9 to 257.3 on the index. This is still the lowest index rating since the week of November 19th when it was 248.5 and the 30-year fixed rate mortgage was at 6.16%.
This week, according to the MBA, the 30-year fixed rate mortgage declined to 4.99%.
The reason why the mortgage purchase application index is relevant is because in order for the housing market to get price stability, we need to stimulate demand, and in order to stimulate … (0 comments)
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housing stimulus plan: Greenspan on housing - 02/17/09 11:27 PM
A reportby Reuters today quoted former Federal Reserve Chairman Alan Greenspan as saying that a housing recovery is a necessary condition for the end of the financial crisis.
I don't disagree with this. In fact I have written a book and nearly 200 blog posts to the same effect. It's the housing market, stupid.
Greenspan goes on to say that, "the prospect of stable home prices remains many months in the future."
I don't disagree with this either. In fact, depending on how effective or ineffective the government's effort is to stem foreclosures by "subsidizing" mortgage payments with $50 billion worth … (2 comments)
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housing stimulus plan: Chrysler & GM Need More Money - Is Anybody Surprised? - 02/17/09 05:42 PM
According to the AP, Chrysler & GM announced today that they are going to need more money. For Chrysler it is $2 billion more than they had originally requested.
I have one question.
Is ANYBODY surprised by this?
Would anybody be shocked if they need even more money in another 6 months?
Isn't this the nature of bailouts?
Isn't this what AIG did, and then Citi, and then Bank of America did? Didn't they all end up going back to the trough, I mean Treasury, after their first bailout?
Isn't this what happened with the first half of TARP, the original $350 billion? It was … (6 comments)
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housing stimulus plan: Do you want the good news or the bad news first? - 02/16/09 12:34 PM
The NAR published their quarterly metro area median sales price report last week, and with any report that is published, you always have to ask the question, "do you want the good news or the bad news first?"
Well, I usually elect for the bad news first, so let's get that out of the way.
According to the NAR, of the 159 markets that they track, 84% or 134 lost value from last year to this year. Additionally, the NAR did not have data for six of the markets. So while all real estate is local, local real estate is not immune to … (3 comments)
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housing stimulus plan: Propecia, jobs, and home sales - 02/13/09 04:08 PM
Washington announced today that their $8,000 first time home buyer tax credit will save or create 4 million home sales over the next several years.
Well, actually, they didn't say that about home sales, but they very well could have. It would have been right in line with their other statement about creating and or saving jobs.
Washington is spending an awful lot of money and nobody knows if it is going to have any meaningful impact on the economy. And so in an effort to cover their "efforts" the buzz phrase has become that the economic stimulus plan will create or "save" 4 million … (9 comments)
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housing stimulus plan: Goodbye $15,000, Hello $8,000 - 02/13/09 01:05 PM
In all of Washington's infinate wisdom, Congress has agreed to reduce the Senate's proposed $15,000 home buyer tax credit to an $8,000 first time home buyer tax credit. The piece of legislation which is part of the broader economic stimulus bill, is expected to be voted on today.
To say that the proposed $8,000 first time home buyer tax credit which will not have to be repaid is an improvement from last years $7,500 tax credit which did have to be repaid over 15 years is kind of like saying that the 2009 Memphis Grizzlies basketball team is better than the 2008 team, … (4 comments)
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housing stimulus plan: Washington is Insane - 02/08/09 03:01 PM
I know what you're thinking, "thank you, captain obvious, tell me something I don't know".
But I'm not talking about O.J. Simpson insane, I'm talking about the other definition of insanity, the one that says, "doing the same thing and expecting different results" kind of insane.
Representative Darrell Isa of California was quoted by Matthew Benjamin in a Bloomberg.com article as saying, "They continue to assume that if you do something and it hasn't worked, you have to continue to do more of it" Isa went on to say, "That's the definition of insanity".
The first $350 billion of TARP capital injections didn't work? … (17 comments)
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housing stimulus plan: With all due respect to Senator Isakson, 2009 is not 1974 - 02/07/09 10:18 PM
Who is Senator Isakson?
He's the prime sponsor and former real estate broker of the current $15,000 home buyer tax credit that is making it's way through Congress.
In a recent New York Times article he was quoted as saying, "We do have a history in this country with housing and it goes back to the crash of 1974, which actually in terms of inventory and price declines was comparable to what's happening now".
Really?
In terms of inventory, in 1974, according to data from the Commerce Department, there was an 8.09 month supply of new homes. Today, in December of 2008, … (5 comments)
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housing stimulus plan: Congress is bringing a knife to a gun fight - 02/06/09 03:05 PM
If you've seen the movie the "Untouchables" with Sean Connery, you probably remember the line where he says something to the effect of "bringing a knife to a gun fight", only he uses a term that I won't repeat.
Well, that's exactly what Congress is doing with their proposed housing stimulus plan that is making its way through the Senate, they are bringing a knife to a gun fight and they have been now for nearly a year. And that's why the housing market has and will continue to deteriorate.
The latest of Congress' efforts is to provide a 10% home-buyer … (7 comments)
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housing stimulus plan: The $7,500 first time home buyer tax credit to be expanded? - 02/03/09 05:32 PM
Jeanne Sahadi, with CNNMoney.com recently wrote an article about how the Senate may propose a broader housing stimulus plan that would include the creation of 4% mortgage rates for a limited period of time, expand the $7,500 home buyer tax credit to all primary residence purchases, not just first time buyers, increase the tax credit to $15,000, and of course the compulsory 90 day foreclosure moratorium.
Here's my two cents:
The "creation" of a 4% mortgage rate is going to be incredibly expensive. The Fed already tried to plunge mortgage rates by purchasing approximately $600 billion worth of mortgage backed securities … (3 comments)
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housing stimulus plan: Obama's $7,500 First Time Home Buyer Tax Credit 2.0 - 01/31/09 10:11 AM
As part of President Obama's economic stimulus plan, a $7,500 first time home buyer tax credit has made its way into the legislation which has already passed in the House this week.
The proposed new $7,500 first time home buyer tax credit is a revised version of the tax credit that was part of the Housing and Economic Recovery Act of 2008 which was made available to first time home buyers that purchased a home between April of 2008 and July of 2009. The original legislation required the tax credit to be repaid over 15 years, basically, it was an interest … (27 comments)
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housing stimulus plan: NAR v. NAHB Housing Stimulus Plans - 11/29/08 11:17 AM
With all of the talk about bailouts, hope for homeowners, TARP, and economic recovery acts, I thought I would take a second to debate the merits of our own NAR and NAHB housing stimulus plans.
As of November 18th, this is NAR's most recent 4-point plan to stabilize the housing market and home values - mind you, this has been a work in progress over the past several months. The words in quotes are taken directly from the associations, my response is in bold. The good news is that both organizations are beginning to realize that this can't be fixed just through … (4 comments)
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housing stimulus plan: Are loan modifications really the answer? - 11/28/08 03:53 PM
Maybe I am the one that doesn't get it. Maybe Iam the one that has swallowed my economic compass and Washington actually knows what they are doing.
Are loan modifications really the solution to this housing and economic crisis?
Is this really the answer to all of our ills - providing loan modifications and principal write downs for Americans that can no longer afford their payments or are under water on their mortgage?
Is this Hope For Homeowners plan indeed going to turn the housing market around and stimulate the economy?
Whenever I hear about these loan modification programs, and there were a couple of featured blogs on AR today … (3 comments)
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housing stimulus plan: The Missing Piece... - 10/23/08 10:32 PM
Colin Barr got it right in an article he wrote for CNNMoney.com today.
Everybody is talking about fixing the banking system. This was what the $700 billion bailout was all about. But there is a missing piece to this attempt to stabilize the economy, it's called the housing market.
The following is a bit from his article:
The government's failure to act pre-emptively and decisively on the housing crunch has only added to the problem, says University of Michigan law professor Michael Barr.
"The administration should have acted a year ago," says Barr, who is a senior fellow at the Center for American … (2 comments)
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housing stimulus plan: Congress is Playing Whac-A-Mole - 10/12/08 11:22 AM
Is it me or has Congress, The Fed, and the Treasury been running around for the past couple of months playing whac-a-mole with the banking and financial system?
Bailout this company, help this one merge, let this one fall, pass a worthless $150b stimulus plan with rebate checks (that everybody except Congress knew would be a waste of tax payer money), pass a $700b bailout plan, propose another $150b bailout for cities, and then some weird economic stimulus and recovery plan for $56b in September. How are all of those things working out for you and the economy?
The problem facing our economy is a housing … (0 comments)
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Mark MacKenzie
Phoenix,
AZ
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Mark MacKenzie Real Estate Planning
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