Friday, July 29, 2011

Vacant Homes Will Drown Housing Recovery

They have this back asswards definition of "recovery". It will never be a recovery in their eyes until prices return to and exceed the highs of the previous bubble, which was completely fake, fueled by the Fed's monopoly money. Housing will recover when the price reflects demand. Right now there are somewhere around 19 million unoccupied homes in America. That means there's a mega-surplus in supply, and nowhere near enough demand. Prices have to come down.

Keynesians think price deflation is some kind of horrible evil, and they make the average American believe it too, but why buy a house if you know prices still have a long way to the bottom? And isn't that good for the buyer? Not good for the seller, but chances are their choice to buy that home was malinvestment anyway. They had no idea of how bubbles are formed, and were duped by idiot establishment economists into thinking housing prices could never, ever, ever go down. So they leaped before they looked. Mark my words, like FDR forcing farmers to kill every other pig and plow under every other row, in order to create artificial scarcity and drive up food prices in a depression when people were starving, the government and the banks will somehow keep these houses off the market - either by simply refusing to sell them, or by demolishing them altogether. That's how sick these people are. And sure enough, Bank of America is doing just that.

    CNBC -

    A real estate source I knew recently told me about a guy he knows in Atlanta who has been hired by several different banks to winterize their REO's (real estate owned, i.e. the bank-owned foreclosures).

    The homes are abandoned and empty, and clearly the banks think they're going to stay that way for a while.

    The winterizer didn't want to do an interview, for fear he would lose his clients, the banks, who might not want us all to know about this.

Read all of it.