I saw this lead article on CNBC today and I couldn’t wait to read it. From where I sit this article is pure make believe and has no resemblance on the real market. The premise of the article is prices are firming. Which I guess if you simply look at the headline number might be accurate but there is no chance the overall market is healthier now than last year.
Don’t believe me then let me ask you a few questions:
Are overall delinquencies up or down from last year?
Answer: They are up HUGE this year
Have banks started to unclog their short sales and non payments (some over 1 year old)?
Answer: Nope
How could the market be better if FHA is becoming a landlord?
Answer: Simple it is not better
What I believe is termed Strategic Non Payment up or down from last year?
Answer: If this is not turned around soon it may become the national pastime
If we let articles like this and others that talk about second derivative improvements fool us we will be in for a nasty surprise in 2010. Don’t get me wrong you have seen some improvements. Investors are buying cheap cash flow houses so there is a bottom in the market. If an investor can buy a property and produce a return in excess of 15% they will buy the house. Anything else is just crazy talk until we can create jobs.
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If you are speaking specifically about the Greater Fresno Area market, then I agree with you.
ReplyDeleteWhat a coincidence! My friends and I were asking the exact same questions today. How can the housing market be stabilizing when companies are still in massive layoffs and unemployment is high? Maybe another bubble waiting to burst ....
ReplyDeleteHi Felix, yes I was refering to Fresno area.
ReplyDeleteSandra, Something seems off in the market