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Thread: Home price drops exceed Great Depression: Zillow

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    Re: Home price drops exceed Great Depression: Zillow

    Quote Originally Posted by Phoenix View Post
    Actually at this point I think it's an out and out lie. Fannie / Freddie do (did?) buy subprime.
    Do you have any data to back that up? A link?
    It was the building frenzy which created the bubble and it's eventual bursting. Without it, the supply of homes and home prices would have remained stable and few people would have lost money. The derivitives would have held their value. Fannie and Freddie would have been fine. That was the root of the problem. They built too many homes after the recession of '01 to meet the artificially created demand. Everyone was buying homes. They didn't want to get left out of the ridiculously low interest rates and they were afraid the way home prices were skyrocketing they would never be able to afford a home if they waited. Market manipulation by Greenspan and Bush created the housing bubble. Had the demand not been there the bubble could not have happened. They used the housing sector to get us out of recession. It worked for awhile too.
    Last edited by Dirty Harry; 01-25-11 at 10:57 AM.

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    Re: Home price drops exceed Great Depression: Zillow

    Quote Originally Posted by BmanMcfly View Post
    Home price drops exceed Great Depression: Zillow | Reuters



    Oh wait a second, I thought the recession was over in 2009...
    CBC News - Money - Recession declared officially over

    Yet home prices have fallen for 53 consecutive months... that's more then 4 years of straight decline.

    So, how long before these prices bottom out and start to stabilize again?? How much more is your mortgage then the value of your house?? How low will the bottom be??

    How long before people stop trusting the experts that keep saying 'don't worry, the worst is over'???

    What's been the solution? THey are on 'QE2', and there are already rumors of a QE3... which is essentially printing money to cover the day to day expenses. That's about as effective as maxing out both your credit cards, so you get a third card so you can balance the debt with a higher limit... and then having rumors circulating of your plans to get a fourth credit card in the near future.... except worse because it's going out as 'taxpayer covered'...

    Does this concern anyone else as it does me?
    Most people look at the stats and go 'wow, look at the drop!' - and wonder how to stop it.
    I look at the stats and say 'wow - look at the RISE' - and wonder why things spiked in the first place

    It's like a tray of Yorkshire puddings - Quick to rise - quick to fall if you open the door while they're baking.
    A screaming comes across the sky.
    It has happened before, but there is nothing to compare it to now.
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  3. #153
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    Re: Home price drops exceed Great Depression: Zillow

    Quote Originally Posted by Dirty Harry View Post
    Do you have any data to back that up? A link?
    It was the building frenzy which created the bubble and it's eventual bursting. Without it, the supply of homes and home prices would have remained stable and few people would have lost money. The derivitives would have held their value. Fannie and Freddie would have been fine. That was the root of the problem. They built too many homes after the recession of '01 to meet the artificially created demand. Everyone was buying homes. They didn't want to get left out of the ridiculously low interest rates and they were afraid the way home prices were skyrocketing they would never be able to afford a home if they waited. Market manipulation by Greenspan and Bush created the housing bubble. Had the demand not been there the bubble could not have happened. They used the housing sector to get us out of recession. It worked for awhile too.
    I am not stating Fannie and Freddie ALONE caused the meltdown. I am in complete agreement with your views on Greenspan. However, they certainly contributed.
    From Wiki
    In 1995, the GSEs like Fannie Mae began receiving government tax incentives for purchasing mortgage backed securities which included loans to low income borrowers. Thus began the involvement of the Fannie Mae and Freddie Mac with the subprime market.[114] In 1996, HUD set a goal for Fannie Mae and Freddie Mac that at least 42% of the mortgages they purchase be issued to borrowers whose household income was below the median in their area. This target was increased to 50% in 2000 and 52% in 2005.[115] From 2002 to 2006, as the U.S. subprime market grew 292% over previous years, Fannie Mae and Freddie Mac combined purchases of subprime securities rose from $38 billion to around $175 billion per year before dropping to $90 billion per year, which included $350 billion of Alt-A securities. Fannie Mae had stopped buying Alt-A products in the early 1990s because of the high risk of default.
    (any number of links can be found by googling)

    That artificially created demand you spoke of? Part of that was fueled by the actions of Fannie and Freddie. They buy up loans that free up cash at banks to lend more money. FHA pioneered the very action that eventually led to the mortgage meltdown. To paint them as a victim is patently false. Their very existence is to get loans to people banks would not otherwise loan money to.
    From the ashes.

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    Re: Home price drops exceed Great Depression: Zillow

    Quote Originally Posted by Dirty Harry View Post
    The housing bubble could have never happened without Bush's push to get everyone to own their own home(ownership society) and Greenspans interest rate cuts. There was a recession in 2001, No bubble before that. It all happened after the '01 recession. New home construction almost doubled between '01 and '06. That is a fact. That was the bubble.

    It appears to me that the slope of the curve from 93 to 05 is the same, so why blame only Bush? There can only be one answer, and one answer only, to that question. You are not independent, but a partisan hack.
    "He who does not think himself worth saving from poverty and ignorance by his own efforts, will hardly be thought worth the efforts of anybody else." -- Frederick Douglass, Self-Made Men (1872)
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    Re: Home price drops exceed Great Depression: Zillow

    Quote Originally Posted by American View Post
    It appears to me that the slope of the curve from 93 to 05 is the same, so why blame only Bush? There can only be one answer, and one answer only, to that question. You are not independent, but a partisan hack.
    Sales in '01 was about the same as '72, '78 and '86. New home sales almost doubled after '01. You really can't see the spike? I guess it's true. Rightwingers do wear partisan blinders.
    My God man you people are pathetic. The housing boom and bubble started in '02 after the recession. Housing was basically flat before that. Low interest rates and Bush's push to make everyone a homeowner created the housing boom. It's historical fact.
    It's funny how I am called a partisan hack for merely pointing out the truth. Take your blinders off and look at the graph.
    Last edited by Dirty Harry; 01-25-11 at 02:50 PM.

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    Re: Home price drops exceed Great Depression: Zillow

    Quote Originally Posted by Phoenix View Post
    That artificially created demand you spoke of? Part of that was fueled by the actions of Fannie and Freddie. They buy up loans that free up cash at banks to lend more money. FHA pioneered the very action that eventually led to the mortgage meltdown. To paint them as a victim is patently false. Their very existence is to get loans to people banks would not otherwise loan money to.
    That didn't create the demand. Cheap easy money and skyrocking home prices created demand. Everyone wanted to own their own home before they got priced out of the market or interest rates dropped. They sold ten years worth of homes in 5 years. That was the demand. Without the artificially created demand there would have been no one to lend that money to.

    Skyrocketing demand for homes created the housing boom and bubble and the mortgage companies took advantage of that demand.

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    Re: Home price drops exceed Great Depression: Zillow

    Quote Originally Posted by Dirty Harry View Post
    Sales in '01 was about the same as '72, '78 and '86. New home sales almost doubled after '01. You really can't see the spike? I guess it's true. Rightwingers do wear partisan blinders.
    My God man you people are pathetic. The housing boom and bubble started in '02 after the recession. Housing was basically flat before that. Low interest rates and Bush's push to make everyone a homeowner created the housing boom. It's historical fact.
    It's funny how I am called a partisan hack for merely pointing out the truth. Take your blinders off and look at the graph.
    The housing boom was steadily climbing, which is obvious. It took years to create that kind of damage. If anything Bush warned about Fannie Mae, while Clinton adjusted the subprime law in 95. But you think by blaming Bush you'll accomplish something. Maybe you even believe the DNC is actually reading your posts, and going, "Why didn't we think of that?"
    "He who does not think himself worth saving from poverty and ignorance by his own efforts, will hardly be thought worth the efforts of anybody else." -- Frederick Douglass, Self-Made Men (1872)
    "Fly-over" country voted, and The Donald is now POTUS.

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    Re: Home price drops exceed Great Depression: Zillow

    Quote Originally Posted by American View Post
    The housing boom was steadily climbing, which is obvious. It took years to create that kind of damage. If anything Bush warned about Fannie Mae, while Clinton adjusted the subprime law in 95. But you think by blaming Bush you'll accomplish something. Maybe you even believe the DNC is actually reading your posts, and going, "Why didn't we think of that?"
    The housing boom and bubble created the ec0nomic meltdown. That happened after the '01 recession.. The housing boom was caused by Greenspans low interest rates and initiatives by Bush to make the US an ownership society. They were using the housing sector to pull us out of the recession.
    There was no housing bubble until after the '01 recession. Housing had peaked in '01 and without stimulating demand for homes it would have declined once again just like it always did and the recession would have gotten much worse..
    Fannie and Freddie did not cause the housing bubble. The CRA didn't cause the housing bubble. Artificially stimulating demand for homes created the housing bubble.

    I don't belong to any party. I am only concerned about the truth. Not politics. I work in the housing sector and we tripled our workforce in '02 to keep up with the increased demand for homes. That's when the bubble began.
    Last edited by Dirty Harry; 01-25-11 at 03:13 PM.

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    Re: Home price drops exceed Great Depression: Zillow

    today: Likely Double Dip in Housing

    remember, the president's response to the POP that more than any other brought us all here has been described by tarp inspector general barofsky and dem rep jackie speier (survivor of jonestown) as a "miserable failure"

    Obama Loan-Modification Effort Fails Miserably

    it's probably because half those who qualified for hamp have ALREADY REDEFAULTED

    Half of U.S. Home Loan Modifications Default Again (Update1) - Bloomberg
    Last edited by The Prof; 01-25-11 at 08:54 PM.

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    Re: Home price drops exceed Great Depression: Zillow

    Quote Originally Posted by VanceMack View Post
    EVERYONE shares some guilt here. Banks made stupid loans and their investors should pay the price. People made stupid home purchases and they should pay the price.
    Yes, but the ponzi scheme at play here relied on BOTH fraud on the part of the consumer lying on the application to get a larger mortgage then they should have got in the first place, as well on the side of the banks they weren't performing due diligence and sometimes even encouraging people to exaggerate on the loan...

    The government responded poorly.
    To an extent the government / the fed were COMPLICIT in this fraud...

    One of the biggest scourges is the get rich quick home flipping industry. Granted...they (ok...we) were just taking advantage of the existing market. Doesnt mean it didnt aid in driving prices through the roof.
    Yes... when you artificially create a demand like this, the result is a bubble... the thing about bubbles like that is that you gotta get out before the bubble bursts. Only the insiders knew and understood when this was going to happen, but not only that... these banks FURTHER PROFIT when the bubble bursts because the insurance covers the cost of the house, and then they can turn around and sell it to the next person.

    People that made those foolish out of reach ARM loans should have rengotiated with their bank by now. If they tighten their belts and ride things out, 5-10 years from now their property values SHOULD climb back up to an appropriate market value.
    Ya... I have a much more grim view... those that own their homes free and clear will be able to ride out an economic storm much more easily. Most people who are on a mortgage are going to be very likely to lose their homes, OR end up with the government deciding that housing is a 'right' and you will simply pay a 'rent' directly to the government.

    Quote Originally Posted by VanceMack View Post
    It doesnt bother me...Im actually glad it is happening. In fact it HAS to happen. The market is finally being allowed to correct itself. It should have been left alone back in 06.
    Yes, it HAS to happen, the longer it gets drawn out the worse this will be... especially with the track the fed is taking the country with measures like QE 2... might as well be a page from President Mugabe's Zimbabwean school of economics.

    Yes...its going to sting a bit..especially those that WAY overspent on houses. Price we pay. (and yes...Ive got a few investment properties that are at the barely break even point...thank goodness for not attaching anything to my primary residence!)
    IMO, this is an optimistic viewpoint...

    Quote Originally Posted by Aunt Spiker View Post
    Most people look at the stats and go 'wow, look at the drop!' - and wonder how to stop it.
    I look at the stats and say 'wow - look at the RISE' - and wonder why things spiked in the first place

    It's like a tray of Yorkshire puddings - Quick to rise - quick to fall if you open the door while they're baking.
    Yes... you always gotta worry when you see an investment start to skyrocket in price, it's fine to invest, but make sure to pull out before these bubbles burst. I'm not sure what other kind of bubble is left to inflate, except by inflating the currency itself, and if that becomes a bubble which bursts, well, america will have to face a harsh reality, of being reduced to a third world economy.

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