If the “green shoots” meme is for real, I am not seeing it.
Since this recession began in December of 2007, we have had never-ending denial from government and the media as to how bad this situation really is. In early 2008, the Federal Government passed a stimulus package that pumped some money into the economy and bought us a little time. It wasn’t enough. By late summer of 2008, the problems had not resolved themselves, and we finally had a major economic meltdown in late 2008.
When Obama came to office, the Federal Government passed another even larger stimulus package, and the Federal Reserve lowered interest rates to zero. As a result, we have managed to put a temporary and artificial floor under house prices locally (although they continue to fall nationally), and we have inflated both the stock market and the commodities market. There is no fundamental reason for asset values anywhere to be rising, but the influx of money from the Government and the FED is pumping up values anyway.
The problem with these artificially induced price rallies is that they do not reflect underlying fundamentals. There is no need for businesses to expand right now because there is very little demand, and consumers keep losing jobs. Absent government stimuli, prices would still be falling.
I work on the front lines of the land development industry in Southern California. I watch markets for residential and commercial properties, and in particular, I closely watch the demand for new development. I can tell you right now that there is none. Private land development across California is practically non-existent. There is some public works stuff going on, and a few school and healthcare projects, but for the most part, land development is dead.
Economists who have studied the economic cycles of the past have noted a strong correlation between land development activity and the broader economy. On academic paper goes as far as to say that Housing is the Business Cycle.pdf.
The past does not always repeat itself, and it is possible that we will have an economic recover that does not coincide with the resurgence of housing and land development. I hope so because right now, housing and land development is not showing any green shoots.
Well, the stock market is positive for ’09 as of today.
This is not a green shoot, it’s a Fed funded redwood tree.
California has at least one unique problem. The budget deficit is distracting a lot of people from long term investment. They are wondering if taxes will be vastly higher, if the State will be much more dangerous, and if the schools will deteriorate sharply.
The deficit is one of the reasons why I am not rushing back from Dallas. Another reason is that my pay will not go up if I move to LA. Because of the less expensive housing and lower taxes, it is costing me about $1800-1900 less a month to live here after taxes.
Diddo here (not rushing back to California).
As a matter of fact, I’m not even in any US territory currently 🙂
I spent a couple of hours last night looking at homes on Redfin, then cross referencing them with the new service I ordered for my business that allows me to view all types of home transactions in Orange County. I looked at all corners of the county, from Yorba Linda to San Clemente, and no matter where I searched, from little condos to large single-family homes, the theme was almost in complete unison … borrow, borrow, and then borrow more. I don’t think everybody did this, BUT most of the homeowners with current listings on the MLS did do it.
The most alarming issue I noticed on the MLS, were a lot of the people that purchased at the bottom of the last bubble (95-98), that you would assume were in a safe equity position, were in fact not in a safe position at all. I looked at numerous homes on the MLS with asking prices exceeding 1m, that were purchased in the nineties for about 1/3 the asking price, yet because the owner had extracted so much money, they stood to only profit a small sum after the closing cost. I think a lot of these WTF asking prices are sellers that purchased for significantly less than the asking price, and they can’t accept the idea that they may actually have to sale the home (with lenders approval) for less than they owe … this after owning the home for more than a decade. Another common mantra was the higher you went up on the economic scale, the more egregious the MEW was in many cases. Wealth does not equal responsibility.
All this makes me ask, where was the local media when this obvious Ponzi scheme was roaring?
You are seeing the same thing I am seeing. I wish California had a better organized free access to the public records. If anyone could easily look at the totality of the public record and research for themselves just how much debt is out there, they would be astonished.
There is no way our housing market or the local economy is at a bottom. As long as this debt exists, house prices will continue to decline, and the economy will suffer.
Think about it, if 20%-30% of the population has more debt than they can service — which they do — these debt levels must be decreased to serviceable levels. Reducing these debt levels requires a sale, foreclosure or bankruptcy. To complete a sale, someone who can afford the debt must buy a house from someone who cannot afford the debt. There are only so many of these people out there who are able and willing to do this. The rest — all the rest — will go through foreclosure.
To the extent that loan modifications succeed, our local economy will suffer. Imagine an economy where everyone is has received loan modifications. They are all trapped in their homes because they have no equity, and they are making the maximum possible loan payment their overlords believe is possible. How is that any different than serfdom? In such an economy, there would be little or no discretionary spending to support local businesses because every available penny will be going toward debt service. If the politicians in Sacramento were smart, they would be secretly opposed to loan modification efforts because of the long term drain on the California economy.
Think about it, if 20%-30% of the population has more debt than they can service
There’s also another 20%-30% that can service their debt, but do so at the expense of a change in lifestyle. They now have to cut back on everything else, and make more financially prudent decisions in order to maintain their home. That means hard decisions between mortgage payments or vacations to Hawaii … Honda Minivan or BMW X5 … public school or private school … Ruth’s Chris Steakhouse or Ribeye on the home grill.
The MSMs are not covering this because they WANT you to believe in the green shoot. Exacerbating this problem is the fact that commodity prices are going up as we speak which supports the green shoot theory (no deflation).
My guess is that more and more people are starting to believe this green shoot and are now slowly piling up on this gain. Evidences such as consumer confidence, etc, are fueling this sentiment as well.
Even with mortgage rates shooting up last week, we’re not going to see a massive foreclosure euphoria because this very govt is supporting the banks’ balance sheet with Mark to Fantasy accounting so that there’s no hurry to even foreclose on anything (let alone even getting future payments from these folks).
Think of it this way: it’s like buying a house with no down payment, monthly payment, and interest payment for 60 months. Hell, if 60 months pass by, we’ll give you another no down payment, monthly payment, and interest payment for another 60 months.
Prop tax? Screw it and let Ahnold ask the Fed for more printed Franklins.
Can you spell *doomed*?
The budget deficit is the tangible evidence that the California economy is far worse than the national economy. Look at the controller’s latest report, and you can see the dimensions of the problem.
On a statewide basis, year-to-date sales tax collections were down 11.8% while income taxes are down 20.7% from last year’s totals through May. If the definition of depression is down 10%, then we’re well past that mark.
New housing starts are down 84%. The state has lost 26% of its construction jobs, compared to 16% nationally, and 7% of its retail jobs, compared to 4% nationally.
With Schwarzenegger proposing at least a $20 billion cut in spending, with the multiplier effect and the loss of federal matching funds, that loss alone could cut another 400,000 jobs out of the economy, and accelerate the already disastrous downward spiral.
A big part of the reason for the intensity of California’s downturn ultimately hinges on the fact that our economy was built on mortgage equity withdrawal, and corrupt financial institutions generating mortgages that never made any sense, but were somehow transmogrified into AAA investments.
Our inept local media isn’t reporting this story, as California slides into a depression.
A big part of the reason for the intensity of California’s downturn ultimately hinges on the fact that our economy was built on mortgage equity withdrawal
You mean to tell me that all those new MBZ & BMWs that started showing up on our local freeways after 9/11 came from MEW, and not income advances. Who would-a thought.
Our inept local media isn’t reporting this story, as California slides into a depression.
I couldn’t agree more. You’d expect this crap from the OC Register, but for the LA Times to disregard this unsustainable Ponzi scheme for so long was just irresponsible. And our local TV news (eyes roll) is just pathetic … they are more concerned with covering Hollywood and sports than economic & political issues that impact our lives.
Methinks you are giving the La times way too much credit. They are as liberal as it gets, maybe you meant the Korean Times? JK
News organizations are frequently accused of being liberal because their job is to report the truth, and the truth has a liberal bias. 😛
Via Calculated Risk, Fitch expects California real estate prices to fall another 36%. Statements made as they downgraded a lot more mortgage backed securities.
The projected losses also reflect an assumption that from the first quarter of 2009, home prices will fall an additional 12.5% nationally and 36% in California, with home prices not exhibiting stability until the second half of 2010.
I was going to put that article in the face of that San Diego Housing Blog guy.
Original report had the following
“The projected losses also reflect an assumption that from the first quarter of 2009, home prices will fall an additional 12.5% nationally and 36% in California**, with home prices not exhibiting stability until the second half of 2010.”
** the kool aid saturated city of Irvine, on the other hand, will buck the trend and record an increase of 5%. The prices stabilized in December 2008
All the comments are absolutely correct. The “green shoots” are a dead cat bounce in the middle of a much deeper fall. The simple math is, unemployment is still going up, consumer savings rates are now at 5.7% and still going up…likely to 10%…and consumers are still in the early stages of paying down their debt.
Those three factors are subtracting from the consumer ability to spend, not adding to it. Until at least one of them goes away, consumer/discretionary spending will keep falling, and at 70% of the economy, consumer spending IS the economy.
The “green shoot” callers should be completely disregarded … mainly because they never thought we would have an economic collapse in the first place.
I actually saw a money manager on CNBC last week, that made the suggestion that Bank of America was presently trading at 1/3 its value from the high 2 years ago, and because of govt intervention and “green shoots”, it’ll soon be back to pre-debacle levels. These fools have no understanding that the world has changed. No one likes to remain bearish forever, but to ignore the obvious is just stupid.
Right now, this country is in the eye of the storm. We still have to deal with commercial real estate, the Alt-A debacle and rising unemployment. Plus, the foolish banks are still levered up 15x’s (+) in many cases … starting with BAC.
Two of the most interesting chart on the UCLA paper are the tight trend between construction and real GDP. This leads me to believe that the real GDP is not so real after all.
Large imbalances indicates that the economy is on the brink of falling. This is seen with divergence between construction and manufacturing for this cycle and the last RE bust. The USA can get only so much external investments with mergers, accounting tricks, creative financing and other scams before the rest of the world either catches up with their own scams or see the emperor has no clothes and curtails investments.
Matt’s Blog is right on target:
Painful months ahead for housing
Look at the chart.
I want to share this bank’s greedy story with you.
I have 710+ credit score, w2 income of $120,000+ in 2008 and $200,000+ in 2007. YTD in 2009 is about $15,000mo as a financial advisor. I sold my home 2 years ago so have $100,000 in bank (and $150,000 in retirement fund), found my home for $215,000 and will put 20% down.
Prior to open escrow, I had a “underwriting approval” from Countrywide. The loan package and all supporting documents were submitted on 5/18/09, and was told again and again, my loan is “no problem”. I have 3 car loans, (2 co-sign for my children), one to be paid off in 2 months, one in 7 months. Even with all these, I still qualify with flying color.
Countrywide has been draggin on the loan docs, and on the day I was supposed to close, they said “your loan got denied.” And the reason, I put $60,000 from my w-2, 2008 income into tax saving deferred comp. (like 401 k). It is my money and I paid Social Security and Medicare tax already. (only deferred income tax to future year).
They did not send a condition, they denied the loan, which means I about to lose my deposit and the home I planned to move into.
They refused to use my w2 income, the tax return is clean with no deduction other than the car allowance, which is totally based on IRS rules, I do not even run a business nor have loss. Even if they refuse to use the defer comp, (only happened in 2008), my 2 year average would still be over $100,000/year.
I think the real reason is that the rate has come up so much and I locked at a good rate. The greedy bank came up with excuses not to honor their obligation.
By the way, I do not own any home other than this one I intend to buy. I beat out maybe 10 other offers when my offer was accepted. The listing agent and bank would not extend the escrow. The irresponsbile denial BOA (countrywide) gave me would mean a total loss for me.
I tried to contact BOA’s throught its website, but they would not do anything.
I got my loan “approved” by another BOA loan office, but they will do it if I start the loan again, lock at the much higer rate and take 30 days to close.
Who and where should I contact for help.
Get a local attorney, preferably one that deals in Consumer Protection and also knows mortgage transactions. Most attorneys will give you a free consultation, or will charge a nominal fee.
The moral of the story here is:
DO NOT USE COUNTRYWIDE/BANK OF AMERICA FOR ANYTHING!!!! They suck in every single way known to man to suck.
Try a different lender.
You should have used all cash transaction.
Oh well, lesson learned. Move on.
I remember my first house was owner financed. It would be nice if people starting owner financing houses again. Its a great way for a seller to make more than you would make in investments but alas, i suppose nobody actually owns their houses anymore.
Works when values are going up, but not when values are going down. The banks usually wants and gets the first. The owner the second. With all the delay laws in FC, it will be tough to get back the property in a timely manner. In the mean time, the second would need to pay off the first to get the property back. If the seller gets very big downpayment is might work out if the values don’t go very much. If they do, the buyer can still walk after a year or two of “free rent.” IMHO.
ozymandias…I own a place outright but decided to rent it out since the income was better than the return I could get for investing the profit from it. Thought about selling and offering owner financing but with all the deadbeats out there it would take forever to evict someone. It’s a lot easier to evict a tennant then to foreclose on someone. Especially with the way the govt wants to protect the so-called “homeowner want to be”.
Too much hassle. Just my two cents.
I don’t know why adding comments was disabled for the previous blog post about the Northwood home … but I wanted to show amazing results below, assuming the seller sells at the low price of $300K, which we know was incorrectly presented (that Northwood home has been listed at $360K since June 6th):
Assume: $168500 1st loan, 5.00%, retained for 5.5 years, 15 yr mtg (if he put down so much, why not?!)
This would have got him a loan of $1330/mo, paid off in 2018 (that’s when he’s mortgage-free)
If you assume the above, he started paying $630 principle/mo, $700 interest/mo.
and in 2009, $830/mo principle, just $500 interest.
Cost of HOA, closing costs, property taxes for all that time:
=15840+10800+23760=$50400
Rent for similar place in 2004-2009 (5.5 yrs): 2000/mo *5.5*12mo=$132,000
In June 2009, he would only have $120K balance, and had paid $40K in interest.
Total property expenses: 40K+50.4K=$90400
Yearly expense: 16436
Montly expense: 1369
Selling cost at 6%: 18000
Capital lost/gained: -128400 (=300000-C12-C9-120000-200000) – note this assumes he sells at 300K and includes his cash downpayment of 200K.
True monthly cost: -1945.454545
Now, assuming this unit would rent for about 2,200 in today’s market,
he is still ahead, or at best a wash.
From these calculations, renting is commensurate with throwing your money into the wind.
Baffle them with Bullshit must be your motto. Are we to ASSume some knifecatcher is going to have a downpayment of more than 50% according to your calculus. And your point is?
“From these calculations, renting is commensurate with throwing your money into the wind.”
Can you support this statement? $300k sales price which you were using does not appear to do so (although $360k does).
I was having trouble following your calculations (what are C12 and C9?). Using your numbers:
Lifetime inputs:
Down payment: $200000
HOA, closing, taxes: $50400
Mortgage: $1330/mo*66 mo = $87780
Balance June 2009: $120000
Total: $458180
Lifetime outputs:
Sell $300000 – 6%: $282000
Sell $360000 – 6%: $338400
Lifetime net:
If sold at $300k: $-176180
If sold at $360k: $-119780
Over 66 months, $-2669 / $-1815 monthly (for $300k / $360k sales price)
So, at $300k (18.6% below purchase), the owner is well above water but worse off than the renter. The own-rent breakeven point is apx $333k (9.5% below purchase).
Note that GRM = $360k/$2200 = 164 which is not far from (IR’s typical for owner occupied?) 160. $300k was too low for owner occupied.
With your crazy ASSumptions and per your calculations renting and owning are a wash. And per your statement renting is throwing your money away. So you are making IR’s point that owning was throwing your money away. nice job!!!!
True Serfdom is paying monthly fees with
guarantees of having to pay higher monthly fees the next year, and never owning the land you pay for. That my friend, is why the Rental companies and their developers are in business, why the Irvine Company is so formidable here. They prefer you pay more and buy bigger plasma TVs every year, you live large and rich, change your car every 5 years, change your wife and household once or twice, and never save enough for a home. Once you start getting smart with money, you’ll realize you simply can’t retire in California being a renter or on interest-only loans. You need to be rent-free and mortgage-free when you retire. Rent is adjusted to inflation. People priced out of Westwood and Brentwood are now living in Irvine, Mission Viego. People priced out of ther are now living in Riverside, San Bernardino… I pray you start your life OUT OF RENTAL SERFDOM when you can, assuming you can. And I don’t endorse you buy junk – buying value, prime location, a home that holds value, is a true art.
Irvine’s values are protected by the hegemony that Irvine Company holds here. And I would suggest underwater homeowners hold here through
this downturn; when homes in WPII close in 2-3 days, they’re underpriced and the homeowners and their agents are not reaping the market’s true value. Good investors train to think contrary to the market – and with the solid morose mentality out there about housing, you know that
only means one thing. “Group Think.” Group Think always leads to overcorrections. When the credit markets froze up and bonds got cheap, Buffet bought bonds, muni’s. Six months later, he announced it. Watch and see IrvineRenter do the same to his loyal followership. I’m just saying, look out for your own long-term well-being; bears and bulls make money, pigs just
get slaughtered.
“Once you start getting smart with money, you’ll realize you…”
Shouldn’t leverage a declining asset? Fitch expects a 36% drop from Q1 prices in California.
“I pray you start your life OUT OF RENTAL SERFDOM when you can, assuming you can. And I don’t endorse you buy junk – buying value, prime location, a home that holds value, is a true art.”
And many of us are planning to practice that art, by buying what we can afford during the gradual price rise after the bottom.
By the way, are you admitting that, contrary to your claims, Friday’s featured seller would have been worse off with a $300k sales price than he would have been renting? How about addressing the 10% price drop for rental to be a better option vs. the Fitch 36% forecast?
And retire in California with all the taxes is really attractive because, uh, you lost me.
Acutally, I just got a rent decrease offer from IAC and my lease isn’t even up for a few months yet.
With renting per your calculations and owning a wash the money that pays principal could be saved for thirty years by the renter and you could retire by buying your house with cash. Checkmate, renting is better when you have a crazy premium to own a house.
IrvineRenter: your audience deserves to know:
1. What type of development does your employer specialize in? Specifically, is it RENTALS or condo/SFR or commercial?
2. Is there foreign investment or involvement in your employer’s business?
3. When it is in your honest opinion a great time to buy a home, do you rush to tell everyone in this blog first, then appear at the Open House hoping to be the only one putting an offer on the prime property?
4. Do you invest in real estate futures or REITS/equity, as short or with puts? And, shouldn’t you wager there if you sincerely believe what you post?
Regarding your question 1:
“Our firm provides a full range of services to home builders and developers, and municipalities for development of residential, commercial, industrial, recreational, educational property and civic improvements in the Southern California area.” — from the Mayers & Associates Civil Engineering, Inc. website, the “About Us” page.
So the answer would appear to be “none of the above”, or maybe “all of the above and other types as well”. And may I point out that there is a big link to the Mayers homepage in the sidebar.
Regarding your question 3:
“I will not write a post saying “the bottom is here.” When we get closer to the bottom, I will start to find more and more properties at or below rental parity. When most of my posts start pointing out what good deals there are in the market, then we will be there.” — from “Fundamentals at a Market Bottom”, see sidebar.
I’m pretty sure IR has done at least one post profiling a property he considered worth buying. (Feel free to search the archive yourself.)
And I very much doubt that he can, by not blogging about it, keep a well-priced property from getting multiple offers. It would surprise me if he thought that he could.
Nancy,
I checked the blog this morning and I see you made for some interesting conversation.
I like that you are suggesting people use fixed-rate conventionally amortizing mortgages. I have always promoted this idea. The rest of the stuff you are going on about is not thought through quite as well.
As for the questions you post above, please note that I chose what I reveal to my audience about my personal business, and rarely if ever is it about my personal finances. If you or anyone else doesn’t like that, feel free to leave. I owe you nothing.
As for question #1, feel free to go to my employers website and look around. That is what it is there for.
Question #2 is none of your business.
Question #3 is some kind of conspiracy theory rant that makes you look a bit crazy.
Question #4 is really none of your business.
BTW, in my calculations above, i didn’t even consider the tax benefits of homeownership and capital gain writeoff… it seems even if sold at $300K, he’d be even more ahead of renting the same unit at $2K/mo. Startling… even I can’t believe this hard fact. Mind you, if he took a HELOC and played with ARMS and negative amortization and what not, you’re talking a different story. All i can say to the audience is, buy less home than you can afford, take 15 year mortgages, you’ll be the Lord of your Domain in no time… and can one day rent it to renter Serfs just like the IrvineCompany does.
IrvineRenter: one more candid question: Are you at all affiliated with the venerable Irvine Company or with the Fast Food business which aggressively gages potential new land for placing their venerable franchises?
Nancy, are you kidding? First of all, your math is off. Second, why the bone to pick with IrvineRenter, he presents the facts. If you can’t handle them you are probably a bubble owner or a Realtor. Either way, the facts speak for themselves.
Nick – pray do correct my math, then. Don’t just pontificate.
This blog advertises currently listed home prices and implies their current owners are losers; perhaps it should at least verify the accuracy of the figures mentioned before posting, and do the rental comparison math in detail as I’ve done. About my being in real estate… well on second though, I may rent my paid-off Irvine home to one of you sideliner guys someday, in that sense I am very much in real estate.
“…I may rent my paid-off Irvine home to one of you sideliner guys someday…”
The “sideliners” are more like you than you appear to realize.
You said in a comment to the post on the 12th that you’ve had a mortgage “…[n]early a decade…” implying you bought in 2000-2001. Buying was reasonable in many cases then. (Had you bought in e.g. 2005, what would have been “…cheaper than [you] could afford…” and would you have wanted to live there?)
Since then, first rising prices priced out almost all the buyers (or would have done except for financial innovation), then falling prices made negative appreciation a certainty.
It is a good time to buy when a bottom is near and the payment is easily affordable. You bought a few years after the last bottom and did well. Buying is reasonable now for properties which are near bottom (mostly low end properties).
I would guess that many here are planning to wait until the bottom in their market is clear and then buy / move up, since prices usually rise slowly right after a bottom.
Oh, only the facts are presented? Indeed, through shit tinted glasses… much like Fox News presents reality.
We have an asian version of Truthi now visiting this blog. She is on a mission to prop up this ponzi scheme to pay for the house or houses she does not own in Irvine. Another realtor leveraged to the hilt trying to convince us all is well. LOL
“She is on a mission to prop up…”
Wait a minute. If we’re going to cast aspersions, let’s at least make them accurate.
The debt you can carry on a given income increases with mortgage term & risk, so if she is really trying to prop up prices she should be promoting longer terms, IOs, and ARMs.
She actually specifies 15 year mortgages and implicitly supports amortizing mortgages.
We don’t need mean-spirited people on this blog. Please excuse yourself and find a nasty blog like Lansner’s to make a home. IR is doing a great service discussing issues that most of his readers care to read and discuss, as human beings. I have found his posts to be honest and forthright. If he misstates something and someone asks about it, he will address it and correct any misstatement. This is not one of those angry rant, online ad hominem attack worlds. If you have valid critiques, those are always welcome. But the mean-spiritedness you continue to display has no home here.
I couldn’t agree more. Please leave the slanted comments and personal digs on the OCRegister blogs. Not that you’ve gone that far, but this just reeks of the beginning of a Dealtracker type relationship.
Paging Kirk for rebuttal …
That last post was directed to Nancy.
Nancy,
IR did mention in the comments of that post that the price had changed. That price wasn’t always $360k. There have been quite a few sellers who have changed or removed their listings after being “profiled” on this blog. The home you’re talking about wouldn’t have been the first.
Secondly, I think the napkin math you used is probably pretty accurate, and the homeowner was a little better off owning his home than renting over the previous 5.5 years. If I’m reading your deductions correctly, he saved around $300/month by owning that property. However, I have a few things to point out:
1. We cannot extrapolate from this owner that owning a property is always the best financial decision in all markets. For one, this guy used more than a 50% downpayment, which many people do not have. This guy was extremely conservative (a good thing) and he had the luxury of doing that. Your median homeowner will put down ~20% and will use a 30yr mortgage.
2. Again, assuming your numbers are correct, and assuming I’m reading your conclusions correctly, this guy spent $200k up front to save himself $300/month for 5.5 years. His $200k earned him a benefit of $19.8k over those 5.5 years, for a total ROI of 9.9%.
However, if he had put that $200k into an investment that yields 3% a year, he would have made ~$500/month, or $33k over that same 5.5 years.
My point being that there are good arguments for people who have been renters the last 5 years, and there are good arguments for why current property values are not yet at reasonable prices.
My God, who unleashed the troll?
BTW, epic FAIL Nancy. Had I followed your advice, I’d of bought my house using conventional financing and be out $5600 a month for what I can rent for $1750 – plus my $150K downpayment. Since I moved here 3 years ago, homes have fallen from the high sixes/low sevens to the high twos.
I’m not into negative equity.
Crawl back under your bridge, reload, and try again.
Just saw this in the LA Times..
http://www.latimes.com/classified/realestate/news/la-fi-harney14-2009jun14,0,5640861.story
Appears that there is a push to expand the tax credit to no first time buyers and allow a credit for closing costs…
How nice of us hard working tax payers to line the pockets of loan officers, realtors and flippers!
What this really screams, is that this tax credit/loan or whatever is never going to go away, it’ll be permanent part of the RE landscape.
Or until the real estate market recovers which seems more and more like it’ll be in 2015 and beyond with all the garage things the government is doing. Guess till then I’ll be more than happy renting.