Comments on: Ivy Zelman says housing bottom 2012

By: CHESSNOID

CHESSNOID — Wed, 08 Jun 2011 00:17:32 +0000

Hi John,
I agree she was correct in her many forecasts. What many other financial analysts fail to realize is that there is literally a glut of homes in the foreclosure process that number in the millions and are backed up for over 2 years and growing. The many programs put in place fail to recognize that this natural process of balancing the economy back is necessary. That demand will not increase in relationship to the housing supply when the banks are purposely holding them back to be processed. The domino effect is many empty homes are not having real property taxes paid which in turn reduce the total revenues to the states which creates a budget deficit.
Thanks for stopping by.
Cheers!

By: John Carroll

John Carroll — Tue, 07 Jun 2011 22:03:10 +0000

It looks like Ivy was correct again with her prophetic forecast. I do see a structural problem with the economy as a whole though. This structural problem cannot be avoided and there is no cure. Markets around the world must, and will, continue to open in this Psychozoic Era. You can’t stop it. People around the globe are connected now and forever. World economies will float to a level, like water finds level, it’s natural. The pain, programs of avoidance and machinations for a cure will inevitably run their course for the next 30 years. Average America’s real estate will follow suit in a static to downward trajectory for just as long.

By: alex morfesis

alex morfesis — Mon, 04 Jan 2010 22:42:05 +0000

well, ivy is a smart cookie, but forgets to factor in the 3 million people per year who have entered the real estate market in the last 3 years who have not had new homes built for them…and as to the 8 million homes, the average mortgage(unless you are in california or some other of the few high priced markets in the country) is about 100k not 200k…so your number of loans at risk is 800 billion…which if the servicers took a breath and did what they contracted to do with the government in april of last year, and push thru the modifications as required, would leave us with less than 2 million homes at risk, as the rest of the home owners are prepared to stay in their homes given the opportunity for adjusted payment schedules that will allow them to move forward with their lives…the true cost of funds, now and for the near future is less than 200 basis points per year…the 11 trillion in loan pooled mortgages have seen an increase in net to cost of funds of over 250 billion per year…more than enough money to offset any subsidized short term workouts…do the math…the cash flow is there, the players just want to see jimmy stewart jump off the bridge, just this one time…