From Realty Times:
"Buyer are still hesitating on whether to enter to market, but the National Association of Realtors estimates "the impact of the stimulus package and lower interest rates on the housing market to be about 900,000 additional home sales in 2009 compared to conditions before the stimulus package."
I know the NAR's mission is to be cheerleaders for the real estate industry, but to say that the Federal Spending Spree aka: Stimulus will have anything but a negative impact on home sales is just plain dishonest. First of all, most of that money wont be spent until 2010 at the earliest. Second, the NAR needs to show specifically where in that spending is anything that can be shown to have a direct positive impact on home sales. Additionally, the unprecedented borrowing and printing of money that is coming will cause rampant inflation and drive up interest rates.
The current historically low interest rates should have already spurred home sales, but the paralyzing negative rhetoric coming out of Washington, along with the promise of higher income and energy taxes is enveloping the market in fear. Did the NAR miss the proposal to limit itemized deductions, especially on mortgage interest?
Having said that, I still believe now is the time to buy and borrow at fixed rates.
Tuesday, March 3, 2009
Personal and Economic Freedom Index
The Mercatus Center at George Mason University has produced its index of Personal and Economic Freedom in the Fifty States:
"We find that the freest states in the country are New Hampshire, Colorado, and South Dakota, which together achieve a virtual tie for first place. All three states feature low taxes and government spending and middling levels of regulation and paternalism. New York is the least free by a considerable margin, followed by New Jersey, Rhode Island, California and Maryland. On personal freedom alone, Alaska is the clear winner, while Maryland brings up the rear. As for freedom in the different regions of the country, the Mountain and West North Central regions are the freest overall while the Middle Atlantic lags far behind on both economic and personal freedom. Regression analysis demonstrates that states enjoying more economic and personal freedom tend to attract substantially higher rates of internal net migration."
Now the Imperial Federal Government is attempting to nationalize the failed policies of these states, leaving the productive with no place to go - in this country at least.
"We find that the freest states in the country are New Hampshire, Colorado, and South Dakota, which together achieve a virtual tie for first place. All three states feature low taxes and government spending and middling levels of regulation and paternalism. New York is the least free by a considerable margin, followed by New Jersey, Rhode Island, California and Maryland. On personal freedom alone, Alaska is the clear winner, while Maryland brings up the rear. As for freedom in the different regions of the country, the Mountain and West North Central regions are the freest overall while the Middle Atlantic lags far behind on both economic and personal freedom. Regression analysis demonstrates that states enjoying more economic and personal freedom tend to attract substantially higher rates of internal net migration."
Now the Imperial Federal Government is attempting to nationalize the failed policies of these states, leaving the productive with no place to go - in this country at least.
Upper-Income Taxpayers Look for Ways to Sidestep Obama Tax-Hikes
From ABC
President Barack Obama's tax proposal – which promises to increase taxes for those families with incomes of $250,000 or more -- has some Americans brainstorming ways to decrease their pay, even if it's just by a dollar. "
This isn't really news. What is interesting is the poll ABC attaches to this article, which asks: VOTE: IS IT FAIR TO REDUCE YOUR SALARY TO AVOID TAXES?
Fortunately, most answered yes. But I want to know why they even asked the question. Is the phrase "From each according to his ability, to each according to his need" now an American ideal? Is it now considered "unfair" not to produce just as much so more of it can be taken by force and given to others? Collectivism doesn't just want your money, but your life. It's slavery, period. Atlas Shrugged is becoming more relevant by the day.
"I swear by my life, and my love of it, that I will never live for the sake of another man, nor ask another man to live for mine." - John Galt
"Anyone may arrange his affairs so that his taxes shall be as low aspossible; he is not bound to choose that pattern which best pays thetreasury. There is not even a patriotic duty to increase one's taxes.Over and over again the Courts have said that there is nothing sinisterin so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands." - Judge Learned Hand
President Barack Obama's tax proposal – which promises to increase taxes for those families with incomes of $250,000 or more -- has some Americans brainstorming ways to decrease their pay, even if it's just by a dollar. "
This isn't really news. What is interesting is the poll ABC attaches to this article, which asks: VOTE: IS IT FAIR TO REDUCE YOUR SALARY TO AVOID TAXES?
Fortunately, most answered yes. But I want to know why they even asked the question. Is the phrase "From each according to his ability, to each according to his need" now an American ideal? Is it now considered "unfair" not to produce just as much so more of it can be taken by force and given to others? Collectivism doesn't just want your money, but your life. It's slavery, period. Atlas Shrugged is becoming more relevant by the day.
"I swear by my life, and my love of it, that I will never live for the sake of another man, nor ask another man to live for mine." - John Galt
"Anyone may arrange his affairs so that his taxes shall be as low aspossible; he is not bound to choose that pattern which best pays thetreasury. There is not even a patriotic duty to increase one's taxes.Over and over again the Courts have said that there is nothing sinisterin so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands." - Judge Learned Hand
Good Bye Detroit
DETROIT — "It may be tough to get financing for a new car these days, but in Detroit you can buy a house with a credit card.The median price of a home sold in Detroit in December was $7,500, according to Realcomp, a listing service..."
"...If the Obama administration is looking for a city to test new ideas for chronic urban problems, it can look to Detroit, a northern New Orleans without the French Quarter. "
Test new ideas? Detroit and New Orleans have been implementing Obama's old far left ideas for decades and this is the result. The same thing is happening on a statewide level in New York and California. The people paying the bills are stampeding for the exits in those places too. Obama wants to extend this equality in poverty philosophy to the whole country. Eastern Europe is starting to look more attractive by the day. How ironic is that?
"...If the Obama administration is looking for a city to test new ideas for chronic urban problems, it can look to Detroit, a northern New Orleans without the French Quarter. "
Test new ideas? Detroit and New Orleans have been implementing Obama's old far left ideas for decades and this is the result. The same thing is happening on a statewide level in New York and California. The people paying the bills are stampeding for the exits in those places too. Obama wants to extend this equality in poverty philosophy to the whole country. Eastern Europe is starting to look more attractive by the day. How ironic is that?
Thursday, February 26, 2009
Apartment Group Attacks Small Investors
Kenneth R. Harney at Realty Times reports that a lobbying and trade group representing large apartment owners is embarking on an ad campaign designed to frighten renters away from housing owned by small investors:
**"The National Multi Housing Council is mounting the campaign to warn consumers about what it considers the imminent dangers of renting with landlords who don't own many properties and don't offer "professional management."**
The NMHC then adds to their disgraceful scare tactics by using misleading statistics to dishonestly assert that 40% of all foreclosures are rental housing owned by small investors. They breathlessly warn that: "(I)f you choose to rent from a private individual, the risk of losing your rental home is very real,"
Have things gotten this desperate? I don't recall Mc'Donald's ever warning consumers that they are in imminent danger of getting food poisoning if they buy a burger at their local diner.
I wonder what the financial health of the NMHC's membership is? That could prove to be an interesting research exercise. How many of them might go bankrupt or into foreclosure if they haven't already?
Is the NMHC trying suck my tax dollars out of the bailout rathole? If they are, how much of that are they using to harm my business?
A lot of their members are publicly traded REITS and other companies that I'm sure many small owners are invested in. I'm very familiar with several of them through my 30+ years in this business. Small owners should let them know how they feel about this stupid and destructive campaign. I know I will.
**"The National Multi Housing Council is mounting the campaign to warn consumers about what it considers the imminent dangers of renting with landlords who don't own many properties and don't offer "professional management."**
The NMHC then adds to their disgraceful scare tactics by using misleading statistics to dishonestly assert that 40% of all foreclosures are rental housing owned by small investors. They breathlessly warn that: "(I)f you choose to rent from a private individual, the risk of losing your rental home is very real,"
Have things gotten this desperate? I don't recall Mc'Donald's ever warning consumers that they are in imminent danger of getting food poisoning if they buy a burger at their local diner.
I wonder what the financial health of the NMHC's membership is? That could prove to be an interesting research exercise. How many of them might go bankrupt or into foreclosure if they haven't already?
Is the NMHC trying suck my tax dollars out of the bailout rathole? If they are, how much of that are they using to harm my business?
A lot of their members are publicly traded REITS and other companies that I'm sure many small owners are invested in. I'm very familiar with several of them through my 30+ years in this business. Small owners should let them know how they feel about this stupid and destructive campaign. I know I will.
Bargain-Hunters Descend, Cash in Hand
Capitalism is starting to self correct the housing market as it will always do in every market if left alone. But the left would rather confiscate taxpayer money to institute feeble, inefficient and reckless interference in the process. Wealth is created by individuals empowered with economic freedom. Government creates wealth and power only for itself.
** "Falling home prices are spurring an increase in all-cash home sales in markets that have been hardest hit by the foreclosure crisis, an indication that bargain hunters have descended on the markets looking for deals.
Homes financed with cash comprised one-third of sales in Phoenix last month, up from 19% one year ago, according to a report by Raymond James & Associates Inc. In Sacramento, Calif., all-cash sales accounted for 24% of total home sales last month, up from 8% in January 2008 and 3% in January 2007, according to the Sacramento Association of Realtors. Sacramento and Phoenix have each ...
** "Falling home prices are spurring an increase in all-cash home sales in markets that have been hardest hit by the foreclosure crisis, an indication that bargain hunters have descended on the markets looking for deals.
Homes financed with cash comprised one-third of sales in Phoenix last month, up from 19% one year ago, according to a report by Raymond James & Associates Inc. In Sacramento, Calif., all-cash sales accounted for 24% of total home sales last month, up from 8% in January 2008 and 3% in January 2007, according to the Sacramento Association of Realtors. Sacramento and Phoenix have each ...
Bankruptcy Mortgage Cramdowns Would Hurt Housing Market
The Heritage Foundation has produced an analysis of the Democrats latest bit of economic idiocy and shortsightedness. First they screwed the little guy by making (forcing) mortgages too affordable. Now they're going to screw him again by making them unaffordable and unobtainable:
"**Bad policy is not improved by limiting it to certain situations. The Helping Families Save Their Homes Act (H.R. 1106) would allow bankruptcy judges to reduce the principal owed on a mortgage, a practice often referred to as a "cramdown." Judges would also be able to reduce interest rates or lengthen the term of the mortgage. This is a huge policy mistake that will help only a few people while raising the cost of borrowing for thousands of moderate-income and first-time home buyers...
...Allowing bankruptcy judges to modify mortgages would:
* Raise mortgage costs. Cramdowns would add additional risk that mortgages will not be repaid as the contract requires. Lenders must charge for that added risk, and experts estimate that the additional costs would raise mortgage rates by as much as two full percentage points or substantially increase required down payments.
*Further undermine the value of mortgage-backed securities.
Banks and other investors are already facing heavy losses because mortgage-backed securities have lost much of their value because of uncertainties about whether the mortgages will be paid. The language in H.R. 1106 increases this uncertainty. Investors will be at risk of both foreclosure and cramdowns that reduce the earnings of these securities. Many cramdown mortgages will later go into foreclosure. Since investors have no idea what this new provision will do to the value of their securities, prices will drop further.
*Fail to help many homeowners. Only one-third of all Chapter 13 filers complete the process successfully and get the fresh start that bankruptcy promises. The other two-thirds "pay court fees, pay attorney's fees, pay fees to the bankruptcy trustee, invest time and money to restructure their financial affairs, and then wind up with nothing more than temporary relief. It is therefore not surprising that a substantial number of Chapter 13 filers—nearly one-third—go on to file for bankruptcy again."[2]
"**Bad policy is not improved by limiting it to certain situations. The Helping Families Save Their Homes Act (H.R. 1106) would allow bankruptcy judges to reduce the principal owed on a mortgage, a practice often referred to as a "cramdown." Judges would also be able to reduce interest rates or lengthen the term of the mortgage. This is a huge policy mistake that will help only a few people while raising the cost of borrowing for thousands of moderate-income and first-time home buyers...
...Allowing bankruptcy judges to modify mortgages would:
* Raise mortgage costs. Cramdowns would add additional risk that mortgages will not be repaid as the contract requires. Lenders must charge for that added risk, and experts estimate that the additional costs would raise mortgage rates by as much as two full percentage points or substantially increase required down payments.
*Further undermine the value of mortgage-backed securities.
Banks and other investors are already facing heavy losses because mortgage-backed securities have lost much of their value because of uncertainties about whether the mortgages will be paid. The language in H.R. 1106 increases this uncertainty. Investors will be at risk of both foreclosure and cramdowns that reduce the earnings of these securities. Many cramdown mortgages will later go into foreclosure. Since investors have no idea what this new provision will do to the value of their securities, prices will drop further.
*Fail to help many homeowners. Only one-third of all Chapter 13 filers complete the process successfully and get the fresh start that bankruptcy promises. The other two-thirds "pay court fees, pay attorney's fees, pay fees to the bankruptcy trustee, invest time and money to restructure their financial affairs, and then wind up with nothing more than temporary relief. It is therefore not surprising that a substantial number of Chapter 13 filers—nearly one-third—go on to file for bankruptcy again."[2]
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