Rent Increases have outpaced Income growth 2 to 1 by Zillow

If rent is rising much faster than the growth of income there is only two possible outcomes in the long run. Either income will have to catch up with the debt load American families are taking on or the economy will force deflation to occur at a quick pace. Families will not be able to pay for the curent American lifestyle.

The world is facing a slow down. The economist say the main reason for the falling price of gasoline is because of slow down in demand world wide. The falling price of gasoline is not enough of a stimulus to drive an increase in spending in most parts of the world. Debt loads are way up everywhere. Because of the deflation and lower demand soon American exports will decrease and jobs lose will occur.. Very soon many oil well rigs will begin shutting down and a large number of people will loose high paying jobs. There are 1500 rigs drilling for oil in America today, but according T. Bone Pickens more than 30 percent of wells will lay down and layoff crews.

The question of the day is what will happen to rising house prices and will families and communities be able to cope with a decline in revenues?

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Brooklyn Is Now the Least Affordable written by Jacob Davidson

 The study gauges affordability by measuring the percentage of the locality’s median monthly household income that is required to make monthly payments on a median-priced home in the area.

This study was based on a study of 475 counties in the United States. The statistics I have read about other parts of the world is most of the US single family homes are currently still affordable as compared to the worst three markets I have read about. Hong Kong, Canada (Vancouver, Toronto and Calgary) and London are much less affordable than most of the United States. It appears I need to study more about New York because prices have risen so much in the last eight-teen months.
Gene Hoffman

Read More by Mr. Davidson.

 When RealtyTrac ran the nation-wide numbers in October, payments on a median-priced home required 26% of the average household income. In Brooklyn, by contrast, where the median home costs $615,000 and the median household brings in only $46,960, home payments take up about 98% of a regular family’s wages. That’s less affordable than Manhattan — and even than San Francisco, where half of all homes sell for $1 million or more.

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Contracts to buy homes fall for 8th straight month by Josh Boak, The Associated Press

Inventory has been increasing for the number of homes on the MLS. Sales have slowed a little here in Central Florida so the slight decrese in prices in not seasonal.

Gene Hoffman

WASHINGTON (AP) — The number of Americans who signed contracts to buy homes fell for the eighth straight month in February, a sign of slow real estate sales over the next few months.

 The National Association of Realtors says its seasonally adjusted pending home sales index dropped 0.8% to 93.9. The index has fallen 10.5% over the past 12 months.

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Sell butter and make $$Millions$$ greasing the political wheel BY FRANCISCO TORO

Venezula has more oil offshore than any county in the World an yet people are lined up arounf the block to buy one stick of butter and a roll of toilet paper. Gene Hoffman

A recent New York Times article about the protests in Venezuela reported that "demonstrators condemn a wide range of perennial problems, including… shortages of basic goods like sugar and toilet paper." This has become a meme in coverage of the unrest, as just about every story mentions these "shortages" as a reason for the student demonstrations. The word has become a kind of shorthand for the chaos and decay of the Venezuelan economy, driven by bolivarian socialism's uniquely self-destructive mix of economic policies. But how, you might wonder, does government policy cause a toilet-paper crisis?

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Investors closely monitoring Pimco after internal strife

The thirty year bull market for bonds maybe ending soon. The bond market is a huge market. Currently billions of dollars are leaving bonds. Soon interest rates rates will creep up because people will want their money to work for them. The dollars will chase higher returns and interest rates will go up. Many people believe the stock market has peaked. I am suggesting this will have a domino effect in the next two months. Get out while you can and find a safe place for your money.

The investors, including retirement systems, have formally put Pimco on "watch lists," a signal that they will keep a much closer eye its performance than usual. It could eventually lead to reductions in the amount of money they allocate to funds at the firm, whose full name is Pacific Investment Management Co and which has $1.91 trillion in assets.

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Short Sale Valuation Problems by Realtor.org

 In this article it directs a Realtor to the necessary online form to dispute a valuation of a Fannie Mae listing price. Fannie Mae is in a fight against investors. Fannie Mae is helping the Banks sell their foreclosed properties at a much higher price to first time home buyer than the property is really worth. Invests will not pay the high  price of HomePaths' homes. Realtors have the right to dispute the value and a good Realtor should help an investor that wants to buy it.


January 23, 2013

Beginning in the latter part of 2012, a number of REALTORS® across the country reported that Fannie Mae had started jeopardizing short sale transactions by requesting purchase offers at significantly higher prices than market values. REALTORS® continue to report that Fannie Mae’s actions have led to a decrease in the number of Fannie Mae short sale transactions, an increase in the number of borrowers going through foreclosure producing further negative effects on surrounding property values. As a first step to address these concerns, Fannie Mae expanded its online HomePath for Short Sales tool to help speed up its escalation process in order to review problematic transactions more efficiently.

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U.S. Housing Market Mortgage Purchase Applications Running Out Of Time by Doug Short

The article and chart from Doug Short shows that wages have been declining. In Fact it shows median wages have declined to 2005 level. following the decline is mortgage applications. Both wages and mortgage application peaked at the end of 2006, What the chart doesn't show is the huge rise in the median price of a house. The median price of a house has rose 14% nationally. In Florida where I live prices rose over 20% in 2013. With house prices rising and wages on the decline house sales will decline in 2014 if one of two things do not happen soon. Either the twenty percent of people who are not looking for a job anymore find a good job or prices of houses must decline. If income remains the same most sellers will bot be able to find enough qualified offers to float the market.

by Gene Hoffman

U.S. Housing Market Mortgage Purchase Applications Running Out Of Time by Doug Short

For 2013, one of the main stories in housing was the cool down in existing home sales numbers over the second half of the year, in spite of the relative strength in GDP. What was the main reason for this? Follow the data and the answer appears. When interest rates spiked we did not see the mythical sideline home buyer rush to the market place. Rather what we saw was a collapse of the mortgage purchase application index.

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