Housing haunted by shadow inventory in 2011 Video

There is good information in this video on the state of housing.  Still seems the MSM is blaming Fannie and Freddie and letting the bankers off the hook for their role in the debacle.  Unless we get the root causes of this meltdown out in the open we could struggle for years to get the confidence back that will get the housing market going again.  The shadow inventory of foreclosures could double the current amount of foreclosures the market in the near future.  There is no way for these large amounts of inventory to be absorbed into the market without weighing down home prices.  If the government does hold the banks accountable and push for a legitimate re structuring of mortgage debt the country will end up on the 10 year recovery plan that still may not work. 
The administration sided with the banks and allowed them to use the hold and hope plan so they could avoid taking losses but all this did was prolong the agony for many people who burned through their savings and 401 k funds to try and ride out the recession.  Very few people can ride out a 5 year recession if they have any job instability and others who have seen 50% drops in housing values are doubting a recovery more and more the longer we see stagnate and declining prices. 
There is system debt restructuring that needs to occur for the country to get back on its feet.  The clock is ticking while we are digging deeper and deeper into housing abyss.  It is not a moral hazard issue anymore because everyone stands to lose if we continue down this path. 


Good Video on shadow housing inventory and prospects for 2011



The Housing Boom and Bust

Housing Boom and Bust: Owner Occupation, Government Regulation and the Credit Crunch

The banks hold the key to a recovery

I just received a comment from some one saying that real estate value is relative. He was referring to an article I wrote discussing the fact that 80% of the home owners in Las Vegas have a mortgage that is worth more than the underlying real estate.


I agree with this statement of course because the appraisal system is for pricing residential property typically relies on the comparable sales method to set value. If you neighbor sold his house yesterday for 200,000 and it is similar in size and detail as yours, you will not be able to sell your home to someone for 300,000 the next day. Unless of course they are willing to pay cash and are ready, willing and able to purchase, you would have no need for an appraisal. If your buyer is financing the property it is a different story.

The mortgage system is set up in such away to protect everyone. It protects everyone if the parts are working correctly to carry out the checks and balances meant to keep unscrupulous sellers and lenders from taking advantage of buyers.

So pricing is relative when you compare with your neighbors and appraise property. However, most people could care less about relative value when the bank holds a note in an amount twice the value of their home. R
Read more on the how the housing crisis has devastated many Americans. 
We are seeing this in many areas of the country, especially in Las Vegas. There will be no speedy recovery as log as so many people are underwater with their homes and burdened with debt that may never be able to be paid back. There is a chance that home prices not get back to 2006 levels for twenty years.

It makes the bailouts for the banks seem even more ridiculous.