Blogosphere

Zillow’s third housing forum, “The Future of Housing: What’s Next for Housing Demand, Mortgage Finance, and Recovery,” took place last week at the Knight Conference Center at the Newseum in Washington, DC.

Thanks to everyone who attended and participated, particularly our keynote speakers, panelists and moderators. You can see a replay of the full conference below.

More information about our speakers and ongoing news of the event are available on our housing forum site.

http://www.zillowblog.com/2013-04-25/zillows-forum-on-the-future-of-hous...

But while the mortgage deduction would save a lot of money, the consequences of eliminating it entirely will be dire. According to the National Association of Home Builders, home purchases and the ancillary economic activity generated from home purchases account for nearly 20 percent of GDP. That's not insignificant.

An alternative for policy-makers to consider, however, is to adjust, rather than eliminate, the mortgage deduction. Capping the tax break will allow it to do what it is intended to do: stimulate home buying. A cap would continue to motivate individuals to purchase a home without giving them a benefit that lasts well beyond its usefulness to the economy.  

http://www.cnbc.com/id/100583714

One of the big questions about the sustainability of the housing recovery is whether it’s being driven by owner-occupants — the people who live in the houses they buy — or speculators.

In the last year or so, after all, some of the big institutional investors have bought up a lot of distressed properties because they perceived the market to be undervalued, and saw some major opportunities in the rental market. Blackstone, for example, is now the biggest owner of single-family homes, having purchased about 20,000 homes across the country, most of them foreclosures.

http://economix.blogs.nytimes.com/2013/03/27/investors-vs-occupants-in-t...

The Washington Post has been as aggressive as any Republican in Congress in hyping the dangers of letting the Bush tax cuts expire. It has run numerous front page pieces telling readers of the dire consequences of letting January 1 pass without a deal (e.g. here and here). Today Wonkblog warned of us the real bad news of going off the fiscal cliff!!!!!!!

Just in case you didn't understand the Post's official line on this, the headline of the piece is "the economy (probably) can't survive a short dive into austerity crisis." It starts with some clearly mistaken economics. It calculates the hit to the economy of higher tax with-holdings for the month of January.

http://www.cepr.net/index.php/blogs/beat-the-press/its-so-cute-when-peop...

The economics blogosphere was invented in early 2005 by a retired technology executive in Southern California named Bill McBride.

Thank God for that, because his blog, Calculated Risk, has been an invaluable and influential read for numerous reasons.

For one thing, it's always been right. In its early days, when we all started reading it, it was way ahead of the curve in terms of warning about the housing bubble, horrible bank lending practices, and generally the economic collapse. From his perch in Newport Beach, CA he could see first hand the people taking out loans worth 10x their income, filling their Inland Empire garages with Harleys and Boats that they obviously couldn't afford.

http://www.businessinsider.com/bill-mcbride-of-calculated-risk-2012-11

Never in history have so many middle class households been able to borrow so much against real estate at such low mortgage rates. In the last great debt bubble in the U.S. that peaked in 1929, the average household could not afford a house and had to put down 50% and get a 5-year balloon mortgage. Hence, home prices did not bubble as much as stocks and then they only fell 26% in the worst depression in U.S. history.

In emerging countries never have new middle and upper class households grown so fast, even though the average household similarly cannot remotely afford to buy a house in a major city like Shanghai.  We shouldn’t be surprised at what happens after a major housing bubble bursts as Japan went through this starting in 1991 after home prices rose 160% in just 6 years and then fell 64% — and they are still down that much 21 years later as a smaller generation followed a large baby boom for the first time in history. The U.S. followed with a 130% bubble up in 6 years from 2000–2006.

http://www.forbes.com/sites/greatspeculations/2012/10/03/greatest-real-e...

Housing data showing rising prices released over the past week has inspired a chorus of cheers. "The housing market is beginning to find its footing again," exulted CNBC. "The free fall appears to be over for both sales and prices." The New York Times echoed, "The housing market is starting to recover. Prices are rising. Sales are increasing."

And the skies are clearing. And the sun is shining. And all is going to be well with the world.

At least in the same fantasyland that suggests there was ever a glimmer of economic recovery in the first place. The reality is that we are not at the bottom of this housing bust. And this is important to understand because the economy is not going to recover until housing prices are at their bottom, with toxic housing debt cleared off the balance sheets of households, financial institutions, and the federal government's bailout bucket.

http://reason.org/news/show/dont-believe-the-near-term-housing

Let me tell you how that came about. Neil contacted me and asked if he could use an example from my Portrait of HAMP Failure series to illustrate the real-world consequences of the program, which all too often turned the loan modification process into a nightmare for homeowners. I gave him a number of suggestions, and he selected the story of Jeremy Fletcher, a Southern California swimming pool installer who bought a new home at the height of the bubble, right before the housing market crashed – and the market for installing pools along with it. Fletcher’s HAMP odyssey included a yearlong fight with Citi Mortgage, and just when he maneuvered to the point of getting a permanent modification, his loan was sold off to Saxon Mortgage, who then refused to honor any of his previous agreements. “It seemed like we had cornered Citi, got them to the point where they had to modify, and they just up and sold the loan,” Fletcher told me at the time.

http://fdlbooksalon.com/2012/09/22/fdl-book-salon-welcomes-neil-barofsky/