Absolutely agree! My opinion is that it will take at least 20 years to get back to normal or more! I have had some tough times out there as a broker.

Ireland Properties, LLC

Prices are lower than they were. With the housing boom people, who couldn't afford houses bought houses, and with more homes in demand, construction companies built houses at a frantic pace. Once people started foreclosing en masse on their houses, an excess supply became available. There are a huge number more houses on the market than what is in demand right now. Until that becomes corrected, prices are not going to change.

They'll just basically lie and keep the prices high via the banks, realtors, etc.

If the real information got out there about how many homes are being held off the market, prices would crash so fast it would destroy any recovery.

The real tragedy of the housing bust is in the amount of jobs that were lost because of it. Consider the construction people that are out of work. Consider the construction companies that have gone under. Consider all the workers associated with building. The dirt guys, the concrete finishers, the framers, the plumbers, the hvac and electrical contractors.. the roofers, window installers, drywall installers... trim carpenters and painters.. landscapers and even pool companies.

Those are just workers on a new home... how about the residual job fallout? Appliances not being bought... toilets, sinks, tubs, cabinets, tile, carpet.. People make those things.. and with no demand, no jobs.

The housing market is screwed for the immediate future... Until all the foreclosures have subsided, the price of property will continue to fall. I'm only holding on to my home to wait to see if it will rebound in a couple of years. It's getting bad though...

Maybe prices aren't falling very fast because ordinary people around the country can't afford to take a huge loss on selling their home.

You make it sound like homeowners are just a bunch of greedy pigs, when the reality is that they already owe more to the bank than they can sell their house for. And the bank isn't the winner here either - the previous owner already made off with their inflated payout.

Home prices more than doubled in the span of just a handful of years, creating the largest home price bubble in U.S. history. During that time, a lot of people either bought houses they couldn't truly afford, intending to use that artificial appreciation in order to refinance, or drained the equity from their existing homes to pay for upgrades or toys. I have no sympathy for those people if their own poor decisions brought them trouble. Those who lost jobs, of course, are a different matter, but just being underwater isn't the end of the world, as long as you bought a house you can afford. Your home is supposed to be shelter, not an ATM.

However, my point is this: I would buy a home today if prices were reasonable. I suspect there are many others who would as well, if prices were where they were at the beginning of the decade, before the price spikes, the too-easy credit, the lax lending standards, etc. If people (homebuyers, homeowners, banks, etc.) made poor choices, they should take the responsibility and the losses for their decisions.

I so sppreciate such insightful and thoughtful analyses from people with the intellect of a fifth grader.

oldcavscout - for those that can't understand simple things - what Edward said is (a well known fact) when interest rates go up home sales suffer. Interest rates can't stay this low forever, so when the Fed decides to start raising rates it will drive already low home sales statistics even lower.

What! Don't buy now because rates are low, wait until rates are higher and prices come down? So if I want a steak I should wait until beef prices go up and I won't eat as much?

Actually Yes! you should wait. Higher interest rates = lower housing prices, which is turn equals lower property taxes, etc. Interest rates can always come down again and one can refinance, but what you pay for a house is essentially set in stone.

Chris, It won't lower property taxes whatsoever. The appraised values go lower the tax rate goes higher, just as when the appraised values go higher the tax rate goes lower.

“When interest rates go up home sales suffer…” The reason why home sales suffer is because higher interest rates create higher mortgage payments that ultimately result in fewer buyers. Meaning some buyers will elect to wait then buy a home in this economy. Others who are looking for an affordable mortgage are less likely to look at expensive homes. The more expensive a home is, the higher the mortgage. To lower the mortgage, a higher down payment would be required for buyers to finance. The average home buyer is cash poor and therefore is more likely to look for a lower priced home. To remain competitive, sellers will need to lower the price of their home in order to attract buyers in a competitive market; thus, causing home prices to drop. As home prices drop, the supply of buyers increase and ultimately interest rates will drop again to reflect a more active market. As activity among buyers increase, more homes are sold. When this happens, the supply of sellers will decrease to ultimately open doors for home prices to increase. When this happens, buyer activity will subside as more sellers decide to list to take advantage of higher home prices. Ultimately, we end up again with more sellers than buyers….and the cycle resumes. How long doe the cycle take? …it really depends on other factors happening in the economy.

Socalism is good untill you run out of other peoples money!!!

Oldcavscout...

You forgot that the American People have already paid the original $10,000 so that the bank was off the hook months ago. It's the American Peoples money the bank's have collected and are still trying to collect more of without helping the home owner that the bailout was intended to help... The banks and others that speculated got paid but not the homeowner.

oldcavscout,

It's not that simple. Banks, or more their servicing companies, are denying a lot of short sells no matter the situation and no matter if they get their remaining principle returned.

Example: Lend me $150,000, I'll sell the asset for $120,000 and 'hand' you a $30,000 cashier's check for the difference at signing. They are still saying no.

Had a friend who set up 3 short sells following that example and the bank denied all of them. He eventually just had to do a deed in leu of foreclosure. And after they agreed to the deed in leu they then tried to foreclose anyway and the judge threw it out.

Tell me, did the servicing company, or the bank, make money on that deal by stringing out the process? The servicing company made more the bank, or taxpayer, who may own the note at Freddy and Fannie got shafted.

The mortgage market is a complete crock of crap right now. The whole system needs to be flushed and started anew. We had 5 year olds in charge during the last decade and they have massively botched everything. Banks need to own these things, they need to service these things, and the entire securitization of asset backed debt needs to be stopped.

Do some of you guys even know what a mortgage or deed of trust is? The lender and Wall Street banks want to make you believe the rules only apply to the borrower and not to them.

Quite simply when you get a mortgage, you are borrowing money with a promise to repay the loan (the borrower's side of the agreement). The lender agrees to take the property via foreclosure if you cannot or will not pay (lender's side).

So why the heck should anyone feel guilty that the lender does not want to honor their side of the agreement? The borrower cannot or will not pay, the agreement says they get the property. Excuse me but this is the agreement. They had the money and decided to give it recklessly to people who they did not bother to check if they could repay it or if the secured house was way overpriced. Now they get to share the loss with the borrower. Simple really.

Who said lenders are in business to help "the contry"?

show me were it say any bank could use my credit/and home for bets.

So since the person borrowed more than they could afford, it is the bank's fault. Now if the borrower had it in writing that the banker told them they could easily afford the payments, that could be justified but saying the negligent buyer is the victim when he obviously spent out of his budget is wrong. But of course, this is America and we can't take care of ourselves.

BisQueen..., Have you heard of the Community Reinvestment Act? http://en.wikipedia.org/wiki/Community_Reinvestment_Act

Janet Reno's Justice Dept told the lending community the Justice Dept was going to prosecute the firm and its executives which failed to aggressively embrace the Act. They would be charged with Redlining, a criminal offense.

Time honored financial underwriting standards: debt to equity ratio, downpayment requirement (say 3% for FHA qualifying loans); debt coverage ratios (income must equal or exceed two criteria: mortgage obligation (the payment) could not exceed 28% of income; total debt could not exceed 35% of income) were tossed out AND the lenders were not required to hold the mortgages once issued. They were guaranteed by Fannie Mae and Freddie Mac (you and me taxpayer) to be able to sell those mortgages to those institutions which in turn, pawned them off to Wall Street through having AIG insure them, thereby providing AAA status to investors. Investors? Goldman Saks, Bear Sterns, Merrill Lynch et al, were promoted to package these "unqualifed" mortgages into packages for sale to the Public under the AAA guarantee from "insured status" by AIG. If onsy twosy of these mortgages had failed, AIG would have easily survived the "sub-prime mortgage" fiasco. Obviously, there were just too many of them simultaneously failing; and the house of cards collapsed when AIG called itself failed! Uh oh. Suddenly, and I mean suddenly, the insured mortgages didn't have insurance! The Recession of 2008 was underway.

Congress preened about pointing fingers at everyone. The presumptuous, narcisistic Prima Donnas on Capital Hill hauled up CEOs of AIG, Bank of America, CITI, Merrill Lynch - the list supra, and more - to testify, ostensibly, and tell Congress what went wrong and how Congress could "fix" the problem so there could not be a reoccurence - and to get their mugs on TV - but, mostly, to make the CEOs the "Face" of the Recession onto whom Congress could foster blame and anger by the American Public and not onto them! Heaven Forbide.

Politicians caused the entire Recession of 2008 back in the 90s. President Clinton enjoyed a blissfully good economy ("It's the economy, Stupid" - James Carville) because James knew THE cardinal rule of economics. Do you? If YOU do not know the FACTS about finance and economics, THEY can lead you around by the nose and tell you anything and you have no choice but to believe it and I will not be around to teach and re-teach it if you don't get it.

Here it is.

What is the #1 economic generator in the United States?

Housing. Measured by housing starts. In macro economics it is irrelevent whether Joe sells his house to Bill.

#2?

Auto manufacturing.

There are 52 economic indicators that are measured and followed by economists and should be by YOU. Stop allowing the bubble heads on TV and in Congress tell you FACTS. Most Congress people can't spell Cat if you spot them the c and the t. That is almost a literal jab. And their sychophant supports are worse than they.

There are a lot of people who WANT the world be rosy and sweet and for everyone to earn $100k per year. Me too. Unfortunately, that is not reality and it cannot be made so by political fiat.

I digress but, if EVERYONE earned $100k per year, a good hamburger would cost $20 and a $20k car would cost $100k.

You would love me and I you - and truth be - you probably would not even like me, if we ever met. Japanese hate Chinese. French hate Germans. That list goes on and on and is reciprocated vice versa. It is time for Social Engineers sit down and be still . I WANT will never be reality, so stop wasting your time and energy and our money and let adults run the world.

I will write a book someday. Then, you will have to pay to get the wisdom of my education, training and experience. Today, here and now, it is freely given. Do with it as you please.

why is the bank at fault when the homeowner bought a house they couldn't afford? i do blame the banks for the way they packaged these bad loans and sold them, but i do not blame them for the buyer's bad decisions. and i do not want to bail them out.

Ranger6669, you have it correct. Everyone reading these blogs should pay attention to what you have said and learn the truth about what has and still is happening.

really???????......

The bank is at fault if they ignored the income to debt guidelines and approved the loan in the first place. I know from firsthand experience that "facts" are not allowed to stand in the way of approving a loan that will make a profit for the bank.

The banks had better be hoping for that turn around soon. Even with those mountains of money handed to them by the government (taxpayers) the cost of sitting on those properties for an extended period of time could easily cause another calamity. The lawns need to be mowed, the heat needs to stay on or a professional house closure must be done. Vandalism, copper theft, leaks, vermin, mold and mildew, ect., all take their toll on a vacant house. There still has to insurance and don't forget the biggest expense.....TAXES. If this goes on for a couple of years, forget about the decades that some claim it will take, I can't see the banks getting rich by waiting to sell them.

I think it's more a case of not wanting to flood the market any worse than it is and driving prices even lower that's stopping the banks from dumping them all now.

Just think of the what would happen if prices just keep dropping. People would wait for the next drop instead of buying. It would be like the bubble in reverse on steroids. If that happened, would anybody that was paying a $300,000 mortgage continue to pay on it if the house next door was just sold by the bank for $100,000? The only way they might do it would be if they had their mortgage paid down to around the $100,000 range. I think the government and the banks forseen that scenerio and the government gave the banks enough to keep it from happening for awhile.....but......there's limits to everything and even Bush was smart enough to realize it when he said "This sucker can go down".

Rumor has it that the mortgage interest write off is on the table to go bye bye starting in 2011 for all newly purchased homes. When Obama talks about fiscal restraint he's talking about OUR fiscal restraint not HIS.

Between that, the foreclosure stall tactics being employed by our leaders and the imminent collapse of the FHA, we are looking at detriments to the housing recovery that will take a loooooooooooooong time to clear out (if it ever does). In short, if you have been a good borrower, stayed within your means and paid your bills on time.........Bend over and grab hold of something solid.....

Where are you looking?

Not all foreclosed homes were owned by people who couldn't afford the mortgage. Hundreds of thousands, if not millions of responsible homeowners who had good, secure jobs and had been paying on their mortgage for years found their jobs no longer secure, and were permanently laid off. Their jobs had gone to China.

Those who were lucky enough to find new jobs wound up making half of what they used to. They could no longer afford their mortgage. The fact that they lost their homes was not their fault. Period. They were cast off like used toilet paper by their employers because they wanted to make boatloads of money. I know. I'm one of those people. My former home, which I bought in 1983 on a 30 year mortgage, would have been paid off by 2013 because I was making extra payments on my principal.

Now the bank will make a handsome profit on a home that was almost paid off before they took it. Let me tell you, there's a lot of cruelty in this world, by the banks, by businesses, and by Wall Street, which is the ultimate culprit in all of this.

Shoulda proof read my comment. I hit an "8" when I meant to hit a "9". I bought my house in 1993, not 1983. I was on track to pay it off in 20 years. And I never took a dime of equity on the house.