Can we now finally admit the Housing Emperor has no clothes?

Claims by Housing experts that the residential real estate market has bottomed are a cloak with no substance.

For the last year my constant drumbeat has been that we do not have enough qualified buyers (excluding cash buyers) to absorb the true massive housing inventory. Just recently the NAR has come out and said they have to revise their home sales numbers going back to 2007. Here is the Truth: We have a very manipulated and artificially propped up housing market. You can deduce from the facts what you will. But, as John Adams once said, “facts are stubborn things.”

1. The US government has spent trillions of dollars to bring mortgages rates down to spur home buying.
2. The US government has created programs like the home buyer tax credit to get people to buy homes and take advantage of historically low interest rates. A new bill sponsored by Senator Chuck Schumer would incentivize foreign buyers to purchase a primary residence as a path to legally live in the United States.
3. The banks and Freddie and Fannie have avoided flooding the market with distressed homes in efforts to avert a further drop in home prices. This strategy on their part is understandable, but nevertheless has kept prices propped higher than market forces would normally bear.
4. Many institutions have created some type of a loan modification to prevent home owners from foreclosing or being part of a short sale, thereby keeping troubled inventory off the market. However, loan modifications have a high redefault rate so the likelihood of these homes ending upon the market is high and looming ahead.

These are just some of the actions taken by the Federal government and banks to prop up home prices, manipulate inventory numbers and prevent future foreclosures.

Yet, in spite of all these actions, home prices still double dipped in 2011.

Think about that. Trillions of dollars spent to bring mortgage rates to near all time lows, manipulation of home inventory numbers to prevent flooding the market with distressed properties, government tax breaks for buying homes, loan modifications to prevent foreclosure, and yet nothing has really worked.

So you tell me: is the Emperor really wearing fine clothes?

Logan Mohtashami is a senior loan officer at his family owned mortgage company AMC Lending Group, which has been providing mortgage services for California since 1988.

Read more: http://www.benzinga.com/general/politics/11/10/2023277/ows-banks-democrats-obama-and-money-that-really-talks#ixzz1gXkNiouFRead more:

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