Home Prices Rise in Half of U.S. Cities as Market Stabilizes!?
Mary Lynn's note: Forgive me as I rant, but I've had about enough of this - please keep your eyes and ears open and feel free to correct me if you think I'm wrong...
It is mostly foreclosures and it is the gov't banks who are making the profit. Read it for yourself, but when you get to the bottom and see the profit made by Fannie Mae, you will know whose prices have risen. Many seller-owners are still lowering their prices and still can't sell. Why? Buyers WANT foreclosures.
The change I see is the foreclosures are selling for more money - I've seen it in my own market. They are not slashing the prices to list and move the properties, like they were in the beginning. They don't have to - buyers want foreclosures - they have been hypnotized to buy from banks/corporations instead of people/human beings and believe they are getting a better deal because the word "foreclosure" is stamped on it.
It's simple economics - drop the prices, give away homes - get everyone hooked to buy from you and then you raise the prices, but everyone still thinks you're the best deal. It's simply psychology in marketing and it is being used on the masses.
Thus, Fannie Mae, etc. can slow down now and raise their prices, because they know it's a long-term "business" (real estate) they're in. As REALTORS we fought them for years to stay out of our business, but they found their own way in. The original problem still exists in full force, it's just increasing its own profit. How are they making MORE profit? A smaller decline in home prices - that's price increases, but they don't want you to catch on to that and admit that they are raising their own foreclosure prices to make more profit. That may wake up some buyers to start buying from human beings again. Surely, they can't have that.
It was a hostile take over of the Real Estate Industry, they got all the people who have money left to chant "foreclosure, foreclosure, foreclosure - we want foreclosure" and now they are settling into ANOTHER profit maker caused by a problem THEY created and we paid for and are still paying for!
THE GOOD NEWS is that as foreclosure prices rise, the human being seller will not have to reduce their price so low, but that still does not change the mass hysteria that has created buyers who only want foreclosures. I call it Zombie Real Estate. No matter how many times I tell a buyer that they are still only going to get a CURRENT FAIR MARKET VALUE for ANY property they remain under the FANNIE MAE spell. Now, at the beginning of the hostile take-over there were steals and deals, because many of the homes were builders brand new homes, but those are long gone. Now, you just get a trashed home, that the bank stole from someone that they loaned 3x the value of the property, to. And their reward??? $2.7 billion in 3 months!!!
I am PRO LOCAL BANKS and CREDIT UNIONS - can you tell? :)
Here's the excerpt below - you do the math. They lost $6.5 billion in all of 2011 and in the first quarter of 2012 they have over a 3rd of that back already. They knew exactly what they were doing and they do now - I expect to see a continuation of the rising home prices, but it will be because a large percentage of the market is owned by Fannie Mae. These writers need to separate home sales/prices by corporations and human beings. BECAUSE THEY ARE NOT THE SAME THING! Corporations thrive on profits and human beings thrive in a republic with a free market and moral integrity. Okay, my rant ends now - start your own!
Fannie Mae, the nation’s biggest mortgage-finance company, today reported a $2.7 billion first-quarter profit after a $6.5 billion loss a year earlier, citing smaller declines in home prices as one of the reasons for improvement. The Washington- based company said that it won’t need Treasury Department aid to balance its books for the first time since it was seized by federal regulators in 2008.