SO YOU THINK YOU MISSED THE BOTTOM OF THE HOUSING MARKET

You didn’t.   The latest frenzy of price increases have been driven by large dollar investment companies and foreign buyers .  These purchases were largely cash deal and were all bought for one of two reasons.  The big American investors were buying up large blocks to turn into rentals, a lot of these were Hedge fund types looking for large returns on investment.  I knew they were in for a shock when it didn’t turn out to be as large as they thought and maintenance overhead was killing them.  The foreign types were looking for a flip type situation and are going to take it in the shorts as the prices decrease from lack of demand.

One thing to keep in mind , as long as the median wage in this country is 40K or less there can not be a huge demand on housing.   At 40K under normal banking rules can buy you a 120K house.  Till housing reaches that level there will be no large demand drives ..Prices will fall once again and probably go lower than the last lows.

Mike Whitney spells it out HERE

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