Prices are really jumping because of the shortage of homes available and the big hedge fund dummies buying up everything. However, i am concerned. This is not a natural progression. Usually prices increase when income increases. This is not why prices are increasing. Income has not increased in Ca and the job market still stinks.
According to the law of supply and demand, when you have more demand than supply, you get a jump. House prices are going up because there are too many people chasing too few properties. Foreclosures are down. and the cash buyers are paying whatever causing our inventory to be really puny. Sales are up 9% from july and 14.2 since last august in socal
The California board of realtors is pushing to stop a sale of foreclosed houses from fannie mae and freddie mac to hedge funds who will turn them into rentals. This will further squeeze the market. We don’t need it. Now we surely don’t need this latest govt plan which is to have the fed buy large groups of toxic loans from the banks. These are the loans that caused all the problems in the first place. What are they going to do with these loans? My guess is that they will sell them to the same hedge funds. What will the hedge funds do? Keep in mind this is not ownership of the homes,they become the lenders. Will they sell them? Will they modify and keep them? Will they modify and sell with owner financing? That would be good.- nah- they are too stupid to do that.
Folks, we are setting up the next boom and bust cycle right here. Large funds will control a good portion of the housing market . What happens when they want to sell? It’s not like a few sellers selling-IT’S A BUNCH !!.
What do you guys think about this?