The Illegal Immigration Industrial Complex
Here's the Pro-Life Message Airing in Ohio During the OSU-Notre Dame Showdown
When Democrats Do Corruption, They Do It Right
Details About the Third GOP Debate Have Been Released. Here Are the New...
We're in Trouble: When Teaching American Values Is Considered Problematic
MSM Ignores Death of Longest Suffering Female Political Prisoner in Modern History of...
Biden Makes Bizarre Eyebrow Raising Gun Control Remarks
Private Video Captures What This Democrat Really Thinks About Biden’s Border Crisis
Leaders, Like Joni Ernst, Are Making Up For Biden’s Weak Policies Towards Iran
Government Isn’t the Only Tool for Protecting Competition
Orthodox Jews Expose Zionist ‘Antisemitism’ Racket of ADL
The GOP Can't Survive the Only Trumpers
What’s the Matter with Latin America, and the Media?
Trump's Role in History - and Why He Must Be Reelected
Biden Promises to Supply Ukraine With Missiles After Announcing Another $325 Million Aid...

Where Have All Our Houses Gone

The opinions expressed by columnists are their own and do not necessarily represent the views of

Did you read the story home prices are up due to falling inventory? Case-Shiller just reported home prices were up in their 20 city index 5.5% in November all the way back to 2003 levels.

Regarding these price increases one must put them into perspective. As reported at the BusinessInsider, Quinn Eddins at RadarLogic argue the recent rise in home prices reflects the weakness in 2011 home prices more than the strength of 2012 home prices. I concur.

The reason for prices rising? According to the WSJ: “Economists see the report as a sign of the housing market gaining strength. “The house price rally still has a long way to go. The most important driver will be the dwindling supply of new homes. Thanks to a combination of an extended period of under construction … and a fewer foreclosures, the inventory-to-sales ratio fell in December to the lowest level since May 2005,” said Harm Bandholz of UniCredit Research.”

This is a mystery when just in July of 2012 Bloomberg reported the following:

“The shadow inventory of homes – those in foreclosure plus those 90 days late on mortgage payments – is on the rise again, a further indication that the supply side has not yet healed. According to RealtyTrac, foreclosure starts jumped 6 percent on a year ago basis in the second quarter, the first year-over-year increase since 2009. There are roughly 4.16 million homes that could begin to flow to market.

Once one takes the number of homeowners 30- to 90-days late on their mortgage payments and includes the likely default of those that have negative equity on their homes, there is a strong possibility more than 6.5 million additional foreclosures will enter the pipeline. The  addition of homes that banks may be holding back suggests a much larger number. Laurie Goodman of Amherst Securities Group has testified before Congress that it could be as high as between 8 and 10 million.”

The Bloomberg report came four months before the FHA announced conveniently the week after the election that they have 789,000 homes in foreclosure or coming soon.

Where have all the houses gone? Not to be a conspiracy theorist, but do you think the big banks who were the recipients of government largesse with bail outs, or the risk free money making turnstile between the Fed loaning them money at near zero to buy treasuries returning 2.5% provided the capital necessary to hold foreclosed properties off the market?

Inventory will be one of the keys to how housing prices perform in 2013, however the three biggest factors remains jobs, jobs, and jobs. Followed by interest rates. Pent up demand drove sales in 2012 because it sure wasn’t due to job growth not able to even match new entrants into the job market. Investors also added to demand accounting for an estimated 28% of all home sales.

The stage is now set for the 2013 housing market and it remains cloaked behind a curtain not yet raised. Will millions of foreclosures mysteriously begin to appear? Will the phantom job market miraculously begin to add to demand?

Release of more foreclosed homes is more probable than job creation adding to demand.

As bad as Q4 GDP falling into negative territory was the collapse in Consumer Confidence. The media wants to blame falling confidence on the expiration of the payroll tax holiday. That is certainly a part of the reason, however that doesn’t give consumers enough credit.

Is it possible the collective wisdom of the consumer after listening to Obama’s inaugural dead left progressive edicts, including Climate Change that has driven up their costs of necessities could have contributed to a crisis in confidence? Could dysfunctional government be a cause?

Sure that’s possibly part of the decline in confidence, but in my opinion they are simply scared. People don’t see or are living any recovery. They see Washington DC and Wall Street thriving while they languish. What a better boost to confidence could there be if main street actually saw jobs being created?

Since jobs are the key to housing sales my outlook is for more of the same. The media will continue to report a non-recovery as recovery, banks will withhold inventory, jobs will languish, and confidence will remain low.

Why? Because only liberal pundits, academia, economists, media, and the new Collectivist Party, formerly known as Democratic, could possibly say that what Obama is doing is working.

The opinions expressed here are solely those of Fritz Pfister or identified sources, and not necessarily those of RE/MAX Professionals of Springfield or RE/MAX International.


Join the conversation as a VIP Member


Trending on Townhall Videos