Friday, December 21, 2007

Supply Side Friday

by Tanta on 12/21/2007 08:46:00 AM

What's Friday morning without a good laugh? Via our friends at Housing Doom, this solution to the RE market doldrums from a bona-fide Relitter:

Here is a moderate solution to the real-estate market:

There are more than 58,000 homes on the market. If each and every person who does not need to sell his or her home, or can wait to sell, takes his or her home off the market, the market will correct very quickly.

What we would see is all the homes that the banks have had to take back or the short-sale homes. After a few months, we would have a strong housing market. In fact, if many Realtors would educate their sellers about this, everyone would be happy.

Sellers would get closer to their asking price, buyers would feel more confident when making a decision to purchase, and Realtors would not be throwing their hard-earned money out the window to market a property that will not sell.

I honestly believe that the greed of the banks and mortgage companies are to blame for a majority of this mess. We are helping them out. But in order to keep happy customers and create a strong housing market, we all must work together.

If you are planning to sell your home in this market, think again. Waiting just a little longer could mean extra money in your pocket. - Jason Grandon, Scottsdale
You have to admit it would be a way to find out how many folks in Scottsdale don't actually have to sell. I suspect, however, that they'd both be a little disappointed later . . .

And before I get accused of going after low-hanging fruit by picking on Relitters, there's this from Bloomberg yesterday, by "a senior fellow in economic history at the Council on Foreign Relations," which may possibly be one of the most ridiculous things I've read in nearly a whole week (the op-ed, not the author's title, although that's pretty funny too). There seem to be a lot of people who are confused about where "prices" come from. Certainly this is a classic:
The whole subprime problem can be seen as a consequence of too few prices and too many deals in the first place. The price of a standard fixed-rate mortgage is too high for many families, even at today's historically low rates. The appeal of the adjustable-rate loan, never mind that of the subprime no-doc mortgage, lay precisely in that it allowed borrowers to fool themselves about the true price of the debt they were assuming.
You can, apparently, be a senior fellow of something having to do with "economics" and not realize that "loan amount" is one of the variables in =PMT. I fault the educational system: too much economic history, too little Excel.