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Patrick Killelea: What Every Homebuyer (And Homeowner) Should Know Now

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Submitted by Chris Martenson of Peak Prosperity

Patrick Killelea: What Every Homebuyer (And Homeowner) Should Know Now

For many, the collapse of the housing bubble was the trigger that began the era of economic slowdown Americans find themselves mired in.

But recently there have been growing reports in the media of a housing "recovery." So we've invited Patrick Killelea, founder of the popular housing site and author of The Housing Trap: How Buyers Are Captured and Abused and How to Defend Yourself, to clarify the situation.

The short answer is this: While there are some markets where home prices are back in line with both fundamental and historic norms, buyers still need to exert caution when making a purchase.

First, to the reports of "recovery":

Prices at the low end are definitely rising. All measures are showing that. But I don’t like to use the word “recovery,” because it implies there’s something good about rising prices. Rising prices are a kind of inflation. I’d be delighted if reporters would use the correct term and say "housing inflation return." But back to the point, prices are rising at the low end. But it’s not really an organic growth.


What’s happening is that a lot of investors realize two important things. One is that the price of a house in the biggest bubble areas like Phoenix fell well below the price implied by the rental evaluation. So these guys want to make a profit and they realize, if we buy up these houses and rent them out, we’re going to get a better return on our money than we can get anywhere else, especially with interest rates being as low as they are. The return on a rental property, often referred to, as “capitalization rate” can easily be 10% in these areas. And that’s huge. So that drew the attention of not only little investors, but also actually even big hedge funds. Although recently a lot of those have announced that they’re getting out of the game. They seem to have picked over a lot of these places, and there aren’t the deals that there were even a year or two ago.


At the other end of the spectrum are really expensive places like New York City. The crash was very muted, and it was hardly a crash at all. It was a downward trend in pricing. But what that means is, it’s still difficult, or maybe even impossible, to buy property in New York City and rent it out for a profit. You can’t do it. You’ll lose money. So if you were buying there, you’d be betting truly on appreciation that’s not justified by the underlying fundamentals.


I said that investors realized two things. The other thing investors realized is that they have cash. Ordinary buyers, families, don’t generally have enough cash to buy outright. So that gives the investors a huge advantage, especially since lending is still pretty tight. Even with the low interest rates, it’s still considerably harder to get a mortgage now than it was in the big bubble years, 2004 and 2005.


So I’d say it’s an investor-driven recovery. And that recovery is really only in the places where they had a huge bubble and a huge crash. I’d say that it’s safe to buy in those areas, especially in places where the house is lower than the rental equivalent cost.

Patrick goes on to share the key elements to keep in mind when buying a house, including price-to-rent ratios, leverage limits, construction quality, and diversity of the local economy.

Beyond that, he shares his concerns about how the playing field when buying a home is slanted against the buyer's interests. He warns of numerous tactics the industry employs, most notably information asymmetry, that consumers need to be aware of, including:

There are all kinds of tricks that agents play. I list a lot of them in my book, but it would probably take several more books to cover it all. There is a lot of psychological manipulation of buyers. Agents are used-house salesmen. That sounds harsh, but it’s true. They are kind of like used-car salesmen: they’re not there to provide value; they’re there to get a commission. That’s their goal. And if you don’t buy, they don’t get paid.


A typical trick of theirs would be first taking you around and showing you extremely ugly and overpriced houses. And then they show you the one that they think you’ll buy. Maybe it’s overpriced as well, but not as bad. So you’ve got an anchoring effect, and it makes you a little more susceptible.


There are all kinds of other and evil games that are played. And because the whole housing market is very non-transparent, it’s very hard to pin them down. You don’t have any way of knowing if there are any other offers at all, because you’re not allowed to look at the other offers. You don’t know that they exist. So agents can lie with impunity and say, oh, there are twenty offers, and people just believe it. They think why would the agent lie?


Clearly, they’re not thinking hard enough. The agent has a motive to lie. And if you can’t prove that they’re not lying, the agent has the means, motive, and the opportunity to deceive you for profit. That would be enough to convict them if they were in court. But it’s normal business practice in real estate, so nobody seems to think twice about it.


And agents and house inspectors often have a cozy relationship. Maybe a little too cozy, where the agent recommends an inspector, and the inspector sort of passively agrees he’s not going to find anything. He gets business from the realtor, and the realtor gets the recommendation that you should buy it. You should really separate those things. Don’t take the realtor's recommendation for an inspector. Find your own inspector, preferably one who has nothing to do with that realtor. 

Patrick also shares insights from his analysis of years of national home purchases. These include: don't sell too often (the transaction costs will kill your returns), don't upgrade too frequently (it's more costly than you think), and it's worth it to transact without an agent if you're able to do so.

Click the play button below to listen to Chris' interview with Patrick Killelea (39m:55s):

Click here to read the full transcript


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Sat, 11/03/2012 - 13:01 | 2944373 Mr Lennon Hendrix
Mr Lennon Hendrix's picture


  The things you own, they end up owning you.

Sat, 11/03/2012 - 13:48 | 2944470 redpill
redpill's picture

Real estate agent scams are nothing new, and don't really have anything to do with current market conditions.

And FYI if you're buying a house and don't use an agent, you don't save any money because they won't pay you the commission unless you are an agent.  It just means the seller's agent pockets both sides of it.  If you're selling a house and don't use an agent, you'll probably need to offer higher commission to a buyer's agent anyway to get enough traffic to have a chance at selling the place in a reasonable span of time.

As for cash buying, it peaked nationwide in 2011, and has relaxed slightly since.  The loans are starting to flow again, and the author is correct that it is a form of inflation.  The Fed is spending billions every month in an attempt to inflate housing prices and they won't stop until they are "successful."  Unfortunately that will eventually go away (by choice or by force) and housing will once again have to deal with the rug getting pulled out as happened in 2010 with the ridiculous home buyer tax credit scheme.

Investment purchases are flat since 2011, still a significant portion, but the market has started to broaden again.  But recovery in housing has substantial obstacles obviously, anyone thinking that they'll be able to make it big off price appreciation alone is fooling themselves.  There are good investment opportunities for rentals that would easily be cash flow positive on day one.  However when peoples' credit starts to heal in a few years, the rental market won't be nearly as lucrative as it is today.  ZIRP will eventually lure people back into buying homes.


Sat, 11/03/2012 - 13:59 | 2944490 flacon
flacon's picture

How much money will you earn in your lifetime? Suppose you earn $70K ($50 after taxes) and suppose you work 40 years. You will earn $2,000K ($2 million). 

How much was that mega-mansion selling for down the road?


Perhaps the key lesson here is that 'working' isn't 'working' any more.

Sun, 11/04/2012 - 18:48 | 2946925 economics9698
economics9698's picture

“And agents and house inspectors often have a cozy relationship. Maybe a little too cozy, where the agent recommends an inspector and the inspector sort of passively agrees he’s not going to find anything.

Lol this is most defiantly true.  I have worked in civil engineering, (hey I got to pay bills too) for 25 years and with the 47% decline in construction spending in Florida since 2007 we have been begging for one government job after another.

So with the down market we (my civil engineering group) decided to go after housing jobs, wind mitigation and home inspections. 

It was the proverbial clash of two completely different worlds.  In commercial construction the standards are very tight, people have died because of building failures, and residential is, at best, the “B” team, some might say the “C” team.

So this realtor gives us a 1957 house knowing we have never done this before hoping for the good report.  Bad decision.

We come up with a 36 page punch list, pictures, detailed report that would meet commercial standards, and the lady is pissed off, flabbergasted, and threatening to sue us.  Pretty funny stuff for us but not the real estate lady.

Another house had a flat roof that was holding water 3” deep in the middle.  Like I am not suppose to notice this?  WTF?

Needless to say we never get call backs from the real estate professionals.

In good economics times its chump change. 

So do beware and do your own inspection.  Get a punch list on line and check everything yourself.  


Sat, 11/03/2012 - 17:02 | 2944866 CPL
CPL's picture

That won't happen with minimum wage being standard wage.  Face it, it's not coming back.  Everyone is switching places, that's the plan until oil runs it's self past a mortgage payment for regular suburban commuting.

Sat, 11/03/2012 - 17:10 | 2944882 MachoMan
MachoMan's picture

Exactly.  He dropped the ball with the last few sentences:

There are good investment opportunities for rentals that would easily be cash flow positive on day one.  However when peoples' credit starts to heal in a few years, the rental market won't be nearly as lucrative as it is today.  ZIRP will eventually lure people back into buying homes.

So....  if credit heals and people start piling back into homes, wouldn't the cash investors have appreciation in value?

I'll posit a different approach...  that credit doesn't heal...  that prospective renters will become more and more broke with stagnant wages...  and that rents will decline along with them.  We've hit a peak in distributed ownership of housing... 

Sat, 11/03/2012 - 17:08 | 2944877 disabledvet
disabledvet's picture

I think Long Island is about to collapse...and possibly take the Greater New York Metro area with it. The fact of the matter is Bernanke has NOT given speculators the ammo with which to go "hog wild with house flipping." In fact he's created the same bubble that was created the last time "only with a more permanent ending." Free fares, free gas....these are your cues that something horribly wrong is at play "and no matter the outcome of the election a sudden downturn is in order." The only question for me...indeed only question I've had since I came to this site years ago..."will the tanks be over here...or over there." Right now we've got a little bit of both I think...

Sat, 11/03/2012 - 22:03 | 2945479 southerncomfort
southerncomfort's picture

"...the seller's agent pockets both sides of it."  

False.  If you're not using an agent, knock the commish down 1/2 - you're not required to pay any agent you didn't hire.  Get outta here w/ that junk.  You can't ask for 1/2 a full commish paid back after close (unless you're an agent) but you CAN drop your offer price 10% prior to contract to nix paying all the commissions and toss paying that shiz back into the seller's court for hiring a freakin' RE agent to start with.  In many states you can print standard RE contracts off www (look for your state's real estate licensing board and find their contracts) and fill 'em out yourself - they're boilerplate.  Have in fact done "zero agent" (no agents at all) buyer to seller deals this way - seller/buyer just go to reputable title company- let seller choose, they're state regulated anyhow - THEY walk you thru it - everyone saves big $$$s doing this.

"If you're selling a house and don't use an agent, you'll probably need to offer higher commission to a buyer's agent anyway to get enough traffic to have a chance at selling the place in a reasonable span of time."  

Poppycock.  Have used on last 3 deals -- 2 houses, 1- 250+ acre tract of land.  Got asking prices on the houses (one closed in 4 days, other in 10 days), paid 1/2 commish to agents who brought the buyers (3%).  On the land - which did take a little longer to sell since there aren't tons of folk walkin' around looking for 250+ acres - offered 2% to buyer's agent since price ($) was large and any agent who did the deal would walk away w/ nice chunk of dough anyhow.  Used boilerplate "farm & ranch" contract from state RE license site and deal went fine.  

IF you sell yourself, make sure whatever www source you use  lists your property on MLS in your area.  That way, buyers looking and agents see it - so if buyers want to see your property their agent willl be compelled to come to avoid having you do a deal with their buyers direct (with agent losing commission for not being there).  Also, of course, price your ask 10% higher to cover cost of any buyer bringing an agent--they're the one bringing this baggage, not you.  If buyer comes w/out agent, you've got plenty of $ flex on your ask to offer buyer some $ reduction.  Print the contracts, sit at the table, and fill 'em out together and drive over to title company to get deal going.  It's not rocket science....

If you're selling your own deal, 1) be as honest as you know up front.  Easier to warn about things that might be iffy than pay later w/ lawyers.  I always let buyers ask questions, then sege into "I am going to tell you everything wrong about this house that bugs me"...and tell them.  With a 4 day and 10 day contracts under my belt, this blatant honesty appears to work wonders and amazes even me, the seller.  Next thing is give the buyers my number - with instructions to call me within a month or two to let me know everything's okay (they never do).

Then I call THEM a week later saying I want to buy the house back--I miss it, etc.  lol, man, they always scream NO WAY!  (I do this with cars I've sold too...).   Everyone knows - in his gut - a "fair" deal.  If you give people a fair deal everyone wins.  With no disrespect to RE agents, man, in my experience, they "add" a lotta expense and nonsense to deals sometimes -- so at least with my own, most times I just pass on the agents or push their expense to the other party's side of the table since it's their expense, not mine.

Sat, 11/03/2012 - 13:52 | 2944478 mmanvil74
mmanvil74's picture

The italicized paragraphs by Patrick are bang on in my view. Finally an 'expert' on ZH who agrees with my assessment of the opportunities in key US real estate markets. Yes it is an investor driven recovery. Nothing wrong with that. I would rather get in on a cash heavy investor driven 'recovery' than a debt laden consumer driven boom. Sure there are risks. Sure your realtor will try to screw you over, that's not news, that's real estate 101. However, the risk/reward factor is compelling as the author suggests 10% net return (30% on cash if the property is mortgaged) is hard to beat in a ZIRP environment. And yes NYC would not be a good market to target, just look at the numbers it's easy to figure out which cities offer the best rent to price ratios in the US right now. Rent to price ratio, it's that simple, but it always amazes me how many people overlook the math when 'investing' in real estate.

Sat, 11/03/2012 - 14:56 | 2944593 Piranhanoia
Piranhanoia's picture

Renting a dwelling that isn't properly maintained because of the investor/owners is a form of enslavement.  It is very popular for psychopaths.

Sat, 11/03/2012 - 19:08 | 2944910 TruthInSunshine
TruthInSunshine's picture



You'd better pay for your to-lease/rent inventory with cash, carry a lot of surplus cash for carrying costs (property taxes, maintenance, rehabilitation, etc.) and be brilliant at deducing supply/demand trends, to be a rockstar in what has already become a distorted, investor-driven, buy-to-rent residential housing market.

I'm not saying it's not possible to make consistent, long term profits in this industry. I am saying that anyone jumping in right now had better be self-financed (assuming you can borrow to finance what is an investor portfolio of rental properties, the lender is going to shave what could've/would've/should've been profits by a large factor), and you'd damn well be fully aware of how distorted this market is due to...yet another Broken-By-Bernanke market (where ZIRP/NIRP is pushing investing sheep where they dared not graze before).

On top of the inability to obtain accurate valuation and price discovery, due to The Bernank's monetary madness, you have an unknown-in-size pipeline of residential unit shadow inventory sitting on the books yet still of banks and large GSEs (Fannie & Freddie) that has been made possible by The Fed & Treasury propping these institutions up, and allowing them to effectively sit on these assets, or market them at their pure discretion, removed from all market based incentives, whereas in "normal" markets, there would be fire sales raging left and right at this moment, weighing heavily on prices and bids.

You'd better get that model correct as far as future inventory levels, prices, and supply/demand ratios, because if you hope to actually make money you're necessarily paying cash for inventory (or using partner money to do so), and you'd certainly not want to underestimate just how many family members and friends can move into residential dwelling units together, nor how much additional supply will trickle, leak or flood onto the market in years future.

By the way, vacant units you're carrying as inventory have oddly similar "fixed costs" to occupied/rented ones, as your amortized payment obligations for units acquired (you still model it this way, even if you paid cash up front for the property/properties, as opportunity cost on money comes into play) that you've used in your initial model don't actually stop accruing until the total net income you've received for those units exceeds income expended to acquire them, and those pesky and forever property tax obligations are really a bitch.

p.s. - It's good to be connected to Timmy @ Treasury and Benevolent Ben @ the Fed as a proper TBTF, such as the Blackrock's of the world, because if you're playing with your own money, and not backstopped by the taxpayers, take a cue from Och-Ziff, and at least look around for signs of too much hot money chasing artificially supressed inventory, which makes for a bad case of the "damn, I paid too much."

Sat, 11/03/2012 - 22:26 | 2945519 honestann
honestann's picture

Anyone stupid enough to play a game with their hard-earned savings with predators who constantly change the rules, and ignore the rules whenever convenient for them... is just downright stupid.  Of course that's just a tautology, but is also true.

Sat, 11/03/2012 - 17:12 | 2944886 disabledvet
disabledvet's picture

Cash heavy investor? Bwahahahahaha. These clowns are up to their eyeballs in debt with "just one hurricane" separating them from the totality of their authority. This is not just unsustainable...we could be heading off a cliff here.

Sat, 11/03/2012 - 13:55 | 2944484 Death and Gravity
Death and Gravity's picture


Sat, 11/03/2012 - 16:25 | 2944776 boogerbently
boogerbently's picture

What (relatively peaceful) country allows Americans to own home/property, that DOESN'T have annual property taxes?

In other words, "one and done."

Italy, Greece, Spain, Asia/pacific??

Sat, 11/03/2012 - 17:06 | 2944876 CPL
CPL's picture

First Nations if you are native.

Sat, 11/03/2012 - 12:56 | 2944374 Manthong
Manthong's picture

Fly in the ointment ..

Property Tax

Sat, 11/03/2012 - 13:24 | 2944420 SoCalBusted
SoCalBusted's picture

...and it is a very big, continuously growing, fly!

Sat, 11/03/2012 - 16:19 | 2944764 boogerbently
boogerbently's picture

And now, included in the HEALTHCARE BILL, a 3.8% "sales tax" when you sell your house.

Do Obama fans know how much CRAP is hidden inside that Obamacare package?

Sat, 11/03/2012 - 17:05 | 2944873 MachoMan
MachoMan's picture

just some quick googlefu would appear to refute your assertion or, at the very least, clarify it significantly...

Sat, 11/03/2012 - 13:00 | 2944387 dick cheneys ghost
dick cheneys ghost's picture

Beware Clouded Titles

Sat, 11/03/2012 - 17:01 | 2944863 MachoMan
MachoMan's picture

Beware of what exactly?  Can you please articulate a widespread and recurring issue whereby home purchasers have to pay twice for a house?  In the event you buy a house and a creditor asserts a pre-existing lien on the house, can you please articulate the respective cause of action to collect and the likelihood of success in the purchaser's home town?  Are there any other parties who may have to pony up the cheese for your defense?  (e.g. title companies).

I'm not saying that there is no risk...  There clearly is...  but we cannot simply leave it at "there is a risk"...  we need to quantify that risk...  determine the severity of that risk.  People have to make rent or buy decisions daily...  without doing so, you might be leaving a good investment off the table.

Sat, 11/03/2012 - 19:51 | 2945237 TruthInSunshine
TruthInSunshine's picture

There's clearly less risk in whatever inventory is currently listed, as title insurance has (ostensibly) been or can be procured to insure title.

I'd suggest that much of the risk that relates to title hazards (known, unknown and maybe even unknowable-- at least until there's some sort of final court order/judgment) centers around the shadow inventory of housing, occupied, vacant, current, delinquent, foreclosed or otherwise, that's sitting on the books of banks and GSEs (Fannie & Freddie) that's only able to be piled there in silence, because of the continuous IV of fiatskis being funneled to these entitites via the Fed & Timmmmay!!!

Sun, 11/04/2012 - 01:03 | 2945683 MachoMan
MachoMan's picture

I'm not sure why any shadow inventory would have any less of a sketchy lien history than any other home... presently listed or otherwise encumbered in the last decade or longer.  It's all the same.  Needless to say, I highly doubt any court of general jurisdiction in BFE is going to give two shits about a con artist trying to collect the second time on a local homeowner...  if they can't even get standing to foreclose, I doubt they'll have more luck with other creditors asserting the same claim.

Sun, 11/04/2012 - 11:01 | 2945970 chunga
chunga's picture

I think this discussion died out but...

Two lien holders at once coming to light? What a disaster that would be. That shit happens but gets settled out real quiet with huge non-disclosures.

Here is one that didn't.

Bevilaqua v. Rodriguez

Rodriguez walked away from the mortgage and property...and Bevilaqua bought it at auction. Before Mr. Bevilaqua learned his title to the property was "clouded" he spent a couple hundred thousand renovating the property.

He went to the MA SJC to clear his title and lost. What's ironic is the judge who made the ruling was Judge Long...same guy who ruled on Ibanez. A good judge in my book.

The court ruled that Bevilacqua did not have standing to bring the try title case because he didn't have a cloud on his title, he had NO title to the property-- the flawed foreclosure sale had conveyed no interest in the property to him at all.

As far as I know the situation is in top secret lock-down. It will get worked out (or already has) in the shadows of the boiler room.

Sun, 11/04/2012 - 11:59 | 2946037 MachoMan
MachoMan's picture

That doesn't have anything to do with what I was talking about...  I've litigated a similar case to our state appellate court and won for the purchaser at foreclosure...  it's all based upon the facts of each case and, typically, very technically procedurally based.  Given the entire process is typically in derogation of the common law, even the slightest screw up (e.g. service) can void a judgment (although, fraud upon the court is a bit more difficult).  [and, even if the purchaser lost, he would still be entitled to his good faith improvement of the property ("betterment statute") and his title company picked up the tab on his defense].  But, in your scenario, the party receiving the foreclosure proceeds would have to promptly cough them up in the suit to set aside the foreclosure decree.

What would happen in order for there to be a "risk" of a clouded title like what I was talking about would be some scenario where the homeowner pays off his home note to company A (BoA or a GSE, etc.), but then company B (fly by night) comes in an asserts that the note was actually assigned to them and the homeowner paid off the wrong company (or, alternatively, the company receiving the foreclosure proceeds goes tits up immediately thereafter).  Simply put, this doesn't happen (and the closing agent would have some splainin to do)...  the only risk would be that company B is correct AND company A was insolvent by the time company B won its lawsuit.  I'm just spitballing here, but I'm not sure it would be a bad thing to be in this situation, as you'd have plenty of top shelf attorneys clamoring to get a piece of your case when the thought of punies against a large financial institution (in a home court no less) come to light.  As a result, company A would pony up the cheese, in a hurry, to avoid the issue...  and hopefully a little extra to boot.

Sat, 11/03/2012 - 13:02 | 2944392 chunga
chunga's picture

One thing everyone should know when buying a house...

You might be buying a bag of tricks with bad title from a party who doesn't own it.

MERS Assignment of Mortgage Signed in MA Notarized From Texas

Can someone please explain how an Assignment of Mortgage can be signed in Massachusetts and witnessed/notarized from Texas? The notorious screwballs from Harmon Law cancelled the 11/1/2012 auction on this property. I wonder why. We are watching you!

Sat, 11/03/2012 - 16:54 | 2944842 MachoMan
MachoMan's picture

The wording on acknowledgements can be fairly tricky.  Generally speaking, there isn't a problem notarizing a document from a different state if the signer actually converses with the notary and acknowledges that it is in fact his or her signature and he or she signed it for the purposes stated therein.  Of course, we all know this conversation didn't happen and the documents are probably simply made up...

Sat, 11/03/2012 - 20:50 | 2945357 chunga
chunga's picture

An important distinction to make...this particular property is recorded as "Registered" land.

The law in MA is very unique. They are not even bothering to pretend they're following the law.

Sun, 11/04/2012 - 01:06 | 2945686 MachoMan
MachoMan's picture

Are you of the impression that the entire gambit [the actual mechanisms, not individual mortgages or assignments] is one big clusterfuck or designed?  You have a lot of on the ground experience on the issue...  either answer is scary, but just curious about your perspective.  I have a hard time believing that there can be this comedy of errors, but then again...  people are stupid.

Sun, 11/04/2012 - 11:10 | 2945910 chunga
chunga's picture

If I am understanding your question correctly, the sheer size of the housing/securitization/ponzi tells me it was designed.

Nothing this big and so lopsided can happen as a result of a series of unintended consequences. It's my opinion that this really got ramped up when $lick Willie was in office. Under the guise of helping the "little guy" and the "disenfranchised", he loosened up the Community Reinvestment Act.

I don't believe ANY politicians truly give a shit about "little guys". He was also in office when both the Gramm-Leach-Bliley Act and Commodity Futures Modernization Act of 2000 came along. That let derivatives and Credit Default Swaps out of their cages. So now, not only can money be lent and multiplied, it can be "insured" against default. I over-use this little phrase "How do you steal money from people who don't have any? Just give it to them." That's the deal right there.

Even though the Clinton's ran their own miniature housing ponzi with the Whitewater Development Corporation, I don't exclusively blame them. The CFMA fit nicely with Reagan's deregulation mantra and Greenspan's "invisible hand". In the early to mid 90's along comes the MERS...helped nicely by the Covington & Burling law firm (hello Eric Holder and Lannie Breuer) with the tech piece being awarded to Perot's EDS.

At the end of the day, when the pieces are being lined up to kick somebody out of their house, we wind up finding AOM's being signed in one state in the presence of someone in another state. Could I call the notary at the local library and ask to have something notarized without coming in? I doubt it.

This was very carefully planned and represents the biggest swindle ever conceived. And nobody of significance is in prison. Who planned this? That I cannot answer...Woodrow Wilson's quote comes to mind.

Since I entered politics, I have chiefly had men's views confided to me privately. Some of the biggest men in the United States, in the field of commerce and manufacture, are afraid of somebody, are afraid of something. They know that there is a power somewhere so organized, so subtle, so watchful, so interlocked, so complete, so pervasive, that they had better not speak above their breath when they speak in condemnation of it.

Sat, 11/03/2012 - 13:07 | 2944400 Dr. Engali
Dr. Engali's picture

In this day and age where there is no clear title and the government is abusing eminent domain I wouldn't want to buy a house.

Sat, 11/03/2012 - 13:40 | 2944454 Drachma
Drachma's picture

Most people believe they own their property. Keyword being believe.

Sat, 11/03/2012 - 14:49 | 2944578 goldfish1
goldfish1's picture

Try not paying the property taxes and see who owns it.

Sun, 11/04/2012 - 04:30 | 2945502 honestann
honestann's picture

Correct.  Only if you have an allodial title do you "own it" (and you pay no property tax).  Even then, nothing stops predators-that-be from stealing your land and home, just as they steal anything else they want.

Until the predators are eliminated, no individual and no property is secure.

Sat, 11/03/2012 - 16:57 | 2944850 MachoMan
MachoMan's picture

Actually, they do own it...  this is how they get to stay in it when they refuse to pay the note...  if someone else actually owned it, then this would be impossible.

Further, I would much rather take my chances with local governments (in non massively urban areas) than uncle sam.

Sat, 11/03/2012 - 13:41 | 2944457 Simplifiedfrisbee
Simplifiedfrisbee's picture

Get off your vibrating saddle Doc. Families need sustainable and generative homes to occupy before decay sets in the flesh.

Sat, 11/03/2012 - 17:16 | 2944900 disabledvet
disabledvet's picture

I agree. You should SQUAT in the house. Don't pay taxes...nothing. "Make them evict you." And this is exactly what is happening in Long Island right now. That tax base is now KAPUT.

Sat, 11/03/2012 - 13:12 | 2944411 Simplifiedfrisbee
Simplifiedfrisbee's picture

Spare me the callowness of such an incredulous housing blog such as Pat. All zerohedge needs is more users as those incredibly unfallicable subscribers that post comments on Pat.

Sat, 11/03/2012 - 13:52 | 2944481 Bay of Pigs
Bay of Pigs's picture

Agreed. Here is something more on point and goes to the heart of the matter.

QE3 – Pay Attention If You Are in the Real Estate Market
By Catherine Austin Fitts

"So, it looks like the Fed decision last week to buy $40 billion a month in mortgage paper is the ultimate plan to clear the market once and for all of fraudulent mortgages, mortgage backed securities and related derivatives. This means Fannie and Freddie will be bailed out and winding down through the back door."

Sat, 11/03/2012 - 17:20 | 2944908 disabledvet
disabledvet's picture

The Government cannot compel me to own or run a bank. They can take it they have I might add...but I need not lend money. And indeed from what I've been reading banks are doing just that: recoiling from lending in the Government rigged real estate market.

Sat, 11/03/2012 - 23:45 | 2945620 TruthInSunshine
TruthInSunshine's picture

They will lend & have been (although at depressed levels) with 84% of all mortgages being backstopped by taxpayers (i.e. the lender has no risk) via your friendly FHA.

Sat, 11/03/2012 - 13:23 | 2944419 TeamDepends
TeamDepends's picture

Obama to carpenter putting the finishing touches on lovely new house:  "'You didn't build that".

Sat, 11/03/2012 - 15:52 | 2944715 donsluck
donsluck's picture

And he would be correct. That finish Contractor built the house as part of a team, and it would be more accurate to say he was part of the team that built that house, which I think was Obama's point, not that I'm voting for him. BTW, the "you didn't build that" qoute is getting stale.

Sat, 11/03/2012 - 16:50 | 2944832 MachoMan
MachoMan's picture

To be fair, his premise was vastly broader than the team actually working on the house.  In effect, it spread to society at large.  This is why he is a socialist (crony capitalist, whatever ist you want to call him) and you are an idiot.

Sat, 11/03/2012 - 18:26 | 2945039 Bananamerican
Bananamerican's picture

"the "you didn't build that" qoute is getting stale"

You enjoy wit, novelty and nuance, Donsluck....

You're obviously not a foxtard.

Foxtards NEVER get tired of their dumb-shit, Left-wing toys and shiboleths....


"Obama is a commie" etc...."Obama is from kenya", "Obama gonna pay my mortgage", and now, courtesy of Fox™, "You didn't build that"....over and over and over and over.....

bless their simple, pointy, fascist-loving, Romney-fellating heads......

Sun, 11/04/2012 - 15:29 | 2946530 TeamDepends
TeamDepends's picture

Unbelievable.  So you believe that Obama is NOT a communist/marxist/socialist/leftist?  Oh man, people like you will be the first to go because you have no clues whatsoever.  See you on Wednesday!

Sat, 11/03/2012 - 19:00 | 2945114 mvsjcl
mvsjcl's picture

Bullshit is born stale, and deteriorates swiftly.

Sun, 11/04/2012 - 15:53 | 2946583 TeamDepends
TeamDepends's picture

Face it, Don, you ARE voting for him.

Sun, 11/04/2012 - 16:06 | 2946615 TeamDepends
TeamDepends's picture

"And he would be correct".  You are reacting to a HYPOTHETICAL SITUATION, Don.  Bow down to Don, the all-seeing prophet.

Sat, 11/03/2012 - 13:28 | 2944433 earleflorida
earleflorida's picture

thanks chris and pat :-))

Sat, 11/03/2012 - 13:33 | 2944440 ebworthen
ebworthen's picture

Housing bubble part two.

If the FED weren't buying $40 Billion a month in Mortgage Backed Securities and FHA wasn't funding loans with 3% down there might be realistic valuations.

The current market has an artificial floor based on historically low rates and government propping.

When rates go up and government propping ends is when the next crash in prices and a flood of new foreclosures and shadow inventory will drag prices down again.

Historically low labor participation rate and decreasing average hourly earnings are not a recipe for stabilizing housing prices.

Increasing taxes, insurance premiums, and general inflation in things people need (food, fuel, etc.) will further alter the housing price calculus.

Imagine five years from now higher taxes, greater inflation, more unemployment, and rising rates on ARM's combined with Boomers downsizing.


Sat, 11/03/2012 - 14:20 | 2944530 Bay of Pigs
Bay of Pigs's picture

I listened to half of that interview and turned it off.

Nothing against Martenson, but that dude is fucking clueless. He doesn't connect the dots at all.

Sat, 11/03/2012 - 17:23 | 2944913 disabledvet
disabledvet's picture

Seems to me "the greater fool theory" is in play. The Fed induces a speculative frenzy...then pulls the rug out from underneath by driving down the return on the paper to zero. Where's my cash cushion? What if values start falling? How do I sell?

Sat, 11/03/2012 - 13:37 | 2944446 adr
adr's picture

Home values in the distressed under $50k market have increased because investors have found that buying a $30k distressed property and putting $30k into it can return a sale of $100k for a quick $40k profit.

Most of the time this is done in areas where the median price may be $130k or so. What this does is push the property values of the other homes down as the majority of the real estate transactions are occuring at half the previous median values of the neighborhood.

There are in effect no buyers for occupied homes. Because a renovated distressed property will most likley have new windows, new furnace, water heater, and kitchen, prospective buyers will only buy a listed property with everything updated. This forces the owner of a home to perform expensive upgrades, even if the furnace and windows are only ten years old. In order to sell, even a three year old water heater needs to be replaced.

In my neighborhood listed homes have dropped by 15% in the last six months for lack of buyers and renovated previously forclosed homes hitting the market for less. When a flipper puts a 1400sq ft home with brand new everything on the market for $125k to move it fast. The 1400sq ft home listed for $140k, without the upgrades around the corner is now worth $125k too.

The cash investors looking to flip for profit hve destroyed the housing market in my area. Anyone actually living in a home has no choice but to walk away if they need to sell, because every mortgage is now underwater.

Sat, 11/03/2012 - 14:55 | 2944588 kaiserhoff
kaiserhoff's picture

What state?

Sat, 11/03/2012 - 16:47 | 2944827 MachoMan
MachoMan's picture

When a flipper puts a 1400sq ft home with brand new everything on the market for $125k to move it fast. The 1400sq ft home listed for $140k, without the upgrades around the corner is now worth $125k too.

Math fail.  The 1400 sq ft home around the corner is now worth considerably less than $125k because the new owner will need to update it to bring it in line with the neighborhood.  I notice this a lot in my area...  15 year old homes are trying to get the same $/sq ft as new construction... (eventually there isn't a bigger fool).

Sat, 11/03/2012 - 17:57 | 2944974 blunderdog
blunderdog's picture

     The cash investors looking to flip for profit hve destroyed the housing market in my area.

So...if I understand this correctly, you're *complaining* about the free market and true price discovery?

Sat, 11/03/2012 - 22:08 | 2945484 honestann
honestann's picture

NOTHING about the real-estate "market", especially the real-estate mortgage market, has anything remotely to do with a "free market", and it hasn't for decades (most especially the past decade).

Sun, 11/04/2012 - 13:17 | 2946225 blunderdog
blunderdog's picture

What's your interpretation of adr's complaint?

It comes across as "people flipping houses is bad."

Going off on a tangent about various government interventions is all well and good, but what's he talking about?

Sun, 11/04/2012 - 23:30 | 2947671 honestann
honestann's picture

I wasn't primarily complaining about your post or his (and didn't down-arrow anyone) since I was just trying to remind myself and everyone that once a so-called "market" like real-estate is this massively perverted by artificial forces... no action is really a "market action".

Perhaps one buyer is thinking only about "what is good for him", but he is doing so within a totality that is so utterly perverted at that point, that no real "market action" is possible, so one cannot honestly think any action is part of a "free market".  This is part of the problem when predators-that-be insert their stinking manipulation into a "market" in a substantial way --- no action is a market action, and thus we should not delude ourselves that "a market exists" or "market forces exist".  They don't.  Only manipulation exists.

I think we all agree that the problem with artificial manipulation of markets is that it encourages individuals to take destructive actions by making those actions look rational.  That inverts the feedback and makes feedback volatile, and thus makes all actions suspect, even the well intentioned ones.

I guess the bottom line of my personal motivation for responding is this.  I am painfully aware of how human consciousness typically works.  When something is perverted (like from being a "market" to a "manipulation"), and people continue calling it a "market", they tend to automatically screw up their thinking process because continuing to calling it a "market" implies (to their own thinking process) inappropriate things.  The best way I know of to not make this mental mistake... is to stop calling things what they aren't.  Stop calling the USSA a democracy (or even a republic at this point in time).  Stop saying people are free in the USSA.  Stop saying all the things that might have been largely true once upon a time.  Otherwise people can't think their way out of a wet paper bag.  That sort of thing.

Sat, 11/03/2012 - 14:06 | 2944475 buzzsaw99
buzzsaw99's picture

Puleeze! Buyer-flippers were and are part and parcel to the continuing real estate/bank  fraud. They didn't want to pooch the deal anymore than the realtwhore did. Often they are the same person. Everyone from top to bottom is crooked as a dog's hind leg. This article is saying beware to a bunch of assholes who don't care about anything but a fast buck. Anyone with half a brain and who is paying 20% down already knows all that shit.

Sat, 11/03/2012 - 13:56 | 2944487 I am Jobe
I am Jobe's picture

and the slavery continues, ah the dream and hope . Yes drink the kool aid sheeples and get fucked. Slavery is here to stay. Enjoy the time and be a bitch to the Govt both the USSA and China.


Sat, 11/03/2012 - 13:56 | 2944488 Peter Pan
Peter Pan's picture

The real estate market is like a crocodile's jaws. It would be interesting, for the sake of true comparison to ask what the movement in prices has been on a per square foot basis. Also, it's hard to get excited by real estate price increases without knowing to what extent the price increase is swllowed up largely by renovation costs.

But a great deal of attention should be given to the fact that if tax deductibility of interest is curtailed or interest rates move, then we will be witnessing another massive implosion.

Sat, 11/03/2012 - 16:43 | 2944816 MachoMan
MachoMan's picture

Practically speaking, I'm not sure that the home interest deduction isn't going away naturally, without an act from congress...  Less and less people have enough qualifying expenses to itemize their deductions...  no itemization, no deduction.

Sat, 11/03/2012 - 17:28 | 2944925 disabledvet
disabledvet's picture

For that deduction to matter my house would have to be 100 million. Interest rates are too LOW. DEFAULT looms as people stop paying their taxes. THERE ARE NO GOVERNMENT JOBS BEING CREATED. And now Long Island asks "where are the Government people?" Well...there aren't any!

Sat, 11/03/2012 - 14:08 | 2944508 Lester
Lester's picture

Got money?
Got a home inside a metro area or upscale suburb? Thinking about buying there?

Best think again...

America is on the collapse. The only kind of property that will yield safety and a "return" is a homestead optimized for self-sufficiency. All else is bullshit, ego, and doomed to failure.

Not like you need a farm, but you need to own a small woodlot, enough quality soil to yield a good garden, your own well and cistern water storage, at least a 1000gal septic or composting blackwater system, a greenhouse site with good sun exposure, and remote enough to be off the beaten path.

Can't be self-sufficient? Then you are at the limited mercy of those with "good" intentions. Then there are those who see you as a ripe melon for them to harvest...

Much of the NYC and related NJ infrastructure has collapsed. Only been 4 days, but both states have turned to Federal Govt to pay their costs. There is no money in their coffers. There are only 5% of trained specialist technicians to handle the rebuild. NONE of the electrical infrastructure parts are built in the USA nor are they in inventory ready to be installed.

If the tenuousness of modern metro life is not now apparent to you; it never will be.

Hurricane Sandy's swath of destruction is America's Death Knell. Better make your plans while you can and spend your dollar denominated wealth while it has value. If you value your children and have hopes for their progeny, a self-sufficient homestead with housing and food/gear for all your loved ones is what deserves your attention now...

Sat, 11/03/2012 - 15:01 | 2944599 AgLand
AgLand's picture

I am a big believer in AgLand and self suffiency and all, but one storm, like Katrina, does not a death knell for America make.

Yes, given my druthers I would much sooner live on 10 acres and grow my own food, but if the collapse you believe actually comes you would not be safe either. In fact, having what others need will make you a target.

You are far better off with that mindset to have some foreign 'port in a storm' already picked out and a means to move there either permanently or to ride out the civil storm. Preferably a country that grows plenty of its own food and has an educated, but not too wealthy, peaceful population.

Sat, 11/03/2012 - 17:32 | 2944929 disabledvet
disabledvet's picture

New York City has been working on a massive new Transporation Hub in lower Manhattan since 9/ even though this is a catastrophic event there is a way forward. Other than that...I totally agree with you.

Sat, 11/03/2012 - 14:11 | 2944512 Miss Expectations
Miss Expectations's picture

Patrick's site gathered housing news...kind of like a drudge report of the housing bubble.  He is not an intellectual giant nor does he have any special housing knowledge (as far as I can tell).  He LOVED the idea of Obama care...especially the fairness of it.  Beware.

Sat, 11/03/2012 - 14:26 | 2944541 Stanley Lord
Stanley Lord's picture

Good heads up -thank you

Sat, 11/03/2012 - 14:53 | 2944582 AgLand
AgLand's picture

A guy who spent every waking day looking at, posting about, reading and reporting about housing is certainly much more of an 'expert' than any of us will ever be...

I know something about AgLand, particularly in a specific South American country. It does not make me an 'expert' but after several years at it, I am certainly more educated than most everyone else.

There are no degrees in 'housing bubble' but if one were awarded Patrick would get it.

As to liking ObamaCare, I personally don't like it but at the same time know parts of it are MUCH better for me than the existing system.

Sat, 11/03/2012 - 15:43 | 2944695 Bay of Pigs
Bay of Pigs's picture

Educated? I junked you on the facts alone.

He didnt address, nor explain, the shadow inventory and how the TBTF banks and FED are going to deal with the massive fraud that exists in the housing sector and derivatives market. That is where QE3 comes in. Seriously, how can anyone ignore this issue and be a credible source? You think papering over criminal activity makes it all okay again for "investors" to buy into a completely fraud laden market?

Give your head a shake.



Sat, 11/03/2012 - 15:59 | 2944728 donsluck
donsluck's picture

Fraud in the derivatives marked is addressed through QE3. The shadow inventory will be given time to wind down by the bank regulators. Although you can't ignore it, it's like weather, out of your control and something to consider, but "fairness" doesn't matter to your decision. So you look at the present situation and make your decision, if owning is currently cheaper then renting and you can swing, buy it.

Sat, 11/03/2012 - 16:51 | 2944833 Bay of Pigs
Bay of Pigs's picture

So not only condoning the fraud is acceptable, but actively participating in it is even better?

We're really making progress aren't we? 


Sat, 11/03/2012 - 17:14 | 2944893 MachoMan
MachoMan's picture

It's actually the natural conclusion to our fiscal and monetary policies...  moral hazard.

Sat, 11/03/2012 - 17:39 | 2944939 AgLand
AgLand's picture

A much wiser guy than I, on another blog, once noted it was NOT our job to analyze what WE believe is happening -- but to analyze what those in control of the situation will most probably do to deal with the situation.

Thus, we have a FED attempt to reflate a bubble in housing (or at least to stabilize if).

Patrick specifically says he makes no market forecasts and he is right to do so. For some time people believed the '09 crash was 'the big one' and the market would never recover yet the Fed pumped it up again.

You are dinging me for YOUR beliefs. Frankly they don't matter. All that matters is what those who pull the strings believe and how they will go about making those beliefs come to fruition.

I have no need to give my head a shake. I believe I am mostly well positioned in foreign farmland and precious metals along with some select stox. And i find nothing to disagree with that Patrick says either, though being a landlord is not my bag.

I believe it was Mike Kreiger who said 'there are no markets, only manipulations'. And he was right. I certainly disagree with the fraud and manipulations, but I cannot control them nor can you. However we can play in these cesspools if we know the rules as they are made by those in control.

So shake your own head and look at it all another way and you will be far better off for it.

Sun, 11/04/2012 - 11:54 | 2946034 Bay of Pigs
Bay of Pigs's picture

Cesspool? Now your getting warmer. Waddle in the shit if thats your choice. I wasnt telling people what to do, just pointing out some FACTS, not my OPINIONS.

The FED is going to end up owning a huge amount of bad mortgage debt (540B next year alone). Draw your own conclusions on that going forward.

And no, Kreiger isnt the one who coined that term. that would be Chris Powell of GATA.

Sat, 11/03/2012 - 16:26 | 2944783 DonutBoy
DonutBoy's picture

How can you know that a 2700 page law that no one has read is going to be beneficial for you?  What happens when 30% of the doctors leave the system entirely and take only cash patients?  Health-care is at least 2 trillion a year of GDP.  it's going to be managed by a 2700 page law that Nancy Pelosi is ready for us all to read now?  I find your faith disturbing.

Sat, 11/03/2012 - 17:46 | 2944954 AgLand
AgLand's picture

Someone has reading comprehension issues.

I said 'parts' of it are beneficial to me though I dislike it. In my specific case the issue of pre-existing conditions. I would still much rather NOT have it.

Sat, 11/03/2012 - 21:59 | 2945468 honestann
honestann's picture

Oh, I know.  NO law is beneficial for me.

Sat, 11/03/2012 - 14:15 | 2944522 CoolBeans
CoolBeans's picture

I will never, ever purchase another home ever again.  I refuse to participate in the bankster game of toxic titles and bankster fraud.

Just doing my part to starve that machine.

Sat, 11/03/2012 - 17:14 | 2944806 MachoMan
MachoMan's picture

Either you own it or you're paying someone else's note for them...  not sure how propping up rental prices hurts the inventory on the banks' balance sheets.

If you want to "starve that machine" then, among other things, you might increase the amount of bartering you do, keep money more locally, pay at all local/non-chain stores with cash, cash any checks at the issuing bank, pay all credit cards off each month (for those transactions that you want the merchant to eat 1%+ on the transaction cost), and refrain from investing in financial instruments or participating in retirement accounts.

Realistically, ownership of local real estate is one of the few matters within your control locally...  obviously incentives can change dramatically based upon centralized decision-making (e.g. the home interest deduction), but I'm not sure that taints the entire transaction or spirit of the matter.  Don't cut off your nose to spite your face.

Sat, 11/03/2012 - 14:16 | 2944526 Offthebeach
Offthebeach's picture

Lots of ads on TV for reversed mortgages.

Asset stripping. Financialism. Land for catfood, Depends, windmill generated electric bills,, etc.

Sat, 11/03/2012 - 14:30 | 2944545 tedstr
tedstr's picture

Good piece but don't kid yourselves.  This is a classic dead cat bounce.  If there is any rule to all markets it is the dead cat double bottom.  NO market ever recovers without one.  The only game going on here folks is 1) bailing out the banks from dead paper, and 2) bailing out the fed before their paper becomes dead.  Till thats cleared, cash is king.

Sat, 11/03/2012 - 17:40 | 2944941 disabledvet
disabledvet's picture

Undermining the tax base. Mad rush for "crazy income" just before the underlying asset goes belly up. There will be no Government bailout. IT HAS FAILED.

Sat, 11/03/2012 - 15:12 | 2944624 Piranhanoia
Piranhanoia's picture

Most people live in the city and are poisoned by their environment.  That includes your rental because investors don't give a damn about anything but the lowest price for everything.   They hire the cheapest cleaners, carpet, contractors, etc...    You will get constant  care from exterminators  dusting your living space. Can't rent the place if there are bugs everywhere.  Nuke em.    If you rent, you suffer health effects for it.   If  you share walls and floors, good luck to you.


Sat, 11/03/2012 - 15:52 | 2944716 markar
markar's picture

What  drivel. As in any industry, there are good and bad players. A good realtor makes money by putting his clients' needs first. Unfortunately, many Realtors are either dumb as rocks or unscrupulous. But there is no reason why anyone with half a brain can't ferret out the good ones and utilize them to their own benefit instead of being led around by the nose. Besides, it costs nothing to use an agent to buy and no one is forcing anyone to buy something they don't want or like. The Internet has leveled the playing field such that buyers and sellers can know as much about the inventory and comps as the agents do. And in CA, try navigating around the showing challenges, the paperwork, the liabilities and the disclosures without an agent.

Sat, 11/03/2012 - 16:03 | 2944735 donsluck
donsluck's picture

I hate to be sexist, but my experience has been that the best realtors are male. The women tend to treat house shopping like shoe shopping. Practicality, affordability, quality of construction don't matter. They say it all the time. You need to "fall in love" with the house. Anyone with experience knows that falling in love is not a good place to be to make a serious decision.

Sat, 11/03/2012 - 16:30 | 2944790 MachoMan
MachoMan's picture

In my experience, real estate agents routinely lie about disclosures and, further, encourage their clients to lie about disclosures...  There are also rampant conflicts of interest given the common practice of the seller's agent communicating with and making representations to the buyer.  That said, it's pretty difficult to pin damages on them in a civil suit...  always a he said she said affair, leading to a battle of the sympathetic witnesses.

Sun, 11/04/2012 - 12:15 | 2946069 markar
markar's picture

And you base that on what? Are you a Realtor? Try lying about disclosures in CA as an agent and see how long you keep your license. Real Estate law at least in CA is so full of legal landmines for agents from disclosure to fiduciary responsibility only idiots would not represent their clients openly and honestly--and they don't last long in the business. It's not that hard to find a reputable one to use to your advantage, whether you are buying or selling. It's also a statistical fact that "For Sale by Owner" homes sell for less money than listed ones.

Go ahead. Down arrow me away

Sun, 11/04/2012 - 19:11 | 2946976 Blankenstein
Blankenstein's picture

.  "Don't last long in the business"  


Oh, like Crisp and Cole and the realtors working at their business:


Sat, 11/03/2012 - 18:38 | 2945056 Blankenstein
Blankenstein's picture

Yes, what drivel.


"Besides, it costs nothing to use an agent to buy and no one is forcing anyone to buy something they don't want or like."

Baloney.  The buyer's agent's commission is a percentage of the selling price of the home.  It is in the best interest of the buyer's agent to have a higher selling price, because his commission will therefore be higher.  The buyer's agent does not have your best interest at hand.  

Sat, 11/03/2012 - 16:27 | 2944786 Got_Nukes
Got_Nukes's picture

Every article another popup. I hate this site now. Get rid of the pop up adds on mobiles.

Sat, 11/03/2012 - 23:10 | 2945580 Real Estate Geek
Real Estate Geek's picture

Don't let the door hit you on the ass on your way out.

Sat, 11/03/2012 - 16:31 | 2944792 Benjamin Glutton
Benjamin Glutton's picture sentence in and you totally discredited yourself.


For many, the collapse of the housing bubble was the trigger that began the era of economic slowdown Americans find themselves mired in.


Subtituting credit, stock market and housing bubbles for a previously productive manufacturing base had nothing whatsoever to do with our "mire"? Tell me again why we facilitated an economic boom in "commie" countries while at the same time overspending on a bloated military to defend ourselves from that very 'menace'.

Sat, 11/03/2012 - 16:57 | 2944854 quartshort
quartshort's picture

You are correct, Ben. However, I think he is asking you to view it from the perspective of the consumerist. They partied on HELOCs and couldn't give two shits about where dad went to work everyday for 30 yrs to produce a real good. The house was going to pay their way, forever. Then it didn't.

Sat, 11/03/2012 - 19:15 | 2945153 Benjamin Glutton
Benjamin Glutton's picture

You are a hilarious troll...perhaps you might name the asset bought primarily on margin owned by 60% that has survived a total and sustained liquidity withdrawal and hypothecated CDS attack after being intentionally overinflated.


It didn't was in fact engineered DH.


Take your time genius.

Sun, 11/04/2012 - 13:38 | 2946269 quartshort
quartshort's picture

I'm a troll, huh? Go fuck yourself, dickhead. I know as well as you it was engineered. But to the average automaton they only see the credit rug pulled out from under them, thus my point pin dick.

You are piece of shit w/ a keyboard in mom's basement. A little butt hurt your "investment" didn't go well?

How's the conjecture on your end now? Sorry the cat shit in your sandbox, enjoy the lumps.

Sun, 11/04/2012 - 13:39 | 2946270 quartshort
quartshort's picture

must of clicked twice...?

Sat, 11/03/2012 - 16:47 | 2944826 Got_Nukes
Got_Nukes's picture

My wife is a Realtor and to paint all agents as used car sales men is wrong. She truely enjoys helping people find a home to live in. Is it wrong to expect a commision for driving all over town showing houses? Or coordinating the home inspector, appraiser or dealing with the bank and closing company on behalf of the client.  Never seen any problems with inspectors either. To say they are intentionally not identifying problems is also wrong. All the agent I know are professionals who aren't used car salesmen.  If you're ne to any area, agents are a great help for those who don't know the area or know the market. Do you work for free or do you expect to get paid for your time?

Sat, 11/03/2012 - 21:51 | 2945454 honestann
honestann's picture

Let me guess.
She is a real-estate agent.
YOU are the used car salesman!

Sat, 11/03/2012 - 17:02 | 2944867 Clowns on Acid
Clowns on Acid's picture

Article pretty much covers the obvious. Has the author ever heard of Zilow ?

Sat, 11/03/2012 - 17:15 | 2944897 dondonsurvelo
dondonsurvelo's picture

I bought a house two years ago after selling in 05 and renting for five years.  I found the house online and then called a realtor to close the deal.  In todays age of internet listings, it amazes me that anyone would need a realtor to find a house for them.

Sat, 11/03/2012 - 19:51 | 2945236 XenOrbitalEnginE
XenOrbitalEnginE's picture

Behold, they are forced to admit (Open Secrets dot org)

These salesmen even-hand glad-hand Federal functionaries:

National Assn Realtors: (45% to Democrats, 54% to Republicans) $2,886,331

Real Estate Roundtable (50% to Democrats, 50% to Republicans)    $390,977

Ntl REITS  (45% to Democrats, 55% to Republicans)                       $824,825


And somehow, Maui Land and Pineapple GOT 1,800 from R's and D's.  Some kind of outlier in that kickback.  Maybe they had a loan from someone.

We've been telling this story about an overal air of puffery about realtors for years (and getting funny looks shrugs and duh-so what's.)  I expect this will continue to be ignored until some...lobbying reforms?



Sun, 11/04/2012 - 09:25 | 2945897 Taint Boil
Taint Boil's picture made it to Zero Hedge! Pat is one of the few good guys left.

Sun, 11/04/2012 - 10:20 | 2945936 1eyedman
1eyedman's picture

realtors are useless.   marge simpson as real estate agent was exaclty correct.

Sun, 11/04/2012 - 16:10 | 2946628 rayschmitz
rayschmitz's picture

Most home buyers and sellers do not know what they should before completing a transaction.  Books like The Housing Trap and sites like my own company's can change that.

Sun, 11/04/2012 - 19:13 | 2946982 Blankenstein
Blankenstein's picture

How about just using a real estate attorney instead.

Do NOT follow this link or you will be banned from the site!