I LOVE this column from HousingWire. As I said earlier, I think “maybe bad boy” Herman Cain is the only Repub candidate who has said anything remotely intelligent about solving the nation’s housing crisis, which is a major constipator of our economy: housing is 5 or 6% of the GDP. Nationally foreclosures are on their way up, while U.S. home prices fell in nearly three-quarters of metropolitan areas third quarter. National median home prices dropped 4.7%. The housing market is very anemic: median prices for pre-owned sold July-to-September declined when compared with last year in 111 out of 150 metro areas tracked by the National Association of Realtors.
I laud Cain because he acknowledges that Dodd-Frank is a nightmare. A nightmare that has only just begun. The other day, I had the pleasure of hearing my favorite real estate guru, Dr. James Gaines, speak to the Home Builder’s Association of Greater Dallas. It is so fun to be around a (dwindling) bunch of home builders —
“Hey Joe, how much are you paying for metal roofs now?”
“Oh about $350 a foot.”
“Wow, who do you use?”
I always feel like I am getting inside info and I am addicted to the smell of fresh lumber! Anyhoo, Dr. Gaines made his usual stab at spreading common sense: our economy is trying to recover, but cannot because of all the uncertainty. Texas is the only state in the union with job growth. Everyone has quit spending. It’s like we are at a giant standstill. Corporate America is siting on $3 trillion in cash but no one wants to move because no one knows what crazy thing the government might do next.
Like Dodd-Frank. 240 regulations yet to be written by an entity that doesn’t even have a leader because the Senate won’t appoint anybody, says Dr. Gaines. Will the government change the mortage deduction? There has been speculation they may wipe it out completely for second homes — there goes that market.
So Kerry Curry hit it on the nose: they are all pretty much clueless, expect, I think, Cain. I thought I would barf last debate when Michele Bachman got all touchy-feely and went “Super Mom” on us, sympathizing with the Las Vegas foreclosure folks. Last night she said that Fannie Mae and Freddie Mac are destroying housing and “we need to put them back into bankruptcy and get them out of business.” Michele, they are already sort of bankrupt but they are also the only entity loaning money right now for many Americans. Do you want everyone to pay cash for homes like they did in 1915?
Then Newt Gingrich claimed that banks profit more from foreclosures than they do from short sales. This is something I have actually heard, and would love to know more about, the idea being banks repossess the home or property, then they re-sell it. But it’s still hard for me to understand how banks “profit” from millions of foreclosures or short sales.
Ron Paul is a physician and has his home on the market so should not be so clueless: “prices on mortgages are too high, and that’s being done to prop up the banks.” GMAB: interest rates are at their lowest in years, as Dr. Gaines pointed out Tuesday at HBA. He expects them to continue to be low at least through 2013.
Kerry liked former U.S. Ambassador to China Jon Huntsman, who felt the pain in better words than the other candidates:
“Let me just say, on the housing discussion here, lost in all of this debate is the fact that there are people tuning in tonight who are upside down in terms of the financing of their homes. They are feeling real pain. People who probably heard today that they lost a job. These issues are very real. They are complicated. For us to say that there is an easy solution to housing, that’s just not right, and that’s not fair.”
Yes, sounds sympathetic, but a solution? One? Two? The Obama administration has none, and neither do any of these candidates. Except, of course, for Cain, once he stops blabbing about his “9-9-9”. He points out that government policy, which got us into to this mess in the first place, sure isn’t getting us out.
P.S: How deft is Rick Perry? While he had that brain fart about which government agency he would eliminate, why didn’t he jump in to talk about what Texas has done to remain one of the few housing bright spots in the nation? Surely it’s our economy, employment stats, lack of regulations, but for one: the Texas legislature passed the RIGHT sort of regulastion when it limited home owners to borrowing 80% loan to value on their homes with HELOCs.