Wednesday Links
Federal Retreat on Bigger Loans Rattles Housing [NY Times] Controversial Takeover of MetroTech BID Approved [NY Post] Rooftop Films Lands a New Role [WSJ] Report: Rents Up in Bed-Stuy [BS Patch] Fewer Geese in Prospect Park [BK Paper] CB1 Supports OSA Concerts [Brooklyn 11211]
Federal Retreat on Bigger Loans Rattles Housing [NY Times]
Controversial Takeover of MetroTech BID Approved [NY Post]
Rooftop Films Lands a New Role [WSJ]
Report: Rents Up in Bed-Stuy [BS Patch]
Fewer Geese in Prospect Park [BK Paper]
CB1 Supports OSA Concerts [Brooklyn 11211]
Dibs, keep dancing, and faster. I think your real problem is that you think they’re talking about your house in Stuyvesant Heights, and your ego is stuck in your zipper. Bedford Stuyvesant is a pretty large area, and apart from nice brownstones near Clinton Hill and the Heights, most houses DO NOT sell for 700-850K. You don’t have to take my word, just check Zillow or Streeteasy or Property Shark.
For every house that sells for 700K, 50 sell under 200K, some well below 200K, which is how the average can be around 160K. The average is going down because prices overall in B-S are going down, especially for distressed properties. Such is life.
DIBS;
Perhaps I’ll ask you another question: why should the federal government underwrite loans for a private sector activity (housing) when other sectors must sell their loans on the free and open market? What is the rationale? As Grand Pa well said, it has caused a mis-allocation of capital that is detrimental to the economy. It is a subsidy of consumption, to the detriment of production.
I understand the point about the need for a housing recovery. As Scott said, any changes would need to be phased in gradually.
“However, any changes need to be gradual to avoid a too much of a shock to the market.”
Agreed.
I’d like to see the federal government get out the housing game, including Fannie/Freddy, FHA, and the mortgage tax deduction.
However, any changes need to be gradual to avoid a too much of a shock to the market.
On the affordable housing issue, I think there are times when it is to the benefit of a local government and community to encourage housing development, but it should be a purely local decision.
benson,,,interest rates are determined by a large number of factors. Whether they raise the limits to $850,000 or drop them to $550,000 has very little bearing.
Affordability is determined by a borrowers income and balance sheet and yes interest rates. That said, a move of 50-60 basis points in interst rates does very little to affect affordability.
“The actual affordability of housing has nothing to do with the fact that the gov’t is underwriting the mortgages. it’s either affordable or not at the sales price.”
DIBS;
Come on!!!! That statement is laughable. You mean to tell me the fact that the government underwites the risk on mortgages has no impact on interest rates, which then has no impact on affordability?!?!!? I’ll have some of what you’re smoking.
The actual affordability of housing has nothing to do with the fact that the gov’t is underwriting the mortgages. it’s either affordable or not at the sales price.
The underwriting of the mortgages facilitates the lending market for them. Like I said above, you can’t have an economic recovery without a housing recovery.
” Propping up one asset class at the expense of other sectors of the economy has been detrimental to the long term health of the US economy.”
Extremely well said.
I agree with Grandpa. The government should get out of the housing market. Stop rent control. Stop the mortgage interest deduction and tax breaks for new development. Stop underwriting mortgages. Stop the “affordable” housing tax breaks. Let the price of housing adjust to the level that people can afford.
I am not advocating for the dismantling of the social safety net. That net should be covered on the income side: EIT, rent vouchers, etc.
Price controls always lead to unintended consequences and distorted markets.