first time home buyers back in the market

LoganMohtashami | Feb 14, 2013 12:44 PM ET If you take an economic view of it.. We clearly don`t have the traditional or first time home buyers back in the market as strong as the cash buyers have been these last 2 years. However, DTI capacity even with rates as low as 3.25% last year didn`t have the follow through effect. Mortgage purchase apps dead since mid 2010 Now, going forward with home prices rising due to low inventory it effects the natural downward turn of affordability and with rates slowly going up now... that is going to limit traditional buyers. Pre Crisis and Pre FED QE and the 3 trillion plus they put in.. rates 6%. Don`t have the income expansion going forward Logan Mohtashami

ragnar_d | Feb 14, 2013 12:47 PM ET Logan, Not sure where you are getting your data on OC. Look on Redfin, etc. at recent sales and pending sales. Irvine Co. Is selling new houses as fast as they can build them. Plenty of articles about that. And annecdotaly, in areas where we have rental houses (owned for many years), there are very few for sale signs, and when one goes up it sells quickly (even in a 1M+ tract). We have a RE agent friend that says Newport Coast is as hot as she has ever seen it. Look at recent data, not stuff from a year ago. Ragnar

JusTheAverageJoe | Feb 14, 2013 12:47 PM ET I tend to agree that housing still has a steep hill to climb to get back to normal levels. These banks are forgiving loans, modifying loans, short sales, and anything else they can do in lieu of foreclosure. This doesn`t even address the huge number of HE loans that have just been written off completely. How can banks or investors make money on loans in states where political obstacles are established to protect people who can`t or will not pay. I have refinanced everything I could at the new low rates, this can`t last, and soon loans are going to be a lot more expensive. They have to be, just to protect the downside loss.

LoganMohtashami | Feb 14, 2013 12:51 PM ET This has nothing to do with tight lending standards not allowing buyers into the market place. FHA still has it`s weak core lending guidelines We have a DTI and liquid asset problem here in the US. This is why the Fed`s balance sheet is heading toward north of 4 trillion dollars and they are desperate into inflating assets because all they have left is the wealth effect model because incomes here in the US are very weak hence the high DTI and why over 7.6 Trillion dollars were injected into the economy since the Crisis started. Logan Mohtashami

LoganMohtashami | Feb 14, 2013 01:00 PM ET @ragnar_d I have lived and worked in Irvine California since 1988 in finance Let me point thesis your argument out. 1. We have a RE agent friend that says Newport Coast is as hot as she has ever seen it. ( who cares about Newport Beach and the 1 -30 million dollar homes there, that has nothing to do with the normal economy or general housing market) Historically higher end homes sell better when the stock market is high Nobody cares that the O.C. Housewife sold her home recently for 16 million... 1% crew 2. Inventory.... Is back to 2005 levels, sales are no where close to those levels. We have 1/3 rd the demand as we did Homes are selling like ... what was your term Hot Cakes... because there is nothing on market ... Inventory has collapsed in this country all

Economist_2085 | Feb 14, 2013 01:02 PM ET If you live in California...I feel sorry for you. You are most likely surrounded by stupidity that manifests itself in politicians that have no idea what they are doing. Isn`t is crazy how Californians let people with Social Work degrees decide economic policy?...They don`t know economics! You don`t ask your foot doctor to perform brain surgery on you just because he`s a doctor. California will continue to wallow in it`s own waste as it keeps trekking it`s way towards the cliff of anarchy = when the people who work and get paid get tired of working for those that take from those that "make" and don`t work at all. I was born in California, and I`m sure as hell glad I got the @#$% out of that wasteland as quick as I could! Fruits and nuts are all they have out there!

LoganMohtashami | Feb 14, 2013 01:04 PM ET over ( ANY inventory chart will show that) Once something comes on it gets over bid... We have way too high of a cash buyers market. Just today S.F. market hit it`s all time high for cash buyers Supply and demand imbalances continue. This is why new homes sales are rising % wise faster than existing . Home prices will rise because we have a dysfunctional housing market - too may homes underwater - 5.3 million homes in delinquency and foreclosure process - Housing starts have had their worst 4 year period ever in the history of the US .... not to mention they have a 30% multi family factor in those numbers Logan Mohtashami

tradereye | Feb 14, 2013 02:10 PM ET Reading my newsletter from John Mauldin (google him, tons of great information) and he was discussing CALPERS pensions (aka Calif public pensions). Woefully unfunded to the tune of 80billion. People in the public sector of Calif are retiring at 6-figure incomes and there are 10 people who will draw a million or more. These are lifeguards, fire marshals, etc. Who can then turn around after drawing ONE pension, get a second job in Calif public works for a SECOND pension (WHILE DRAWING THE FIRST). I would bet that the "buyers" in the hot areas of Calif are foreigners who can use the currency exchange rate to their benefit.

LoganMohtashami | Feb 14, 2013 02:52 PM ET @tradereye CA pension .... Criminal activity when they boost their income in the last year to get the payouts to be larger! ..... Wonder why we have 3 BK cities and 12 on negative watch! Not to mention that awful retro active tax on selling your small business where they will come after you for the money and interest! Logan Mohtashami

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first time home buyers back in the market

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