Thursday, December 27, 2012

The So-Called Housing Rebound

There was such a cheery story on NPR a few minutes ago about the apparent 'housing rebound' -- foreclosures are down! Prices are up!

We're in the money! Come on my honey!

And yet, every now and then -- even in these silly little stories that are practically filler -- a hint of what is really going on comes through. Foreclosures are down and prices are up a tiny bit -- a few percent over last year or the year before that or whatever -- because foreclosures are being delayed temporarily and prices are up because foreclosures put on the market are being bought in bulk by "investors" who bid against one another to snap up valuable assets at pennies on the dollar.

This is a version of how this Perpetual Recession works, and why it persists.

Wealth and assets are being stripped from the working and middle classes at a furious clip, while the leisure class and those above it see their portfolios swell with whatever they can hoover up from the increasingly impoverished masses.

They see it is good and they want this game to go on forever. Talk about "money for nothing," regardless of chicks for free.

These economic activities have been going on for years now, bolstered by government policies that ensure the forced impoverishment of millions every year, people whose assets -- whatever they may have been -- are acquired at fire sale prices by the plutocrats and their hangers-on.

As I've said many times, this Recession doesn't end -- and austerity is imposed on the masses to boot -- for a very simple reason, one that should have been obvious at the outset: some people are getting richer than their wildest dreams because others are in such dire straits and distress.

That's how our predatory economy works.

There is no real rebound in housing, nor is there any end to the recession for most people. In fact for many, the economic situation gets worse year by year, and millions and millions more Americans will be forced into poverty before there is an economic turnaround -- if there ever is one. After so many years of the same old thing, it must be dawning on even the densest American that under the current political and economic regime, there will never be a real recovery. As long as there are enough people getting rich off the continued distress of others, there can't be. As long as there are policies which encourage continued wealth and asset stripping from the working and middle classes, there can't be any real recovery.

With regard to the housing rebound, I have meant to write a bit about the situation in our neck of the woods. There have been a lot of foreclosures in this area over the course of the Perpetual Recession, and some of these properties have gone on the market for literally dimes on the dollar, offered at $10,000 or $15,000 or $20,000. Of course they are snapped up by "investors" at these distressed prices and held for the inevitable time when prices rise. Sometimes they're rented, but often they're kept vacant with a property service caring for them sort of until such time as they can be sold again at a profit.

The two properties on either side of us have been vacant for some time. The homeowners on the east tried to sell but were unsuccessful and as far as I can tell, they went into foreclosure and the bank now has the property back. It's on the market at somewhat less than the lowest price the bank would previously accept on a short sale when the homeowners tried to sell. But it's a HUD auction-type sale now, with the price reduced week by week until the property sells.

The homeowners on the west just disappeared one day, never to return. No one knew where they went or what had happened. The property has been vacant for well over a year. The homeowners had been in the mortgage business, and the house was purchased by them in a distress or tax sale for something like $5,000 about 15 years ago. Since then, they had lived in it periodically and rented it out periodically. After the last tenant left, they moved back in for a while, and then disappeared.

A couple of weeks ago, some men in suits came by to let us know that the homeowners had apparently abandoned the property and it was now in foreclosure. That gave us a clue to what happened: our former neighbors took as much money as they could out of the property and strategically defaulted -- and then disappeared. 

In a way, the neighbors played the lenders' game against them -- and at least for now have won. But so many people have lost. More of them all the time. Our rulers ensure as much.

So all the cheery stories about the Housing Rebound can't amount to more than year-end fluff.

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