Realtor cooking

Highly Entertaining: Realtors Suing Other Realtors.

Yep.

Kitchen Linker searches kitchen for a grinding instrument to use on the guild, then a sharp knife to remove the anti-environment mortgage interest tax deduction.

Save the Environment: Repeal the Mortgage Interest Deduction

That's the title of a great Tax Policy Blog post:

Powerful U.S. Rep. John Dingell revealed Tuesday new details of his plan to cut global warming, including adding a 50-cents-a-gallon tax on gasoline and ending the mortgage tax deduction on what he called "McMansions," homes larger than 3,000 square feet.

On the same blog, France rejected a mortgage interest deduction.

No bailout for Wall Street!

Gretchen Morgenson interviewed by Bill Moyers:

BILL MOYERS: But I mean, look what they've been doing. Their past experience is no indication that they will respond to what you're saying.

GRETCHEN MORGENSON: Only if they're held accountable.

BILL MOYERS: By?

GRETCHEN MORGENSON: And if they have to pay the bill that comes a cropper. Let's not make it a bail out where the taxpayer bails out Wall Street, please.

BILL MOYERS: Then Wall Street would be the winner and--

GRETCHEN MORGENSON: Then Wall Street would say, "Fine. I'll go do that again. I'll go throw money at a problem and let it blow up, and I don't mind."

BILL MOYERS: Does this contribute to what you and I both know are-- is growing inequality in the country? The gap between the rich and the poor? The greatest gap since 1929? Is this contributing to that gap?

GRETCHEN MORGENSON: To the degree that Wall Street made an awful, awful lot of money on these securities, yes, it contributes to that gap. To people who work on Wall Street, you saw the enormous bonuses, the enormous payouts to the CEOs of these firms. Absolutely. The mortgage mania contributed to that. The little guy doesn't have the benefit of all the powerful friends in Washington and the powerful friends on Wall Street. The little guy is just trying to be able to retire comfortably and not have to scrimp and worry about money. And he and she have a right to that. And if we're in an ownership society that's ballyhooed around, that should be a benefit. That should be who wins. But unfortunately, the little guy is the guy that's usually the bag holder.

Kitchen Linker may post this ARM reset schedule chart on the kitchen wall, noting that any housing bubble is in part a kitchen bubble, and any housing bust is in part a kitchen blowout.

Both links via Ben's Housing Bubble Blog.

High risk of housing BUST

Kitchen Linker doesn't like writing about the housing bubble, but sometimes the facts are too much. Take this paragraph from the San Jose Mercury News story on a National Association of Realtors survey:

The highest loan-to-value ratios for first-time buyers were in the South, where the median mortgage was 100 percent of the sale price. In the West, the median was 99 percent, in the Midwest 98 percent, and in the East, 96 percent.

By comparison, the typical repeat home buyer nationwide invested a median 16 percent as a down payment to purchase a replacement home -- typically from the proceeds of a prior sale -- and financed the remaining 84 percent.

Kitchen-mates, a price decline over the next year or two is going to put millions of home "owners" under water. Any increase in unemployment is going to send millions to the hills, or rather cheap apartments and parent's homes (think abut that recursively). Result: housing BUST.

Orlando is DEAD

I don't plan to post much if at all about the housing bubblebust but this is too much, from CNN Money, Help! Home for Sale:

"We're planning on starting a family someday," says the 30-year-old Young, who builds simulation software for a defense contractor. "We wanted a bigger home - with a pool."

The new house cost $562,000 so they were really counting on profits from the old place to help. They had paid $167,000 for their current four bedroom, two-and-a-half bath, 2,861 square foot contemporary that they bought new, on the last day of 2002.

Young had improved the place over the years, putting in tile floors, chair rails, crown moldings and other amenities. The house has formal living and dining rooms and Young also installed a lovely Koi pond in the backyard with a rustic Japanese bridge.

Believing that the house would sell itself, Young decided to list it through Flat Rate Realty, a for-sale-by-owner operation that will place a property on the multiple listing service for a fee of $99. He priced it at $402,000.

The only calls he was getting were from realtors, who wanted to act as his agent.

...

They re-priced the house, lowering it to $369,000 and then to $349,000. They've had open houses that nobody attended; run advertisements that elicited no responses; and sent out flyers that were totally ignored.

In all its months on the market, the house has drawn only two lookers.

"One sounded like he was just doing research. He may not have been a legitimate buyer," says Young. And the other couple just walked away.

...

The number of homes on the market in Orange and Seminole Counties has skyrocketed, from 4,473 in July 2005 to 19,827 in July 2006, according to raw data drawn from Mid-Florida Regional Multiple Listing Service Hotsheet reports.

To know the problem is no consolation to the couple, who are increasingly feeling the stress. They have to make a decision soon about whether to go ahead with the purchase and hope they'll sell the old house, or give up the new place and lose their $28,000 deposit.

They are so out $28,000. Why the heck do they want an even bigger house? Four bedrooms and 2,861 square feet is huge. Are they Mormons?