i believe the narrative was 'who needs credit when the homes cost a steaming pile of fuck all due to population decline'
i.e., he's got nuthin.
Even when assets are very cheap compared to previous values, any surviving--and likely many-times-burned--American bank or S&L questions their going-forward collateral value, particularly in the context of an associated major-city bankruptcy.
Again, where is the Detroit-specific evidence that there is "easy credit" available to purchase Detroit housing, Shadow?
No. The bears were saying it's all about easy credit, and easy credit will always lead to demand exceeding supply, resulting in people bidding up prices.
The bulls were saying, no, while easy credit can increase demand, it won't necessarily cause demand to increase sufficiently so that demand exceeds supply, and therefore it will not always be the case that easy credit causes people to bid up prices (e.g. Japan and Detroit... easy credit but people are not bidding up prices).
Here's what I actually said:
Quote:
I believe that easy access to credit and low interest rates resulted in people bidding more on property and pushing up prices. I believe that most of the time the average region will be in supply/demand equilibrium therefore any increase in credit will increase demand and therefore prices. There are, of course, many factors affecting both supply and demand and regions differ but I believe sustained pressure from easy credit and low interest rates has over, say, the past 15 years been the primary reason we have generally high house prices across most regions.
And here's what Shadow said:
Quote:
Bottom line, unless demand exceeds supply, all the 'easy credit' in the world won't cause people to bid up prices.
Mortgage rates ease in good news for homebuyers, 10:40 AM, July 25, 2013
Average rates on fixed mortgages fell for the second straight week, a welcome sign for homebuyers hoping to lock in lower rates that had spiked earlier this month. Mortgage buyer Freddie Mac says the average on the 30-year loan fell to 4.31%.
The USA is at ZIRP. Easy money is available throughout the country. Rich businessmen from New York to LA can access easy money and go snap up homes in Detroit. Heck, they don't even need the easy money... you can buy Detroit homes for a dollar. But it doesn't matter... all the cheap money in the world won't make people bid up house prices in Detroit. There is very little demand and far too much supply.
Mortgage rates ease in good news for homebuyers, 10:40 AM, July 25, 2013
Average rates on fixed mortgages fell for the second straight week, a welcome sign for homebuyers hoping to lock in lower rates that had spiked earlier this month. Mortgage buyer Freddie Mac says the average on the 30-year loan fell to 4.31%. That's down from 4.37% last week but nearly a full percentage point higher than in early May. The rate reached a two-year high of 4.51% two weeks ago. The average on the 15-year fixed loan declined to 3.39%, down from 3.41% last week
The USA is at ZIRP. Easy money is available throughout the country. Rich businessmen from New York to LA can access easy money and go snap up homes in Detroit. Heck, they don't even need the easy money... you can buy Detroit homes for a dollar. But it doesn't matter... all the cheap money in the world won't make people bid up house prices in Detroit. There is very little demand and far too much supply.
A wonderful mis-take on the question on offer, Shadow!!
Despite the source (the Freep), the article is national in nature and has nothing specifically to do with Detroit, let alone the loan qualification *and* collateral-qualification criteria that are applied to potential purchasers of Detroit city property.
Once again, Shadow, where is the Detroit-specific evidence that there is "easy credit" available to purchase Detroit housing, Shadow?
The amount of money needed to buy a home in Detroit is approximately one dollar.
Are you saying you don't believe there is sufficient easy money on offer to fund a $1 purchase in Detroit?
Go ahead, show us how many Detroit properties are available, right now, today, for $1 US dollar, Shadow.
Now, assuming that you can provide any such list at all, please also highlight those which come with pre-existing loan and/or tax liabilities...?
Do tell.
(You've subsequently upgraded your post from "1 dollar" to "a few hundred dollars." Once again, in how many cases is this net of loan or municipal tax obligations...)
And in any event, what evidence do you have that any bank would provide "easy credit" against such collateral??
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