The Housing Market Bellweather

Homes lost to foreclosure up 6 pct from last year

Aug 12, 3:47 AM (ET)

“LOS ANGELES (AP) – The number of U.S. homes lost to foreclosure surged in July, another sign lenders are moving quicker to take back properties from homeowners behind in payments.

Lenders repossessed 92,858 properties last month, up 9 percent from June and an increase of 6 percent from July 2009, foreclosure listing firm RealtyTrac Inc. said Thursday.”

And, this – along with the grim jobs picture is why the housing market is so stagnant outside of the investor realm. Investors, and a few first-time home buyers are still in the market but being selective – because they can.

In my neighborhood, 20% of the listed homes are listed still above $1,000,000. Strangely some are excellent buys because in the go-go market of the past they would have been much, much higher.

Still, they are not selling – and they are not selling because the rich are now poor but because the rich, like everyone else and possibly MORE than anyone else don’t know what to expect in the future.

That uncertainty is reflected among all of us with the Confidence Level being low. As bad as things are, a Cap and Trade Bill would, as the President has admitted, cause energy prices to “skyrocket.”

That is not what a cautious public, particularly a portion of the public that can hire people wants to hear.

I don’t know that a strong Republican surge in November would cause the business climate to surge, and change the housing market – but it will help. The President has not been able to get through some of his most business damaging agenda, and even if the House and/or Senate do not change hands the President will never again have the political power he had at the end of last year.

He could do himself, and the nation a great service by abandoning the policies right now, since they are policies he can never have anyway. The longer he holds them, the worse the economy and the worse the Democratic Party chances in November.

It is really too late to change the confidence climate this year insofar as housing is concerned. Housing is such a big-ticket item that people do not make quick decisions – and even when they begin to the real estate market is so regionally fragmented that it will not turn quickly.