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Joining me now is professor of real estate finance -- George Mason University Anthony Sanders and professor Ian is -- what Rick Sheridan had to say and he.
-- I agree with virtually everything Rick said I think I grew among that even the FHA issues.
One thing I want to point out -- I think Rick sort of hit and that is that this is really more of an investor driven recovery and cash only recovery.
Credit still very tight.
So the average household that crew what was in the boom and the two thousand's.
This -- -- them.
This is a lot of foreclosed properties going for sale -- even on the new housing side.
This is a very thinly.
Yeah and that's that's why I guess I'm still I'm very cautious about it I I've seen.
I don't have to charge and for me but if you go back -- memory.
We had false starts in 200920102011.
Here we are again so -- go well I've seen this story before.
Well Tom if you look if you look at the charts what you'll see is it almost looks like since 2009.
It almost looks like a big deal waves in the ocean.
It's the summer -- -- summer and late -- and fall.
Housing market booms and then kind of settles down over the winter months and starts up again a Case Shiller Index looks like -- It's that with a business that's very that's not atypical that's very typical historically.
And we're we're entering into the -- -- months.
However that you see pending home sales today -- to the highest point since 2000 and -- Yeah -- -- and out you know that goes back to the -- numbers I used to take yes pretty important precursors of the closing sales.
Except for lately professor you can't even trust those because of the fact that so many deals fall apart.
From the time put somebody puts in an offer a contract is agreed to they go to the lender in the lenders as get out of here or the appraiser kills the deal.
Well that's correct contract -- -- talking to somebody who said -- bit.
They've been delayed so long may have to put up another 500 dollars for an appraisal -- citizen and a ridiculous price and it's been ridiculous ever since the housing bubble.
But having said that.
It again the issue -- I agree with you completely -- not all these pending home sales will not go through a lot of double -- parts -- because they can't get the financing.
The appraisal won't come through correctly.
It's a lot different condition so again I would -- discount that's somewhat.
But it but it goes back I think you made a very important point I had a caller to my radio show from Miami.
Say the exact same thing you said is that -- trying to buy a home we can't buy a home because -- there's.
International buyers coming -- to Miami and also just all cash investors there's even some of the big hedge funds your New York are going out and buying.
Thousands of homes but these are are.
Lower priced homes that they can turn into rentals.
That's correct this is not really occurring at the top and this is mostly mid tier and lower end homes.
Even Beazer Homes is getting in there they've got a real estate investment trust this going after -- is buying foreclosed properties and turning human -- So -- this competition.
For the for the single -- home.
-- by a -- households.
Because their competing with everybody right now -- -- -- of foreign investors are huge in the market.
But that did see this is departed.
That's not come back we we the American dream became the American scream.
When we pushed housing so hard -- had a heart attack.
So go -- the 2000 to -- a huge bubble that burst and I'm still got financial system.
We're kind of the take -- financial system but it was not come back is that traditional American household.
That's been replaced by investors foreign investors.
Yeah China and so yeah so that's why I'm Fawcett about this I think because it's it it's still doesn't feel right to me but.
That the numbers are starting to look good but still listen feel right one last question professor QE3.
-- said we're gonna go out there by forty billion dollars worth of mortgage backed securities a month what's that doing.
Again -- hearken back what you said it's doing very little for the households the United States you look at mortgage purchase applications.
That look like it's looks like a mill pond that the Titanic went -- -- -- flat.
It's not stimulating purchases by households the United States.
It's stimulating big corporations.
And foreign investors if they get the money.
To go through and by this it should -- was not -- -- stimulating the American council spells I thought the intent that's not work it.
Professor Anthony Sanders George Mason thank you so much.
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