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George Mason University Finance Professor Anthony Sanders says the housing market won’t have a vibrant recovery.
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Covering -- the past ten years have been a lost decade for US homeowners.
Take a look at the median price of a single family home it's where it was back in 2003.
What does this say about that housing recovery we want to bring in Anthony Sanders finance professor George Mason University.
And want to point out for our viewers used to be the director and head of asset backed and mortgage backed securities research at Deutsche Bank here in New York City.
People like prices are stuck how can we call this recovery.
Well we can't really calls the recovery yet what we're saying as an investor recovery not a traditional home -- recovery.
So -- investors whether they be Canadian or Chinese south Americans -- you know coming in to -- California.
And buying up properties should not be incurred -- eventually is they remove inventory -- prices following go up.
Well the good news is in the answers yes there -- the -- for two different types of properties the foreclosed properties are being pet heavily.
On the one hand but this the some of the top tier properties like and San Francisco.
LA San Diego you're being bought up by Chinese -- so it's kind of -- but it -- investors lot of cash.
Lot of FHA.
But not really the love that we used to see from the traditional homeowner.
So the conventional wisdom across the country is that we've we've bottomed in housing and we're on the way up and they call -- a recovery.
But if again it just gets down to the price if I bought a home in 2003.
I'm out this is not a recovery.
Well.
There's a -- out there -- showing that the the discounts on foreclosures are back to about 2003.
And 2004 levels which means the markets normalize -- on the foreclosure front.
What that means is is that the cash investors coming in to the foreclosure market.
Are gonna start -- slowing down if -- slowdown.
There we're gonna filled back up with a traditional homeowners and I think the answer that may be no.
Well and when you say traditional homeowners I mean the people who propel the housing market the traditional people who as we talked about the beginning of this program.
Have less money to spend because of payroll tax increases and are looking at an economy.
That could be.
Stalling.
Well even -- even worse than that if you look at a chart of wages and salaries controlled by GDP or debt.
Since 1970.
And comes -- -- been falling like this.
-- economy's not getting any better it's actually getting worse over time.
Even it even -- you Wall Street likes the highlight the the flash stock market up 3% order of the headliners.
Underlying economy -- -- not getting any better so I think that's -- that's not good.
It's an annual also noted -- machine article.
-- on the web on the fact that despite the Federal Reserve's attempts to help the housing market interest rates actually going up.
That's right the whole life.
Did between QE3 treasury purchases and agency mortgage backed security Fannie Freddie and Ginnie Mae FHA loans and via.
Despite all their their whole -- -- -- -- purchasing these securities mortgage rates are going up with the purchases.
Things are working the way they had hoped.
Things are working the way they would help when when is that ever not been the case with Washington -- I think I thought.
Professor Anthony Sanders -- George Mason University I apologize for cutting you short at this moment but we have to let you go but thank you for giving us a new perspective on --
