Atlanta Forward readers responded to our recent column about the real estate boom taking shape in the region. Here are some select comments from our blog under the writers’ chosen screen names.
Mr. Liberty: As with every financial bubble we have faced since 1913, the original bubble was created and financed by the Federal Reserve and its easy-money policies. Interest rates were lowered below any reasonable market-driven rate; laws combined with extortion from activist groups like Acorn ensured that plenty of money would be lent to far-less-than-qualified folks. Banks certainly loved it all around. They got their loan fees and plenty of money by "servicing" loans they sold to Fannie and Freddie. Builders loved it. They built homes that nobody could really afford if we had a free market and honest interest rates. Everyone loved how much money the new housing "boom" (bubble) was generating, either from home purchases and the accompanying costs or the easy-money transformation of homes into personal ATM machines for the gullible and greedy. The purchase of virtually every loan by Fannie and Freddie guaranteed that taxpayers would be on the hook for all these future losses while banks and everyone else made out like bandits. Uncertainty in the market and the depressed price of homes — combined with glut from foreclosures — is leading plenty of financial fund managers and others to take the cash they are sitting on and buy up these cheap properties for renting, as the supply of renters is now being fueled by former homeowners who have faced foreclosure and eviction. These buyers are paying cash for properties and outbidding conscientious savers who held onto their money as the market collapsed and are now hoping to get into their first home in this depressed market. This, in turn, is once again artificially inflating home prices and once again creating an unsustainable bubble.
SAWB: What we need are programs that educate people so they can learn to budget and save money for homeownership. Also, we need to assure that homebuyers understand the true cost of homeownership and the importance of continuing to save for unexpected costs. What we do not need is a lowering of standards that would allow unqualified people to buy homes.
Mangler: A "for sale" sign in the yard can attract unwanted activity in a vacant home, making it obvious from just riding or walking by that the house may be vacant. Could that be why so many homes that are for sale in certain neighborhoods lack a prominent sign? People use tools such as Zillow or Google maps to tour neighborhoods without ever having to set foot in them today. You also have to look at how the prices dropped or recovered in some neighborhoods versus others. The pricing held steadier and rebounded swifter in high-priced communities that also tend to be newer than it did in low-priced communities that tend to be older. The banks were putting more effort into maintaining some houses over others — the ones that were going to sell instead of the ones that weren't.
