The Politics of Housing
I've been standing in a neighborhood less than a mile from the Ford center here in Dearborn today. I've been doing "live shots" on the Michigan housing market. I wish I could preview what the candidates would say about the current housing recession in our country, but they really haven't said anything, so I don't have a clue what to tell you. I do know this: the neighborhood I have been standing in is what I like to call "America." Friendly folks, living on nice little manicured lawns in nice little brick and shingled houses.
Several came out to watch me do my live shots, and they all seemed to know each other. I'm guessing, given their proximity to the Ford headquarters and the auto plants, that these are the people that built my dad's car. They're probably the people that built your dad's car, I mean the one before the Japanese one he recently bought, or, given the CNBC demographic, the German car you just bought for him, but you get what I'm getting at.
In the one little cul de sac on which I stood, there were three "For Sale" signs. One was a foreclosure sale, and one had a "Price Reduced" hanging off the bottom of the main sign. I looked at these homes, which I am just guessing are probably on the market for about $150,000 at most, and I thought: who's going to buy these?? Who in their right mind would invest in real estate in the backyard of the U.S. auto industry. That got me thinking again (sorry, it's a habit).
Today the folks at Standard and Poors said they do not expect the bulk of all those adjustments in those low-rate ARMS to finish up until 2009. Fist it was this fall, then '08, now suddenly '09. Given that foreclosures lower the prices of the homes surrounding them, not to mention add unnecessary inventory to a completely over-glutted market, I have to wonder exactly what kind of economy these candidates think they're going to be running when they start running the country?
The Democrats have been far more vocal about addressing the housing crisis, not that I agree with any of their scenarios for fixing it so far, but the Republicans so far are stealing clear. Do they think this thing is just going to work itself out? Do they think Wall Street will just absorb the losses and move on to some other sector with the potential to over-inflate? Do they think that all the neighbors standing out there today watching me report are going to buy what they're selling?
I look forward to hearing what the candidates have to say.
Questions? Comments? RealtyCheck@cnbc.com