Do pardon the sarcasm in the title, but here's the most important news, IMHO, in the Housing sector:
Last summer, I noticed that the Government had issued an RFP (Request for Proposals) on how to deal with the Shadow Inventory. In short, the Feds seriously started dumping foreclosures onto the market, as some have noticed. However, they are simply overwhelmed, and just cannot deal with the sheer number of houses that they have.
So they asked the hedge funds, on how to deal with batches of houses, at $50-100 Million a bundle. Bundling up these and selling them off, just like the bogus MBS's which got us into this mess.
The idea here is that the Hedge Funds will snap these up, turn them into Rentals, or maybe even sell them off.
"In our opinion, this is the most important housing-related program under consideration"
Gosh, what could possibly go wrong here? Let's see, you can kiss the rent/buy ratio good-bye, which in turn will seriously impact housing prices. And remember those "savvy investors" who were snapping up foreclosures at auctions a couple of years ago, and turning them into rentals? It was a positive frenzy then. Those "investments" are about to take a serious hit.
One thing no one is considering is the people who rent these places. Who the heck wants a hedge fund as a landlord? Those folks will ignore any complaints. I foresee a lot of problems being reported by people who are attracted by the cheap rent.
The only positive thing that I see here is that there's some positive movement on the Shadow Inventory. But get this quote:
"The hope is that a larger unified program is established that could move the needle a year or two down the road.". Translation: Kick the Can down the road a year or two.
We shall see about that one.