House listings in the Twin Cities up 7.7 percent; sales up 5.3 percent

  • Article by: Jim Buchta , Star Tribune
  • Updated: May 10, 2013 - 11:39 PM

Rising home prices and a rapidly warming market are giving homeowners a reason to sell.

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swmnguyMay. 11, 13 8:19 AM

The market for sales between a seller with significant equity and a fully qualified and approved buyer never really went away in the Twin Cities. We sold our starter home in September of 2009 for 17% over our asking price. That gave us enough more to add to a downpayment to let us buy a house we had considered out of our price range, paying 45% down and keeping the total monthly payment where we wanted/needed it to be. In the fall of 2009.

In a weird way, Federal policy is working. The banks are being paid $85 billion per month (partly in direct purchases of worthless mortgage-backed securities, the other part indirectly in a cycle of bond purchases and exchanges) to put their bad debts on the public tab and pump newly-conjured money onto the asset side of the banks' balance sheets. This is supposedly to allow the banks to lend more freely, but the real purpose is to allow them to continue to keep the 8 million or so vacant homes in America off the market, to constrict supply and drive home prices back up. It also allows the banks to bid up the asset markets.

None of this makes sense until you understand that not only is debt money and money debt, but that debt is actually more valuable and desirable to the Finance industry than money is. There is about 5x more consumer debt in our economy than government debt, and consumers can't print money to pay their own debts. So for the health of the Finance industry, consumers must continue to take on debt, which provides income to the banks, but more importantly can be sold or securitized, to be sold many times over.

What we muppets see in our neighborhoods is bidding wars over the one house that is for sale, but 3 empty houses slowly deteriorating in the Minnesota climate, not for sale and barely being maintained.

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