On Monday January 9, 2012, Louis Cammarosano, General Manager of HomeGain, was a guest on the Real Estate 360 radio show on The Big Talker 1580 AM, hosted by Ryan Sloper.
Listen to the show.
Part 1 (14:56)
Ryan and Louis offer their predictions for 2012 on the general economy, real estate market, interest rates, the presidential election, the price of gold oil and silver and foreclosures. Louis notes that the beginning of the year will be a continuation of low interest rates, working off inventory and a tepid market but predicts a financial shock at some point in 2012 perhaps based on a European debt crisis or something in the US.
Louis notes that there is no way to solve the housing crisis or the general sovereign debt crisis other than to allow the debt to be liquidated, but notes that the central banks are not willing to allow it.
Ryan notes of a new tax on mortgages that helps Fannie Mae and Freddie Mac which Louis characterizes as a back door bailout of these entities.
Louis notes that many home buyers are holding off on purchasing a home because they think interest rates might go lower or that they will stay low for a long time or that home prices will fall further. Louis notes that more likely rents will rise and that it makes sense to get a long term low interest rate to protect against the rise in the real cost of shelter.
Louis notes that if interest rate rose it would be a disaster for the US government as it would make it even more difficult for the US to pay off the interest. Louis notes that the Fed’s operation twist is intended to keep long term interest rates down. Louis notes that institutional investors purchase US government bonds for their perceived safety. Louis notes that the US is actually printing LESS physical currency as the cost of paper and its components (cotton and ink) are getting more expensive.
Part 2 (12:10)
Louis and Ryan discuss the employment situation. Ryan predicts a worsening employment market.
Louis notes that the employment rate does not include those that have stopped looking for jobs and notes that no president has ever not been reelected if the unemployment trend is improving. Louis quotes Mark Twain re three types of lies “lie, damned lies and statistics”. Louis notes how inflation statistics can be manipulated using hedonics.
Louis also notes that productivity numbers can also be manipulated. Louis notes that the strong DC employment numbers are largely based on Federal spending and government jobs. Louis notes if that if Federal spending gets cut it could have an impact on the DC market.
Louis notes that only Ron Paul is talking about cutting Federal spending. Louis notes that 401K plans have limited options. Ryan says he would invest in gold, silver and real estate.
Louis notes that 401k plans have choices that generally under perform the market. Louis notes that gold and silver are vastly under owned and not generally offered in most 401k plans. Louis points to these factors as reasons that gold and silver are not in bubble.
Part 3 (12:14)
Louis and Ryan discuss the direction of gold and silver prices. Louis notes the downsides of owning gold and silver including storage costs and the potential of government putting a sur tax on gold and silver profits.
Louis predicts that the prices of gold and silver should go higher absent of market manipulation. Louis notes that the central banks of an interest in keeping the price of both metals low. Louis notes that both markets are thinly traded. Louis notes that the physical market is fairly robust. Louis notes that since silver hit its high in 1980 there has developed an international market which should help prices rise.
Louis notes that there has been a recent dollar rally in the past six months largely because of the problems in Europe. Louis notes that it may make sense to take advantage of a long term artificially low mortgage interest rate. Louis notes that just because it is inevitable that interest rates will rise, doesn’t mean that its imminent.
Ryan notes that according to Realty Trac one in three homes are underwater.Louis notes that if the government got into the rental market it would be a disaster. Louis notes that foreclosed homes used to be undesirable options for potential home buyers. Louis notes that according to the recent unreleased HomeGain home ownership satisfaction survey that satisfaction rates among home owners who bought in foreclosure were more satisfied than those who bought non foreclosed homes
Part 4 (10:53)
Ryan notes that in his experience that foreclosures are popular among potential home buyers. Louis notes that short sales make more sense for the bank and seller. Louis notes that banks however don’t have an incentive to do them due to accounting rules.
Ryan predicts an increase in short sales in 2012. Ryan asks whether there will be more government program in 2012. Louis responds of course there will be but that they will be ineffective. If you can’t get a loan modification, you are in a short sale situation on the way to foreclosure.
Louis notes that it seems that banks are less interest in having real money than they are in making their accounts look good. Louis notes the problem with any subsidy or bail out is that the government is favoring one entity over another. Louis talks about the real estate information available on HomeGain.com.
Listen to other Real Estate Radio shows with Louis Cammarosano
Listen to the Real Estate Radio show of November 14, 2011
Listen to the Real Estate Radio show of November 7, 2011
Listen to the Real Estate Radio show of October 31, 2011
Listen to the Real Estate Radio show of October 24, 2011
Listen to the Real Estate Radio show of October 3, 2011
Listen to the Real Estate Radio show of September 26, 2011
Listen to the Real Estate Radio show of August 8, 2011
Listen to the Real Estate Radio show of July 25, 2011
Listen to the Real Estate Radio show of July 11, 2011
Listen to the Real Estate Radio show of June 27, 2011
Listen to the Real Estate Radio show of June 20, 2011
Listen to the Real Estate Radio show of May 23, 2011
Listen to the Real Estate Radio show of May 16, 2011
Listen to the Real Estate Radio show of May 9, 2011
Listen to the Real Estate Radio show of May 2, 2011
Listen to the Real Estate Radio show of April 25, 2011
Listen to the Real Estate Radio show of April 18, 2011
Listen to the Real Estate Radio show of April 11, 2011
Listen to the Real Estate Radio show of March 21, 2011
Listen to the Real Estate Radio show of March 14, 2011
Listen to the Real Estate Radio show of February 28, 2011
Listen to the Real Estate Radio show of January 24, 2011
Listen to the Real Estate Radio show of November 29, 2010
Real estate radio interviews also available on Youtube
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About Ryan Sloper
As a highly motivated mortgage consultant, with more than nine years of mortgage lending experience, Ryan Sloper has acquired a solid understanding of the local and national real estate markets. Ryan has been investing in residential and commercial real estate for the last 5 years, where he has first hand knowledge of what it takes to be a successful real estate investor. Ryan also hosts a weekly radio show, Real Estate Radio, which airs every Monday on 1580 AM in the Washington, DC Metro Area. Real Estate Radio also streams live nationally @ http://whfs.cbslocal.com/shows/real-estate-radio-with-ryan-sloper/