We can’t take credit for this idea — Scott Van Voorhis over at the Real Estate Now blog actually wrote about this earlier this week. The idea is that there’s positive news coming from the National Home Builders Association annual meeting in Orlando … and no one is really buying it. Maybe it’s because everyone is expecting 2011 to be the highwater mark for foreclosures. Just remember, Boston real estate is a different breed. Add your own pinch of salt to all national real estate news.

Click charts to enlarge

The quotes below are from a review of a new book by Raghuram Rajan, former chief economist at the International Monetary Fund, called “Fault Lines: How Hidden Fractures Still Threaten the World Economy.” A sample:

The credit market—at least as regards to housing—was distorted by government policy, not by a sudden and mysterious escalation in “greed.” The trends that shook the world economy came out of Fannie Mae and Freddie Mac, out of the Federal Housing Administration, and out of their “regulator,” the U.S. Department of Housing and Urban Development.

By 2000, HUD required that low-income loans make up 50 percent of Fannie and Freddie’s portfolios. Out of “compassionate conservatism,” perhaps, the Bush administration raised that mandate to 56 percent. Rajan cites Fannie Mae’s former chief credit officer, Edward Pinto, who notes that, by 2008, “the FHA and various other government programs were exposed to about $2.7 trillion in subprime and Alt-A loans, approximately 59 percent of total loans to these categories.” Peter Wallison of the American Enterprise Institute found that government-mandated loans accounted for two-thirds of “junk mortgages.”

Some might find Raghuram Rajan’s argument very compelling, but it also contradicts economist Paul Krugman’s constant assertion that Fannie and Freddie (and our beloved Barney Frank) had absolutely nothing to do with the real estate boom and bust.

What are your thoughts?

Why did this woman pay $500,000 for a 2-week rental?

Excerpts from the New York Post:

…she’s spending a record-breaking $500,000 for a two-week summer rental in the Hamptons, but not just to go to the beach and shop at tony boutiques — she’s hoping to land the love of her life.

“The dating pool is much better here than in Florida!” Cheryl Mercuris, a 40-something divorcée from Tampa, told The Post yesterday of her decision to rent a Bridgehampton estate for a staggering $1,488 an hour.

File Under: Hubby-huntress

The Wall Street Journal has a news article on how Detroit wrecking crews are preparing to tear down the boyhood home of one-time presidential candidate and former Massachusetts Gov. Mitt Romney. Detroit is losing a small piece of its history. But the project is part of a demolition effort that is just now gaining momentum and could help define the city’s future.

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