Eco Realty Blog More on the housing "recovery"

This article by Mike Whitney points out that there is no question that prices are rising in some markets in the country (especially where Wall Street investors are snapping up foreclosures) and houses are selling, but it is due to (1) the contrived suppression of supply (banks are holding millions of distressed properties off the market) and (2) the massive stimulation of demand (the Fed purchases $40 billion of mortgage-backed securities every month to keep mortgage rates low), as I explained in my post "Housing recovery?". Prices are not being allowed to find their natural level.***A woman I have a lot of confidence in, Gail Tverberg of the Our Finite World blog, thinks that 2013 will bring the beginning of a permanent recession. But the Federal Reserve and the banks have been so successful in holding any major price deflation at bay (in housing and the stock market), that I don't see them faltering just yet. They seem to have struck upon a great (though cynical) temporary solution---suppressing supply by holding distressed properties off the market to drive up prices. It is without question getting some traction. But you can only hold these distressed properties off the market for so long.