All week we have seen pundits and oracles talk about the imminent doom of Fannie Mae and Freddie Mac (I’ve written before about who they are and what they do, and why it’s a little problematic). Jim Cramer has been saying to get out of Fannie and Freddie’s stock for a year.  Warren Buffet told us about his concerns on Monday (scroll down this page for the link). Also Monday, some investors speculated about the impact that “The imminent failure of both Freddie Mac and Fannie Mae” would have on rental housing — which even at record homeownership levels represent over 30% of housing in America.

Now, of course, we aren’t talking about them collapsing.  We’re talking about a massive bailout. I did hear someone on CNBC talk about them merging, but that has to be the dumbest thing I’ve heard all week:  how exactly are you going to make one healthy company out of two companies said to be failing, ailing, and ready to collapse?

Robert Reich used the rumors of bailout to talk about “socialized capitalism” — keep the profit for the executives, but spread the losses across the taxpayers like so much fertilizer.  Business Week is asking just how much this bailout is going to cost, both up front and as impact on the economy.

In the medium to long term, there will be no normalization of the real estate markets on a national level until we all know exactly what is up with Fannie Mae and Freddie Mac, and what is going to be done to make the market for mortgage backed securities stable.

On a local level, however, there are signs of life.  According to our in-house research team, there are 16,408 single family homes available and year-to-date sales of 14,635.  That’s closings and keys changing hands, not purchase offers.  Over 550 of those homes sold for less than $80 per square foot — you can’t build it for that price. An issue of concern is that there is only a 2.23 month supply of rental housing while our population continues to grow every month.  Part of the reason it’s so low is that banks don’t rent out the REO properties they own;  thousands of homes that could be occupied are vacant, and current mortgage restrictions make it difficult to purchase investment property.  If you happen to have the cash for a big downpayment, this really seems like a great time to buy a rent house in Vegas.

And one last item on renting a house in Vegas:  be careful when renting a home from an Elvis impersonator.  The FBI is looking for him.

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