Housing market going to tank?

[Greenman]

Originally posted by: LegendKiller
http://www.nytimes.com/imagepages/2006/08/26/weekinreview/27leon_graph2.html

the guy who crated that graph, shiller, wrote Irrational Exuberance, from which arthur levitt coined the term before the .bomb.

housing is tanking and will continue to do so for a another year or so. I project a decline of about another 15-20%, which will put us into a full blown recession. I then predict housing will stay nearly flat for another 5-7 years. adjusted for inflation, housing will decline about 40% from the highest. keep in mind that price declines also mean no inflation increase, eroding real value. I also predict that rates increase significntly due to increased risk in the market and a pullback from the largest mbs/whole-loan purchasers.

this sucker isn't even half way into the decline.

Lots of predictions, not many facts. Here is my prediction.
If the market drops another 20% we will see a full blown depression. Millions of creatively financed homes will go into foreclosure, and the lending industry will take a hit of Biblical proportions. Long before that happens, the Fed will cut interest rates to shore up the Banks, with cheap money and lower prices, the market will rebound.

Edit: Thats all juat a WAG, which makes it just about as good as what all the experts say. For every one that say's the end is near, there is another one that says were all about to get rich.

 

[CasioTech]

Originally posted by: JS80
"continue to collapse"

Since when did this "collapse" begin?

I own two properties in miami. The prices have gone down, but are still up what they were from 2 years ago... BUT... There are not that many buyers. Hardly any. The turnaround time for my area is a condo selling every few months, vs. every few weeks. That's the problem. Another terrorist attack would drop interest in half, like in 9/11

 

[bennylong]

I wish the price of RE in San Francisco and Los Angeles would go down.

Prices are still going up. $500k for a crappy one bedroom condo with a $500 a month assocation fee in San Francisco.

 

[SarcasticDwarf]

I am somewhat concerned about the decline (I will not be purchasing a home for at least four years, so it does help me to an extent), but I think what we see 20 years from now will be interesting. Most homes built within the last five or so years were built out of the absolute cheapest materials. Twenty years from now I would expect that many of them will be in extremely poor condition. Add in the huge number of homes built during this time and you have a problem.

 

[LegendKiller]

this is one thing people get confused on. the fed only prices risk free rates. defaults, other risks, cost of funds, and cost of servicing debt is what matters. if those other components, especially defaults go up, then the cost of mortgages go up. a 1% increase in defaults needs a greater than 1% decrease in the risk free rate. a 3% increase, or a 50% over current, would require the fed to give away money for nothing. that didn't help japan much and hurt them a lot as a deflation environment set in.

the only way to get out of this bubble is to fall, a lot, and then stay flat for a long time

Originally posted by: Greenman

Originally posted by: LegendKiller
http://www.nytimes.com/imagepages/2006/08/26/weekinreview/27leon_graph2.html

the guy who crated that graph, shiller, wrote Irrational Exuberance, from which arthur levitt coined the term before the .bomb.

housing is tanking and will continue to do so for a another year or so. I project a decline of about another 15-20%, which will put us into a full blown recession. I then predict housing will stay nearly flat for another 5-7 years. adjusted for inflation, housing will decline about 40% from the highest. keep in mind that price declines also mean no inflation increase, eroding real value. I also predict that rates increase significntly due to increased risk in the market and a pullback from the largest mbs/whole-loan purchasers.

this sucker isn't even half way into the decline.

Lots of predictions, not many facts. Here is my prediction.
If the market drops another 20% we will see a full blown depression. Millions of creatively financed homes will go into foreclosure, and the lending industry will take a hit of Biblical proportions. Long before that happens, the Fed will cut interest rates to shore up the Banks, with cheap money and lower prices, the market will rebound.

Edit: Thats all juat a WAG, which makes it just about as good as what all the experts say. For every one that say's the end is near, there is another one that says were all about to get rich.

 

[Rage187]

far from it, the south is booming and posting +6% numbers

the west on the other side may take a 15% beating and parts of Florida.

 

[LS20]

so , does this mean i should wait until the end of the year to buy a foreclosed home on the cheap, with cheap rates
OR
keep renting for few more years, move into city of final destination, then buy

 

[tfinch2]

Hopefully it will crash all the way into the ground because I will be entering the housing market in the next few years.

 

[dullard]

Is the no-downpayment loan going to go the way of the Dodo? Is this just a fluke? Or is this a sign of things to come? Does anyone in the business have an idea?

If the banks stop the flood of people coming to the market, that'll just be one more downward pressure on the housing market.

 

[dullard]

Originally posted by: Rage187
far from it, the south is booming and posting +6% numbers

the west on the other side may take a 15% beating and parts of Florida.

Define your numbers please and list a source. +6% of what? 6% higher prices? 6% more homes unsold? 6% more fiber in a bowl of Total?

Scroll to the bottom. Latest home prices, South -3.7%. And I forget where, but I saw some data showing the South is going to get hit harder than the rest of the country.

 

[Vette73]

Bad news for housing market.

 

[ponyo]

I'm looking to purchase a vacation beach condo along the Florida gulf cost near Pensacola, Fl and the average asking price on 2 bedroom condos seem to have dropped about 15% since last summer. Units that used to list for in the high 500s are now listing for mid to upper 400s.

I'll probably pull the trigger if I can catch a good deal sometime next year. Until then I'm just going to keep an eye on the market.

 

[Rage187]

Originally posted by: dullard

Originally posted by: Rage187
far from it, the south is booming and posting +6% numbers

the west on the other side may take a 15% beating and parts of Florida.

Define your numbers please and list a source. +6% of what? 6% higher prices? 6% more homes unsold? 6% more fiber in a bowl of Total?

Scroll to the bottom. Latest home prices, South -3.7%. And I forget where, but I saw some data showing the South is going to get hit harder than the rest of the country.

Same source, thats why I said parts of FL were going to get hammered.

 

[Squisher]

It's hard for us here in Detroit to not think our misery is nation wide.

Houses are down 5 to 10% here.

 

[bennylong]

Originally posted by: Squisher
It's hard for us here in Detroit to not think our misery is nation wide.

Houses are down 5 to 10% here.

Well,ummmm,it is Detroit...

 

[dmcowen674]

Originally posted by: LS20
Ive heard a few people project that the housing market will continue to collapse, rates will drop down to 4, etc etc etc

Housing market will continue to crash but don't expect rates to fall.

The rich are done playing that game for a while.

 

[theGlove]

anybody want to buy my 5bdrm 2536sq ft house? 380k

 

[b0mbrman]

Originally posted by: sm8000

Originally posted by: Krazy4Real
Is JS80 the new and improved version of LS20?

They're the next generation sedans from Infiniti.

Ah, it's good to see Infiniti's moving away from the old naming convention which produced cars like the sm8000

 

[shortspanishguy]

Damn subprime lenders falling like flies is hurting my business.

 

[Slew Foot]

Ahh time to post my favorite website http://flippersintrouble.blogspot.com/

Prices are down 15-25% in the CA central valley, and still falling.

 

[Squisher]

Originally posted by: bennylong

Originally posted by: Squisher
It's hard for us here in Detroit to not think our misery is nation wide.

Houses are down 5 to 10% here.

Well,ummmm,it is Detroit...

I use that word "Detroit" loosely. Detroit is smallish city with a very large suburban metro area.

 

[ponyo]

I was listening to Clark Howard recently and he talked about the upcoming opportunities in the slowing housing market. He's going to target the previously red hot areas that will suffer the sharpest decline and focus on the condo market since that got overheated the most. He basically said at most you shouldn't pay more than 70% of the previous year sales value for the units. So applying his formula, I still have to wait for at least another 15% drop in the Florida beach condo market before I start looking for deals.

 

[KarmaPolice]

Originally posted by: Kwaipie

Originally posted by: smack Down

Originally posted by: KarmaPolice
I don't see the arguement in the housing decline. Sure there might be a decrease in value for a small bit but for how long? If you pick the right places to buy I don't see how its a bad investment..they cant great more land and the population should only grow(except if there is a nuclear holocaust or something). My parents bought a house next to a college...easy money.

There is enough land in texas alone so that every person in the US can have a half acre of land. The US is not running out of land.

One problem.

1. Texas

I've actually been sitting on the fence about purchasing my first house, I'm going to push it until next summer. Mortgage defaults are just getting started.

yeah no one is saying there isnt a lot of land in the US...look at the middle of the country and you will find a lot.....its finding land in places people WANT to live in.

 

[LegendKiller]

Originally posted by: Naustica
I was listening to Clark Howard recently and he talked about the upcoming opportunities in the slowing housing market. He's going to target the previously red hot areas that will suffer the sharpest decline and focus on the condo market since that got overheated the most. He basically said at most you shouldn't pay more than 70% of the previous year sales value for the units. So applying his formula, I still have to wait for at least another 15% drop in the Florida beach condo market before I start looking for deals.

I would expect that to be about right, maybe a tad bit high. But don't expect your new place to appreciate for another 5-7 years. Essentially, houses have to be worth a little bit more than half what they are worth now in order to regress to the mean.

 

[BUTCH1]

Originally posted by: Slew Foot
Ahh time to post my favorite website http://flippersintrouble.blogspot.com/

Prices are down 15-25% in the CA central valley, and still falling.

Wow, talk about a beating...it's like a game of musical chairs, if you don't get out at
the right time your screwed...