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"Housing is only about 40% through its reversion process."

By Massive Housing Inventory   2012 Aug 5, 11:43pm   7,262 views   28 comments   watch (1)   quote      

Gluskin Sheff Chief Economist & Strategist David Rosenburg;

"The deflation in housing is going to continue. Housing is only about 40% through its reversion process. In fact, along with housing, the entire household debt deleveraging process is still in progress and still has a tremendous way to go. This deleveraging cycle will remain a dead-weight drag on the economy for quite a long time."

http://advisoranalyst.com/glablog/tag/capital-preservation/

#housing

Comments 1-28 of 28     Last »

1   HEY YOU   2012 Aug 6, 4:14am     ↑ like   ↓ dislike   quote    

Great link.

"household debt deleveraging", no problem I'll just make minimum payments on my credit card. LOL

2   bubblesitter   2012 Aug 6, 6:06am     ↑ like   ↓ dislike   quote    

Sure,it is going to keep reversing until $ printing machines stops.

3   pazuzu   2012 Aug 6, 8:24am     ↑ like (3)   ↓ dislike   quote    

Yup, this housing crash is nowhere near over regardless of how much mindless quacking is heard.

"It seems very unlikely only five years into such enormous, structural shifts in the US economy that the repricing process is over in housing.

At minimum, I expect the median price of single-family existing homes to revert to the 2000 level of $147,000, with the strong possibility of an overshoot to the $125,000 level. This process will take SEVERAL MORE YEARS."

http://www.peakprosperity.com/blog/79376/when-qe-finally-fails

Buy now, cry later.

4   duckhead   2012 Aug 6, 9:30am     ↑ like (8)   ↓ dislike   quote    

WHY DO YOU PEOPLE EVEN GET UP IN THE MORNING???? Seriously, you’ve got accentuate the positive, eliminate the negative don’t mess with mr. in between!!! Buy as many houses as you can and rent them to doomer loser’s like yourselves and you will be RICH IN NO TIME. BAZOOMBA

5   pazuzu   2012 Aug 7, 8:56am     ↑ like   ↓ dislike   quote    

"The fed can only postpone the impending economic storm a little bit"

http://money.cnn.com/video/news/2012/08/07/n-el-erian-fed-recession.cnnmoney?iid=HP_Highlight

Anyone want to guess what "a little bit" means?

I place my bets on just after the election.

6   JodyChunder   2012 Aug 7, 10:27am     ↑ like (1)   ↓ dislike   quote    

Housing shit the bed, and we still working on gettin all the stains out. Bobby Shiller says it's probably better off if you keep renting from Jody for a spell...

"Recent research by Robert Shiller indicates sounding the all-clear for a housing recovery is premature since the home-price rebound, if that's what it is, doesn't yet have momentum - which is the most powerful driver of home prices. As he notes in today's WSJ, momentum is a modestly weak force in the stock market but the most important driver of the 'feedback loop' in home-price increases (followed by unemployment). "It could be a bottom, I just don't know", he adds pointing to the large overhang of homes that are either in foreclosure of near it - which would push prices down further if they were ever released to the market (wanting to see momentum carry into the Spring to be convinced). Critically, he sees bubbles once again forming in some areas, commenting that investors have been "primed to think speculatively" adding that "There was a change in our mindset. Now we start thinking about the housing market as like the stock market." Our question is, if the increasingly speculative housing market is part of the CPI basket, why then is the stock market not also part of what is now an inflationary basket chock full of QE-sensitive assets."

http://blogs.wsj.com/totalreturn/2012/08/06/is-this-the-end-of-the-housing-bust-not-so-fast-says-shiller/

IOW the same numbuts what are pouring $$ $ into they 401K are the ones buying primary residences.

7   JodyChunder   2012 Aug 7, 10:31am     ↑ like   ↓ dislike   quote    

duckhead says

WHY DO YOU PEOPLE EVEN GET UP IN THE MORNING???? Seriously, you’ve got accentuate the positive, eliminate the negative don’t mess with mr. in between!!! Buy as many houses as you can and rent them to doomer loser’s like yourselves and you will be RICH IN NO TIME. BAZOOMBA

What he said...

8   iwog   2012 Aug 7, 1:30pm     ↑ like (1)   ↓ dislike (3)   quote    

David Losh says

Deleveraging is real. Holding a mortgage, no matter how low the interest, is bad.

I hold a mortgage on a property that earns 120% of my monthly loan payment in rents. The house is 100% financed and I have $0 of my own money invested. In 15 years the home will be owned free and clear and all it will cost me is a little management time.

How exactly is this bad?

(note: 3 years down, 12 more years to go. One of the benefits of ignoring the housing bears in 2009)

9   JodyChunder   2012 Aug 8, 10:41am     ↑ like   ↓ dislike   quote    

David Losh says

I can rent it out to recoup some of the interest I had to pay, or more likely sell it, so I can trade up.

You're not going to be trading up anytime soon junior.

10   HEY YOU   2012 Aug 8, 1:37pm     ↑ like   ↓ dislike   quote    

I can see into the future but I'm not telling anyone about what's about to happen.

11   gbenson   2012 Aug 8, 5:37pm     ↑ like   ↓ dislike   quote    

There is an obvious floor in prices, and much of the low end inventory that's hitting the market is at that floor. ( So they ain't going lower)

When my net income on renting a property out is 10% (I can recoup the purchase price in 10 years after all expenses), then investors will buy and it will hold the price.

By this measure, mid-range and some higher end properties still have a ways to fall, but low end properties are pretty near bottom.

12   JodyChunder   2012 Aug 8, 6:37pm     ↑ like   ↓ dislike   quote    

HEY YOU says

an see into the future but I'm not telling anyone about what's about to happen.

You don't need a crystal ball -- just basic numeracy will do.

13   Dan8267   2012 Aug 9, 12:23am     ↑ like   ↓ dislike   quote    

HEY YOU says

I can see into the future but I'm not telling anyone about what's about to happen.

Spoiler: We all die.

14   iwog   2012 Aug 9, 1:02am     ↑ like   ↓ dislike   quote    

David Losh says

It's not a bad thing. You just have to remember that the property is worth less than you paid for it, and rents will decline.

Wrong and wrong. It's worth more than I paid for it and I've raised rents twice. First $1800, then $1850 and now it earns $1900. I'm almost certain I could get $2000 today because of skyrocketing rents, but I'm in a 2 year lease.

15   errc   2012 Aug 9, 11:55am     ↑ like (1)   ↓ dislike   quote    

why do people think that if you buy a house, and hold on to it long enough, it will magically appreciate in value? That's pretty backwards assed, when you stop and think about that over a long enough stretch of time,,,,,,

16   New Renter   2012 Aug 9, 12:41pm     ↑ like   ↓ dislike   quote    

errc says

Put that house on a postage stamp lot in Atherton or Woodside and it'd STILL get at least a mil

17   errc   2012 Aug 9, 1:04pm     ↑ like   ↓ dislike   quote    

and in ten years, it will certainly be worth ten million!

18   thomaswong.1986   2012 Aug 9, 1:50pm     ↑ like   ↓ dislike   quote    

errc says

why do people think that if you buy a house, and hold on to it long enough, it will magically appreciate in value? That's pretty backwards assed, when you stop and think about that over a long enough stretch of time,,,,,,

Ever since Y2K... that has been the ongoing thinking ! I certainly dont know where they came up with this nonsense.

19   thomaswong.1986   2012 Aug 9, 1:54pm     ↑ like   ↓ dislike   quote    

Call it Crazy says

Don't you know..... everyone buys a house and lives in it for at least 30 years... then they are rich when it's paid off free and clear!!

Bubble prices were about selling their home and early retirement.
Not sure how buyers could fall for paying for both!

Why would anyone want to pay 200-300% vs few years prior.

20   thomaswong.1986   2012 Aug 9, 1:57pm     ↑ like (1)   ↓ dislike   quote    

Call it Crazy says

Isn't that what every realtor tells you to get you to buy??

yes, some crazy thing about "forced savings"... fast forward.. no savings there, but the exact opposite.

hey what happened to 401K,IRA, cash savings accounts, investment , etc...

21   Massive Housing Inventory   2012 Sep 27, 8:56am     ↑ like (3)   ↓ dislike   quote    

Big Sur/Carmel Street Report

Lots of inventory, for sale signs growing like weeds, prices are slipping but no bites because prices are still much much too high. Very few sales. It's going to be a long winter.

22   Bigsby   2012 Sep 27, 12:25pm     ↑ like   ↓ dislike   quote    

Massive Housing Inventory says

Big Sur/Carmel Street Report

Lots of inventory, for sale signs growing like weeds, prices are slipping but no bites because prices are still much much too high. Very few sales. It's going to be a long winter.

Yep, the enormous total of 29 properties listed on Redfin for below $1m for the Carmel, Big Sur and Carmel Valley area. And that includes 11 that are pending. It's a veritable tsunami.

23   Bigsby   2012 Sep 27, 2:10pm     ↑ like   ↓ dislike   quote    

RentalWatch says

Per movoto, there is over 1000 houses for sale in the Carmel area. Given the inflated prices, this should be no surprise.

Strange. I just went to Movoto and typed in 93923 and SFH and got a grand total of 48 results (actually 100 if you untick the 'has photos' box)- with no maximum price. Redfin shows 213 listings doing the same search.

Edit: Just done the search again on Movoto and it's showing 162 listings. Don't know what's up with the site. Still rather a long way from over a 1000 though.

24   Bigsby   2012 Sep 27, 9:47pm     ↑ like   ↓ dislike   quote    

RentalWatch says

You "typed in 93923"????

This is how you're going to misrepresent this one too?

Nice try.

It's called a zip code. Guess where for?

25   Bigsby   2012 Sep 27, 9:52pm     ↑ like   ↓ dislike   quote    

So let me get this straight, your response to being shown to be a liar about the situation in Carmel is to post up a graph that shows you don't know where 2004 is. Well done.

26   37108605   2012 Sep 27, 10:32pm     ↑ like (2)   ↓ dislike (1)   quote    

RentalWatch says

Obfuscate you coward!

That is just another one of their ACTS.

27   37108605   2012 Sep 27, 10:33pm     ↑ like (2)   ↓ dislike (1)   quote    

READ AN LEARN MORONS

It has all happened before, here is the story they don't want you to know about. Let's see the fault found with this FACT of the all too conveniently forgotten REAL ESTATE BOOM AND COLLAPSE OF 1926

http://www.library.hbs.edu/hc/crises/forgotten.html

28   thomaswong.1986   2012 Oct 3, 3:50pm     ↑ like   ↓ dislike   quote    

JodyChunder says

ritically, he sees bubbles once again forming in some areas, commenting that investors have been "primed to think speculatively" adding that "There was a change in our mindset. Now we start thinking about the housing market as like the stock market." Our question is, if the increasingly speculative housing market is part of the CPI basket, why then is the stock market not also part of what is now an inflationary basket chock full of QE-sensitive assets."

Bingo! as usual, Shiller hits it!

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