patrick.net

Typical housing recovery article

Reports that home sales down slightly from prior month but fails to mentions lowest homes sales in 19 months

http://www.nasdaq.com/article/us-existinghome-sales-fall-slightly-in-february-20140320-00649

Who will buy?

Gay Trillionaire Chinidians who shit gold and eat caviar off the asshole of their gay lover.

Higher interest rates will prompt banks to lend again perhaps creating some demand. They will make adjustable rate mortgages popular again

Call it Crazy says

A lot of that was drummed into their heads by their parents. A big piece of the blame rests on the parents. Many of these kids got degrees in useless majors, and now are wondering why they can't find work.

It worked for them and there were loan guarantees and everyone was doing it

Hard for parents to admit they made a mistake so they "live with them"!

Call it Crazy says

After that the young people will be the ones who set about to rearrange things for the better.

It will be in their hands.... (that's a scary thought)

I think millennials are no better or worse than any other generation. They just haven't been tested. I know that many congressional medal of honor winners were never considered leaders or heroes before they won their medal. They rose to the occasion in a crisis.

Call it Crazy says

smaulgld says

I think millennials are no better or worse than any other generation.

I don't know about that... I have 3 millennial kids and I've met a whole bunch of their friends. Over all, they seem to be generally smart and an intelligent bunch. But, as a whole, they lack any drive, ambition, have no goals, no plans, no dreams, lack personal responsibility, can't handle change, etc.

They are just happy "existing".... If we are betting the future of this country on them stepping up and taking control.... we're screwed...

Don't disagree but that is a product of their circumstances. If things change, a crisis or collapse they will have to rise to the ocassion

jojo says

Debt does not equal wealth. That is where people went wrong. Debt is a tool for building wealth, not a guarantee of wealth.

Debt for business or investment CAN be a product of building wealth.
Debt for consumption is never a tool for building wealth

Foreigners bought 58% of their properties in 4 states- Florida, Arizona, Texas and California.

Blackstone bought 88% of theirs in Arizona, California and Florida

http://www.bloomberg.com/infographics/2013-12-20/blackstones-big-bet-on-rental-homes.html

Call it Crazy says

I know my kids will, I don't have a lot of faith in the rest of that generation..

You kids and select others will lead, the rest will follow- no different than any other generation- their time hasn't come yet

Call it Crazy says

Ha ha... very true.... many times I think the ones who didn't have kids were the "smart" ones...

Certainly is cheaper not to have kids!

Call it Crazy says

smaulgld says

Call it Crazy says

Ha ha... very true.... many times I think the ones who didn't have kids were the "smart" ones...

Certainly is cheaper not to have kids!

Don't even go there.....

Kids used to be a financial asset- another set of hands to work the family farm. Today you have to invest in your kids with time, love, energy, teaching and tuition!

Here's one that blames low inventory not low demand as a reason why the housing "recovery" may not continue http://www.foxbusiness.com/personal-finance/2014/01/23/housing-biggest-obstacle-inventory/

jojo says

Debt is a tool for building wealth

Lol

Call it Crazy says

That "low inventory" chant is such a load of crap!!!

jojo says

Does that mean higher prices?

They love higher prices but bemoan low inventory. They think if there was more inventory it would create demand and prices would rise!

We'd be better off with lower home prices- they are trying to bailout the 40% underwater homeowners by pushing prices back to the prior fed induced bubble peak-and call that "back to normal"

jojo says

smaulgld says

They love higher prices but bemoan low inventory. They think if there was more inventory it would create demand and prices would rise!

So they are saying more supply will lead to higher prices? Whoever wrote this must not have taken Econ 101.

That is the way I interpret their reasoning. They believe that housing went down so it has to go up. And they believe that this "recovery" is just starting.
I've been tracking the non housing recovery for nearly a year.
Here is a summary up till last November
http://smaulgld.com/the-false-housing-recovery-of-2013-and-how-it-unraveled/

jojo says

smaulgld says

They think if there was more inventory it would create demand and prices would rise!

If that were true then home builders alone could build the way out of this recession! Why stop there, just keep building and the economy will experience infinite growth!

But they are NOT building-starts are down three months in a row and new home construction is at lows not seen since the 60's & 70's when there were far fewer people in the US

sbh says

"supply creates its own demand".

as seen in a movie- If you build them they will come and overpay

sbh says

And their concept of debt baffles me. The great danger inherent in debt is that it turns time against you. The most fundamentally sensible way for normal people to accumulate wealth is to put time on your side such that when you get up in the morning or take a nap at noon your money is actually working while you are doing something else.

And I don't buy the "they can't afford rent" excuse. They can't afford the rent for the place they think they deserve. And then the rent they save by staying in the basement goes toward anything but their debt.

For once we have something to agree on.

jojo says

smaulgld says

They think if there was more inventory it would create demand and prices would rise!

If that were true then home builders alone could build the way out of this recession! Why stop there, just keep building and the economy will experience infinite growth!

That's more or less the essence of the global economic bubble. There are literally ghost cities in some other countries that embraced bureaucratic GDP counting.

Demand is naturally created from excess savings from production
Its artificially created by debt and public financing

Actually, when it comes to housing, the act of building a house instantly creates ten people out of thin air. It also provides those people with enough cash to pay double the asking price. I think Tesla came up with this and was incessantly mocked.

jojo says

smaulgld says

Demand is naturally created from excess savings from production

Its artificially created by debt and public financing

I don't think this is entirely accurate but I see what you are getting at. Personal debt is borrowing from your future self. So it can help or hurt you depending on what you use it for.

Thanks was talking generally on a macro level
The unhampered market economy vs the centrally planned one

jojo says

exfatguy says

the act of building a house instantly creates ten people out of thin air

That's an interesting trick. I heard about this on FOX news.

Moving creates three people two cats and a dog

Have any of these buyers stepped up?

Who Will Buy the Homes to Keep the Housing (Price) Recovery Going?

Millennials & First Time Home Buyers?

Millennials, as we have pointed out since the beginning of Smaulgld.com, are in no position to buy homes because of their high unemployment/underemployment rates and crushing student loan debt. Household formation among millennials is low and prevailing economic circumstances are shutting them out of the housing market. For many millennials, staying at home may reflect a cultural and generational shift. Higher mortgage interest rates and higher home prices will put homeownership further out of reach.

Baby Boomers?

Aging baby boomers are not looking to buy new and larger higher priced homes. Many boomers will be selling their homes and searching for smaller accommodations. They may move in with relatives or move to retirement homes but most won’t be buying new and larger homes.

Move up Buyers?

For the up to 40% of home owners with mortgages underwater, moving out and moving up is not a possibility. For those homeowners not underwater, stagnant wages or spells of unemployment, financing their children’s education or servicing their student loan debts will sap the financial resources required to purchase move up houses.

Foreigners?

Foreigners have made up significant portions of the higher end home sales in upscale markets like San Francisco and New York and a decent amount of the lower end sales in Florida. Foreigners however, constituted only 6.3% of all home purchases in the United States in 2013. I addition fifty-eight percent of foreign home purchases were concentrated in four states- California, Texas, Florida and home purchases by foreigners in the United States is declining.

As investors and foreigners leave the housing market there will be even fewer buyers capable of buying at the current higher “recovery” housing prices and the housing inventory shortage will become a glut unless prices come down.

Recovery, Recovery, Recovery, Recovery

https://smaulgld.com/will-buy-homes-support-housing-recovery/