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While supply has certainly been tight and still is, the For Sale signs have been picking up steam even here in SF lately (today there were one or more signs literally at every intersection of sunset boulevard. Smart time to sell, dumb time to buy. Not sure how much higher the market can go, DOW 20k is still a possibility, albeit chances are getting slimmer by the day with this sideways action and the poor economic data. This won't be as easy as 2007/2008 where the market actually started dropping slowly, it will be more like 1999/2000 where you wake up and it's 10%-20% down. Don't think we're that close yet though for 2015.
This won't be as easy as 2007/2008 where the market actually started dropping slowly,
Mell its not so much a matter of prices but volume of sales. Cash buyers are a good portion of the market because "regular" buyers either already own, are underwater, have outstanding HELOCS or cant afford a home. Sales have been very poor during this housing "recovery"
Mell its not so much a matter of prices but volume of sales. Cash buyers are a good portion of the market because "regular" buyers either already own, are underwater, have outstanding HELOCS or cant afford a home. Sales have been very poor during this housing "recovery"
Yeah. but to be fair part of the tight supply is also the ZIRP environment. A lot of people have locked in great rates and think they are golden with that fixed rate. Some are and will be, however quite a few will at some point not be able to make their payments (HELOCs make this only worse) or watch their value suddenly sink again and then they will sell. It will be interesting for sure.
tight supply is also the ZIRP environment
ZIRP is responsible for all the distortions in the economy
Mell its not so much a matter of prices but volume of sales. Cash buyers are a good portion of the market because "regular" buyers either already own, are underwater, have outstanding HELOCS or cant afford a home. Sales have been very poor during this housing "recovery"
Cash buyers are a good portion of the market because sellers and agents don't want to bother with people getting their loans denied all the time.
Cash buyers are a good portion of the market because sellers and agents don't want to bother with people getting their loans denied all the time.
Absolutely true and it highlights that people either don't have the money or the credit or both to buy the ever expensive houses
Contrast the charts in the blog post re the massive increase in new car sales where credit is easy to get or look here https://smaulgld.com/new-home-sales-vs-new-car-sales/
And cash buyers cannot sustain the market. Once the stock market stops going up watch out.
Cash buyers are sustaining the price portion of the market but sales are still very low
And cash buyers cannot sustain the market. Once the stock market stops going up watch out.
Cash buyers are sustaining the price portion of the market but sales are still very low
It's not so much an abundance of cash buyers, but a lack of first time buyers. It's just a matter of time before the first time buyers start buying in hordes, and when that happens....OMG. All hell will break lose.
The flat consumer spending #s released today during a period of good weather highlight that consumers are tapped out
We need another Constitutional Amendment requiring that buyers overpay for shacks. Because a value is placed on a property by someone who doesn't care about the buyer,then the property must be worth at least that amount.
"A sucker is born every minute."
Because a value is placed on a property by someone who doesn't care about the buyer,then the property must be worth at least that amount.
"A sucker is born every minute."
Let me wake you up. No home seller gives a damn about a buyer. All they want is the maximum dollars for their property.
The flat consumer spending #s released today during a period of good weather highlight that consumers are tapped out
Cough Cough!
"U.S. construction spending surged in April to the highest level in nearly 6-1/2 years"
We need another Constitutional Amendment requiring that buyers overpay for shacks.
or at least an executive order
Cough Cough!
"U.S. construction spending surged in April to the highest level in nearly 6-1/2 years"
ahem-construction spending is not consumer spending
Consumer spending stalled
http://www.bloomberg.com/news/articles/2015-06-01/consumer-spending-stalled-in-april-as-americans-saved-more
What could they be saving for? Homes, my friend, their dream home.
Americans are spenders, not savers.
The majority of that rise was on non-residential, public construction... Sorry, no additional residential housing for you!!
Housing is like a spring. The more you compress it, the higher it jumps.
What could they be saving for? Homes, my friend, their dream home.
Americans are spenders, not savers.
I don't think they are saving at all- they are blowing their money on rent and healthcare insurance and some on student loans and car payment
Home sales have been well below 2004-8 levels since 2009-its not just tighter credit standards, its lack of income and savings and higher prices
ZIRP is responsible for all the distortions in the economy
Sir ZIRP is not responsible for all the conditions in the economy. The severe outsourcing of jobs, manufacturing and R&D has caused a collapse of the middle class, and has imploded the Economy. In much as the companion NINJA loans copying the CRA at the same time cause a collapse in the real estate, because Clinton and team tried to use Real Estate ownership to invigorate the economy in place of real growth with real jobs. Because of the willful offshoring of jobs, the CRA and its companions were exactly the wrong medicine - it would have been better to spend 5 Trillion on jobs, manufacturing and ways to get the government out of the way.
ZIRP is an effect of Malivestment started at the Federal Level, and the destructive policies of NAFTA, CRA, Subprime, and all the other bad decisions.
Economists expecting that second quarter and second half 2015 U.S. GDP will get a boost from increased consumer spending or a rise in home sales, should note that the U.S. consumer, while seemingly better able to keep the collection man at bay and is no longer filing for bankruptcy at record rates, is over loaded with debt and tapped out.
https://smaulgld.com/bankruptcy-in-america/
While bankruptcy rates are falling
Consumer credit has exploded
https://smaulgld.com/bankruptcy-in-america/
#housing