Housing Secretary Shaun Donovan today declared that the housing market had finally “turned a corner” amid reports that foreclosures are down, home sales are up and it’s getting easier for buyers to obtain credit and mortgage money. Even so, new Census data suggest the American dream of buying a home remains elusive.
Four Years Later, Housing Finally Turns a Corner
By mili Follow Tue, 1 May 2012, 12:03pm 5,289 views 60 comments
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another bottom caller. how charming except for the fact that prices are still falling: http://www.bloomberg.com/news/2012-04-24/home-prices-in-u-s-cities-fell-at-slower-pace-in-february-1-.html
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Do you just tell yourself this to feel better. All signs point to no recovery, sad but true
http://www.dailyjobcuts.com - Jobs are Hurting
Housing Prices will never recover
http://www.marketwatch.com/story/why-us-house-prices-wont-recover-2012-05-01-1225310?reflink=MW_GoogleNews
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See,the thing is people have been buying since 2008 and still will be,thinking that bottom is behind us - which will be simply not true for few more years.
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bubblesitter says
If we are only really a "few years" away from a bottom.. then no one will be devastated buying now. It's like telling someone in 1993... Don't buy a house they are going keep dropping until 1996.
I don't think the person who bought in 1993 in Los Angeles is in much worse shape than the person who bought in 1996. (the last bottom in the market).
Cherry picking and saying 1996 is the last fair price level for home prices in Los Angeles is kind of crazy. If you bought in 1993 you already own your house outright, if you bought with a 15 year mortgage, so it's obviously better than renting.
The same might be said in 2025 when people look back at 2010-2016...
Sure the 2016 buyers might get the best deal.. But I don't think the 2010 buyers will care too much in 2025, if history repeats itself.
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bubblesitter says
A few more years, you mean like 30?
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BoomAndBustCycle says
I guess, then you agree that 2006 was the time to buy too. LOL.
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ZMan says
Nah. Another 10 to 15 years.
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bmwman91's website
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For some areas yes, and for some no. It depends. Most of us seem to be focused on the Bay Area, and most indicators point to "no." We'll see though.
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BoomAndBustCycle says
Okay, you be the 2010 buyer and I'll be the 2016 buyer. Works for me. I couldn't give a rats ass about the future 25-50 year growth. I care about the cost today as a function of my income. If the indicators are saying the future will be cheaper then waiting seems like the obvious choice.
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Pleasanton, CA
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This headline is almost correct. Fast forward 36 years and change the title to
"Forty years later, Housing finally turns a corner".
That is more believable. :)
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San Leandro, CA
ZMan says
Old school upbringing provided a hedge against inflation. REAL ESTATE increased in value JUST enough to stay JUST ahead of the rate of inflation. Investing in Real Estate was NOT designed to make the masses rich. BUT, In 1973 the value doubled expeditiously, cuz women suddenly became credit worthy. (don't shoot the messenger) THEN, in 1983 when Woz & Jobs stepped up, everyone was already poised ready for another unjustifiable doubling in value. Add some gubmint promotions and we have lift off. Values soon became detached from reality. (Money Magazine quote). The mentality changed to " BUY at any price, it will be worth 20% more next year".
FORWARD into the future, After all those years of artificial stimulation wears off, Real Property values will again begin to appreciate at about the same rate as a healthy savings account or C.D..
The word RECOVERY is used to squeeze the last few dribbles of greed from the masses.
While we look to gubmint for relief from ourselves, gubmint increases their income to protect us from ourselves. They mock us.
WHEN PEOPLE START LEADING, THE LEADERS WILL FOLLOW.
unless blinded by greed.
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In some markets it is a good time to buy. In CA tho, I don't think so.
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But pay cash, mortgages are a long term sentence and keep you from roaming the planet freely.
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Calling the "Federal Reserve" Federal is misrepresentation. Thats taken as a given. With that being said do you REALLY expect those mf's up there in D.C. to do anything but lie in your face. They are gaming you. The ones that don't get it. Fine eaiser to deal with. Seeing they enjoy the "rubes" Like er Rube Goldberg. Who could, as I have demonstrated be a "rube" himself.
(A Rube Goldberg machine, contraption, invention, device, or apparatus is a deliberately over-engineered or overdone machine that performs a very simple task in a very complex fashion, usually including a chain reaction.) (Over the years, the expression has expanded to mean any confusing or complicated system)
I guess this is a simple mothkilling machine.
Artimus 10:4 They didn't want another banking system of course. They could only count to two back then. So they had only two choices. They chose usury. Thus throwing themselves and the populace under crushing debt. It's hysterical-fun watching people drive 65 mph on the side roads all day long scrambling to pay it all back.
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BoomAndBustCycle says
If you think about it, there really isnt a bottom or a top, but deviation from the norm. Based on history, prices only appreciate at rate of inflation, and there isnt much a connection between prices and interest rates... see Robert Shiller on those two.
The bottom, is really the norm, where prices match regional incomes and typical lending practices. Anything above that norm would be a warning sign... and that pattern is again proven by history... end up with spike in higher foreclosures, be that after 1990 and more recently.
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thomas.wong1986,
Do you have a graph where the vertical axis is log or inflation adjusted?
From the chart, even at the toughs, prices in SF & SV are a certain % above inflation rate. This could be because of the high pay jobs, good schools and higher wage growth. The inflation rate used is a national general inflation rate. The SF & SV house price behavior may look differently when plotted against SF & SV inflation rate. I postulate that inflation rate in SF & SV is higher than the national general inflation rate, so prices of RE may already have overshot below the "green" line in 2009 and is now just touching the "green" line.
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thomas.wong1986 says
Thomas, do you have one of these for Southern California, and Indiana?
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Corning, NY
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Wow that chart seems to show that a few markets are still very overvalued, at least historically. Be careful out there folks.
Where's the money coming from? China?
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wthrfrk80 says
From the crushed middle class of America. Wealth redistribution.
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wthrfrk80 says
No, United States real estate is undervalued. Historical values are a remnant from when we had a functioning middle class and low wealth disparity. The elite cities of the USA (of which San Francisco will certainly be one) are destined to catch up with the rest of the world, not sink in price to be on par with 3rd world slums.
Suburbs of San Francisco and New York will benefit from the wealth effect of rich aristocrats investing money into the local economy. Unfortunately this means dragging wealth out of flyover states, where generational land holdings will be operated by cheap labor at bare subsistence wages. That's the future Republicans have given us.
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Corning, NY
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You could be right.
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San Jose, CA
iwog says
I don’t know where from you got this picture. I returned from Europe a month ago. Spent some time in London, Frankfurt, and Warsaw. Talked and saw real estate in many occasions. When you compare APPLE-TO-APPLE prices in $/SqFt are pretty much same like in US.
Homeownership is smaller than in US, but most owners do not carry mortgage.
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Tarzana, CA
This is how I feel and post many times. All the housing news is just 'crap'
http://www.forexlive.com/blog/2012/05/03/evil-bank-regulator-says-evil-banks-did-not-cause-housing-crisis/
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KILLERJANE says
or you could settle down.. form roots and contribute to your community.. rather than living eternally as a nomad.
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REpro says
Well lets start with the above map. Are you disputing that $ per sq. ft. in San Francisco is a small fraction of what it costs in Paris? London? Singapore? You say prices are pretty much the same as in the United States but you don't offer a source so how did you come to this conclusion?
What you observed while abroad is certainly not a valid statistical sample.
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Corning, NY
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Wow look at that map. Housing overseas is even more outrageous than it is in NYC and SF.
From now on, when I say, "God Bless America", I'm not being sarcastic!
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Of course, there is no reason at all that a 3/2 in Stockton should not cost exactly the same as a 3/2 in Notre Dame, Paris and therefore anyone who is not shoving every dime they have at Realtors® and flipping every property they can get a mortgage broker to write a note for is living in denial and hates prosperity.
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Monterey, CA
REpro says
Well, that's simply untrue for London. Home ownership levels are very similar to the US in the UK and people buy homes using mortgages.
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San Jose, CA
Bigsby says
APPLE-TO-APPLE. Compare Townhouse in London or Paris to similar neighborhood in Manhattan. The difference won’t be that shocking.
iwog says
So what is your reliable source?
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BoomAndBustCycle says
LOLWUT
Yes, all house owners are saints that volunteer and actively work to improve their community.
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Only a fool will believe that Egypt, Iran and India cost more than SF.
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bmwman91 says
Sounds like coming out of a Realtor. :)
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Monterey, CA
REpro says
Apple-to-apple? Or APPLE-TO-APPLE? Either way London is more expensive. You're probably looking at figures for Greater London, but that is unreasonable given the size of the place - it would make more sense to compare the central part of London with San Francisco.
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San Jose, CA
San Francisco is fine. Look at same quality of buildings with similar location values. Best way is to access local listing in each country. London may be a bit higher, but what iwog showed on picture poster is simply insane.
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wthrfrk80 says
Yep.. its called a Global Housing bubble...
Only two nations, Japan and Germany didnt see prices skyrocket... but they both actually saw RE bubble back in the 80s and 90s. So they learned the hard way NOT to inflate RE prices.
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iwog says
The burbs of SF as you call it .. i guess you mean Santa Clara County.. has a deflationary economy! as such very little wealth is driven by fundementals. Higher prices in SC only move jobs out as we have seen from MFG to R&D...
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iwog says
Dont look now, but the flyover states are full of rich natural gas deposits.. you do realize many farmers/landowners are being paid several hundred thousand for renting their land to the natural gas companies...not even the so called FABLED Facebook millionaires come even close to these numbers.
Its called the next big thing!
http://www.netl.doe.gov/technologies/oil-gas/futuresupply/coalbedng/coalbed_ng.html
Gas boom mints instant millionaires
http://money.cnn.com/2010/10/06/news/economy/penn_community/index.htm
Sutton recently leased his 154 acres of land on the Marcellus Shale to Talisman Energy for a $900,000 up front check, plus a 20% cut of the revenue of the natural gas extracted from his land.
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thomas.wong1986 says
Spain will learn own lessen very soon. With about 50% workers out of work, foreclosure is “everyday bread”
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hanera says
First off, the Good Schools, which I went to, have been around for a very very long time, long long before bubbles, when we had normal prices...
Second, great jobs/industries, have been around even in the 70s and 80s when we had a strong driver of tech growth...
We really should have had a huge bubble from what you mentioned back in the 80s.. but look again.. IT DIDNT HAPPEN!
Today.. we have far far less jobs, companies, and market strenth. We dont have MFG, and most of OUR employees are actually out of state.. we employ fewer in Bay Area...
Vanishing Public Companies Lead To The Incredible Shrinking Silicon Valley
http://www.siliconbeat.com/2010/02/17/vanishing-public-companies-lead-to-the-incredible-shrinking-silicon-valley/
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REpro says
Yep! and so will Ireland, Italy and many others...