Three Key Reasons Housing Not Coming Back: Demographics, Student Debt, No Jobs
http://globaleconomicanalysis.blogspot.com/2012/06/three-key-reasons-housing-not-coming.html
Mish
Three Key Reasons Housing Not Coming Back
By Mish Follow Sat, 23 Jun 2012, 11:48am 9,103 views 100 comments
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Die, Boomer fucks, fucking Die and take the banksters and Realtor®s with you to hell!
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You see ladies and gentlemen here is THE MAN ROBERTO REALTORO. He buys houses which never need repairs!!! CHACHINGA! Damn I wish I knew how to do that, my back is killing me I was up on the roof all weekend working with gooey tar while my deadbeat tenant was drinking lemonade under a tree. I think he was snickering. I’d raise the rent but then he would move out, too many other TYCOOONS like myself trying to rent out their goldmines. :(
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Housing is supposed to appreciate at 100% per year - guaranteed!
Ask any Realtor® if you can get their attention while they're fisting you.
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What many of the comments here and on other blogs that I read occasionally do not reflect is an an understanding of basic demographics. It is a fact that the birth rate deceases during times of distress. Sure, people still have sex and babies, even during times of great hardship, even warfare; but overall, the birth rate declines during stress on civilian populations. This has been shown time and again. It is a scientific fact.
Unfortunately, most Internet blog readers are essentially scientifically, mathematically and economically illiterate so this point will be lost on them.
Now, relating this fact of demographics to the current housing situation in the United States is another thing. My own interpretation is that housing prices have nowhere to go but down, at least in my area, the Pacific Northwest. That is why I sold my home in 2008 and moved into a similar rental house. Since then I have watched my landlord's bubble pop to the tune of over $500K (40% drop from 2008) while I have paid him $96K for the privilege of living in his house. He takes all the risk of further price declines; I wait until local home prices start to rise consistently, not yet seen, and then purchase another home with a low mortgage rate or cash, if need be. Meantime, I watch as 'homeowners' I work with or have as neighbors struggle to keep the homes they are 'renting' from their mortgage holder; all the while thinking that they are 'homeowners with equity. Unfortunately, they are all underwater but can't yet face the reality that bubble pricing is not coming back. LOL
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Good article from Mish as usual.
To killerjane's "analysis" re: births and housing: http://www.aneki.com/birth.html
Yeah those housing markets are to die for. :p As usual the pineapple spouts nonsense.
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Pacifica, CA
I disagree with Mish about other subjects, but I can't see anything glaringly wrong with this analysis.
He does say that he thinks housing has bottomed, but that it's not going anywhere (upwards) for a while.
I don't think housing has bottomed, because in the Bay Area, we have such high prices. There is a mini-tech boom going on, but not that many jobs are being created - it's nothing like 1999.
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"but what Mish is focusing on is the house-buying age group. HE says it is shrinking, that is all."
Exactly, kids getting out of college and then moving back home with parents or never moving out at all. Not just younger ones, those caught later in life with no jobs, not old enough for the safety nets combining with elderly parents.
Household consolidation, a way to cope with declining employment and incomes. Less houses needed, prices fall. So simple even a Realtor can understand it.
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Kids should just start hedge funds like Romney. Or flip real estate and become billionaires. Why do they hate prosperity? And China! Zillions of jobs there! If they had any ambition at all, they'd swim there and get a job! ANd come back and buy million dollar 3/2s in BA like the prosperity-loving Chinese!
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“get a job! ANd come back and buy million dollar 3/2s in BA like the prosperity-loving Chinese!” APOCOLYPSEFUCK I used to think you were crazy but I see now you are ON THE MONEY BOOMBA! I can see you will soon be a landLORD like myself, buy houses + rent them out = RICH TYCOON! Simple really, these doomers are missing the boat.
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Santa Cruz, CA
Housing is not coming back in California at least.
Where I live a couple friends are telling me how house prices must go back up. They are pissed they aren't "rich"=live in houses that are expensive.
I say to them "Ok, take a look around Trader Joes. Which of those guys would you imagine has $100K cash in their jeans to buy? Which of those illegal alien teenagers will make enough in their mcjobs to buy as they grow older? Which of those sec.8 , SSI, food stamp losers will?" None will.
California is a mess and house buyers are squeezed between taxes, fees, and these are ever-increasing. We have cap and tax now for example. Businesses and productive people are fleeing the state and losers are flocking here.
Of course, I live in bubble ground zero Santa Cruz.
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Los Angeles, CA
no way! the illegal aliens are job creators
if she had not come here to have a baby - the doctor/hospital/nurses would be out 50k of income that they used to buy million dollar 3/2's (to flip to other doctors back and forth each time adding 200k in price).
thats how CA works.
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BABOOMBA PRICES GOING UP UP UP! But it really doesn't matter up or down BUY A HOUSE NAO. Simple formula: Pay Realtor(tm) full commission when buying house and live HAPPILY EVERY AFTER. Silly Doomers will never have super bowl parties keeping this up.
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Corning, NY
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reallife says
Ain't that the truth.
Interest = Rent
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clambo says
But,but,it is a golden state for a reason. LOL. It should be the richest state in the country but still it is red then most states - despite all that hefty property tax collected by state.
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San Leandro, CA
What does that mean ? "Housing not coming back"
Housing is not coming back to an annual appreciation rate of 20% ?
Not coming back to 8 to 10 times annual income ?
DUUUH ?
Why won't my finger come back ?
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San Jose, CA
Pineapple, you're totally missing his point. Yes, the population is always growing (at least so far), but what Mish is focusing on is the house-buying age group. HE says it is shrinking, that is all.
So sure there are tons of babies being born, but are you telling me that these babies are buying houses? Not yet, but they will 25-35 years from now.
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APOCALYPSEFUCK is Shostakovich says
lol, funny but true.
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Santa Cruz, CA
There will never be a "bull market" for housing in our lifetimes.
The previous bubble was caused by an aberration noticed by some people before the bubble burst.
Rise in house prices will happen when there are rising wages. Not before.
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This looks great.
10x in a week or two.
I can flip a 3/2 next to 101 in Santa Clara after a few weeks, cash out and buy the entire Dalmatian Coast.
Mr Duckhead, umma TYCOON!
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iwog says
Dont mind me... just plucking feathers!