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Three Key Reasons Housing Not Coming Back

By Mish   Follow   Sat, 23 Jun 2012, 11:48am   9,092 views   100 comments
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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

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1. iwog Follow Befriend (48) 273 threads 12,520 comments 47 male Lafayette, CA Premium

   61   8:13pm Tue 26 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike (2)   Protected   David9 says is also popularly applied to any case where a subject experiences a brief resurgence during or following a severe decline." Which exposes the total bullshit of calling this a dead cat bounce. The best characterization of the market since 2009 is FLAT. Although prices may be down a few percentage points (and only a few percentage points) since early 2009, there has been NOTHING WHATSOEVER resembling a severe decline since 2009. Accepting that we're still in a real estate bear market, this is now year seven of that market. Not only has the duration exceeded the stock market crash of the Great Depression, but it has also exceeded the duration of nearly every bear market in history. So if you STILL think we're headed for a further crash, you now accept: 1. That United States real estate will be a screaming buy compared to most 3rd world nations. 2. That United States real estate is special and will not conform to all prior markets with the possible exception of Japan. (we are not Japan and our real estate is already a bargain compared to Japan) 3. That none of the multi-trillion increase in the money supply will ever be spent on real estate. If you believe this, please detail which market is about to be jacked up with the ocean of cash that is now available. 4. That investors will stay away from earning an easy 5% return on leveraged rental propery capital (extremely easy in this market) while 10-year bonds are paying less than 2%. My strong belief is that none of you crying for another crash have thought about any of these things.

2. APOCALYPSEFUCK is Shostakovich Follow Befriend (28) 170 threads 4,186 comments Premium

   62   8:21pm Tue 26 Jun 2012   Share   Quote   Permalink   Like (2)   Dislike   Protected   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!

3. thomas.wong1986 Follow Befriend 16 threads 4,426 comments

   63   8:22pm Tue 26 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike   iwog says Accepting that we're still in a real estate bear market, this is now year seven of that market. in the SFBA shit the crapper at the end of 2008.. so by your measure that would be only 4 Years out! that pimple of a bubble in 89 played out for 6 years... but this correction will be even longer... and there wont be a Stock Bubble like the one in 1998 -2000 to create a new "Bull" market ... so sit back and enjoy... the sobriety! think of it as 1992-1995 for the next 20 years with declines and foreclosures... much like Japan.

4. iwog Follow Befriend (48) 273 threads 12,520 comments 47 male Lafayette, CA Premium

   64   8:25pm Tue 26 Jun 2012   Share   Quote   Permalink   Like   Dislike (1)   Protected   thomas.wong1986 says in the SFBA shit the crapper at the end of 2008.. so by your measure that would be only 4 Years out! that pimple of a bubble in 89 played out for 6 years... but this correction will be even longer... and there wont be a Stock Bubble like the one in 1998 -2000 to create a new "Bull" market ... That's not even close to accurate considering I bought real estate in 2008 and it was 50% of peak. It's the reason I joined the board. Can you please knock off the BS for awhile?

5. thomas.wong1986 Follow Befriend 16 threads 4,426 comments

   65   8:25pm Tue 26 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike   iwog says 3. That none of the multi-trillion increase in the money supply will ever be spent on real estate. If you believe this, please detail which market is about to be jacked up with the ocean of cash that is now available. You put too much importance of a FED ledger entry..has everyones wallet grown by 10 fold recently... I think not! so dont expect that inflation to kick in anytime soon!

6. thomas.wong1986 Follow Befriend 16 threads 4,426 comments

   66   8:26pm Tue 26 Jun 2012   Share   Quote   Permalink   Like (2)   Dislike   iwog says Can you please knock off the BS for awhile? Dont mind me... just plucking feathers!

7. bubblesitter Follow Befriend (5) 10 threads 2,329 comments

   67   8:28pm Tue 26 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike   iwog says I bought real estate in 2008 You are already deeply underwater. Try giving some commission to Realtors and you will know.

8. APOCALYPSEFUCK is Shostakovich Follow Befriend (28) 170 threads 4,186 comments Premium

   68   8:29pm Tue 26 Jun 2012   Share   Quote   Permalink   Like (2)   Dislike   Protected   OMG, it's like magic! I just drive around Santa Clara, like kinda close to 3/2s and after a half an hour or so, the trunk of my car is FILLED WITH MONEY! The housing market is busting out so hard, it's having these Twilight Zone effects on everything. Tycoons from outer space are eating people's pets but no one cares, even if they have a million dollar albino rino in the backyard because they're pulling million dollar HELOCs every day on their way back from picking up the kids at school!

9. iwog Follow Befriend (48) 273 threads 12,520 comments 47 male Lafayette, CA Premium

   69   8:29pm Tue 26 Jun 2012   Share   Quote   Permalink   Like   Dislike (1)   Protected   thomas.wong1986 says Dont mind me... just plucking feathers! Why would you say something so ridiculous as "SFBA shit the crapper at the end of 2008." Do you even care how much you discredit yourself? Are you so intellectually corrupt that the truth doesn't matter at all?

10. bubblesitter Follow Befriend (5) 10 threads 2,329 comments

    70   8:31pm Tue 26 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike   Ivvog says bubblesitter says You are already deeply underwater. Deep underwater. Just call me bubbles. I'm thinking of changing my name from Iwog to Bubbles. Seriously. Try selling one of it and you will know reality is nowhere close to your much favorite CS graph. LOL, I thought you were real Iwog. Now I have to differentiate you from Iwog and duckhead.

11. thomas.wong1986 Follow Befriend 16 threads 4,426 comments

    71   8:34pm Tue 26 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike   iwog says Why would you say something so ridiculous as "SFBA shit the crapper at the end of 2008." Do you even care how much you discredit yourself? Are you so intellectually corrupt that the truth doesn't matter at all? there you go again, with it started at year 2000... you know better than that ... we already doubled in price by 2000, thanks to that "other bubble"...

12. iwog Follow Befriend (48) 273 threads 12,520 comments 47 male Lafayette, CA Premium

    72   8:36pm Tue 26 Jun 2012   Share   Quote   Permalink   Like   Dislike (1)   Protected   thomas.wong1986 says there you go again, with it started at year 2000... I said nothing about 2000. I said you are totally wrong when you say the bear market didn't start until late 2008. That's a ridiculous assertion with no basis in fact. Why did you make it?

13. thomas.wong1986 Follow Befriend 16 threads 4,426 comments

    73   8:38pm Tue 26 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike   iwog says I said nothing about 2000. I said you are totally wrong when you say the bear market didn't start until late 2008. That's a ridiculous assertion with no basis in fact. Why did you make it? We were special.. we have the fortress! even back in 2008 many denied prices would fall.. and in fact they started as the Wall Street melt down happened. that was the trigger for the BA....

14. iwog Follow Befriend (48) 273 threads 12,520 comments 47 male Lafayette, CA Premium

    74   9:00pm Tue 26 Jun 2012   Share   Quote   Permalink   Like   Dislike (1)   Protected   thomas.wong1986 says We were special.. we have the fortress! even back in 2008 many denied prices would fall.. and in fact they started as the Wall Street melt down happened. that was the trigger for the BA.... The bear market started in 2006. End,.

15. agst Follow Befriend 12 threads 27 comments

    75   10:48pm Tue 26 Jun 2012   Share   Quote   Permalink   Like   Dislike   I think this discussion (and others started by Roberto Aribas) are missing a key point. It's true that there is a shortage of inventory - I can see the statistics for myself on the ground, others can verify it easily enough. Is this an engineered shortage by the banks or a true market driven shortage? If this is engineered, any bump in prices is likely temporary and more an action to "put a floor under home prices" than a lasting bull cycle. Unless the banks can do this forever - oh, wait a minute, there is no reason they cannot!

16. robertoaribas Follow Befriend (23) 55 threads 3,783 comments Scottsdale, AZ robertoaribas's website

    76   11:24pm Tue 26 Jun 2012   Share   Quote   Permalink   Like   Dislike   agst says I think this discussion (and others started by Roberto Aribas) are missing a key point. It's true that there is a shortage of inventory - I can see the statistics for myself on the ground, others can verify it easily enough. Is this an engineered shortage by the banks or a true market driven shortage? If this is engineered, any bump in prices is likely temporary and more an action to "put a floor under home prices" than a lasting bull cycle. Unless the banks can do this forever - oh, wait a minute, there is no reason they cannot! hmmm, I wonder why these same banks started foreclosures on 12,000 home foreclosures a month at the height of the crisis? why did we reach a point where 50% of sales in phoenix were bank owned, and another 20% were short sales? If it is so easy to manipulate the market today, why did these very same banks drive prices down by 60% in Phoenix? AND ask yourself, why don't gas companies just start all charging $10 a gallon for gas? OH, because off it would be illegal monopoly action, and second off, one bank/gas station would lower the price slightly to gain a competitive advantage, thus the ball would get rolling. I drive all over this town, and simply don't see that many homes that appear abandoned. The squatters I knew personally have all been foreclosed on, yeah it took years for some of them, but they all happened and the houses were sold. . I own 7 separate condominiums, and thus I see the delinquency rates for literally thousands of condo owners. ALL of them now have much lower delinquency rates for HOA dues than a year ago, which has severed as a good indicator of future foreclosures till now. You can take your mythical "missing point", I'll trust data I can actually measure.

17. clambo Follow Befriend (5) 1,070 comments Santa Cruz, CA

    77   11:40pm Tue 26 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike   Guys like iWog and Roberto want to change the subject to make their argument. No one claims that real estate will collapse another 40%, at least I don't. What Roberto calls a "bull market" is nonsense. He may have correctly timed the bottom of the price of this asset and gotten into some of it. But a person who expects to see a long term capital gain on a house is dreaming. The performance of this "investment" is going to be closer to the historical preformance, which is, the prices of houses will rise along with inflation. Since most people buy houses with income from wages, if there is wage deflation (helped by illegal alien scab labor) or real income decreases because of higher taxes and fees, the result will be house prices cannot rise. Why not? Because people need money to buy them and pay for them. Where I live, the YOY decrease in median prices is 4.7%, but it's down about to 2002 levels, and down 48% from the peak in 2006. Anyone who bought a place in 2006 is not experiencing a bull market on HIS house "investment". When the median price of a house here was $769K and the median income was under $60K, it was a bubble and was going to pop. If Roberto is positive on his houses he should also recognize some people did things that worked out well for them in late 2008 that made them a shitload of money too. So what? No one who buys a house today should expect to make a lot of money from it, but he can expect to live in it and later reverse mortgage it if he's smart.

18. marcus Follow Befriend (5) 168 threads 5,071 comments

    78   3:11am Wed 27 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike   robertoaribas says And yet Phoenix prices are up nearly 30% from the bottom... I guess never is here already! Hmmmm. Okay, I guess if you say so...,but... I'm pretty sure that some people don't understand the difference between prices going up and more expensive homes selling. E.g if only one home sold in a town one month, and it was a 75,000 home and then two 200,000 homes sold the next month, you could say the median sales price went up more than 100%. Jeepers !

19. tatupu70 Follow Befriend (3) 15 threads 5,626 comments

    79   4:21am Wed 27 Jun 2012   Share   Quote   Permalink   Like   Dislike (1)   marcus says Hmmmm. Okay, I guess if you say so...,but... I wouldn't put much stock in the zillow home value index.... It's pretty much complete crap.

20. CaptainShuddup Follow Befriend (1) 247 threads 4,702 comments

    80   6:33am Wed 27 Jun 2012   Share   Quote   Permalink   Like   Dislike (1)   The pity party has to end at some point. Let's all hope "insanity" won't be coming back. Unless Obama wins and we continue on this downward Third world spiral, then eventually the economy will even out, and my kids my be in a better position to buy a house, than I was when I was at 21. My prediction is, in 10 to 15 years it will be 20 and 30 somethings that are the average age of homeowners while those 40,50 and 60's ect will still be reeling from the RE collapse and the great recession. They will still be calling those crazy kids crazy for buying instead of renting.

21. woppa Follow Befriend (3) 2 threads 178 comments Bronx, NY

    81   7:08am Wed 27 Jun 2012   Share   Quote   Permalink   Like   Dislike   What resources are legitimate when looking for local housing stats? Can someone share some websites and any other resources they use?

22. clambo Follow Befriend (5) 1,070 comments Santa Cruz, CA

    82   8:44am Wed 27 Jun 2012   Share   Quote   Permalink   Like   Dislike   trulia and zillow are popular

23. robertoaribas Follow Befriend (23) 55 threads 3,783 comments Scottsdale, AZ robertoaribas's website

    83   9:29am Wed 27 Jun 2012   Share   Quote   Permalink   Like   Dislike   Housingtracker.net is a great source for inventory and asking prices. Case-shiller is good but old for sale prices. Phoenix is up what 8.6% year over year and 2.5% month to month from March to April on case shiller? That data is an average of 4 months old (the index out is for April, but that is actually a three month average, so Feb, March, April) 2.5% The same market dynamics have of low supply, high demand, bidding wars have continued for the past 3 months, so expect similar gains when those indices come out in the future. While long term I agree, home prices should follow income gains, in the short term, supply and demand rule. Phoenix was in an oversold condition, prices had gone far below anything reasonable compared to rent, and so a quick increase of 20% is not out of the question. I'm closing another 80K home next week, that will rent for 1000 a month. Tax at 900 a year, insurance 800 a year, hoa 80 a month, do your own math and tell me what a fair price for the home is. It needs zero repairs.

24. duckhead Follow Befriend 3 threads 81 comments

    84   10:01am Wed 27 Jun 2012   Share   Quote   Permalink   Like (11)   Dislike (1)   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. :(

25. APOCALYPSEFUCK is Shostakovich Follow Befriend (28) 170 threads 4,186 comments Premium

    85   10:02am Wed 27 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   duckhead says too many other TYCOOONS like myself trying to rent out their goldmines. :( Hehehehehehehehe

26. robertoaribas Follow Befriend (23) 55 threads 3,783 comments Scottsdale, AZ robertoaribas's website

    86   10:15am Wed 27 Jun 2012   Share   Quote   Permalink   Like   Dislike   duckhead says 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. :( you guys are hilarious! I gave that one a like!!!!

27. freak80 Follow Befriend (4) 52 threads 4,416 comments Corning, NY Premium

    87   10:26am Wed 27 Jun 2012   Share   Quote   Permalink   Like   Dislike   Protected   Trolling. Not just for fishermen anymore.

28. KILLERJANE Follow Befriend (3) 12 threads 600 comments

    88   11:48am Wed 27 Jun 2012   Share   Quote   Permalink   Like   Dislike   What is the tax rate on non owner occupied/ investment property in Phoenix, AZ?

29. Goran_K Follow Befriend (4) 25 threads 1,517 comments Laguna Beach, CA Premium

    89   2:38pm Wed 27 Jun 2012   Share   Quote   Permalink   Like   Dislike   Protected   duckhead says 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 This forum still surprises and entertains.

30. everything Follow Befriend (2) 3 threads 547 comments Madison, WI

    90   3:14pm Wed 27 Jun 2012   Share   Quote   Permalink   Like   Dislike   Still got to ask yourself at the end of the day, if wages are down, where is the money coming from? Investors?, foreigners? Anyone who can service the debt? That's who is buying many of the homes around me. It may no longer be the traditional home buyer driving the RE market any more. Also, I see credit being loosened up as well, (banks recapitalized by government), people who have declared bankruptcy in the past, are able to get zero down home loans.

31. APOCALYPSEFUCK is Shostakovich Follow Befriend (28) 170 threads 4,186 comments Premium

    91   3:43pm Wed 27 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   I just bought five three deckers filled with section 8 grotesques that I know I will be able to flip for 10x in a year or two. I feel, so, so TYCOOOON!

32. bubblesitter Follow Befriend (5) 10 threads 2,329 comments

    92   9:23am Thu 28 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike   duckhead says 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. :( ROTFLMAO.

33. APOCALYPSEFUCK is Shostakovich Follow Befriend (28) 170 threads 4,186 comments Premium

    93   9:29am Thu 28 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   The lemonade is funny.

34. freak80 Follow Befriend (4) 52 threads 4,416 comments Corning, NY Premium

    94   9:37am Thu 28 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   APOCALYPSEDUCK is Shostakovich says I just bought five three deckers filled with section 8 grotesques that I know I will be able to flip for 10x in a year or two. You're from Worcester, MA!

35. APOCALYPSEFUCK is Shostakovich Follow Befriend (28) 170 threads 4,186 comments Premium

    95   11:05am Thu 28 Jun 2012   Share   Quote   Permalink   Like   Dislike   Protected   Worcester?

36. freak80 Follow Befriend (4) 52 threads 4,416 comments Corning, NY Premium

    96   12:41pm Thu 28 Jun 2012   Share   Quote   Permalink   Like   Dislike   Protected   APOCALYPSEDUCK is Shostakovich says Worcester? You know..."three deckers" That's the only place I've ever heard people use that term. Maybe it's in other New England cities too.

37. freak80 Follow Befriend (4) 52 threads 4,416 comments Corning, NY Premium

    97   12:43pm Thu 28 Jun 2012   Share   Quote   Permalink   Like   Dislike   Protected   http://en.wikipedia.org/wiki/Triple-decker

38. 2k12 Follow Befriend 2 threads 20 comments

    98   2:50pm Thu 28 Jun 2012   Share   Quote   Permalink   Like (1)   Dislike   Homes purchased at trustee sales for 90k-100k in Phoenix area can barely get 800-850/month in rent and many sit vacant for months.Dumb money has been buying lately.Supposedly Mr Roberto is going to get 1k month for his 80k house.House I bought for 50k last fall that need 5k rehab rents for $700-750.Idiots now are paying 77k 90k for the same house at the courthouse steps.

39. robertoaribas Follow Befriend (23) 55 threads 3,783 comments Scottsdale, AZ robertoaribas's website

    99   2:52pm Thu 28 Jun 2012   Share   Quote   Permalink   Like   Dislike   2k12 says Homes purchased at trustee sales for 90k-100k in Phoenix area can barely get 800-850/month in rent and many sit vacant for months.Dumb money has been buying lately.Supposedly Mr Roberto is going to get 1k month for his 80k house.House I bought for 50k last fall that need 5k rehab rents for $700-750.Idiots now are paying 77k 90k for the same house at the courthouse steps. I'm not buying at the courthouse steps, and clearly you don't know where or what to buy if those are the numbers you get :-) In fact, I have condos that I bought for 30k, 32, and 42K rented for $750, $825, and $825...

40. KILLERJANE Follow Befriend (3) 12 threads 600 comments

    100   3:07pm Thu 28 Jun 2012   Share   Quote   Permalink   Like   Dislike   2k12 says Homes purchased at trustee sales for 90k-100k in Phoenix area can barely get 800-850/month in rent and many sit vacant for months.Dumb money has been buying lately.Supposedly Mr Roberto is going to get 1k month for his 80k house.House I bought for 50k last fall that need 5k rehab rents for $700-750.Idiots now are paying 77k 90k for the same house at the courthouse steps. Seems like a good ROI to me. 750 per month for 55000 investment.

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