WatchOkay, this is my first posted Real Estate Discussion, please feel free to tear apart at will. I expect nothing less.
Articles like this irritate me, so I thought I would take quotes from the article and write my housing bear thoughts, which the article did evoke.
1.) "Joe {Last Name}, a real estate agent in the Minneapolis suburb of Eden Prairie, said he recently concluded a streak of 13 consecutive bidding wars over homes that his clients wanted to buy. Each sold above the asking price."
-- I just don't buy these stories and every time there is an opportunity to search for the sales record I can't find it.
2.) "Millions of people remain underwater" & "Millions of families still face forclosure"
-- So how in the hell is there a housing recovery and / or bottom?
3.) "Our sense is that the market is recovering"
-- Well, isn't that reassuring. Data? A thread of evidence?
4.) "The trend is clear in the data. The widely respected S.&P./Case-Shiller index reported earlier this week that sales prices for existing homes rose in April for the first time this year." & "Indeed, in a growing number of areas demand for homes is outstripping supply."
-- Yes, that is true. There is no inventory. Why? Please refer to # 2
5.) "This is the fourth consecutive year that the housing market has shown signs of revival, and each previous episode ended with prices renewing their downward slide."
-- And this year is different because?
6.) "Government efforts to help homeowners have intensified, allowing more borrowers to refinance or avoid foreclosure."
-- Yes.
7.) "The influx of investors is a major reason that the market is looking stronger"
-- Really? Ok, in what way? True, Wall Street is a cash cow for a few.
8.) "And the rise in prices is happening despite the vast number of vacant houses awaiting buyers, up to two million more than the normal level, with several million more houses still at risk of being foreclosed."
-- Again, this indicates a recovery?
9.) "There are still reasons for caution."
-- Agreed.
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Goran_K says
Again with the bullshit. The growth I "claim" exists? How about the growth that DOES exist?
You see how it changes the entire discussion and why you refuse to acknowledge reality? Instead of me having to prove why there possibly could be growth, YOU Have to explain why there's growth when everything you believe says growth is impossible.
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iwog says
"Gross domestic product is supposed to be a measure of all the goods and services produced here at home. But there's a discrepancy.
You see, private-sector output is measured by the price people are prepared to pay for it. But government output is fudged: It's measured by its cost.
That means GDP increases any time the government spends money. It doesn't matter if that money is actually put to productive use or not - GDP rises nonetheless.
The bureaucrat devising regulations that damage business? His salary increases GDP. The $300 million Alaskan "bridge to nowhere" of a few years back? That was $300 million added to GDP. The jet-fighter project that costs billions, and is plagued by huge overruns that lead to its cancellation? Those billions add to GDP.
Even public-spending "stimulus" programs, however foolish, are always effective according to the GDP definition, because their cost is simply added to output.
It's obvious why big-government Keynesians would like this calculation: It substantiates their claim that government spending stimulates economic growth.
In the real world, however, this makes no sense. Indeed, none of the examples above actually add to economic welfare. "
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StoutFiles says
There is one stimulus bill passed in 2009 that added less than $1 trillion to the economy.
Where did the other trillion come from? Furthermore how come the economy keeps growing YEARS after Republicans shut down any additional stimulus money?
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iwog says
The Current Outstanding Public Debt of the United States is:
$15,856,367,214,324.44
The GDP keeps rising because we print and spend money like it's going out of style. At some point we will have to answer for this.
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StoutFiles says
Yes the country does borrow a large amount of money, but at the same time there are more people begging to lend the US government money than ever before and interest rates are at record lows.
So obviously the solution is to print the difference directly.
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iwog says
Iwog - you are lying, again. There are, actually, less and less people begging to lend the US government money. Look at the graph. The buying of treasuries by both people and foreigners has fallen, so the FED (monetary authority) has to be pick up the slack, in order to keep the interest rates low.
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dunnross says
OMG you are ignorant!!!!!!!!!!!!
The United States has to issue a FIXED amount of new debt to cover the deficit. It has no choice. It cannot issue fewer bonds than are required to cover the shortfall.
The federal reserve has two ways in which to affect these markets.
1. Quantitative easing which is buying bonds directly. This hasn't been done since June 2011.
2. Operation twist which is buying long term debt and selling short term debt. The net result is no additional debt acquired by the fed.
Now there's a reason your silly graph ends in early 2011, and that is because it reflects the end of QE2. However bond rates didn't jump afterwards, they actually declined. Therefore demand for US debt increased without any interference from the federal reserve.
Nice try but another complete fail.
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In case you're wondering about those 1-year treasuries the fed is selling as part of operation twist, forgettabout it. They are earning very close to 0%. Why? Because demand for US debt continues to be at record high levels.
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iwog says
Iwog. You are a complete ignoramous. The size of the FED balance sheet continues to grow, even with no QE3. Also, buying long term bonds and selling short term bonds, will cause long term interest rates to drop, so your conclusion that just because bond rates dropped and FED balance sheet didn't increase, so this must mean that there is more interest for US debt, is a complete leap of faith. In fact, many foreign central banks like China & Japan are now net sellers of US debt. And next time, please don't try to teach us things we already know, trying to pretend like you are some kind of a f*n professor, here.
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iwog says
I know you roll in dough, but the prices are still far out of reach of dual income middle class people. I know life is easy when you collect oppressive rents, but for those who do the 9-5 and pay the full tax because we dont have businesses to write everything off on, this environment it still oppressive.
And gas, commuting, food, tuition and rent are all going up making it harder to save for a down payment.
Inflation in real prices for real items and no wage growth in real or relative terms.
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iwog says
This typically indicates extreme fear. The dollar is the toilet paper of last resort, so people have little faith in the market or in other fiats.
And people that can capitalize on this situation use the media to claim the status quo is good and trending better, but in reality, we will be deleveraging for some time or collapse in some way.
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iwog says
clearly the significant price increases at the grocery store due to all the printing doesnt bother one-percenter guys like you. but for regulars, its been tough.
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Mick Russom says
No they aren't. They are more affordable than ever. PIT on a $500,000 home with 20% down is only $2500 a month and well within the reach of a typical Bay Area family.
Saving a $100,000 down payment does suck, but then how many couples drive around in $80,000 worth of new cars? Most of my bankruptcy clients drive better vehicles than I do.
Do you know what I'm driving in Philadelphia right now? A 1993 Camry I bought for $2500.
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Mick Russom says
Maybe in very specific local markets, but not in the majority of the US>
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iwog says
Do you even know how GDP is calculated?
Secondly, your graph is not even a graph of REAL GDP, which would have shown even deeper dips in 2008 and 2009 than what your graph is showing. That's amateur iwog.
That graph doesn't prove anything. That's like pointing to a person who gained weight from last year and saying "See, he's healthy! He gained weight!" But did he gain weight from eating twinkies, or did he build muscle? Just like a human being can gain 50 pounds over a year and be unhealthy, so can GDP grow, while an economy is unhealthy.
Your own graph shows that GDP can grow during recession, and GDP did grow even during years of the Great Depression when unemployment was at 18+%. The important question to ask is where did the GDP "growth" come from iwog? This is the 3rd time I'm asking you. This is the 3rd time you've given fairly nondescript, almost evasive answers.
If you don't know, just say so, but don't fake being indignant just so you can avoid the question, 14 year old teenage girls use that tactic. Have more respect for yourself.
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See this is my point. A lot of people (SubOink, roberto tycoon, iwog) will claim that housing prices are moving up and the market is recovering even though prices are still inflated compared to incomes and rents in many areas not considered fly over states, but they won't explain what exactly is driving this supposed "recovery". Because I think if they spent time actually analyzing what was driving this "recovery" they might figure out that there really isn't anything to drive home prices up at all, except for government props, and artificial market manipulation.
Because we do know that job growth isn't driving any recovery:
It's not wage growth:
It's definitely not foreign investment:
Let's not even look at the GROWTH of U.S privately held debt-to-GDP, it's fairly unnerving to look at when you consider that we are higher than the peak of the global depression pre-WWII:
So if we're not creating more jobs, revenue, or wage growth at home, and we're not attracting massive amounts of foreign investment, and per capita U.S private debt is higher than even during the Great Depression, then where is the growth coming from?
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Goran_K says
I'm not sure how you read those graphs, but we ARE creating more jobs, revenue and wage growth.
It's not at the same rate as previous recoveries, but you CAN'T deny that it's happening.
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Funny, just stumbled upon this article during morning coffee.
http://articles.marketwatch.com/2012-07-01/economy/32488820_1_job-growth-dismal-jobs-report-new-jobs
Not only is job growth not improving, it looks like it's actually starting to get worse.
Where's the recovery? I invite logical debate (based on empirical data). 3rd straight post without a response. Someone show me the way to prosperity. :)
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Goran_K says
See--it's hard to have a discussion when you ignore everyone who might disagree with you... lol
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Goran_K says
Don't set your hopes up. None of these realtard losers like iwog, his pet - the spin mister from phoenix, or fatupu are going to answer your question, because, by answering it, they will completely discredit themselves.
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dunnross says
Well, I do believe that iwog, and SubOink may actually be seeing slight nominal increases in home prices for a variety of reasons; seasonality, artificially constrained supply, ZIRP strategy,etc. But none of it is sustainable. It's all government props. Has any economy achieved long term prosperity and growth in this way? I think the USSR tried it once.
In Roberto's case, he's really only talking about Phoenix which was one of the Top 3 hit markets in the U.S during the crash. I think the median sold price of homes in Phoenix is hovering slightly above $70/sqft, and that's after a fairly dramatic rise in prices since last year June. You won't even find those type of prices in the high desert of California. I think the Phoenix market may have bottomed, but I really can't say for sure, it's not a market I look at, and I'm not interested in being an out-of-state landlord.
As for "fatupu", I believe you're referring to "tatupu70", I've had him on ignore for a few months now. Too much trolling, and thread derailing, so I'm afraid even if he did have a response, I wouldn't see it.
When it comes down to it, and I have tried the past few years (as part of my job), it's impossible to find anything more than negligible real sustained economic growth in the U.S economy.
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WHEEZJEEZ so much focus on who’s lying who’s not lying and this GDP stuff, growth shmoth… listen to the DUCKHEADS buy a house, hell buy 10!!! ANYTIME IS THE RIGHT TIME TO BUY AND SELL A HOUSE. Besides that helps prop up prices in case my alligators get any hungrier and I have to unload some of my goldmines. BAZINGA!
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duckhead says
Best response yet.
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Goran_K says
Wow, you've found ANY sustained economic "growth" in the US economy?? You must have a VERY powerful magnifying glass. :)
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Call it Crazy says
I admit, Apple sold more iPhones and iPads than I even anticipated. These gains slightly hedged the mobile devices market.
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Goran_K says
I don't know what exactly is driving it. Maybe its just a natural cycle? Maybe people are sick and tired of living in complete frugality and feel a bit more confident that they will still have work next year...therefore they treat themselves to a new ipad/iphone, restaurant...vacation...slowly things are starting to go again. Who knows?
I am simply observing with open eyes. I see tons of new construction projects in my area, new buildings, new restaurants...the movie theaters are packed, restaurants are packed (all the way from Denny's to "the grill")...so it does not look like the great depression to me. Even house prices are higher than last year. That's all. Can it be sustained? Who knows? We can all have our theories as to why it can or can't be sustained. No one knows the future. All we know is history and history has shown us that things go up AND down...and to me it looks like things are on the up swing.
Then there is massive manipulation of data by either party. Democrats are in power so they will promote the fact that things are on an upswing, while republicans are painting the picture in a very negative way. Obviously, that's their angle...don't vote for Obama again because things are shitty. If republican's were in power it would be the same shit vice versa. Just a game.
That's why I don't pay too much attention to the BS...I just look around in real life and when I see activity, neighbors remodeling, people eating out etc etc, I get the vibe of a recovery. Period. I believe what I see.
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SubOink says
I'm glad that you are adult enough to admit that instead of trying to fudge numbers, or outright lie about economic indicators.
Anyone else?
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Goran_K says
Ha Ha, so very true.... I guess it's all about priorities!!! People definitely need their iThingy fixes....
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Goran_K says
Not on the east coast...
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Call it Crazy says
I don't pay attention to the east coast because on the east coast things are always shitty :)
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There's no such thing as a bottom.
Though I feel 80% of the market rebound news is pure speculative crap.
We have a mixed market in the US, more so than anytime in our history.
Most markets are flat, some are still falling, and a few are on the rise due only to local booming temporary economies. Like mineral booms, they can't last forever and those hang overs will hurt bad bad bad.
The market is going to chug along in this state for years to come, anyone waiting for a bottom will be missing the boat. In markets where housing is so low now, it would be pointless to wait even more, investors are buying them up, and renting them out. The quality of life in those neighborhoods are going to shit, as there is no pride of ownership from those investors. This will continue to plague many communities in Florida, Nevada and other hard hit states.
Why are investors buying these houses and not would be homeowners?
Because there are two initiatives for buying. The investor sees prices low enough, and the potential for rent so great, they don't have to think twice how much lower the price goes. It is a positive cash flow, and they are interested in doing volume. You get ten, twenty houses that are paid for in cash, giving you on average $1500 a month.
They can buy another house every two to three months just from the profits.
Where as would be homeowners are stuck in the stupid flipper mentality that is so 2002 Mambo #5 must be their favorite song. This lot is going to be sucking hind tit when the music stops and they realize the bottom was last week, last month, last year and they wont be able to buy a house at any price. Why on earth would the man with a gaggle of Geese that lay golden eggs want to part with even just ONE?
Or in areas that weren't bought up, those would be homeowners will be kicking them selves for not buying, even as far back as last year(when ever that may be).
But make no mistake there wont be a ticker tape parade, the blue angles fly over, a presidential address, or a televised special announcing the bottom.
Sit on the fence at your own risk.
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Call it Crazy says
A classic sign of a great depression...millions have $599.- for a completely unnecessary gadget...
Things are just THAT bad...
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CaptainShuddup says
Because ZIRP.
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SubOink says
Yeah, it's not like people ever buy things they shouldn't. People always have their priorities in order. HELOC what?
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Goran_K says
Starting with a false premise, such as there isn't any growth when there clearly is, cannot be an invitation to logical debate.
There does happen to be economic growth according to empirical data. You may question why, but complaining that I used nominal numbers instead of real numbers when you've already denied all numbers is really lame.
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iwog says
4th time: Where?
If you don't know, just admit that you don't know like your buddy SubOink did.
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Goran_K says
Why are you asking me? I can pull up examples of job growth in silicon valley, in manufacturing, and elsewhere. Airbus just announced they are building a factory in the USA for the first time.
Would any of this satisfy you? I doubt it because you've already gone on record to say that there isn't any economic growth.
Do you want to retract that comment and start over?
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http://www.mercurynews.com/business/ci_20463046/silicon-valley-ceo-see-solid-job-growth-2012
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http://www.huffingtonpost.com/2012/05/09/detroit-manufacturing-jobs-growth-brookings-institution_n_1503151.html
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iwog says
So is growth only happening in Silicon Valley? Will Silicon Valley's economic growth drive a nationwide sustainable housing recovery?
Where in manufacturing? Nationally? Or is that only Silicon Valley too?
You're talking about a sustained economic recovery. When people usually discuss that, we're talking about employment, and wage growth as a country, you know national numbers. But you're talking about Silicon Valley. Will Silicon Valley drive national economic growth? Or are you just talking about the local economy of the South Bay.
Continue on your point iwog, don't toss out random articles, and then run away. Put a concise, complete argument together. I feel like we're finally getting an answer out of you. Don't be shy, be assertive and confident of your position.