http://elibroad.com/blog/2012/8/3/the-housing-market-will-rise-again.html
The housing market will rise again
By LeahE Follow Fri, 3 Aug 2012, 1:00pm 4,709 views 52 comments
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Surrrre it will.
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LeahE says
When? 5, 10, 20 or 30 years?
Just like economists calling for a housing bubble in 2001, but it kept going and going and going, and BAM! 2006, 2007 came. They were finally correct in their predictions. They were just off on their timing.
So yes, I agree that housing will rise again. :O)
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Yes,it will rise from the ashes.
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Like Voldemort. Cool. Are the real estate agents the death eaters?
"There is no good and evil. There is only power, and those too weak to seek it." - Lord Voldemort
Right?
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Of course it will rise again...... Sales will.... after prices continue their decline to early 1990's levels.
Why buy a house today when prices are falling? Buy later after prices crater for 65% less.
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WHY did prices explode in the first place ? Two reasons;
#1. In 1973, women were all of a sudden considered credit worthy in the house buying process. Prices doubled.
#2. Early 80s, the computer was introduced at about $2k ea. We all bought new computers every few years till it evolved. Those purchases created high paying jobs. Those individuals et al., paid any price, believing prices would continue to appreciate.
That bubble in HIGH paying jobs popped. Now what ?
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TMAC54 says
Good. You've explained away high prices in the United States.
So how come a small 800sq. ft condo in Sao Paolo Brazil costs $350,000?
What most of you real estate bears lack is perspective. When I bring up the fact that US real estate is a screaming buy compared to the rest of the world, I get a rather lame "The whole world is a bubble".
So did Brazil experience women being approved for loans and a high tech job boom too?
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iwog says
Where in Sao Paolo? Surely it isn't in the slums which makes up most of Brazil's citites.
I do agree though that housing in America is quite affordable, it's just that people always want to live beyond their means and buy a house they can just barely make the monthly payment for.
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StoutFiles says
Welcome to the United States circa 2030.
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iwog says
Not true. An 800sq ft condo is only $83K in Sao Paolo. You can get a 4bdrm house for $350K in Sao Paolo:
http://www.vivareal.net/apartment-36133511/
http://www.vivareal.net/home-house-36045931/
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dunnross says
LOL......not true eh? So there are no 800sq ft. condos in Sao Paolo selling for $350,000?
I'll bet you $1000 I can find one. Patrick can hold the money in escrow.
Deal?
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iwog says
Only the ones which have gold plated toilet seats.
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iwog says
Iwog, Iwog, that is the kind of effort I'd expect from Goran.
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iwog says
Because they have been issuing credit as silly as US does. 10 years ago in Brazil mortgage rates were so crazy only cash buyers could afford. Now, they have opened up the supply to many. Brazilians are slowly going into the debt hole that American's are trying to climb out. Does it mean the place is actually valued at 350K? Absolutely not.
A lot of countries in the world are jumping on the easy credit bandwagon and making the same mistake and will pay the price as well. Good luck to all the greedy people out there.
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RentingForHalfTheCost says
1/2price-renting, can't you see, you are falling into iwog's trap. There are no 800sqft condos in Sao Paulo for $350K, unless they have hidden treasure under the bathroom tiles. Somebody here said that condos in Moscow are more expensive than in San Francisco. That's not true, either. You can get a decent condos in Moscow for less than $100K, but don't check the prices on the internet, unless you can speak Russian. The prices you can see on the internet are just for foreigners, like iwog. In reality, the actual prices you will get, in any 2nd/3rd world country is what you can get on the ground, if you speak the language, and you can negotiate the right deal.
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iwog says
Hey San Pablo flippers, I've got one for ya!!!
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robertoaribas's website
iwog, you know I've lived in brazil right?
I'm sure you can find a 10 million dollar condo in Sao Paulo, but that doesn't really say much about the market there...
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dunnross says
And then there's reality:
http://www.globalpropertyguide.com/Latin-America/Brazil/Price-History
800 sq ft. is 74.3 sq. meters. Considering this is a table of average apartment values, there is a significant number of $350,000 condos. In fact the average for Southeast and West is around $270,000. ($2 reals is $1 dollar US)
My ORIGINAL point, before things got sidetracked into gold toilet idiocy, is that a very specific set of circumstances that is blamed for causing the United States bubble doesn't apply to almost every other country with high real estate prices.
So how about Brazil?
So how about Canada?
So how about Australia?
So how about China?
So how about Europe?
If everything is a bubble, nothing is.
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iwog says
Not following the logic here. Everything is in a bubble. Globally we are living beyond our means. Many have just followed the greed and idiocy of the American bankers and realtors. Hence, why we are in a global crisis right now. House values are a big part of the blame. Not just in the US, but everywhere. Gov'ts (Brasil, Australia, Canada, Europe, etc.) are all playing money games just like the US trying to keep the dingy floating. Good luck is all I say. Down we go.
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In order for the housing market to rise again, prices must plummet to 1960s levels. If that happens, people can once again be confident that the market price of any house they buy will rise steadily over the course of decades. Only then will house owning be attractive to the young.
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"what this country needs is a really good 5 cent cigar" U.S. Vice President Thomas R. Marshall
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iwog says
Iwog, you've just discredit yourself completely. Even your own cherry picking of the most expensive areas of Sao Paolo doesn't even come close to the $350K which you pulled out of your ar*ss. 6020R/m^2 * 74.3m^2 / 2.032 = $220K not even close to your postulated $350K. So, instead of apologizing for being wrong, you call me an idiot. A typical Iwog - the weasel tactic.
Now since you've picked the most expensive district in Sao Palo, let me pick the most expensive district in San Francisco (I am not even talking about NY, which - the city you should really be comparing Sao Paolo to), and what do I see:
http://www.redfin.com/CA/San-Francisco/425-1st-St-94105/unit-3304/home/39821111
$688K for 605 sqft
Or
http://www.redfin.com/CA/San-Francisco/199-New-Montgomery-St-94105/unit-1501/home/12401527
$1M for 971 sqft
Hmm. Let's see, and who is the idiot now?
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dunnross says
You are. While I posted averages, you went and looked up the most expensive home you could possibly find. WTF is wrong with you?
btw I wasn't wrong. There are hundreds of homes in Sao Paolo selling for $350,000 and much much more.
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iwog says
Open house at Iwog's $350K condo in Sao Paolo:
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See? You can't even concentrate on your own topic.
It's ridiculous to post SINGLE HOMES in San Francisco after I posted AVERAGES IN Sao Paolo but you did it anyway. I don't think you're all that interested in getting to the truth.
About anything.
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iwog says
I doubt whether women are credit worthy everywhere today. But THE MOST PROFITABLE INVENTION of ALL TIME generated enough cash flow to create typical OVER EXUBERANCE all around the world. All the financial problems the rest of the world is experiencing now is traced back to mortgages purchased over the last 20 - 30 years. It behooves me to believe that values will return to the way values were established prior to the price insanity. Buyers make value ? No Buyers = No Value.
Do ya think Banks learned their lesson on investing in overvalued property ?
If they knew prices where low, Loans would be simple to fund.
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Here's the problem.
Everyone thinks that the United States circa 1946-1980 is the norm. That's why real estate valuations seem so high.
Post war America saw huge new tracts of housing developed during a period of rapid monetary expansion, single wage households, and one of the most favorable tax regimes to the middle class that the world has ever seen. This is no exaggeration.
We're entering a new era that has far more in common with 19th century England than 21st century America. Much of the world is already there. Brazil doesn't really have a middle class, in fact Brazil has one of the highest Gini (wealth disparity) indexes of any nation on earth.
Yet they still manage extremely expensive real estate in their largest cities while most of the country is in poverty.
It's not a bubble, it's the end result of wealth disparity and Republican policies. New York, the San Francisco Bay Area, Boston, Miami, and parts of Los Angeles are going to do fine and continue to host the aristocracy at the expense of everyone else.
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iwog says
Iwog. You are full of it. You didn't pick the average area. You picked the most expensive area which is 6020R. You see that there are others on there with only 3000R. Now, 6020R translates to $270/sqft, where in San Francisco an average (yes average) prices for the most expensive area is way over $1000/sqft.
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Lol, it's the amount of money swimming around, combined with low interest rates, Iwog says houses are cheap, well they kind of are, and you have to ask yourself, well, who's got all the money, if I don't. Investors?, they juiced the RE market, and then eventually left when the bubble popped, they came back fast and furious to clean up the damage they caused, you of course, were locked into your mortgage so you were stuck holding the bag, and that's the way it works.
It's all the other inputs relative to my income which is decreasing in real terms that makes it not worth it to buy/own a home. Many people are just not destined to have more, besides not everyone can be rich/have it all, the system is not designed that way and never was.
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Bingo! In Moscow walls are also full 2 foot thick!
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It's currently too high, it looks like a giant sucker game at this point. Prices are at 2005 right now. And if my wife let me I'd put our place for sale and rent instead for next 5 years.
Yesterday evening I was helping out a friend do a basic preliminary inspection. I tell you what, I saw electrical service that was a fire hazard, all original from the 1950's. Improper electrical hookups, structural damage, water damage, etc... and it was all for the low price of 480,000... and needed another 100,000+ in repairs. And that's in a low income neighborhood.
Smart money isn't going to go there, huge gamble, waiting for a clock to strike 12 without knowing the current time isn't how i'd invest.
Michigan and FL are much better places to put your money.
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REpro says
In Russia, walls build you!
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Ca housing is old ugly and way overpriced. 500,000 shacks everywhere. Insane median in the 300,000, those are yuck. The newer stuff is way outta town increasing commute expenses and taking time outta your day. I rented a great apt in burbank with pool jacuzzi and view for .5% of the average ugly house with no pool. Rent in CA, buy elsewhere.
DON'T LIVE UGLY
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dunnross says
No response to this one, ha, iwog. I will take your silence as a sign of consent.
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dunnross says
And I never want to hear you saying that houses in the Bay Area are cheaper than in any 3rd world country.
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dunnross says
I've never uttered that sentence in my life. Stop making up BS.
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David Losh says
How much leverage can you do when interest rate was at 18%? How much leverage can you do when interest rate is at 3.5%?
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iwog says
If real-estate in the US is cheaper than in Brazil, then why is a 2nd rate city like San Francisco, almost 4 times more expensive than the biggest and the most expensive city in Brazil?
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iwog says
No of course not. You are much too advanced a quibler to actually say that. What you said was:
iwog says
So you are by implication (not said of course, IWOG always has to be able to state "I never said that") comparing the entire US housing market, all 4 million sq miles of it, to the highest price (at least in gringo pricing) district in the largest most expensive city in Brazil. That's certainly a valid comparison. NOT.
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Interesting argument but I think what really went on say in the 70's was this.
As people demand more equal rights it meant that there was a huge increase in the labor pool. This drove wages down instead of up. More potential customers means more demand and thus housing went up.
But at the same point a bubble can be found everywhere when it is not sustainable. Suburbia is not sustainable around the world from a resource perspective. Having said that even if it was it still depends on future generations being larger than current once.
There are already arguments that China will start to have a decrease in their population due to the "missing girls" situation. Future generations might decide to cut back on things that are the norm in suburbia...the house, the car the 2.4 kids etc. If they decide to live in a city that would increase urban prices but cause demand for things like cars to drop like a rock.
It also reminds me of Brazil in that supposedly the upper housing end of Miami is being bought by them. Considering how much lower Miami prices went and how Brazil boomed it's easy to see.