Watchhttp://ochousingnews.com/news/the-housing-bears-are-right-but-prices-will-go-up-anyway
Spring of 2012 saw a chorus of housing bulls loudly proclaim the arrival of the recovery. All dissent was squelched as the conversation of housing evolved from debating whether or not the market had bottomed to what form the recovery would take. I’ve never seen such a coordinated effort among journalists to influence public opinion and bolster consumer confidence. Perhaps they think they have a duty to the market. I feel I have a duty to the truth.
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OCHN flaw is assuming Bernanke is in control. Open ended QE will fail in the next 1-3 years; possibly resulting in a mini US dollar crisis. The cracks are already showing and it's only been a month. After that will be a possible housing entry point if you don't want to wait a decade and can pick a safe location.
Recessions come every 5-10 years. The output gap will not have been closed by the next recession, resulting in a confirmation of this being a depression....permanent high unemployment.
Somewhere around a decade out the real crisis will begin. QE will have already moved from open ended to permanent/structural. Some type of political/military crisis will break US hegemony. All US investments will be shattered. Lending standards for houses will become more stringent than 20% down payment and good credit. Collapsing the pool of buyers. (Of course WWIII or major government redistribution may change that. ) Exurbs will be destroyed by oil prices. Major port cities will thrive. Although paper shuffling cities like Manhattan may decline.
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Is War a bot? Very fast irrelevant response.
My stance is prices will staircase down...Stay flat with very sudden drops every half decade or so as central banks and governments lose control.
Despite the 5 comments I've been reading this site for many years
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Laguna Beach, CA
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Blindweb says
I agree with this. The effects of QE 3 (aka QE infinity) have done nothing to bolster the economy, or spur any reaction at all. The 10 year treasury is about go back into the 2s. What's that going to do to the printing press strategy?
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Seattle, WA
David Losh's website
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The bigger issue is the Notes themselves that have been lost.
In all the confusion I think no one knows what loans go where unless payments are made. If you are paying on a loan it's just assumed it is legitimate.
Well, what happens when people who don't pay on a Note start wanting to see documentation that a loan was ever made, or that the terms of the loan are legitimate?
It costs me money to go to court, but what about the banks with that MERS thing? What if there is no clear title. Some loans are being closed with an Affidavit of Lost Note. Have you ever heard of such a thing?
If the Notes should ever become non negotiable what happens to the secondary market, which is already screwed up?
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Valencia, CA
Blindweb says
It's silly to assume that we can use this historical trend with unprecedented market, money and fed manipulation... in a global economy.
Blindweb says
This can not possibly happen. Something this severe would cause the people to revolt. A nationalized mortgage system would happen first, and is much more likely. It will keep the the rich rich, the powerful in power, and the sheeple quasi-happy.
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Valencia, CA
golfplan18 says
This will be true in many markets. The housing market is SO unhealthy right now.
-First time home buyers have almost zero chance of buying a home at a fair price.
-FHA backs something like 97% of mortgages
-Massive amounts of people are gaming the system, squatting in their own homes for years
-Complete manipulation of interest rates
-RE insiders and investors hiding properties from the general public .
It's a sad state of affairs... but those are ingredients for prices rising in the short term (in certain markets).
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Jeremy says
Wait!!! But, But, But the media and Roberto said we are in a HOUSING RECOVERY!! Happy Days are back!!!!
...You don't think they might be lying to me, do you???
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46 male
Menlo Park, CA
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Jeremy says
Already happened.
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Huntington Beach, CA
I second what Patrick said. We are reaping the "benefits" of that system now. Dammit I shoulda bought in 2005. I coulda squatted for ten years. Who gives a crap about credit? But I had these silly antiquated notions of responsibility, paying my debts, and living within my means. So out of vogue these days. All BO's change has made me hopeless.
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Quigley says
Welcome to the club!!
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Menlo Park, CA
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Quigley says
He just inherited the whole pile of shit. Though I have to admit that change in housing policy is lacking.
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Seattle, WA
David Losh's website
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Patrick says
The tax credit changed the housing market, and QE 1,2,and 3 changed how banks do business. Let's not forget bank reserves: http://www.intellectualtakeout.org/library/chart-graph/adjusted-bank-reserves-1959-2012
Yes that graph shows a line going straight up.
Housing remains the same over built mess, but the way we mortgage it has changed. The fact we still use mortgages, rather than having prices closer to a cash purchase price is an indication of the exhuberance of the market place.
No one wants to wait out the market, no one wants to admit defeat, every one wants things to go back to the way they were.
In other words, the market shifted dramatically, but people never changed.
I think the focus on Obama has the financial market with blinders on. What people think is if we could just get that guy out of the way everything will revert to normal.
I don't buy it, and Romney having even the slightest chance at the White House is a good indication that I'm right.
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Kent, WA
John Bailo's website
David Losh says
That has been my definition of Obama all along. He is the candidate for people who want to relive the 1980s.
As I see it, George W Bush was a realist who tried to fast track us into the 21st century. But riding him was like being in a rocket sled. The majority couldn't take it and elected themselves a nice, comfortable old liberal socialist to insulate themselves from change.
Yeah, but it is like using caulking to shield yourself from the water of a tsunami! At some point the answer is to give up everything you hold dear except friends and family, take a few possessions on your back, head for the interior and try to relearn the basics like fishing and making a fire (speaking metaphorically, not a survivalist).