we are now following a low rate policy similar to what the Bank of Japan did with quantitative easing.
OK, but the scale in which we did QE is no where near what the bank of Japan did. The Bank of Japan's QE was small and ineffective. The Bank of Japan was filled with chickens scared of uncontrollable inflation. The current prime minster has pledged to implement unlimited QE. And you should then know what has happened in the last few days.
And our real estate will never lose so much value, because we have Chinese investors and immigrants. Especially now in California, because the real estate bubble in China ended.
Oh, by the way, for the ordinary American citizens, sorry to tell you this, but you are once again priced out of owning your home.
Well, yes this time it is supposed to be different. Before the Japanese were buying up all the real estate, now the Chinese.
The FED has just announced that it is planning on ending QE by end of this year-now for the FED, even announcing such a thing is blasphemy. But their balance sheet of junk debt is going up by leaps and bounds. We have been gaining jobs steadily, but not wages.
2012 was a nice bounce, but lets wait and see. I don't think the fat lady has sung yet. I have no skin in the game, except that I want to buy. But current LA prices no way. But that is just me.
The one comparison that I haven't seen yet in Japan is a chart of rental rates vs property values.
I know now in Japan it costs about half as much to buy as rent at today's new low prices, but that's with a 35 year mortgage and stupidly low interest rates, which means that at current pricing, its still not as 'cheap' as US properties are. (In our area right now its about 0.4 for low end properties and 0.5 on mid-range properties)
The US won't fall below the point at which investors can make a tidy profit. Japan can still fall farther before it gets to that point.
Thomas, thanks for the chart, I looked but couldn't find one. That one differs from what I found (which was limited a few discreet data points). If it costs $1100/mo to buy a place that rents for $1250/mo, then Japan prices have much farther to fall. No investor in his right mind would buy with that kind of ROI.
The place I am currently purchasing would cost $600/mo if I had financed it at current market rates, and it rents for $1100. US prices simply won't go much lower when there's that kind of profit to be made unless the inventory fairies work overtime and start dumping hundreds of properties into a local market. Ya right!