First it was real estate prices still had another 65% to crash.
Then real estate was not recovering.
Now real estate was in another bubble.
2 years from now when prices take a 10% pullback after going up 100%, they will say "See? I told you"
Is there anyone not living in a World of Wacky?
Base on the Japan's experiences, I think we will muddle through for the next 5-10 years bearing a Europe collapse. So, there will always be mixed economical news. I hope they do not pump the housing price too fast this time tho.
I wonder what it would take for people to realize that trading houses back and forth, or securities, or tulips, or whatever, does not make a healthy economy. America used to produce things that had value.
The housing market is turning around, because of the investment from China. Not definitely because the economy has turned around with inflation. So there will be more money for rich to hoard to increase the price of everyday necessities.
Either way I see it, the middle class is screwed.
I bet you Wong will make a comment in defense of Chinese investors.
Base on the Japan's experiences, I think we will muddle through for the next 5-10 years
I'm tired of hearing about Japan, and ZIRP.
Japan, like Germany, is a confined homogeneous society, they were able to do what they want. They are huge economies, but focussed, and directed, a lot by government control.
We'll need something more, because our economy is constantly changing. We have societal diversification that creates demand. We have options that Japan, or Germany, don't have.
I personally don't see where we need a housing recovery. We have tons of housing units, and the ability to add millions more at a moments notice. I don't see adding supply at this point being an advatage, but I don't see any reason for scarcity.
We should move on, and let the housing market flounder along the way it always used to before 1998.
I personally don't see where we need a housing recovery.
If we have a housing "recovery", the middle class is finished.
Bingo - all that housing inflation does is shifting the multiplier of avg. yearly salary to house price upwards to even more unsustainable levels again. Here in the bay area 5-10 x is fairly normal.
You get what you pay for.
If you go to Nebraska, a teenager working for Taco Bell can buy a 5 bedroom home with a swimming pool.
But then, who wants to live where no one wants to live?
Sure, but that's what salary adjustments are for. The salaries in the bay area are much higher than in Nebraska I would bet, but not high enough to keep the multiplier somewhere around 2-5x, where it should be. I bet in Nebraska it is closer to that (though I don't know).
It's going to take a few years to ramp up construction jobs but they are coming. So far we have one single bull market year, and even if subdivisions were planned in 2012, they aren't ready to build yet.