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I now agree with the housing bulls. There is no housing bubble.
The bubble is no longer "is", it is now "was".
Yes, I think it's time to officially declare that there is no longer a housing bubble in USA. There was one, whose size, implications and aftermath are the only remaining questions. The MSM has jumped on the bandwagon. The bulls (NAR, CAR and their mouthpieces) have no clue as to how to describe the situation.
The depth and speed of the unwinding process seems to have surprised everyone. Take a look at the DQ charts for Bay Area.
http://www.dqnews.com/ZIPSJMN.shtm
San Mateo and Santa Cruz have -ve YOY gains for the median. Santa Clara is holding to a 0.1% gain. The price per SQFT is also rapidly trending downwards. Sales have fallen over the cliff. No matter how faulty and lagging these indicators are, they will make headlines. I was hoping to see that (-ve YOY median in Santa Clara county) happen by the end of this year. Seems like we are way ahead of schedule.
Maybe we all wish this to get over quickly, but we know it won't. Still, do you think it's happening faster than you had expected ? Or slower ? Or about the same ?
- StuckInBA
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On the way up it is important to have a supply of stupid but on the way down you need to be the one buyer left standing
There are inevitably people who bought near the top, perhaps even a few at the absolute top, who are not "stupid" when viewed versus their utility function. In a market such as this supply & demand fail as primary analysis because every participant, on both curves, has a different elasticity.
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Maybe we all wish this to get over quickly, but we know it won’t. Still, do you think it’s happening faster than you had expected ? Or slower ? Or about the same ?
I'm tracking Boston RE, where we moved out of last year after selling our place there. It's way ahead of the BA and CA, and I think it likely predicts what may happen in the BA, even the "nicer" parts. The city as a whole, and the state as well are (-)ive YoY with median prices, and the trend is continuing downwards. The consensus appears to be that the city proper has seen 5-10% declines in prices since last summer. Realtors there are clinging to the hope that the traditionally busier fall market will jump-start sales. The next few months will be interesting there. I think it's about a year ahead of the BA market in bubble kinetics - we shall see.
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Equifax reckons the average mortgage and credit card/car loan was $136,000 or so for California and $154,000 for zip 94040, this seems way out of wack, shouldn’t it be much more?
I have several cards with $0 balance and one "loan" with $14.95. Perhaps "averaging" can dramatically reduce the number?
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Mountain View, CA
Okay, so I went back and drilled down a bit more and found out from Equifax report that the average mortgage was actually $236,000 in 94040, I guess that is per person so a couple would have a joint mortgage of $472,000?
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Another bubblicious report from the WSJ (subscription needed):
http://tinyurl.com/mytu9
Housing Slowdown Takes Its Toll
Economists Say Selling Prices May Stagnate,
Or Decline, in 2007 as Cool Down Continues
By PHIL IZZO
September 7, 2006
Economists believe cooling in the housing market to extend into next year and many forecasters in the latest WSJ.com survey predict no change -- or an outright decline -- in home prices next year.
Twenty-five of the 48 economists who answered the survey's question about housing predicted no change or a decline in a closely watched gauge of nationwide home prices during 2007. The average prediction for next year was for an increase of 0.43%, lifted by five economists who forecast gains of 5% or more.
(Much more follows this).
*******
There's even mention of the possibility of breaching the hallowed OFHEO annual housing price index, which hasn't fallen YoY since 1975...
I especially like, "The average prediction for next year was for an increase of 0.43%, lifted by five economists who forecast gains of 5% or more." I wonder if those 5 economists would be, David Learah, Leslie Appleton-Young, David Wluka, etc etc.
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HARM's website
My apologies if someone has already posted this, but... wow!
Scroll down to "Reported Attacked!" link.
http://www.foxnews.com/oreilly/
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Even if average depth is 3 ft. per HARM’s example, AND average swimmer’s height is 5 ft… then 100% are “drownable” if the max depth is 10 feet and the scope of the “drownability” study is lake-wide.
Only with a very very high alpha.
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CNBC on in the background, and they are just hammering housing, and not just homebuilders stocks, but now all residential real estate in general. Some of these reports are coming across from MSNBC, so it's not all just market-geek targeted.
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We still eat out at least once a week, and we’re still saving money.
Perhaps I should cook more. But I find eating out being slightly cheaper.
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Randy, you are right.
However, I do not recommend spending more than 50% after-tax on shelter in any case. Life should not center around the house.
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Chris Says:
September 7th, 2006 at 11:57 am
Holy cow! Santa Clara with a 33% hit?
Where did you get this from? A friend of mine is looking at houses and the realtors are now telling her that oh, they'll only go down 10%
I told her to wait until next Summer, but I think it's real hard waiting when some nice houses are coming on the market and are reduced 10% from previous levels.
I was hoping I could find some more data to indicate or that predicts a bigger drop in prices in Mountain View area.
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I don’t want to get into the middle of this thing but isn’t it possible that maybe buyer’s willingness to adjudicate ever greater portions of their income toward housing costs are part of the problem?
Spending more in housing is not the biggest problem. However, many people do so only because they think of housing as an investment. This is the problem.
(I am sure I have been spending more than the "guidelines" on food.)
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astrid's website
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Animals would eat you if they evolved the teeth and stomach and cutleries for it.
I wouldn't oppose vat grown meat though, as long as it tastes good.
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Animals would eat you if they evolved the teeth and stomach and cutleries for it.
Very true. There are no laws in the Animal Kingdom against slaughtering humans.
I wouldn’t oppose vat grown meat though, as long as it tastes good.
I agree. But we should never ban meat.
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The answer is genetically engineered, cloned meats for consumption.
*hides*
(someone did say we need to stir up more controversy around here, so I also propose the above be powered by breeder nuclear reactors)
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I can guarantee that it will happen, eventually. It's a question of time. In the future, people will pay a huge premium for "natural" food, whereas engineered food will provide mass sustenance. It will happen for pure economic reasons. Less pollution, greater safety, higher efficiency, and more reliability of product quality. There will probably be some zealots who will try to bomb the factories, but that's always the case with anything that works well.
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Sprawl is good. Sprawl encourages biodiversity. Sprawl protects indeveloped spaces from the machinations of planners.
Perhaps. This is why we should let the market decide.
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Peter P Says:
"All right, I will scare them away by throwing in some crab meat."
Perhaps a sea urchin dressing. You could claim you thought sea urchins were a vegetable.
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As a first course or appetizer? Ewwww. Not even with a solid grenache. I’m not even a fan of cheeses in the first salad but a heavy meat early on? No, humans should never be served before the red wine.
Hor D'oeuvres. :-D Just kidding.
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The PETA people deserve just that. They make a mockery of themselves and discredit more reasonable efforts to improve animal quality of life via spay/neutering, shelters, humanely raising meats, and so on.
They should be locked in a cage with 20 or so rabid minxes.