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Patrick
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2011 Dec 22, 3:24am
My impression is that the economy will actually slowly recover in 2012, while expensive housing like the Bay Area Fortress continues to drift downward, because it's still grossly overpriced compared to renting the same thing.
Cheaper housing in poorer neighborhoods is already below rental costs though, and in those areas I think there could actually be a rise in house prices as landlords continue to buy up the good deals.
So the news will be contradictory. It will be reported the prices are rising, and that prices are falling. You'd have to study the details to see what's really going on. You can count on the NAR and Realtors to continue lying, and you can count on lazy or paid-off reporters to continue quoting the NAR and Realtors as if they were objective sources.
Long term interest rates might escape the control of the Federal Reserve and rise quickly, especially if Ron Paul actually gets elected. Not that higher interest rates would necessarily be a bad thing. It would be wonderful for responsible people who have saved. European or Japanese debt repudiation could have the same effect.
FuckTheMainstreamMedia
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2011 Dec 22, 4:09am
If that happens does not realtor flesh move from a delicacy to fodder for common stock?
Patrick
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2011 Dec 22, 4:52am
I'm pretty sure realtor flesh is not kosher, just because they're too close to swine.
David9
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2011 Dec 22, 5:50am
"You'd have to study the details to see what's really going on. You can count on the NAR and Realtors to continue lying, and you can count on lazy or paid-off reporters to continue quoting the NAR and Realtors as if they were objective sources."
I like to take a walk at lunch. I pass by a condominium / townhome complex where I can see just from the street view 3 empty units. I assume someone would want to sell them.
I searched on Redfin up to 300K, went through all the listings, did not see ONE for sale. Ok, went up to 400K, 90% houses.
In my opinion, no one has any real numbers on short sales, forclosures, and shadow inventory. If they do, it is a closely guarded secret.
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I understand that the macro economic picture remains murky, and this slow moving train wreck has already lasted longer than most had ever predicted, but what does your instinct tell you for 2012?
Some are seeing depreciation coming to the core. Others see wealth transfer and information jobs keeping Bay Area Fortress prices high.
For me, I feel the old truism, "You can't fight the Fed". As long as the Fed keeps interest rates at historic lows, it will be hard to move housing prices down quickly. I see 2012 pushing prices down a 2-3% real and thus 3-4% nominal.
One possible big mover would be European or Japanese debt repudiation. The loss of a big chunk of retirement assets could hasten sales, but what a pyric victory.
#housing