patrick.net

unsettling news for the bears indeed.

Bruce's analysis seems reasonable. Nobody ever said that a woefully unhealthy RE market only involves price declines!

20% sounds like bubble talk to me.

Goran_K says

20% sounds like bubble talk to me.

Is anyone seriously denying that we are heading right into the next one? Wildly different mechanisms, same effects on pricing as last time. Hell, Obama and Bernanke have openly stated that their goal is to "recover" housing prices via policy.

bmwman91 says

Is anyone seriously denying that we are heading right into the next one? Wildly different mechanisms, same effects on pricing as last time. Hell, Obama and Bernanke have openly stated that their goal is to "recover" housing prices via policy.

Could be. Not sure how they will do it though unless they literally do 0% interest loans.

Inflating a bubble with the economy of the late 90s is a bit different than inflating a bubble in 2012. I mean, this isn't their first attempt. They tried in 2009, 2010, and 2011. For the most part, prices have been flat. We're still at 2010 in OC prices and we're down to 1 months inventory. Not exactly what I'd expect as a precursor to a bubble.

Private banks aren't stupid, normal buyers are timid. Investors/speculators, continue buying by all means. :)

robertoaribas says

affordable sonoran desert paradise that is Phoenix...

Roberto, what are the popular hangout spots for families in Phoenix?

Goran_K says

Could be. Not sure how they will do it though unless they literally do 0% interest loans.

Inflating a bubble with the economy of the late 90s is a bit different than inflating a bubble in 2012. I mean, this isn't their first attempt. They tried in 2009, 2010, and 2011. For the most part, prices have been flat. We're still at 2010 in OC prices and we're down to 1 months inventory. Not exactly what I'd expect as a precursor to a bubble.

Private banks aren't stupid, normal buyers are timid. Investors/speculators, continue buying by all means. :)

Well, there are all sorts of very obvious benefits to Wall Street from the Fed and government's actions. I firmly believe that all of the central planning that is going on really is just to facilitate the wealth transfer from the 99.9% to the 0.01%. Welcome back, robber barons. Hopefully we'll still have the second amendment in a couple of decades so that the people can take back this once-great nation once they have been pushed far enough. Life's still FAR too comfortable to get anyone to do anything to reverse the process while it still can be reversed.

Then there is the official story from the government and Fed. One of Obama's campaign promises was to put a floor under housing. Obviously, he will support any policy that does this. Why? Well, it seems that most of the economists that provide policy advice believe that we just need to get consumers spending again since our GDP is mostly made of consumer spending. Bernanke has openly stated that he needs to get equities and RE into an upward trajectory to stimulate the wealth effect. That's the master plan. Pump up asset prices so that consumers feel safe with taking out more credit to consume with.

The last bubble was made of unsupervised greed and idiocy. This one is FULLY supervised and has the blessing of our esteemed leaders, and it would seem that they can't really say anything to stop it since their mouths are stuffed full with Wall Street's cock.

Mark D says

unsettling news for the bears indeed.

I don't think so. I don't listen to shills trying to sell newsletters or charge people for "speaking engagements."

Regardless of what happens with the fiscal cliff, unemployment is not going to improve.
https://www.tiaa-cref.org/public/advice-planning/market-commentary/market_commentary_articles/articles/mc_051.html
http://online.wsj.com/article/SB10000872396390443294904578050492836822044.html

Housing prices are decoupled from employment and wages. It's not an accident, it's policy.

Maybe you should listen to a few shills, norris has been buying for last few years like Wogberto.

Heck, house / condo prices went up 10% in my Redfin email this morning.

Whether or not I think these assets are a good value or if this price surge is based on market fundamentals is a different story.

the chart below is the main reason why prices have been going up. it is simply supply and demand. i don't see anything "unnatural" about this recovery. it has always been one of the FED's primary functions to lower interest rates to stimulate the economy when necessary.

The problem with your statement is that the supply is artificially low.