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Stock market has already peaked and dropped 5%.
Housing is much like a group of roller coaster cars, cresting a peak. The riders up front are over the peak and looking at the massive drop, while the back cars are still going up the peak. Once everyone is over the top, then the screaming starts.
The plunge downward is swift and steep, and it will be over before you know it
tatupu70
2013 Aug 21, 1:30am
Housing is much like a group of roller coaster cars, cresting a peak. The
riders up front are over the peak and looking at the massive drop, while the
back cars are still going up the peak. Once everyone is over the top, then the
screaming starts.
The plunge downward is swift and steep, and it will be over before you know
it
Last bubble excepted, housing almost never plunges swiftly and steeply because of the lack of liquidity...
Last bubble excepted, housing almost never plunges swiftly and steeply because of the lack of liquidity...
When you put it in relation to how long it takes to sell a home due to the lack of liquidity, then there is really no difference in the relative pace of price plunge.
joshuatrio
2013 Aug 21, 1:39am
Stock market has already peaked and dropped 5%.
Housing is much like a group of roller coaster cars, cresting a peak. The riders up front are over the peak and looking at the massive drop, while the back cars are still going up the peak. Once everyone is over the top, then the screaming starts.
The plunge downward is swift and steep, and it will be over before you know it
LOL - great picture.
tatupu70
2013 Aug 21, 4:05am
You forgot the rest of that sentence....'after falling 5.4% the previous
week"....
It's the same pull-forward affect just like the 8K first time homebuyers
credit... remember, people buy "payments", not houses... With wage growth
stagnant, they can't afford higher payments, so their jumping in now...
So which is it? Why didn't it pull ahead the previous week?
People aren't buying homes to live in them anymore, so the market is worldwide.
"Mommy, what does owner-occupied mean?"
"Oh, that was back when people bought their homes. Now everybody rents."
"You mean like we do from Mr. Chang?"
"Exactly."
Look at July existing home sales--up 6.5% MOM and 17.2% YOY.
http://finance.yahoo.com/news/comes-existing-home-sales-133000287.html
Oh, you say, those are contracts signed before mortgage rates rose. Also out recently--mortgage applications are down. So, that confirms the theory, right? Well, not so fast. Looking closer,
"... the gauge of loan requests for home purchases, a leading indicator of home sales, rose 1.2 percent..."
http://www.reuters.com/article/2013/08/21/us-usa-economy-mortgages-idUSBRE97K0FS20130821
I'm not sure the rising mortgage rates are having as big of an effect as some on here do...
#housing