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Logan Mohtashami says

debt on debt adds up from that point on

What does that mean for middle class?

bubblesitter says

What does that mean for middle class?

Globalization
Technology
Debt
Demographics

All 4 will shrink the middle class and wage growth. A few sectors will do really well while the rest are struggling with a lack of wages

Logan Mohtashami says

A few sectors will do really well

Which begs the question?

indigenous says

Which begs the question?

-energy
-Medical
-finance ( some sectors)
- Pilots make good money actually
- Engineers

OK guys, that's is too much into future. I am keen on knowing when will the next recession hit? cuz until then there will be no increase in inventory. Another way to increase inventory is that, a shit load of high paying jobs hitting the market and people make huge gains, which is next to impossible and can be easily ruled out.

bubblesitter says

. I am keen on knowing when will the next recession hit?

From what I'm reading this year in the 2nd half, and again in 2017. The one this year is going to be mild and the one in 2017 will not be.

With the apocalypse coming in 2030.

Watch the bond prices especially the relation of 3mo to 10yr bonds

From SF Fed: Explaining the slowdown in existing home sales - http://www.frbsf.org/economic-research/publications/economic-letter/2014/may/existing-home-sales-slowdown/?utm_source=mailchimp&utm_medium=email&utm_campaign=economic-letter-2014-05-19 …

"Sales appear to be slowing even more in distressed markets, where real estate investors had bought up single-family homes to convert into rental properties following the housing bust. Evidence suggests that investors may be retreating from these markets as housing valuations rise."

bubblesitter says

housing valuations rise."

May 7, 2013
http://loganmohtashami.com/2013/05/07/housing-mammoth-stuck-in-tar-has-bigger-problems-to-worry-about/

Housing Mammoth Stuck in Tar Has Bigger Problems To Worry About

Logan Mohtashami, Benzinga Contributor
May 07, 2013 8:11 AM

A recent comment by the Chief economist of the NAR that housing is “stuck ” reflects his concern that the low inventory of homes for sale is holding sales and the housing recovery from gaining traction. But Mr. Yun is focusing on the near term problem facing housing, which is a shortage of on sale inventory, while failing to consider the real dangers lurking just beyond the present.
Perhaps Mr. Yun would do well to take a visit to La Brea Tar Pits, and there consider the plight of ancient Wooly Mammoths. Some of those were stuck in the mire too, but though the tar was a contributing cause, ultimately, what delivered their fatal blows? In some cases It took the Saber Tooth Tiger, and sometimes packs of Dire Wolves to do that, sometimes both at once.
So what of our housing market? Prices are on the upswing, in some markets demand outstrips supply to the point that multiple offers are not uncommon. If housing can “unstick“ itself with an increased inventory, then what could possibly go wrong? What are the saber tooth tiger, and dire wolves of housing?

They are these:
1. Housing Price Inflation without income growth: When prices of homes rise faster than incomes, buyers become priced out of the market. While home prices, year over year, are on the rise, average incomes are not keeping pace. This is not a good long-term trend. Cash buyers are currently 30% of the market, and cash buyers have no debt to income problems. These buyers are helping price some primary mortgage home buyers out of the market.

2. Demand light from first time buyers: Even with historically low-interest rates hovering in the 3.25- 3.75% range, we are hearing cries that mortgage lending is too tight, and that would be first time buyers are having trouble qualifying for a loan. Even in 2013, first time home buyers are running at a 30% level, lower than the historical norms of 40-43%. What happens when interest rates rise (as they inevitably will do) ? Unless we see good income growth, those that can’t qualify now will have a much harder time qualifying when mortgage rates are higher.

3. Mini-Bubble 2.0: The main reason home prices are rising at current pace is that on-sale inventory is so low. There continue to be problematic numbers of homes underwater, many Americans in the 90-99 LTV range, which means these homeowners will not be putting their homes into the for sale inventory. Further, there has been a big drop in home construction in the last 5 years. Though that number is getting better each year, we are not building homes fast enough to make a significant push into inventory. Finally, properties in distress take a long time to get to market and we have still have roughly 5 million homes that are either delinquent or in the foreclosure process. So long as these factors exist, then there remains the possibility that the few properties there are, are being inflated to unrealistic levels, and that mini bubble in prices will get bigger.
It would be wonderful if the good news being reported by many is actually good long-term news as well. But, in my view, the recent rise in home prices , without the corresponding increase in real incomes, and new home purchase mortgage applications being approved, then the truth seems to be more like the truth for our fateful Wooly Mammoth. Sometimes the initial problem becomes insignificant, though contributory, to the much worse problems to come.

clambo says

Houses did OK in Texas because Texas hasn't lost as many jobs as other states.

Nonsense -- housing did okay in Texas because it never went up that much during the boom. Last I checked, housing prices in Houston haven't recovered from the 80s bust, adjusted for inflation.

Sorry about your cat, Logan, 24 is pretty impressive.

Thanks, 24 for a cat is 113 years for humans. He always got me up at 4:00 for work. Now I have spend more time with my wife!!! ;-)

corntrollio says

Sorry about your cat, Logan, 24 is pretty impressive.

corntrollio says

Texas because it never went up that much during the boom.

Texas didn't have the boom and bust in prices yes and they had strict laws on cash out refinances there as well

Logan Mohtashami says

-energy

-Medical

-finance ( some sectors)

- Pilots make good money actually

- Engineers

How did you arrive at that list?

indigenous says

How did you arrive at that list?

Top 20 Highest Paying Careers

Oral and Maxillofacial Surgeons - $166,400

Physicians and Surgeons - $166,400

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Dentists, General $141,040

Judges, Magistrate Judges, and Magistrates $119,270

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Prosthodontists - $118,400

Podiatrists - $118,030

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Pharmacists - $111,570

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Political Scientists - $107,420

Physicists - $106,370

Financial Managers - $103,910

corntrollio says

clambo says

Houses did OK in Texas because Texas hasn't lost as many jobs as other states.

Nonsense -- housing did okay in Texas because it never went up that much during the boom. Last I checked, housing prices in Houston haven't recovered from the 80s bust, adjusted for inflation.

Thomas Sowell talks quite a bit about the price of housing in Calif being higher because of gov't meddling. Rent control, regulations, cost of permits, etc

indigenous says

Thomas Sowell talks quite a bit about the price of housing in Calif being higher because of gov't meddling. Rent control, regulations, cost of permits, etc

Depends on where in California, but that's probably accurate. Prop 13 is a big one, and that saves people on property taxes, but probably serves to make property prices higher since no one wants to sell. There are also lots of artificial constraints on land use in many areas. There is plenty of land in CA, particularly in the Bay Area, but you aren't allowed to build on a lot of it.