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No job security. The poor guy could end up homeless.
You should rent him one of your condos....
To an unemployed with no job prospects? Forget it.
No job security. The poor guy could end up homeless.
You should rent him one of your condos....
To an unemployed with no job prospects? Forget it.
Would you co sign for him?
You should rent him one of your condos....
To an unemployed with no job prospects? Forget it.
Wait, wouldn't you rent it to him based on his stated income?? You want banks to give mortgages based on that!
The sign on the window says...."politicians, lawyers, and other criminals need not apply" This is a decent neighborhood.
But prices in some areas have exceeded their peak in 2006/2007. Even here in the Midwest prices are starting to go up and some houses in my neighborhood are being sold in a few weeks-which is rather strange here. I am actually thinking of selling, almost everyone I know here is upside down and are salivating at being able to sell their house for what they bought-I could actually make a profit in a year!!
This is not a population growth area and hordes of Chindians do not descend here to snap up properties-but the prices and rents are going up.
But prices in some areas have exceeded their peak in 2006/2007.
Adjusted to inflation existing homes aren't higher than 2006 .... adjusted to inflation they're on new homes and on nominal terms they're well above the peak.
In about 2-6 months most likely on nominal median terms (NAR) data line existing homes will be at the peak of 2006
In both case though we had a strong price inflation expansion to go along with a strong rental expansion cycle and from some reason that means home are affordable
But prices in some areas have exceeded their peak in 2006/2007. Even here in the Midwest prices are starting to go up and some houses in my neighborhood are being sold in a few weeks-which is rather strange here. I am actually thinking of selling, almost everyone I know here is upside down and are salivating at being able to sell their house for what they bought-I could actually make a profit in a year!!
This is not a population growth area and hordes of Chindians do not descend here to snap up properties-but the prices and rents are going up.
If those upside down end up selling when they get their money back, will they be moving out of the area? If they start renting, you will be competing with them if you sell your home.
If the population is increasing - Buy homes.
If the population is decreasing - Sell homes.
If the population is steady - Compare PITI to rents.
Logan, you use the labor participation rate, but not the unemployment rates in your charts. Unemployment is a major variable determining housing health.
"Applications for US jobless aid fall to nearly 15-year low
Applications for US unemployment benefits fall to 267,000, near a 15-year low"
Compare PITI to rents.
There lies the big mistake of PITI to rents because the affordability index is so invalid that if you really took PITI inflation to rents then it would have been easy for anyone to know that this cycle would have been a renting cycle not a home owning own
I will say this more and more people have been open to adjusting their algorithm on this because it was such a big whiff.
That at least shows that some people are wanting to learn why they have been wrong on the demand curve. A lot times people just make excuses on why they have been wrong but the cycle is going into year 8 next year .... cycles run on 7-10 time frames so, it's too late for this cycle.
Come 2020-2024 the demand curve will change and we won't have such a weak demand curve numbers
Logan, you use the labor participation rate,
Labor participation rates are totally misunderstood, people are shocked that it fell even though it was forecasted to fall for decades. It's a more a whistle blow for anger than real economics
"Applications for US jobless aid fall to nearly 15-year low
When I talk to housing people I point at that you leave unemployment claims at a 15 year low and the worst adjust to population demand curve from main street post WWII at the lowest rate curve post WWII
This is where people show their colors in terms of not understanding demographic economics in terms of the demand curve with population. This was the main reason why the sales estimates were a big miss
Again come 2020-2024 the demand curve will change
Dual income college educated Americans having kids in big numbers ... will lead to a higher demand curve than this
It's like people either hate math, facts and data or they just want to have a debate for the sake of debate... But numbers can't lie.. this was the reality of this economic cycle
Applications for US unemployment benefits fall to 267,000, near a 15-year low"
Who's left to fire? You have almost half of the working force age not working now...
It's the confidence my friend, in addition to the ability of buying a home. When unemployment is on a down trend people feel more confident to make major decisions like home buying. Guess what was the chief reason I decided to jump into condos at the start of 2012. :)
and because I knew this was going to be the case....
2010
“The longer term consequences of an unstable residential real estate market may be more serious than just the destruction of individual wealth. The ideal of middle class home ownership may be at stake. The census bureau reported a 7% decline in national rental vacancy rates in 2010, along with an overall decline of 0.7% in home ownership rates compared to a year ago. There were fewer “organic†buyers, more renters and more investment buyers in the market in 2010 and I expect this trend to continue into 2011. Are we at the beginning of a sociological movement away from middle class home ownership and towards a cultural split between the investment property landlords and their renters both of whom may have less personal investment in neighborhood security, local schools and shared public facilities compared to primary homeowners.â€
I knew the tight lending myth will be created as has happened... these people Zandi, Goodman, Yun... very predictable if you read their sentence structure... like Yellen as well
Check this out:
The unemployment trend is one helluva predictor of housing.
Check this out:
The unemployment trend is one helluva predictor of housing.
Housing is a process ... it doesn't track 1 to 1 on economic model numbers in a cycle...
Low unemployment
Low Rates
Even in 2015 ... if you take out the excess cash buyers in the system in year 7 of the economic ... you're barley over the Great Recession Lows on demand from main street which are heavy ended on the wealthy Americans as well.
Goodness..
For housing Prime working age is what matters
Forget 16-24
Forget 55- and up
Move the demand age curve to age 29 and up and that group is starting to grow again employment to population
That is the key
Labor Participation rates for Prime working age is over 80% ....
If those upside down end up selling when they get their money back, will they be moving out of the area? If they start renting, you will be competing with them if you sell your home.
If the population is increasing - Buy homes.
If the population is decreasing - Sell homes.
If the population is steady - Compare PITI to rents
here population is decreasing steadily. Not massive, but steady tide out. I myself am thinking of moving out-looking OR/AZ but am talking to a few people in new England too(never been in that area, so it intrigues me, maybe can spend a few years there.) The scenery is great and not much colder than where I am. So which is why I am thinking of selling and taking my tiny profit!!)
^^^^this. Strat cites millenials buying in the next decade.
There's a reason DTLA is experiencing the only growth in new housing in the Los Angeles area. There's a paradigm shift and it's not towards families and kids.
There's a paradigm shift and it's not towards families and kids.
Birth rate climbs for the first time since the recession
Key always is college educated dual income household having kids, more 2020-2024 ....
What happens when we hit another recession?
A recession most likely will happen in the next 2-4 years.. but since we didn't have a real boom the down turn will be much less dramatic
But thinking in bigger terms.. age group 23, 24 25 are the biggest in America, laws of bigger numbers coming in play years 2020-2024... even if college educated graduation rates stay the same, you will just have more supply of young Americans in this group.
We had a good run om demographics from 1996-2007 these few years just wasn't as strong
The X factor going out is how much $$$$ are kids going to spend on their parents housing cost going forward the next 40 years.
That's something that data can't get a grasp on and what I am trying to get a handle on now
When unemployment is on a down trend
I hate to tell you, just because the "official" (artificial) published UE rate is down, doesn't mean everyone is working or has quality jobs. And those who are considered to be employed (even when they only work an hour or two a week) aren't going to ramp up home sales...
Cut back on the kool-aid....
It's not kool-aid. It's fine wine.
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