patrick.net

RayAmerica says

Leave it up to ellie “I never, ever insult anyone” mae to change the discussion from a serious, adult topic into a childish rant. She does this on every thread. At least she’s willing to admit:
elliemae says

having driven away most of the posters on the misc forum with my rhetoric and constant personal attacks

Still masturbating to a typo, rayray?

Ever notice that ellie "I never, ever insult anyone" mae NEVER addresses any issue in detail? To people like her, issues do not matter. The only thing that’s important is they have a venue for their childish little games. I think Patrick should limit this site to adults. Children like ellie really don’t belong here.

This article makes a pretty convincing case that housing has another 10 years to go before it recovers:

http://www.mybudget360.com/lost-decade-housing-real-estate-2010-to-2020-higher-mortgage-rates-baby-boomers-retiring/?source=patrick.net

Zlxr says

We can build sea walls - but where will the Sacramento and San Joaquin Rivers drain too?

We have already seen several times the rivers flood the central valley. No new news there.
And it will happen again long before the end of the century.

There has been enough disasters the last decade that America could have capitalized on, like we did in the Bush Sr. and Clinton administration. Because the Government wasn't in the business of gaining control of the situation while doing nothing to alleviate the problem. And any and all rebuild efforts have been closed government contracts to Lobby and special interest Friends of the Fourth Reich, gets to make all the profits for them selves. And the goods and materials are imported from other countries.

The Midwest Flood and Andrew did more the economy and "Main Street" than president has done in over 60 years. All of the Wood mills, and various building and construction materials and tools manufacturing were booming from coast to coast, which employed the service sector and the not to mention the actual Construction sector. Everybody that wanted a job had one for that reason.

Bush and Obama's administration has allowed corporate and foreign as well as in Carl Roves case capitalize on all diversity and disasters. While keeping the citizens of Burbdale on a broke short leash. People that need a job can't get one for that reason.

What does this have to do with the bottom?

If you need to ask, you wont know the bottom if it bit you in the arse.

I don't think America would have missed a beat, if People descended on New Orleans to rebuild it like they did for Miami after Hurricane Andrew.
Nor do I think "Americans" would have been so stupid to put all of their Eggs, in the "House Flipping To Riches" basket.
That "WAS" the only game in town, people like to call "A time of Plenty".

That's like eating your own flesh, and calling a time of plenty.

Perhaps that's why Katrina was handled like it was. Buy now or be priced out for ever, would have been a hard sale, with 4 million Americans with hammers and saws in their hands.

I'm thinking at this point, the cheaper houses get, then the harder it will be for Commoners to buy them.
I had to crawl through barbed wire and cross mine fields to get my FHA loan. I'm glad I bought when I did.

And I hope the value falls another 10-20% "For now", so I can do about 50K in sweat equity renovations, with out bumping up my Tax roll, more than I'm paying now.

Now's not only the time to buy, but now's the time to Renovate, don't wait for a Market turn around, Cities will call that 50K in sweat equity 100K in improvements.
But while prices are inherently falling, 50K in renovations, adds Jack Squat to the assessed value, no matter how desperately you tried to make it so. You might get back 60% of your time and money you put into those renovations and additions, if anything.

So even though I'll be doing major improvements, my tax bill will actually be going down, every time I petition my assessed value, to reflect the market value.

So in ten, or fifteen years, when comparable houses in my neighborhood are going for 250-300K, not even 350-500K they were fetching, in '07. I'll be paying taxes on 110K.

Make no mistake we are going to over correct hard, don't time it, or you'll miss out on great opportunities. But do take advantage of those falling values, even after you buy.
Falling values aren't only great for buyers, it's great for owners that aren't hung up on what values are today, and are looking more at a long term values. And just generally want a nice place to live in, with out pulling your hair out following the stupidity in politics going on with RE and the Mortgage industry right now.
Sanity has got to be worth something.

AdHominem says

camping says
What’s the point? There is no “national” house. If nationwide prices hit bottom, but in your local market prices have already gone up 20% or are still falling, why do you care about what the nation as a whole is doing?
The bean counters do this thing, they take a look at the actual selling price of houses. Then they add these all up and average them together. It gives us an average sale price of a home in a given area. Lets call this area “The United States of America.” Then they can record these average sale prices over a period of time and make a chart or graph depicting trend lines. The trend goes up and down. Following a housing bubble there is usually a “bottom.”
Unless I am mistaken Ray asked a simple question.

A bean counter would not look at only aggregate data, but do further slicing and dicing of data down to individual components, individual local markets.

Further analysis down to cities/MSA needs to be done becuase national prices are altogether meaningless and has no worth to any end user of data. Such data is only twisted for political purposes by idiotic journalists, not bean counters.

Published data down to local markets has meaning and is usefull to end users in each market.

National it should be around 2023 or so,

US homes lost to foreclosure up 25 pct on year

US home repossessions spike in August to highest level since start of mortgage crisis

Alex Veiga, AP Real Estate Writer, On Thursday September 16, 2010, 12:04 am EDT
LOS ANGELES (AP) -- Lenders took back more homes in August than in any month since the start of the U.S. mortgage crisis.

The increase in home repossessions came even as the number of properties entering the foreclosure process slowed for the seventh month in a row, foreclosure listing firm RealtyTrac Inc. said Thursday.

In all, banks repossessed 95,364 properties last month, up 3 percent from July and an increase of 25 percent from August 2009, RealtyTrac said.

August makes the ninth month in a row that the pace of homes lost to foreclosure has increased on an annual basis. The previous high was in May.

Part of the problem we're facing is that the last 10 years of inflation has been built upon sheer debt accrual, both Federal, State, and household.

If that is backed out (by eg the light purple line graphing 30 year mortgage rates moving back up to mid-90s levels) then we may see incomes and home prices fall back to the mid-90s plateau.

I don't see that as likely, but it's certainly possible. That's the maximum stress case going forward, high rates not due to inflation but a buyer's strike on government debt, or the Tea Party twits taking over gov't and walking their talk.

A more likely scenario is the dark blue nominal price line doing another 50% swoon to bring us back fo $125,000 level in 2020. This is the Japan experience.

EBGuy says

Winter solstice, 2012.

This is the BEST ONE as I re read them, LOL Oh god that is just freaking Funny... I like that one Ebguy... lol

Cvoc13 says

You are laughing or at least making fun of my 2023

I see nothing wrong with 2023 as the bottom. Japan ran up 1985-89 and then tanked 1990-2003 as the bad debts were slowly beaten out of the system.

What people don't understand here is that most of the wealth we got in the previous decade was pure bubble wealth. It was fake, and it did not make us stronger as a nation, just the opposite, and just like Japan's experience in over-consumption and under-investment.

Like Japan in 1990, we're a 350lb fatso who needs to get on a tough exercise and diet program. The results to get back into shape will take a long time, longer if we're not serious or take breaks from the regimen. We shoulda started this regimen in 2001, but the powers that be fed us such that we packed on another 50lbs instead.

Japan's recent semi-recovery of the previous decade was largely driven by more exports to us, btw. Our imports were paid for by the bubble machine.

The bubble machine is broken now.

Troy says

the powers that be fed us

Troy, a great "double entendre"

what portion of Japan's recovery was fueled by our bubble, and will that tie-in cause any extra hardship for them?

Bap33 says

what portion of Japan’s recovery was fueled by our bubble, and will that tie-in cause any extra hardship for them?

Tough to know without a rigorous study. The yen is kinda killing their exports, plus they've offshored much of their ongoing production to Chinese partners so 2000 is a lot different from 2009.

Imports from Japan in billions $:

2000 146,479.4
2001 126,473.1
2002 121,428.6
2003 118,036.6
2004 129,805.2
2005 138,003.7
2006 148,180.8
2007 145,463.3
2008 139,262.2
2009 95,803.7

Going with $100B as a baseline, there was ~$40B/yr of bubble money that made it to Japan 2004-2008. At $50,000 per job that's 800,000 export-driven jobs supported in Japan, not insignificant.

Ms. Nikkei is tightly couple to Mr S&P at any rate:

Spring/Summer of 2013 for alot of reasons, but I think the following two are the most interesting and amusing.

Please put on your tin foil hats. You too, yes you, the guy the on the interwebs still running Win3.11 with Trumpet Winsock. Ok, now that we all have our tin foil hats on. I am not too sure that we will see a significant lift from the bottom of housing until two psychological factors have past and they have nothing directly to do with housing.

1. The 2012 Presidential Elections
2. New Year’s Eve 2012.

Once both those psychological events have past people will be ready to believe that unicorns are real, the President will be willing to do what it takes to bring about real change, and that the “New World” is starting out better than the old world that ended on December 21, 2012.

Laugh if you will, but even if you did not believe in Y2K you still psyched yourself up for it one way or another. It was the talk of town even for those that did not believe in it. Everyone knew when the elephant was to arrive. We all survived its arrival and the world was a better place for a few more years. Well a few more months.

For the next two years the President good or bad will be doing nothing that will not help him get reelected. This has nothing to do with current politics. Every President is a victim of the election cycles. No President even one that stands for change has the power to change that. We will be listening to people talking about what should be done about housing markets or what was done in the past right or wrong, but no one will do anything new until after the Presidential elections.

No one uses Mayan calendars anymore. No one really cares that they stop issuing updates for the calendars sometime before the 900’s and the EOL for the product was set for 1441 about 50yrs before they discovered Columbus trespassing on their beach front property. What no one knows is Microsoft Exchange and Outlook was built on a linear time engine that uses mathematical units that are oddly similar to kins, unials, tuns, katuns, and baktuns. Try setting an Exchange Server to the date Aug. 12, 3114 BCE and see what happens. One day before the beginning of the Long Calendar.

All joking aside everyone knows some old calendar said the “world would end” (Although this miss-interpretation is only supported by those that want to discredit the Mayan calendar) sometime in December of 2012. (Those that support the Mayan calendar firmly promote and state that the ending of the Long Calendar does not signify the end of the world and the Mayan did not believe in an end of the world event. They more accurately believe in a changing of the worlds. Sort of like believing the Great Depression was a different world than say the current world of our Great Recession.)

The point here is that next year is 2011 and everyone that went to ground because of Y2K will start getting ready to go to ground before 2012 starts. No one is going to buy a house unless it is in a nice residential area in the underground facilities under the Denver Airport. To my understanding it’s the only local housing market that is Realtor free; for now. The will eventually find it and inflate a great big housing bubble there too. You have to be able to understand all the extra unexplained underground construction and the codes hidden all over the airport concourse in plain sight to even get to bid on property there.

And Finally…

1. I have never seen a real unicorn in person, but yet I know I could identify one in the wild.
2. I do not believe in Presidential elections anymore, but yet I will still vote and wait up for Santa.
3. I do not believe in end of the world scenarios, but I do believe the Mayan Calendars’ used a base 20 system for counting.
4. I do not want to believe that anyone really believes the Long Calendar predicts the end of the world, yet I know I am as wrong as they are.
5. I have all but said I will never buy a house, yet I sill watch for “houses” (not mortgages and interest rates) to become affordable.

The year 2012 will have a psychological effect on housing even though all logic says it should not. Only investors will be buying; waiting to sale to everyone that survives into 2013. We all know its going to be a tough Presidential race and if the world was really going to end no one would even bother running for President as you would never get to serve.

tatupu70 says

Camping is correct. There is no national real estate market–all real estate is local.

Perhaps, but it's also important to remember that employment is local as well and if local economy isn't doing well then chances are your local housing market isn't doing well. I would look closely at the employment numbers for your local region to get an idea when housing in your area will stabilize and then increase in price.

Housing "bottom" 2013-14? IMO, that's optimistic. This slide is continuing and foreclosures are rising. I don't see "bottom" until about 2015 (estimated time it will take to work through all the excess inventory of foreclosures, etc.). From that point, I think the overall market (with exceptions of various local markets) will stagnate and remain flat for at least another 5 years.

http://www.dailyfinance.com/story/real-estate/housing-bottom-years-2013-14/19636711/?source=patrick.net#articleHeader

I'd say it has bottomed out in the highly desirable major coastal cities such as SF and NYC. There is global demand for property in those areas and a high number of the younger generation of Americans want to live in such dynamic urban areas that developers can't replicate.

During the height of the bubble, mortgage rates were double or even triple monthly rents. Betting on appreciation is unwise. It's safe to buy when mortgage payments with 20% down are lower than rents of comparable houses. If you intend to stay for the long term and have a stable job, you have little to worry about as your monthly fees fixed regardless of the price of your house. Forget about buying real estate as an investment, forget about finding the bottom. Just buy what you can comfortably afford and buy only if the mortgage is lower than rents. If you happen to buy a house that appreciates a great deal, that's just a side perk. Remember, you can only see that gain if you sell the house. If you happen to buy a house that depreciates a great deal, that's just a secondary bummer. You'll only experience that loss if you sell and/or if rents decline. But great depreiation is unlikely if mortgage rates with 20% down are lower than rents of comparable units.

BobbyS says

I’d say it has bottomed out in the highly desirable major coastal cities such as SF and NYC. There is global demand for property in those areas and a high number of the younger generation of Americans want to live in such dynamic urban areas that developers can’t replicate

Freaking grow up, and stop spewing such nonsense.

Thomas, even if BobbyS was wrong about what he said, there is another pull to crowded cities, the unsustainable costs associated with commuting from and maintaining large homes on large lots in relatively undensely populated outlying suburbs.

Sybrib, Commute to/from SF city ? its not a big job center in the Bay Area.

If your stuck in the city limits you pretty much missed on many career opportunities outside the city. The suburbs is where things have been happening.

Besides, the fresh air is much better than the stench of the city.

PolishKnight says

OK, back to the financial incentives: The notion that we will be “very sad” if we don’t buy now because the market will bounce back and go to 10 to 20% increases annually requires another bubble since any such market will require that the entire economy go back to solely servicing real estate… again.

Its just the vested interest and crap they make up. There are 1 Million little Gordon Gekko's in California all calling themself realtors, and each one of them needs your money today.

Back to the original thread. I think the following makes valid points in stating the bottom won't hit until 2014 followed by a decade of stagnation.

http://www.oftwominds.com/blogsept10/housing-bottom09-10.html?source=patrick.net

RayAmerica says

Back to the original thread. I think the following makes valid points in stating the bottom won’t hit until 2014 followed by a decade of stagnation.
http://www.oftwominds.com/blogsept10/housing-bottom09-10.html?source=patrick.net

Let's just assume for the sake of bulls, that the housing has already bottomed, can the bulls give a few reasons why prices should appreciate in near future?

bubblesitter says

Let’s just assume for the sake of bulls, that the housing has already bottomed, can the bulls give a few reasons why prices should appreciate in near future?

no one can justify any increases going forward, and I doubt you can justify the artifically imposed bottom which will not last.

thomas.wong1986 says

bubblesitter says

Let’s just assume for the sake of bulls, that the housing has already bottomed, can the bulls give a few reasons why prices should appreciate in near future?

no one can justify any increases going forward, and I doubt you can justify the artifically imposed bottom which will not last.

I am assuming rock bottom historical interest rate would be the only argument to come up with.

thomas.wong1986 says

no one can justify any increases going forward, and I doubt you can justify the artifically imposed bottom which will not last.

I'd have to disagree with that one. The best argument would be that the economy will recover and people will go back to work.

Look--if you guys think that $8K (the buyers credit) caused the recent rise in prices, then how can you think we are that far from a bottom? $8K is really not a whole lot of money--if it caused that much buying, then clearly people are close to buying already.

tatupu70 says

thomas.wong1986 says

no one can justify any increases going forward, and I doubt you can justify the artifically imposed bottom which will not last.

I’d have to disagree with that one. The best argument would be that the economy will recover and people will go back to work.
Look–if you guys think that $8K (the buyers credit) caused the recent rise in prices, then how can you think we are that far from a bottom? $8K is really not a whole lot of money–if it caused that much buying, then clearly people are close to buying already.

Or it caused that much buying by people who hadn't yet figured out just how bad things are going to get.

More bad news for housing prices:

http://www.theatlantic.com/business/archive/2010/09/more-foreclose-sales-will-drive-down-prices/63862/?source=patrick.net#toolsTop

bubblesitter says

RayAmerica says

Back to the original thread. I think the following makes valid points in stating the bottom won’t hit until 2014 followed by a decade of stagnation.

http://www.oftwominds.com/blogsept10/housing-bottom09-10.html?source=patrick.net

Let’s just assume for the sake of bulls, that the housing has already bottomed, can the bulls give a few reasons why prices should appreciate in near future?

Uh, "They aren't making any more land."

"All real estate is local."

"It's different this time."

"Real estate is your best investment."

Zlxr says

China says they will not buy our batteries unless we ship the manufacturing to China and also give them access to all the technology behind the making of the batteries.

This is precisely what happens when the borrower (the U.S. Government) attempts to deal with the lender (China). Our huge deficits do have a price to pay. China dictates to us trade policies that benefit them and are a detriment to us. "The borrower shall be SLAVE to the lender." When is this country ever going to wake up?

RayAmerica says

This is precisely what happens when the borrower (the U.S. Government)

it's the TRADE deficit that is giving the Chinese our money, not our gummint deficits.

China, Mainland July 2009: $939.9B
China, Mainland July 2010: $846.7B

http://www.ustreas.gov/tic/mfh.txt

So much for THAT thesis.

China, Mainland July 2010: $846.7B
Approximately 10% of the publicly held US debt, by my count. Less than 50% of publicly held debt is in foreign hands.

I don't see the bottom yet. This is one dropped from whopping 559K to 429K in a week.

http://www.redfin.com/CA/Cypress/5591-Newman-St-90630/home/3991345

bubblesitter says

I don’t see the bottom yet. This is one dropped from whopping 559K to 429K in a week.
http://www.redfin.com/CA/Cypress/5591-Newman-St-90630/home/3991345

If this was in my area, I suspect the winning bid will be $595k or something ridiculous that tops the original list price. Agents have that much influence.

bubblesitter says

I don’t see the bottom yet. This is one dropped from whopping 559K to 429K in a week.
http://www.redfin.com/CA/Cypress/5591-Newman-St-90630/home/3991345

Am I missing something? This one was sold last november for $300k...
And Zillow estimate for it is only around $330k

warblah says

bubblesitter says

I don’t see the bottom yet. This is one dropped from whopping 559K to 429K in a week.
http://www.redfin.com/CA/Cypress/5591-Newman-St-90630/home/3991345

Am I missing something? This one was sold last november for $300k…
And Zillow estimate for it is only around $330k

Since the year built is 2010, I suspect that the sale last November may have been the land only; or maybe unfinished construction.

Vain says

bubblesitter says

I don’t see the bottom yet. This is one dropped from whopping 559K to 429K in a week.

http://www.redfin.com/CA/Cypress/5591-Newman-St-90630/home/3991345

If this was in my area, I suspect the winning bid will be $595k or something ridiculous that tops the original list price. Agents have that much influence.

I suspect that too. Multiple bid strategy by the seller. I'd be watching to see what price does it sell for.