patrick.net

HousingBoom says

Fisk says

In all previous collapses in any other country that I know (and I unfortunately lived through one in the USSR and studied a few others), RE was by far the BEST investment/hedge

load up on US RE and let me know how it went in a few yrs =)

I did buy a house and intend to buy one or two more within the next several years. All cash, not leveraged, so can wait.
But I do NOT actually expect a collapse - just rather high inflation
for some number of years. What amazes me are those who DO expect collapse and run away from RE. To where - currency and bonds of collapsing government?

Fisk says

But I do NOT actually expect a collapse - just rather high inflation

Everyone has their opinion. Only time will tell!

I wasn't asking you quack quack

Yeah, I keep hearing that not all areas are the same. I think the trickle down affect is inevitable. Everything from QE3... to the scandals that consistently plague us, despite the lack of reporting on both the Left and Right media owned fronts. We're ultimately screwed.

The banks are swimming against a powerful reverse current that they created. I think everyone should just walk from their mortgages. The banks need to be taught a lesson once and for all. We are not going to allow them to have their one world ruler nor will they ever own us.

So long as our economy continues to tank and I would be watching Greece, we will continue to have an unstable housing industry that will continue to fall. If we crash, which is where it looks like it's going and at Godspeed, well, the housing industry will be decimated more then it is already.

I keep reading the good and comparing them against the bad and the bad is far more prevalent then the good. We're going down, down, down and the banks have done it to us again and again. The media continues to use Madoff as the patsy while the other bastards are getting away with murder. I can't wait for them all to go to jail for a long, long time.

It's only a matter of time, before the people rise against the propaganda and corruption and then the Elites are in store for a revolution that will hunt them and their families down.

I've come to understand that reports are skewed by purchased opinions.
-QE3 being used.
-More money is printed then is backed and China owns us
-Obama is starting WW3
-Billions and billions of dollars remain unaccounted for.
-Bansters / G20 elites... continue to call the shots and have the printing press to all the get out of jail cards.
-The media keeps covering up the facts and instead reports lies
-Hyper Inflation is around the corner
-Interest rates are supposed to go up
-Oil is killing us and will continue to do so
-Nobody is getting adequate raises to offset the inflation, so more goes out then comes in against fixed incomes, especially for those with SS
-Obama admits that there just weren't enough Shovel Ready jobs.
-Unemployment is going up again.
-Dot to dot to dot and it spells disaster. The proof is in the taste of the pudding and right now the recipe is for a disaster.

--Oh, THE SHADOW INVENTORY IS STILL IMMENSE AND GROWING EXPONENTIALLY.

You guys can believe all the charts that you want. They're bought and paid for by someone. While there is truth in them, there is more skewed disinformation then anything.

AUDIT THE FED, THEN ABOLISH THE FED/CORRUPT BANKSTERS
RON PAUL 2012.

I am up in Vancouver, Canada and have been watching the U.S. train wreck for over 30 years. We are not much better in Canada and I predict a huge housing collapse here in the very near future. We are just a little behind as we have done a slightly better job of not screwing up.

I think the U.S. market will continue to go down for at least 5 years and will take 20 to 50 years to recover. We must not forget that the U.S. has been living far beyond its means for decades. I think if America was to live within its means the standard of living would be slightly higher then Mexico. America has gutted its manufacturing sector. After world war 2 approx. 40% of the workforce were employed in manufacturing. At present it is 9-10%. As real jobs that create real wealth were shipped overseas the country ramped up its borrowing to create the illusion of wealth. The great unknown is when America finally has to face reality how bad is the economy. Only after that day of reckoning arrives can the economy and real estate start to heal. Politicians being the con men and idiots they are that day will be posponed as far as possible.

Los Angeles Renter says

Like a game of musical chairs… When the music stops… Whatever home you are sitting in is yours free and clear!

very true.

I completely agree with you solver. The Elite have gamed the system and I think the logical outcome is a good old fashioned French style revolution. They are all narcissistic and living in a dillusional world suspended from reality. They have no clue what they have done and what is going to happen.

I feel sorry for all those who bought prematurely. They bought based on the corrupt media outlets who declared a single short recession. That should have taught us a lesson, but, apparently it didn't. Imagine if you went out and bought a place that dropped 50%, but has the potential of dropping another 25%. I can't imagine that to many people are going to be to stoked over the idea that they are losing their investment.

These guys are running a diabolical campaign and the Sheeple just keep grazing where they're taken.

There's a couple knuckleheads with high power cards out there who are orchestrating a pretty nasty situation.

Imagine this. We keep trying to play catch-up. They know that we're Sheeple and that we do not question anything that is printed.
What if they have intentionally set us up for failure, only to be praised? Like what the banks are doing to Greece. Break them, then bail them out and OWN THEM.

Word is that the Inland Empire and cities on the outskirts are in for one hell of a ride this year and the next. This is in part attributed to gas. People can no longer afford to work to far from their homes. GAS IS ULTIMATELY SUPPOSED TO RISE.

Mecca is Los Angeles and mainly because of Down Town and the studios. If you live far from LA, well your value is coming down. The writing is on the wall. If you live in the far out regions and commute inward to mecca, you're screwed. Your savings will be continuously depleted while they banksters and oil barons get richer and impoverish us. THEN THEY OWN OUR SOULS AND NOT JUST OUR BODIES.

There are always exceptions, but this is the general outlook that has been presented to me by numerous people. Oh, what goes down, does ultimately come up. So, I'm sure that who ever buys on the low will ultimately prosper.

The big question is: HOW LOW IS LOW AND WHEN WILL WE SEE LIGHT? If you don't see light now, are you willing to ride out the losses?

I've been watching quite a few flips that have gone South for the owners. Watch out, because this is not a flippers market, unless it's acquired for 15 to 25 % of what the current DEPRECIATING market is. Those numbers allow for some investment to correct the wrongs and for some return. It also allows for some more depreciation too.

I know this all sounds crazy, but some of you should seriously take the pill that NEO took in the "Matrix". I've been listening to Alex Jones as well as some of the other Left and Right good guys and it's been enlightening on a whole different level. www.infowars.com It's free to listen to, and it's been the most informing media outlet that I've ever tuned into. What I respect most about him is that Mr. Jones is fighting for FREEDOM as it is defined in our Constitution. We're being taken over and it's crazy, because it's being done covertly, yet right under our noses.

Anyway, Mr. Jones has a pretty wide host of professionals some of who he agrees with and some who he disagrees with. It's about the fairest reporting site I've found. Oh, Drudge Report does a really good job too and apparently, many of the media outlets, if not all of them take their reports from him.

So, in the end, I would say that you should do your own math. The signs are the dots on the paper. To me it looks like there is no bottom in sight. The bottom is so low that they're afraid to publicly declare it, for fear that the problem they created will snowball at a Godspeed rate.

Coming down and congress, the banksters and all those on the take are responsible. Why do they get to get away with murder and we get the book thrown at us. Why is Weiner only getting a slap on the hand?

Why are we in Libya? Why is congress taking up against Obama for his illegal "KINETIC ACTION"? Things are happening for a reason that benefits the few at our expense.

I also heard that Apples new CLOUD network gives them the right to keep your information. Better read the fine print, because the details define the service.

The collusion is very deep and the housing market is on the same page of everything else.

Bottom coming within the next 2 years and it will plateau for the next 5 to 10 because of all the corruption. We have nobody to blame, but ourselves. We voted the crooks into office and they've screwed us over and over again.

Ron Paul. I challenge anyone to find anything bad about what he's trying to do. He's also not on the G20 Bilderberger's list of attendees either.

HousingBoom says

Top economists such as Peter Schiff and Robert Kiyosaki said it is highly possible because of our monetary policy.

Robert Kiyosaki??? Are you kidding me???

I certainly agree with Peter Schiff's economic forecast. It could come true unless we do something drastic.

Housing will bottom in November, 2012, assuming we get a new presdient. We will continue to lose about 1% per month between now and that election.

Housing will improve (appreciate) once the Republicans gain a filibuster proof majority in the Senate, while controlling both the House and the White House.

Duh!

klarek says

That was the general premise behind this book

Isn't that working against law of gravity?

I think we all keep trying to assign some type of normal logic to this. If you want to find a nut, you must send a nut to find one. Only a nut thinks like a nut.

We have to look at this whole thing from the perspective of why those in power are doing this to us. It obviously makes no sense from a normal logical point of view to continue to print money with nothing to back it.

I'm starting to think that the idea really is to bankrupt the middle class for control purposes. Why will prices keep falling? Maybe the power elites are really out to break the system so that they can reinvent it with new standards and a greater sense of control.

Was watching Money Masters (the full length version) on You Tube the other night and it really lends quite a bit of insight into the whole power structure of the world.

I think that there are simple explanations to it all. We just don't want to see the handwriting on the wall.

solver says

It obviously makes no sense from a normal logical point of view to continue to print money with nothing to back it.

It makes all kinds of sense actually. What don't you get?

Coogan99 says

Unnatural demand perverted prices. Prices (and rents) will return to levels consistent with incomes. We aren’t even close.

I'd agree if this was 2006, but we're 5 years later. Prices are at levels consistent with incomes in the vast majority of markets.

Saying we're not even close is just dumb.

It stands to reason that home builders made more money than they deserved during the bubble. As demand and prices exploded, supply of material & labor was short, driving up construction costs. As soon as demand dried up, there was excess capacity for materials & an excess of people skilled in construction. So, one would expect that building costs would decrease relative to prices of other things. Due to global supply chains, the popping of housing bubbles in Canada, China, and Australia may also help to lower materials costs. Also, people can life in smaller places or double up if needed.

I agree. We've been setup for failure. I would gladly drop my prices, if everyone else followed. That's not going to happen voluntarily. That's why it has to come crashing down to get people to follow the "bird in the hand, is worth two in the bush" ideology.

When you've lost everything, it's pretty humbling and you have no fear of taking what you can get. I just heard Alex Jones say it best. Illegals in America are being allowed to have more rights then us citizens and the power elites are using it as means of driving down wages. Otherwise, why permit it at all?

Why are they (power elites) allowing this to play out the way they are? Everyone can continue to swing from branch to branch, but if you want to address the real problems, you need to get to the root. Unfortunately, all the branches are tied together by the trunks and ultimately the roots.

All rabbit holes are made by rabbits. All of these areas are interrelated to one another in our economy. To rely strictly on housing information as it is presented is to orphan the other sectors.

That's exactly why housing will continue to crash and what's worse is that they're allowing it to happen.

WE'RE WORSE THEN MEXICO WITH OUR CORRUPTION.

They don't want fear mongering, yet they do nothing to improve the system. This is all happening for a very perverted reason.

tatupu70 says

I’d agree if this was 2006, but we’re 5 years later. Prices are at levels consistent with incomes in the vast majority of markets.

I really wasn't sure, so I built a calculator which, given a home-for-sale, spits out the annual income and liquid savings that a buyer should have, minimum, in order to responsibly afford the home. Obviously it includes some subjective assumptions and views, which I acknowledge. I will note that I work in fixed income at a wall street bank trading mortgage-backed securities. I have bounced the model off some of my colleagues and hedge fund clients, so it includes many improvements and intelligent considerations which weren't mine.

Some markets have rationalized with incomes, particularly in lower price points because those owners lacked the financial and informational resources to refinance, delay foreclosure, seek modifications, etc... That bandaid was pulled off much quicker. Rationalization nearly complete. In higher dollar price homes, you're dealing with larger dollar amounts of losses (lost equity for owners and mortgage losses for lenders). Stakeholders have effectively delayed and resisted the rationalization.

Here's what I mean:
Imagine a 2BR/2BA 2000 sqft condo in a high end building
850k asking, 10k taxes, 1.2k HOA
in a top MSA other than NYC (LA, SF, Chicago, Miami, DC, etc...)

I think the buyer of this place should make at least ~260k and have ~160k in the bank. Maybe you do your own math and you come up with slightly different numbers.

But think about who makes ~260k and has ~160k in the bank (or positive equity in another place).

Now subtract everyone with kids (other than a new born)
Now subtract everyone upside down on their existing place
Now subtract everyone who expects to move in the next year or two

See where I'm going? 2BR/2BA, in general, is a younger professional's kind of place. Young professionals don't usually make ~260k and have ~160k in the bank. After a few years, a lawyer or doctor makes this kind of money. But after those same few years, they're starting families and moving to bigger places.

Also, in most big MSAs, 260k per year puts you in the top 1.5% of earners. 800k only buys you a top 15% kind of place. There's clearly a problem when only 1.5% of people can afford the top 15% of dwellings.

I'm using a lot of generalizations here but you get my drit. Lebron James and some Russian Oligarch taking down a condo does not make the housing market work. (Incomes + Savings ) x People = Housing Demand

Housing prices will continue to fall and at some point end up even lower than "traditional" levels of affordability. From 2000 to 2008, houses were being built on a massive scale and sold, flipped, traded, etc. Many houses were not lived in for a considerable amount of time. Any slow-down in home building will not be able to significantly effect the over-saturation of housing that will come in the next few years. It will take much longer to have a traditional equilibrium. First we had the housing boom, soon will see the reverse, a vicious downward spiral, caused by excess supply and people walking away.

Underdark says

Any slow-down in home building will not be able to significantly effect the over-saturation of housing that will come in the next few years. It will take much longer to have a traditional equilibrium. First we had the housing boom, soon will see the reverse, a vicious downward spiral, caused by excess supply and people walking away.

The problem, as others have noted already, is that the excess supply in housing is in the wrong places. Those houses are almost worthless.

Underdark says

at some point end up even lower than “traditional” levels of affordability

After all the US banks goes bankrupt it will be Cash only business in USA. LOL.

solver says

I’m starting to think that the idea really is to bankrupt the middle class for control purposes. Why will prices keep falling? Maybe the power elites are really out to break the system so that they can reinvent it with new standards and a greater sense of control.

Was watching Money Masters (the full length version) on You Tube the other night and it really lends quite a bit of insight into the whole power structure of the world.

I think that there are simple explanations to it all. We just don’t want to see the handwriting on the wall.

Let me guess, you think 9/11 was a conspiracy as well?

The power elites have little to gain if the middle class falls. Breaking the system just results in revolutions, not in obedient slaves to the system.

I have to say that we are not even at the bottom of the point of where this bubble started. I am no rocket scientist just looking to be a first time home buyer before being engulfed in all these stats, charts and graphs. But I can figure things out. Unfortunately, if common sense would dictate, then it means the final bottom will be equally lower from the starting point from the graph of @Dan8267. It only makes sense. The peaks and valleys from the 70's and 80's were normal industry cycles. What this is a fictitious home inflation caused by banks and indiscriminate lending. However my local real estate agents have all been telling me for the past 5 years even at the peak that now is the time to buy! You better get this great deal of a house otherwise you lose out. One even told me that the median price even went up 20K from last month. Probably due to all the new listings of the month folks trying to offload there house so they aren't underwater. Then 10 more come out on the market at that price or lower. The cycle continues... The weight of this bank caused problem has to continue to give in.

Housing will bottom on December 21, 2012 when the Mayan calendar prophecies the world will end. After that, all of Apocalypsefuck's predictions will come true.</sarcasm>

Not for at least 5 yrs. You'll know when they've bottomed because everyone will be saying housing is a bad investment and they'll never buy another. Right now, too many people are still of the mind set this is just a dip, buy before it's too late yada yada. Nonsense. You want to buy when no one else wants to. Housing is still far too expensive historically compared to incomes. When renting becomes more expensive than owning, then it will make sense to buy.

Fisk says

HousingBoom says

Fisk says

In all previous collapses in any other country that I know (and I unfortunately lived through one in the USSR and studied a few others), RE was by far the BEST investment/hedge

load up on US RE and let me know how it went in a few yrs =)

I did buy a house and intend to buy one or two more within the next several years. All cash, not leveraged, so can wait.
But I do NOT actually expect a collapse - just rather high inflation
for some number of years. What amazes me are those who DO expect collapse and run away from RE. To where - currency and bonds of collapsing government?

Gold, corporate bonds, and a farm :)

bob2356 says

Really? So 70 million baby boomers currently at the peak earnings of their lifetimes living in empty family homes who will retiring, cashing out all their retirement savings, selling their mcmansions, moving to nursing homes, and dieing over the next 30 years won’t matter? They will be replaced by new immigrants and children? Explain the cold hard math involved.

I smell 70 million high paying job openings in UPPER MANAGEMENT.. the positions aging boomers are holding onto right now with a death grip!

What's killing the economy right now isn't so much the outsourcing of jobs.. It's the 50-65 year olds who are all still working! Once they retire or die... Somebody has to be hired to fill their shoes...

Corporate America has already cut their workforce to the bone... Once Boomers start retiring en masse.... Job openings will soon follow!

In fact, I read an article that there won't be enough people to fill the jobs all the Boomers currently hold eventually... And that will force wages higher and put the employee in the drivers seat for wage increases and bidding wars on their talents.

Fun Fact:

1) Beginning January 1st, 2011 every single day more than 10,000 Baby Boomers will reach the age of 65. That is going to keep happening every single day for the next 19 years.

Now if they all decide to work until they DIE... then we might have some issues.. But sadly boomers will probably have to learn to live a lower standard of living in retirement than expected and be forced to retire with less money.

VancouverRon says

We must not forget that the U.S. has been living far beyond its means for decades. I think if America was to live within its means the standard of living would be slightly higher then Mexico. America has gutted its manufacturing sector.

I agree Ron, though not sure if it would be as bad as Mexico. More like eastern Europe? Canada lived beyond its means also for decades but was forced to pay the piper in the '90s when government bonds lost their high credit rating. It took about 10 yrs of Paul Martin's austerity measures but now Canada is one of the most financially stable countries. My point is... Canada's political system provided the framework to support the necessary austerity. The U.S. does not have that. Things will likely have to get much worse in the U.S. than they did in Canada before there is enough political will to do what needs to be done. And that will make the pill that much harder to swallow.

common_sense says

The population won’t keep growing if immigration gets cut off like so many want.

But wages would increase which would cancel out any negative effects less immigrant population growth would have on housing... Boomers just started retiring this year... Boomers Retiring = Job Openings... Most Boomers held the high paying jobs too... All jobs can't be outsourced.

High Paying Boomer Jobs Openings.... Less Qualified People to Fill Jobs.... and you eventually end up with a reversal of the current job market. More jobs than people to fill those positions will eventually push incomes higher.

Los Angeles Renter says

But wages would increase which would cancel out immigrant population growth…

No it wouldn't. That's not what the studies indicate.

corntrollio says

No it wouldn’t. That’s not what the studies indicate.

Not sure what studies you are referring to....I'm just doing basic math.. 10,000 people reaching retirement age on a daily basis. Say 50% of them are actually still working up to age 65...

That should translate to nearly 2 million NEW job openings a year.... Just from Boomer population retiring.

Sure the numbers are out of whack now.. with so many unemployed. But that's 20 million new job openings over the next 10 years stimulated solely by retiring boomers...

Just trying to throw some positive spin on all the doom and gloom here.

Los Angeles Renter says

I’m just doing basic math.. 10,000 people reaching retirement age on a daily basis. Say 50% of them are actually still working up to age 65…

That's non-responsive.

You specifically said wages would increase if immigration were choked off.

The best study on the benefits of better immigration policy:

http://www.americanprogress.org/issues/2010/01/raising_the_floor.html

From the executive summary:

Comprehensive immigration reform generates an increase in U.S. GDP of at least 0.84 percent. Summed over 10 years, this amounts to a cumulative $1.5 trillion in additional GDP. It also boosts wages for both native-born and newly legalized immigrant workers.

Mass deportations would raise wages slightly for unskilled native workers, but would hurt those who have skills and those who modernize our economy, again, from the executive summary:

Mass deportation reduces U.S. GDP by 1.46 percent. This amounts to $2.6 trillion in cumulative lost GDP over 10 years, not including the actual cost of deportation.2 Wages would rise for less-skilled native-born workers, but would diminish for higher-skilled natives, and would lead to widespread job loss.

http://dailydish.typepad.com/.a/6a00d83451c45669e2014e8942dadf970d-550wi

We've literally lost 5 percent of our workforce. Does that really look like a recipe for higher housing prices?

Many of you are forgetting that we're on the precipice of a global financial meltdown. Think I'm chicken little? I couldn't care less. Mark 20 June 2011 in your calendar and I'll meet you here next year on the same date and you can tell me all about your awesome equity.

Los Angeles Renter says

But wages would increase

It would be other way, when most people who lost their high paying jobs could not land another one closer to their last income.

StoutFiles says

solver says

I’m starting to think that the idea really is to bankrupt the middle class for control purposes. Why will prices keep falling? Maybe the power elites are really out to break the system so that they can reinvent it with new standards and a greater sense of control.
Was watching Money Masters (the full length version) on You Tube the other night and it really lends quite a bit of insight into the whole power structure of the world.
I think that there are simple explanations to it all. We just don’t want to see the handwriting on the wall.

Let me guess, you think 9/11 was a conspiracy as well?
The power elites have little to gain if the middle class falls. Breaking the system just results in revolutions, not in obedient slaves to the system.

I think two planes hit the towers and that's irrefutable. I also think that they may have served as a decoy. www.drjudywood.com If you can look at this and refute everything that is scientifically backed, then you should present your discoveries to her. Till then, much is in question STILL and I don't see anyone offering up 100% of the details.

Anyway, I would imagine that given the average shovel ready job that was presented to the unemployed only paid slightly over minimum wage, that would represent a much much lower housing market in the near future. How else are those low wage jobs going to stimulate the economy by buying and remodeling homes.

Hell, homes would have to come down like 75% for these new hires to buy. Maybe there is light at the end of the tunnel.

it doesn't take a rocket scientist to figure out that we're just getting out of the eye of the storm and we're going back into it.

Oh, by the way, a revolution is not to far off. If you educated yourself by keeping up with current events in the governmental system, you'll find that we really are in an Orwellian like society. It's no longer conspiracy, it's not reality and knuckleheads (sheeple) like yourself are the reason. There are some who were born to be followers and some who were born to leaders. Leaders question everything, because they know they have to in order to get the facts straight.

Everything is intertwined at the hip. One thing affects another and problems usually trickle down. Why do they want to break our society? Maybe, because it represents power. How else would you explain all of our current events?

I was in my bank about 3 weeks ago and I was sitting down with the mortgage specialist who was helping me sort my accounts since the other reps were occupied. I was told that their analyst had been in the day before briefing all the branches of what was coming ahead. In short I was told that they were told to simply brace themselves for something worse then what happened before.

He told me that he couldn't say anything more and that he too was a little nervous. That just goes to show you, that even the employees at some of these banks are human too. It's the big powerbrokers at the top who are creating all the havoc in the system. These are bastards that will soon be getting what is coming to them.

As the saying goes: "Be careful what you wish for, because you just might get it" and get it they will.

common_sense says

Gold, corporate bonds, and a farm

A farm is obviously a form of RE, so you second my case.

Corp. bonds denominated in what currency? That of "collapsing government"? You may well get your coupon, in nearly worthless currency. That happened with corp. bonds in Germany during Weimar times, btw.

Gold is good, I agree. But govts. of all stripes, when pressed, have a nasty habit of confiscating or outlawing it as a legal tender. That has happened in 1930-s in Germany, here in the US, and many other nations. But they didn't confiscate or outlaw RE ownership. Perhaps because they can't sell confiscated RE abroad to obtain foreign exchange to pay for critical imports.