July 12, 2006

Pimco PM on Housing Prices - "Rent!"

Posted by blogger at 7/12/2006

4 comments:

Anonymous said...

man even the big money sold and is renting

amazing

July 12, 2006 6:44 PM
Anonymous said...

I wonder why he predicts only a 10-20% drop, and a bottom reached in the next two years. He seems smart; I'd listen.

I did see a historical analysis that said houses typically do not drop by the full amount they are overvalued; rather they drop by half that amount, and stay stagnant until inflation catches up. Perhaps that's what he's thinking?

July 12, 2006 8:36 PM
Anonymous said...

"I did see a historical analysis that said houses typically do not drop by the full amount they are overvalued; rather they drop by half that amount, and stay stagnant until inflation catches up. Perhaps that's what he's thinking?"

In the last big housing slump (late '80s), the crackerbox I bought in '86 lost 15% and didn't recover to the original sales price until 1996. Even when the recovery kicks in markets with lots of building activity will see the effects of downsizing where the demand for smaller houses and lots totally kills the prices of the larger homes. IMO this upcoming slump in RE will be prolonged and ugly.

July 13, 2006 1:17 AM
Anonymous said...

The late 80's housing boom was half the size of the current one in almost all measures, like price to rents etc.

And back then people had to have actual income for loans and actual downpayments. And as inflation was going down interest rates were going down.

It's gonna be alot worse this time.

July 13, 2006 6:31 AM

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