"_________ Landing"
We've heard "soft landing" drilled into our heads for so long now (by Bob Toll, the NAR, Fannie Mae, Ben Bernanke, blah blah blah) that it can't be anything else but the optimal result, right?
Right?
Wrong.
So pick the new "landing" term.
I vote for "Horrific"
It looks like this unwinding real-estate market is going to make more of a mess than expected.
How big remains to be seen, but it will be noticeable. "
I don't think there is any doubt it's going to be a harder landing than was originally forecast,” said Greg McBride, senior financial analyst at Bankrate.com. “The forecasts were made with the rose-colored glasses still firmly in place.”
“It's not going to be a total collapse of the market but it's not going to be so soft that you won't know it,” Ratcliff said.
There is no doubt that sales took a sharper turn than the California Association of Realtors expected.
Last November, the Los Angeles-based group forecast a 2 percent sales dip this year. But in June it was revised down to a 16.8 percent decline, the biggest since a 30.2 percent plunge 24 years ago.
August 02, 2006
Pick your housing landing - soft, hard, rough, disastrous, nuclear, holy-mother-of-Jesus...
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We won't be talking about a landing for at least a few years. We aren't anywhere close to a landing. We are still in free fall mode.
I don't think there's any such thing as a 'soft landing' when it comes to financial matters.
Soft landing really implies some masterful flying with Biggles at the controls when in reality, it's a bunch of chimps (aka Flippers, Investors).
My guess is a long, long, messy 'Brown Trouser' landing (skidmarks on the inside of your shorts as well as outside).
Cheers, Haggis
disasterous - nuclear - holy mother of jesus.....I can't tell the difference between them.
But that's where we will be. A smaller line at Starbucks and a bigger one at the soup kitchens.
Part of the problem is these terms get tossed around and never defined. Is "soft landing" a 10% pullback in nominal prices? 20%?
If nominal prices only come down 10-20%, but real prices come down 30%+ over several years, is that hard or soft?
Is a "Buyer's market" a market in which there are more sellers than buyers? I.e., one in which buyers have more power, time is on their side, and sellers are vulnerable? If so, we are in a buyers market, as many realtors like to say. But if a "Buyer's market" is when houses are near the bottom of a price cycle, we are nowhere near it.
We argue too much over terms without trying to agree what they mean. Bad habit.
Look at Charles Schmits prediction:
http://www.oftwominds.com/blog.html
Based on that I would say: mind-numbing and back to the soup kitchens.
On a positive note the collapse of the US and Chinese economies in that timeframe might just be in time for curb global warning and mitigate peak oil....
A woman in a nursing uniform in front of me in the ckeck out line at a supermarket last night, was talking to the cashier about how "people who bought 2 years ago expecting to sell their homes are really going to get hurt"...
That's when you know that it's starting to reach main street america.
The funniest part was the cashiers reponse... "well, if they bought for 150,000 and sell for 250,000... that's still good!" they both agreed to that, parted company, and I finally got to get checked out of the store.. haha
Anyway, First of all... you couldn't buy a cardboard box here in NJ for 150k, .. and 66% profit?! Thems days is long gone. ;)
I hope Bernanke is ready for the hating on that he's in for!
I've always been partial to 'cataclysmic' and 'apocalyptic'. I like to think big.
The article says it won't be like the 1990's in California again (?) well they are half right because IT WILL BE WORSE!
I worked at the RTC in the 1990's and all the signs that led to that collapse are far more severe this time. All this dampened down language only proves what all of us already knew, which is that many more of us (not me thankfully) are nervous as hell as to what effect the collapse will have on us.
Sure many bought more than 5 years ago, but they also refi'd twice and have HELOCs and now have no equity, with far less forgiving BK laws in place now.
Last night I saw a cable show about this hip-hop guy in LA, CA with a large flashy dealership, I think the guy's name is Towbin, and he had prospective buyers on the show acknowleging that the payment they were looking at on a big SUV with 21" wheels was as high as their rent. That just proves what we knew all along. Our spend-spend and save nothing culture is affecting even those who rent and can't even pretend to have any inflated equity in real estate, many of whom are employed in real estate related or dependent industries.
Hard landing is the least we'll get. It's very likely we will be in a mild depression by late 2007, early 2008.
Painful Landing
I was going to suggest "species-threatening," but that category of disasters is already pretty crowded at the moment.
One of the funny things about the "soft landing" crowd: they perpetuate the idea that this crash is best measured in percent decline. This way, they can make a prediction of a 50% decline sound extreme.
That's smoke and mirrors, and avoids a big question. Why should a sales price from last year be today's baseline at all?
It would be one thing if last year's prices were supported by demographics and income. But they weren't. They were numbers pulled out of a realtor's ass.
The real question is, at what price today will buyers be able to clear the market?
The percent decline is just a descriptive afterthought.
It's different this time. We are on a permanently high plateau, we are coming in for a soft landing, it will be a hard landing, there will be blood running in the streets. There will be no streets because of the nuclear meltdown. The sun is going supernova in three days. You decide.
Captain Bernanke will guide us to a safe landing but please keep your seatbelts fastened until we are parked at the gate.
Governments (the people with badges and guns) are 100% tied into this boom because the false prosperity is what pays those property taxes, income taxes, and sales taxes. There is no way they will let this magic money machine stop because if they do, it will mean their demise as well.
Look at how this has played out in past crises. They will "fix" the problems by inflating them away. The outcome will be far more complicated than a simple "bust" or crash in valuations. Will some people be destitute? Of course they will, but there will also be millions more who make it through but become even more subservient to federal, state, and local governments.
When isreal storms syria by the end of the month i would say the hole economy will be nuclear..not the bomb of course.
Being from the Midwest, where simple terms are required, I'll pick "Crash". That way, realtwhores, bartenders and strippers (IE investors) will understand.
Florida escapes Hard landing as Hurricane strengthens to Cat 5 and hitting Miami before pressing across the Everglades to Naples and into the gulf. One million homeless, 350,000 homes destroyed. The hurricane continued its onslaught as it hit Katrina ravaged New Orleans destroying (or was that just cleaning up) the previously storm ravaged neighborhoods. Now experts believe New Orleans will never rise above 200,000 residents in this much smaller city
The good news for the housing industry, most left homeless were relocated to Phoenix absorbing the glut of homes available stimulating the local economy. Experts expect the next three years to be better than the previous boom (2003-5). Other cities in Florida also benefited with the absorption of those left homeless in Miami.
foxwoodlief, What color is the sky in your world?
Foxwoodlief -- Your satire might be close to the truth. I can see many Americans going along with a plan that involves government-mandated (and funded) housing for the "less fortunate". Uncle Sam can print as many Ben Franklins as needed to buy up all those vacant and distressed housing units "for the good of us all".
We were all born free.
It's quite difficult to land on your feet upright holding an overpriced HOUSE and DEBT upon your shoulders in a RE market downturn.
What WILL hurt the FB's is that SUDDEN STOP and SPLATTER of the "Soft Landing" at the Bottom of their Money Pit as their "investment"..CRUSHES THEM !
BONE CRUSHING THUD = HOUSING MARKET
BONE CRUSHING THUD = US DOLLAR
BONE CRUSHING THUD = FALL FROM OIL ADDICTION
BONE CRUSHING THUD = GLOBAL POPULATION DECLINE
In the words of Samuel Jackson, it'll be "a mushroom cloud laying mxxxxx fxxxxx!"
Actually being a election year..i would say more of a October surprise coming..so by then housing should be buried..totally. holy mother jesus
I think Ben, Cheney, and all the Bushites are planning on a dollar collapse...
Then they can change the color of money.
My vote is for "crash". Right now the American housing market is like a high-flying jet full of passengers and the last engine just conked out. Will there be a miracle?
Definitely: Crash Landing is the best choice...
Splash Down
The big corporations along with the govt are who sold us out. They want open access to the growing middle class in the rest of the world and have already moved a lot of their back end jobs overseas, hence the stagnant wages here.The new world is going to be governed by big business and the working class in America is going down as they ncannot compete. Good time to be an investor of big business and bad time to be a worker on fixed wage.
Put everyone (including white people who were once middle class) on welfare and the problem will be solved.
That'll create a bottom so that people can then start to borrow money, use the welfare check to make minimum payments on the CCs, and the economy will be jumpstarted.
The problem right now is that welfare is limited to certain ethnicities, disabled on social security supplemental, and govt employees. We need to extend this program to cover everyone.
Then they can change the color of money.
Color it Amero.
this housing market is more like a constipated asshole. The pressure's been building up, until the ExLax kicks in, then its going to be a shit storm raining down the toilet for years to come.
>>> and he had prospective buyers on the show acknowleging that the payment they were looking at on a big SUV with 21" wheels was as high as their rent. That just proves what we knew all along. Our spend-
-- When I first got out of the school the car to have was a Chevy Camaro IROC-Z. Lots of fresh out of school kids buying these for in those days $400-$450/mo payments, whiles rents where about the same.
>>> Why should a sales price from last year be today's baseline at all?
-- It's well known that people use "anchoring" in prices and transactions. It's one reason why an RE downturn shows up as exploding inventory first, as opposed to stocks in which its exploding transaction volume. Same thing happens, actual transaction prices head down...
A Soft Landing?.....right!
Is like throwing the Titanic a tow rope!
With that kind of logic, if i remember right, a United Airlines DC-10 made a 'soft-landing' in Sioux City,Iowa a while back! Hey, some people survived!
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