Mish over at global economic analysis has been posting the thoughts of his realtor bud Mike Morgan for awhile now. Like Osman to HP, Mike Morgan is a credit to his industry, because of one big factor: He speaks the truth.
No sugar-coated BS, no NAR talking points. Whether it helps him or hurts him, he speaks the truth. Is that too much to ask folks?
Here's snippets of what he had to say today. I'm truly amazed - and that doesn't happen very often.
Will there be a hard landing? No!
Will there be a crash landing? Absolutely!
Despite September’s short covering of home builders and value buyers trying to cash in on low P/Es and stocks selling at or below book value, a hard landing is now out of the question. We’re in for a market crash.
Who will the housing crash effect? Everyone. Real estate agents will be first. As a group, they’ve made a ton of money during the housing boom, and they’ve spent millions on new cars, vacations, restaurants, clothes, and everything else that comes with excessive discretionary income. That’s over now.
And just like we saw a tech crash with everyone rushing to sell, we’re now just starting to see flippers dump properties for 200-400% losses on their deposits.
The other shoe is dropping now. Loss of hundreds of thousands of jobs created from housing will act like a virus and spread throughout our economy.
This is reality, and you’re hearing it from the horse’s mouth.Multiply these four scenarios by thousands and you have a crash.
A hard landing is out of the question at this point. The economists should be talking about how devastating the crash will be.
September 19, 2006
Realtor: "A hard landing is now out of the question - we're in for a market crash". Wow.
Subscribe to:
Post Comments (Atom)
37 comments:
The housing boom ended more than a year ago, but sellers are having a tough time accepting that fact, says David Lereah, chief economist at the National Association of Realtors.
The result has been tumbling sales as buyers stay on the sidelines.
http://timesunion.com/AspStories/story.asp?storyID=518178&category=BUSINESS&BCCode=HOME&newsdate=9/19/2006
Home prices will be lower a year from now in the nation's leading markets - at least that's what investors speculating on residential real estate believe.
Trading in housing futures on the Chicago Mercantile Exchange point to declines by next August of at least 5 percent for 10 leading markets; speculators are betting the biggest decline will be in Las Vegas, with a drop of 8.2 percent.
http://money.cnn.com/2006/09/19/real_estate/futures_trading_indicates_housing_drop/index.htm?source=yahoo_quote
Will one of you gold bulls please tell me what is going on today? Market manipulation?
IMO gold is going down due to disinflation.
I expect 6-12 months of this where all asset prices fall. Gold might hit 450.
This story is missing a reference to "mad mullahs" and "crazy Arabs". Shome mishtake shurely?
Up here in northern minnesota, the plywood companies are not buying anymore logs from the loggers. they have too much inventory and too many logs piled up in the yard. as of two weeks ago they didnt work on fridays and last week they didnt work on thursday or friday. FYI, plywood sales should be the first indicator of housing coming to a screeching halt.
Thinker:
Gold is down today because Oil is down today.
Will Oil (and as a result Gold) continue to go down?
Short term, possibly, it had quite a run there.
Long term, depends on the fate of the dollar and supply/demand factors.
Manipulation is somewhat possible, I suppose, but I would give more weight to currency valuations and supply/demand factors in the long run.
I talked to a stucco guy today about a small job. He said no way, he's booked solid through October. I mentioned reading about a slowdown in the housing market. He said that's why he's so busy right now. Builders are scrambling like mad to finish their projects ASAP before prices really start to fall off a cliff and the Mexicans go home for the Winter months. he also said he's not doing any more work on credit because two builders had stiffed him last month.
Thinker:
I'm not sure what is going on with gold. Some news reports suggest that the traditional buying (India) is slow because of a weakened economy - - less buying in time for the holidays/weddings; other articles suggest that the European Central Bank (3 bankers) has sold over 34 tonnes of gold reserve this week leading to the drop in prices. All I know is that I still believe that, long-term, the dollar is going down and will be devalued. I still don't see an alternative to gold once the dollar (fiat currency) goes into serious jeopardy. I can only see housing/real estate (serving recently as ATMs for overleveraged consumers) at an even more dismal state in 2007 and beyond. So, I'm still sticking with the fundamentals and bought a bit more gold today (on the dip). In my opinion, it's worth hedging my assets (in terms of asset preservation) even if I'm wrong about the ultimate direction of the dollar (down) and gold (up) since I have plenty of cash and stock still.
The Fed and other Central Banks are driving down gold to cover for a hold on interest rates. Unless they can slow down the slide in housing and prop up consumer confidence, the U.S. economy along with many others will hit the skids next year.
Self-preservation at work, and they might even pull it off, unless of course some unforeseen event pops up...
a bit late for shaq.....
ept. 19 (Bloomberg) -- Basketball star Shaquille O'Neal started a real estate company to invest in projects including a $1 billion residential, hotel and retail complex in Miami, where he plays for the Heat.
O'Neal, 34, has purchased properties valued at more than $50 million, primarily in California, Florida, New Jersey and Texas, during his 14-year career with the National Basketball Association. His new company, known as the O'Neal Group, will be based in Miami, Christopher Handy, the firm's executive vice president, said today.
O'Neal follows athletes such as tennis stars Andre Agassi and his wife Steffi Graf, who this month announced plans to invest in a ski resort in Idaho. Earvin ``Magic'' Johnson, like O'Neal a Los Angeles Lakers veteran, has a company that finances developments in urban areas, and former boxing champion Oscar De La Hoya last year formed a real estate investment company.
``It's refreshing to see these athletes getting involved in real estate beyond the traditional bar and nightclub, where athletes have lost as much money as they've made,'' said David M. Carter, executive director of the Sports Business Institute at the University of Southern California. Real estate is ``a pretty good play, especially if you're a young man like Shaquille O'Neal and can let it run its course and don't need the immediate upside tomorrow.''
Music, Acting
O'Neal, who has a five-year, $100 million contract with the Heat through the 2009-2010 season, has been involved in numerous off-court projects, recording five music albums, launching his own clothing line, acting in three movies, and working for police departments in Los Angeles and Miami after the NBA season ends.
The O'Neal Group's first project will be Metropolitan Miami, also known as The Met, which is being built by Miami- based MDM Development Group. The Met will have 1,100 residential units, including the 866-foot Met 3, the tallest residential tower south of New York, as well as an office tower, a hotel and the area's first Whole Foods market. O'Neal plans to open a 24- Hour Fitness/Shaq Ultra Sport fitness center at The Met.
Handy wouldn't disclose financial terms of O'Neal's involvement in The Met other than to say that it's ``not just a spokesman deal.'' In addition to a financial stake in the project, the O'Neal Group will assist with the sales and marketing, the company said.
Miami Rebirth
The Met ``will be a big part of the rebirth and revitalization of downtown Miami'' and is part of O'Neal's focus on projects that combine residential and retail, improving tenants' quality of life, Handy said in an interview. ``His charge to us is, `Real estate for me should not just be about making money.' ''
The Met likely will get its first residents in mid-2007, and the project likely will be completed by the end of 2009, said Luis Pulenta, principal of MDM Development.
O'Neal's ``involvement is a huge addition to what we are doing and what is happening in downtown Miami,'' Pulenta said in an interview. ``We feel he's going to be a huge element in promoting and making things happen even faster.''
$29 Billion and Counting?
http://tinyurl.com/m8l8s
Thinker, Portugal dumped 35tons of gold on the open market over the last 2 months.
This drove down the price of PMs and stop/loss of weak hands have been shaken out below 200DMA.
My opinion (for what it's worth) PMs are so oversold and have reached a bottom. Back up the truck!!
autofx is an idiot
I don't know about autofx being an idiot - it seems that in times of extreme financial stress gold retains value. How much long term value have the fiat currencies held? It may turn out to be a good idea to have gold, and some cash on hand (the green paper stuff) just in case.
What square footage is the boundary level to being a "McMansion" anyway?
Potato, Potatoe, Tomato, tomatoe, Recession, Depression.....lets call the whole thing off!
Ees no such thing as "Crash", Comrade.
Ees only "Correction".
Like Five-car Correction on I-5.
Like Airliner Correctink eento ocean.
"What square footage is the boundary level to being a 'McMansion' anyway?"
* Home square footage larger than the lot it sits on.
* "Single-family detached home" with five-foot side yards, ten-foot-deep back yard, and an HOA.
* More bathrooms than bedrooms.
* More dens/studies/bonus rooms/home theater rooms/home offices than living/dining/kitchen/bedrooms.
* Particle-board and styrofoam construction. (Yuppie-pink coloration optional.)
What's the difference between houses and tulip bulbs?
After the crash, you can eat the tulip bulbs!
oh oh everyone should check out these vids:
http://bullnotbull.blogspot.com/
bookmark it !!!
Get the latest on the real estate and housing bubble:
http://www.expertresearch.net/realestate/news.html
Get the latest on the real estate and housing bubble:
http://www.expertresearch.net/realestate/news.html
Paintblot,
"It needs to reach over $2000/oz to get back to the same value it had in the early 1980s, capiche?"
You say that like it's a bad thing.
Somebody else might see that as an opportunity, i.e, that it could rebound to that price...
Just sayin'
idiot autofx - go back to your "Holy Grail of Investing"
What I want to know/ understand is how the NAR (David Lareah) can report that this is a temporary slump . . . we will rebound in about six months. Is he trying to scam both sellers and buyers?
We do want to buy, but not watch our investment plummet for years, so we are waiting. Are his predictions even worth considering, or should we shop for the best deal in this market and cut our losses? I have written before, but am at a point where we have the money, but would rather save some for the kid’s college, retirement, having some fun at a happy hour - without the house falling on our head.
As David L. says this is temporary -I don't believe it, but I figure most of you have a heck of a lot more knowledge than he is allowed to spill . . . so a buy now (trying an at least 30% lowball, or wait?
I have been taking my time, and you haven't led me wrong, but now is an even slower time in the market - I plan on waiting out 2006 (thanks to you guys, Chicago, SAS, Bob, Etc;, or do I fear the NAR 6 month rebound? Thanks.
jj
Don't catch a falling knife with silver, gold and oil. Oil might be due for a dead cat bounce, but the metals will continue to decline to their summer 2005 levels. If you people really believe the US Govt is shorting the metals, then why would you want to buy now? Do you think you have more money than the printing presses can print? I will let them bottom out over the next 6 months and then start buying them up next spring.
what happened to bens' blog???
There might be a hard landing, or
there might be a crash....or we might
go right into another leg of the boom.
No one knows, but there are lots of
know-it-alls guessing, all over the
spectrum. Diversify, diversify....
particularly into areas where the
bloggers are predicting doom.
Onion notes housing decline
I wish more of the industry's people would come out and be frank like this!
Itis very refreshing and exciting.
BTW- What is silver going for these days?
Looks like the NAR finally got to Ben...
Kieth you said...
Home prices will be lower a year from now in the nation's leading markets - at least that's what investors speculating on residential real estate believe.
Trading in housing futures on the Chicago Mercantile Exchange point to declines by next August of at least 5 percent for 10 leading markets; speculators are betting the biggest decline will be in Las Vegas, with a drop of 8.2 percent.
-----------------------------------
How are your commodities doing?
It's pretty simple.
Gold goes up when monetary inflation is roaring.
Gold does nothing or goes down during times of stability or deflation.
When the RE boom implodes, we will have massive deflation. This doesn't mean that the gubmint won't try to pump up the economy with funny money tho- but it probably won't work in the face of consumer and business retrenchment.
Of course, all the gold marketing outfits will be telling you that gold goes up in both inflation and deflation. I say baloney. Look at the graph of gold from 1979 to 2000- it goes from $800/oz down to $290/oz. Actually, even more in terms of constant dollars.
Beware the gold propaganda.
I don't "need" to do an effin thing.
YOU may "want" to start learning how to trade and invest, however.
Son, eff you. I was buying gold while you were still in diapers. The fact remains that gold is simply not a good LONG TERM investment. It needs to reach over $2000/oz to get back to the same value it had in the early 1980s, capiche?
___________________________________
You're staring a bargain in the face and don't even see it. If it needs to get up to $2,000/ounce and it's only $580/ounce, don't you think that sounds like a bargain? I do. Sounds like autofix is the equivalent to a trader in 1970 buying gold for $50/ounce and you're going to wait til 1980 to buy it at $850/ounce so that you know you got your money's worth because after all, it's worth $850. If you're that old, you may want to review the last 35 years and think back to what the conditions were like BEFORE $850/ounce gold and see if they kind of correlate with what's going on today.
It's pretty simple.
Gold goes up when monetary inflation is roaring.
Gold does nothing or goes down during times of stability or deflation.
When the RE boom implodes, we will have massive deflation. This doesn't mean that the gubmint won't try to pump up the economy with funny money tho- but it probably won't work in the face of consumer and business retrenchment.
Of course, all the gold marketing outfits will be telling you that gold goes up in both inflation and deflation. I say baloney. Look at the graph of gold from 1979 to 2000- it goes from $800/oz down to $290/oz. Actually, even more in terms of constant dollars.
Beware the gold propaganda.
___________________________________
Actually, we can have inflation and deflation. Most likely deflation in housing, inflation in everything else, as long as the Fed rate stays below the actual rate of inflation, we have inflation. But you're also forgetting that foreigners hold trillions of dollars of US debt which will be diversified out of and most likely into real money (precious metals) and energy.
Better yet -- SILVER. Buy a bunch more, right now.
I am, I do, and I agree
Nice blog. If you are interested in other estate find listing real usa related blogs visit estate find listing real usa
Post a Comment