Nationwide, median home values jumped 32 percent from 2000 to 2005, to $167,500.
Household incomes have not kept up, dropping 2.8 percent during the same period.
October 03, 2006
Everything you need to know about the non-sustainability of the US housing bubble in two little sentences
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36 comments:
Let's add a couple of more conditions:
3. The dropping of lending "standards" (if you can call them that!) to such a level to allow any living (or not), breathing (or not), person (or animal) to "qualify" for a Neg.am, I/O, ARM infinite loan, all with the tacit approval of the so-called "regualtors" at OCC, FDIC, OFHEO and Federal Reserve.
4. The complete co-opting of the appraisal process to allow the house price "hit the number".
5. The collapsing of interest rates, to compel every money market fund, mutual fund, pension fund and hedge fund to "chase yield" and buy MBS.
there's so much more, but in the end, having home price fly to the moon while incomes drop, well, 'nuff said. everything else is secondary
Keith,
Agreed that prices have risen dramatically.
My state of mind is that I am always looking for the "Why", as opposed to the "What".
In this case, the "What" is that home prices (noticed I DIDN'T state "values"!) have risen far beyond income.
So, that impels me to question as to the "Why".
Which leads to the three additional items.
Going forward, we need to look at the next "Why".
Why home prices will drop.
If any one (or more) of the above-listed three items change, and the Fed/Feds cannot overcome the gravity of the house collapse with all of their might (as I posted in my response to the Stephan Roach thread), then look out below...
'nuff said.
Except that Borka's not dead!
He's Back!!!
"The bust everybody is talking about nationally is just not here yet and it will need something unexpected and dramatic to create it."
ARMs resets. They are coming. The consensus on the real estate blogs is 1Q 2007.
InfidelWoman said...
nuff said.
Except that Borka's not dead!
He's Back!!!
InfidelWoman dont be frustrated That toy you ordered from that mailorder catalog is coming..rreeellaaxxx!
The Postman.
InfidelWoman & Borkafatty,
Please don't spend the energy responding to the major troll who just posted above.
If we just ignore jerks like this they will leave this blog and go someplace else
For real dont think for one minute I dont have better things to do.
But to see me dead..gee thanks much apreciated!
First I seen of it anyhow
Good Morning all it's a new day.
If you read just about any pro-housing article, they always seem to go back to the fact that housing prices only fall when there is an external event in an area that causes them to fall.
While this may be the case in a localized event, which is just a non-systematic event, it doesn't apply to a systematic event
If you read just about any pro-housing article, they always seem to go back to the fact that housing prices only fall when there is an external event in an area that causes them to fall such as job losses, etc.
While this may be the case in a localized event, which is just a non-systematic event, it doesn't apply to a SYSTEMATIC event. The collapse of the housing market itself will be large enough itself to create massive job losses from the homebuilding and selling industry plus the loss of refi capital and all the products and services these two groups use.
Everyone look at your 401(k)s.
I did. I was shocked at how much of my "short term fixed income" "stable value" "Intermediate Bond" funds were in mortgage backed securities, FNMA, and other crap.
I moved all that out.
Be careful. You may be carrying all the risk of this housing market, and not even know it!
My aunt who just retired pulled her 401k last week because she was losing $1500 a month. I told her 3 months ago and she smerked at me, you know that look.
Funny thing is I said it here 3 months ago " If you have a 401k pull it..but i was laughed at here also..so be it.
Who want's to take Financial Advice from A Janitor.
Borka, That makes 3 comments so far on one post.
many of these of these households are border crossers. There are so many that they have downwardly affected the household income statistics.
My condolescence to your wife:
No problem she always complined it was to big anyway. So see you have helped me out.
So Ill help you, get over me we are not made for each other trust me, I am way to hairy, and besides that, when I was out with your old lady the other night I seem to have developed this incredible rash in my crotch area.
see Keith these guy's start their shit on me..you know your right Ill leave for awhile..I have a book to tend to.
and there you have it
Joey said...
Everyone look at your 401(k)s.
I did. I was shocked at how much of my "short term fixed income" "stable value" "Intermediate Bond" funds were in mortgage backed securities, FNMA, and other crap.
--------------
Where oh where did you put it?
tell us about your commodity bubble investment
That toy you ordered from that mailorder catalog is coming..rreeellaaxxx!
Dear Going "Postal"
hehheh
HP is my toy.....You guys are, well,
irreverent.
I'm am not a troll. I have been with HP since day one,
1. through a legal Home Owners Insurance Battle for my entire Estate, which was paid for,
2. through the sale of my home in Oct of 05 at Peak,
3. through my rental going up in flames and blowing up my paid for 06 car,
4. through buying a condo from a FB and Keith et all has been there for me.
So, fook you flamer, your the newbe, not Bork and me.
But, I don't mind your passion and interest, it is amusing.
Thanks HP
PS Thanks anon 2:52;08
If we just ignore jerks like this they will leave this blog and go someplace else
They can't stay away, thats why they are the amusing anon trolls
Borka, 5 comments.
Talked to a real estate agent acquaintance yesterday. She was telling me how great option ARM loans are and how they got so many of her clients into homes. I told her I think they can be useful, but people should be qualified based on the fully amortized payment rather than the minimum payment. She got quiet and gave me this disturbing look.
infidelWoman three coments
Joey said...
Everyone look at your 401(k)s.
I did. I was shocked at how much of my "short term fixed income" "stable value" "Intermediate Bond" funds were in mortgage backed securities, FNMA, and other crap.
--------------
Where oh where did you put it?
++++++++++++
Short-term Treasuries.
"many of these of these households are border crossers. There are so many that they have downwardly affected the household income statistics."
These border crossers are "undocumented". They would not be figured into government numbers unless they are documented. Without docs. there are no numbers.
as a former new yorker, if there is a housing price bubble, then there is a housing tax bubble also, and only sales at very reduced prices will ever end it,complaints will at sale refund a 2 year payment, prorated, complaints must be notorized, this all is another land grab scheme
if the property is not worth a quarter of its price, and is taxed at the irrational values, soon enough have you paid its fair market value in taxes again, and with time will unload it to the money changers , just to avoid paying the 15% of its then present day, only offer, sale prici, in taxes
Keith - how is your GLD and COP doing today?
As long as republicans rule, there won't be any concern as to the state of affairs or growing inequality. As long as the top 20% are doing well they're fine with it.
You people who try and paint both parties as bad are in for a real shock.
But keep voting republican. Your grandkids will be born into a pseudo-feudal system of perpetual inequality much like that of a SOuth American shithole.
The Dems are just as crooked and bought off.
You get sucked into the Dem vs Rep con and you have played into their hand. They are dividing us, trying to get us to fight against each other instead of fighting to get our freedoms back.
The Dems are just as crooked and bought off.
You get sucked into the Dem vs Rep con and you have played into their hand. They are dividing us, trying to get us to fight against each other instead of fighting to get our freedoms back.
++++++++++++++++
Why don't you start doing some research into current events? Then you'd find out exactly WHICH party is destroying us and WHICH party is fighting to pull us back from the brink of disaster.
It really ticks me off to have to read posts of bloggers too LAZY to uncover the facts and figure out what's really going on....
thank god I'm 100% in cash except for my 2012 cop options
I think every investment class will tank. time to be really defensive I believe.
the bond market is telling us all what's coming. it's not gonna be pretty
I don't see any decline in housing prices. Asking prices are still extremely high and sellers are not listing as though they are in a "buyers market".
What makes anyone think sellers are going to have suddenly drop their high asking prices? I'd like some convincing evidence - not wishful thinking (as I have been doing).
jr
I'm a homeowner with an option adjustable rate mortgage. Everything you people are saying on this blog is scaring the crap out of me. I have spoken with our mortgage lender and he is telling me to re-finance, but I don't know if I can afford my house even after that's all worked out...
I'm worried and feel really stupid.
The Dems are not *quite* as crooked and bought off. The GOP (Gang O Pedophiles) are far more currupt today than the Dems.
The GOP are IN POWER in all three branches of the US government and still can't keep these Delay, Foley, Abramoff, Lay, Rove, et al. scandals from blowing up. (NOTE: Not for lack of trying, as it's been going on for years.) Clinton's greatest sin? Getting sucked off by a fat intern. Hey at least it was legal! (Though the perjury wasn't.) I'm pretty sure giving sex talk to 16 year old boys is not legal, at least not without their parents' permission. I guess warping intelligence to get us into a war, hmm, can't tell if that's legal or not, but it certainly isn't good!
jr-
If you have enough equity in your home to sell at a good discount (ie. undercut the comps by a decent percentage, 10% or more) you might want to think about doing that.
Even if it means you'd lose a little money. Losing a little is a lot better than losing a lot.
I know it's hard to come to grips with, but think forward.
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