October 03, 2007

HousingPANIC Stupid Question of the Day


One day on this blog, I'll say "OK folks, that's it. The fundamentals are back in line, you can buy a house now and rent it out for positive cash flow, and the Late Great Housing Bubble has been deflated. Go out and buy homes again (but don't use a realtor!)"

So what calendar date do you think that will that be (be specific)?

NEW YORK (Reuters) - U.S. housing prices may not start recovering until 2010 or 2011, according to a Barron's report that quotes bond fund manager Jeffrey Gundlach.

The report in the October 1 edition cites a Gundlach forecast that U.S. home prices may drop an average of 12 percent to 15 percent annually and not reach a trough until late 2008.

According to the report, Gundlach sees particularly sharp declines in bubble markets of California, Florida, Nevada and Arizona and areas in Michigan, Ohio and Indiana, with price drops of 30 percent to 40 percent in those areas.

41 comments:

Anonymous said...

Peak (89) to Trough (92)

Trough (92) to (99)

Trough (99) to Peak (05)

Peak (05) to Trough (09)

Trough (09) to (15)

Trough (15) to peak (?)

guru said...

I called the top of the market on August 18 2004. I was off by a year?

There won't be an actual defined bottom but there will be a time to buy. Start putting offers in Thanksgiving day 2009.

The last of the flippers and most of the weak arm-ers will be beat up. Sellers won't be desperate the will be numb.

Anonymous said...

4/1/2012

Yoski said...

The motherlode of the loan resets will over by 11/08. Then it will take 3-4 month for the debtors to become delinquent and another 3-12 month for the foreclosure proceedings, so by late 2009 most foreclosures will have worked themselves through the system. My guess is spring of 2010 will see the bottom and it will stay there for a while before any serious upswing.

Paul E. Math said...

I don't get a really clear vision of where the bottom is but I believe it will be a wide one, the way I like 'em. I think you'll be a little late in calling it, just out of caution.

But the very day you'll proclaim the demise of the Great Housing Bubble will likely be December 5th, 2010.

That doesn't mean housing will be on the upswing at that time - it just means the fundamentals will be solidly back in line to support ownership.

Anonymous said...

I'll start looking 2008 or early 2009. If I miss the exact bottom so be it. I don't think I can put up with renting more than that.

Anonymous said...

I would say nationally you are looking at summer 2010. California will take another year after that...summer 2011.

Tangelo Mozilo said...

I find iTulip's prediction pretty convincing. Unfortunately, I'll have to be combating a nesting wife for several years hence.

http://tinyurl.com/gugva

David said...

Depends upon which area, bu in most bubble markets the bottom will be reached in 2009 - 2011

Anonymous said...

I'd say we're in for at least 3 years of plagued housing market,then 1 year for the home stocks to come back to reasonable levels and home builder getting some work back. So I guess when we see home stocks declining significantly will be the time. So 2011,2011.5

Darreningainesvillefl said...

2 things will give the buy signal, first, everyone around you, friends and realtors and other financial people will say "realestate is a bad investment" and then when you look at prices, you can purchase and be at rent with PITI.

Ed said...

What are you talking about? Larry Yun and CNBC talking heads say the bottom is here already.

DUH.

smitty said...

well, if the graphs of Japan's RE market repeat themselves around the world, you'll have a steady job for years to come!

besides, income inequality will make this topic relevant forever.

Anonymous said...

2010 for AZ will be the beginning of the bottom. It will probably take another 2 years for prices to come down a little more.

cobra2411 said...

Under normal conditions I would say that 08 and 09 are going to be very painful for homeowners. The fall will slow in 10 and 11 and by spring of 2012 it will be a good time to buy a house. Of course everybody and their mother will tell you how the worst thing in the world you could do was buy a house...

But this isn't normal. The FED is hoping they can kick off a stock bubble, and so far it's working. The dollar is being manipulated by foreigners (China) and what do we say about something that's based on perceived value rather then fundamental value? That's right; A BUBBLE. And what do we know about bubble? Once people stop believing in them they pop pretty quickly.

So if Ben-Dover Bernanke doesn't take the dollar out back and execute it (he's trying...), investor sentiment will change as the housing bubble continues to pop. Once that happens, people will stop believing in the dollar and that bubble will pop...

Once the dollar pops, we're F'd. But not as bad as the people that have been buying the dollar manipulating the price.

So given that I'm predicting 50-70% drops in real estate prices when the dollar bubble pops. Taxes, inflation and interest rates are going to rise and no one will be able to afford to own.

So it's hard to say when it will be better. If what we're seeing is the dollar bubble popping because of Ben's actions then we still might be on target for leveling by 2012.

The thing that worries me though is that there will be so much pain as everything corrects that people will beg for any help at all. Remember the patriot act? People lined up just to have their freedom taken away and are we really any safer?

Ownership Gold, which I own alot of, could once again become illegal and if they really want to screw people they'll set the redemption price far below market value.

New currencies could be introduced and even fully electronic money could be introduced.

I'm a home owner and I'm more worried about the knee-jerk reactions then if my house looses 70% of it's peak value.

Of course if the dollar bubble is maintained somehow the correction could take a lot longer...

Happy Homedebtor said...

When prices fall, they fall fast. Seriously, with real drops of 20-30% in bubble-central like Vegas/FL/AZ already, you think it'll take 4 years to bottom out? You're hallucinating. Lemme guess, you're expecting a "buy 1 at 2005 prices, get 2 free!" type of sale?

There will not be 2 million people defaulting/foreclosing - that's a doomsday scenario for people trying to look like the messiah by guessing.

Because of folks like you - thanks! - rents are rising 8-12% a year in my area. In 5 years, that means rent will have increased 50% or more, and will be more than my PITI.

I would say Jack freezes to death by the end of Q3 2008. But, I think Rose will be stuck drifting in the water for a full year before a lifeboat finds her - although it may just miss her a few times during that year providing false hope.

Since I'm here 'til at least 2012, IDGAF really. My house is a home, not an investment or an ATM. When I retire, I will not have a mortgage, period.

Anyone wanna harass Lowes for me? Bastards are supposed to be delivering/installing my storm door in the next 2-3 hours.

westwest888 said...

May 2015

Anonymous said...

I'm betting that the retiring Boomers will kill all non retirement friendly locales starting in 2015 or so. 2011 peak if it happens will be a mirage or very very short lived.
Cool.
Cow_tipping.

Anonymous said...

Peak (89) to Trough (92)

Trough (92) to (99)

Trough (99) to Peak (05)

Peak (05) to Trough (09)

Trough (09) to (15)

Trough (15) to peak (?)

----------------------------------
I pretty much agree with this anon's scenario. Bought my bank owned house in Ca. back in 1994. About 50% off what it would have sold for in 89.

It didn't go up much, (if any) in value until around 1998.

So somewhere between 2010 and 2014 would be my guess at this point in time.

Timing would also depend on whether I planned to live in the house or rent it for a while then flip it. Yes I said flip it. (Me bad)

Mammoth said...

“Anyone wanna harass Lowes for me? Bastards are supposed to be delivering/installing my storm door in the next 2-3 hours.”
------------------------
You are better off with Lowes than with Home Depot.

The idiot Mexis their contractor sent to install my carpet back in February, rolled their van into the garage door and damaged it.

When I called the manager at Home Depot he told me to “just work it out with the contractor.” No wonder their stores are so empty these days…

Tweener said...

Most of the boomers will hit retirement between 2010 and 2015.

This demographic and the burst of the housing bubble will cause the "great cratering" of home prices, according to NPR's On Point Radio show.

If this is true, the bottom may not be reached for another decade or longer. The psychological impact of a deflating market makes it impossible to predict timelines or the total fall.

Anonymous said...

.

Well supposedly, December 21 2012 is the end of the world, so I guess you can call it over on Dec 22!!!!!!!!!


.

Anonymous said...

Tweener said...
Most of the boomers will hit retirement between 2010 and 2015.


=======

Here we go again. HPers say this and then turn around and say boomers have no money saved and will be working till they day they die.

Just like the stock market will fall but rise

Just like we'll have hyperunflation and a recession.

You idiots take both sides of an argument each time.

Anonymous said...

Tweener said...
Most of the boomers will hit retirement between 2010 and 2015.
=======

Here we go again. HPers say this and then turn around and say boomers have no money saved and will be working till they day they die.

Some boomers are retiring early because they have plenty of money!And some don't! Duhhhh..

Anyhow, of the one's that don't...most will retire anyway and move to their retirement destination. If they need extra income, they will make due with less or find another job/career for their elder years.

Duhh...

Anonymous said...

Here we go again. HPers say this and then turn around and say boomers have no money saved and will be working till they day they die.

Just like the stock market will fall but rise

Just like we'll have hyperunflation and a recession.

You idiots take both sides of an argument each time.


Hey dumbass. The stock market is not an indicator of an economic health. Your problem is that you've fed into the MSM simplistic and insular view of the US economy. Stocks are up - things are going great! No, not if the price of food, energy and commodities are shooting up and if the dollar is tanking.

The stock market is not an absolute quantity - it's all relative.

Anonymous said...

Most Boomers who put their faith in RE will be sorely disappointed. They will be rustling stray shopping carts at grocery stores for an extra decade or two. Nobody wants to pay $1 million for your crackhouse.

Anonymous said...

Hey dumbass. The stock market is not an indicator of an economic health.

------

spoken like someone who has all his money in 5% cds while the dow is at record levels

moron the stock market is THE indicator of economic healthy. Only morons like you and Peter Schiff say otherwise.

How are your CFC puts doing by the way? How is silver? Gold? All down heavily this week.

Keep renting and holding cash for all I care. While you are 70 and living in an apartment I'll be sipping pink drinks on a beach.

Anonymous said...

Well... the point is that sooner or later - things will calm down enough so that you can buy a house... but the big question is whether or not you would want to live there?

Would anybody like to go back in time and invest in 1946 Germany?

How about Russia after the Bolshevik revolution?

How about Central Europe after the Napoleonic wars or in the Netherlands just after the Tulip fiasco?

Granted... it might not be as bad this time around. But then again... it could be worse.

Got gas?

IB

RiperDurian said...

I like 2012. But this is total pulling out of ass hunchery.

One thing is for sure the bottom like the top will be spread out over several years with the last to bubble being the last to finally capitulate and crater.

Hey RealtWhoreClerks were right after all, "all real estate is local"!

Anonymous said...

Here's a deeper bottom being predicted in the biblical prophecies of Daniel for the year 2012:

http://tinyurl.com/2uh7s8

Frank@NeverColdCall.com said...

2010 for AZ will be the beginning of the bottom. It will probably take another 2 years for prices to come down a little more.

I don't even live there and yet I'm afraid to see what kind of Detroit ghost town Phoenix will soon become. Their entire economy was tied to the REIC in one way or another.

When prices fall, they fall fast. Seriously, with real drops of 20-30% in bubble-central like Vegas/FL/AZ already, you think it'll take 4 years to bottom out? You're hallucinating. Lemme guess, you're expecting a "buy 1 at 2005 prices, get 2 free!" type of sale?

Hey dumbass, in places like NV and AZ houses are up 300% or more since 2001. Trust me, they've got plenty of room to fall.

There will not be 2 million people defaulting/foreclosing - that's a doomsday scenario for people trying to look like the messiah by guessing.

Actually, based on the number of resets coming up for people who already live check-to-check, yes there will be.

Because of folks like you - thanks! - rents are rising 8-12% a year in my area. In 5 years, that means rent will have increased 50% or more, and will be more than my PITI.

I don't know where you live but in Newport Beach CA they're in a free fall. We expect to cut ours by a few hundred bucks when renewal comes up next year. If this landlord won't then there are comps we can get for less.

A 50% increase in rents? When the economy is being sucked dry of disposable income thanks to mortgage resets, student loans, gas prices ... now you're just making crap up.

Anonymous said...

Looking at data from previous housing bubbles in regional areas, these things take an extremely long time to play out. It will probably be a good time to buy in about 10 years from now.

I wish I could post some graphs for you so you could see how painfully slow housing markets can move in price. During the previous bubble in Honolulu, home prices peaked in 1991-1995. There was a long plateau. The trough occurred between 1996-1999. Prices reached their former levels in 2002. Interest-adjusted, prices reached their former levels around 2004 which is 13 years after the former peak.

This is all you need to remember: When housing prices are appreciating at the rate of inflation again, it will be time to buy. Don't worry... it will happen slowly (over years) and you'll have plenty of time to examine the data.

Anonymous said...

2035

Lost Cause said...

Those historic high prices that will be followed by a historic crash. The market high will again be reached in about 2025.

Anonymous said...

There are plenty of times as a REALTOR I have advised folks not to buy or sell. What I am suppose to do if they decide to go ahead? I am all for telling folks that there is a long fall at the end of that cliff but I am not going to stand in front of them to prevent them from going over.

james said...

BOttom 2011. Its all about the sunspot cycles. ;)

Anonymous said...

Sadly this will go far beyond an up down in the housing market. This whole thing was engineered to bring about a collapse of the U.S. economy to help bring in world govt. This will spin out of control and will result in severe social upheaval resulting in disintegration of our society a la Katrina style .

Later there will be war on this continent and invasion by Russia and China. If you didn't hear it before, you heard it here first. If you look into it you'll find out this is a widely known scenario.

Anonymous said...

I told my landlord I was moving and they dropped my rent 10% to match the new house I was looking at.

Anonymous said...

'Only morons like you and Peter Schiff say otherwise."

Wow! Being lumped in with Peter Schiff is the highest compliment! Thanks!

BTW:I think your break is over and your not supposed to be using work computers for personal business.

Anonymous said...

russia expand its mineral market by forcing war industry productions in china.... sounds posible like the neo illumaniti and a billion sheeple forced to buy, buy buy themselves back to poverty...good for economys that need growth, rather than sustenence

Anonymous said...

1) Jeffrey Gundlach is a fraud. TCW is/was the #1 volume CDO manager for three years running. Jon Laing should know better than to profile that donut, all recent reporting evidence notwithstanding.

2) Cumulative HPA per (sq ft)markets (thinly traded)
RPX.CP28 (25-MSA Composite)
Contract Close S
SEP 2008 -6.38%
SEP 2009 -4.78%
SEP 2010 -3.69%
SEP 2011 -1.69%
SEP 2012 -0.44%