March 28, 2008

The way-back machine has already taken us to 2003-2005 on home prices. So where does it stop? 1999? 1992?


You'll want to check this article by Jim Willie

Here's a snippet.

Ready to party like it's 1999? And ready for the complete and total destruction of the US dollar?

The usual outcome of busted bubbles is a return to pre-bubble prices. That means at least a return to 1999 housing prices, and possibly a return to 1992 prices if the new collections fail to deliver.

The gigantic rescue platform for mortgages, the official bond refund lending facilities, the flimsy USGovt stimulus plan, these had better be designed as large, really large, because the current housing crisis and mortgage debacle is bigger than anything the nation has ever faced. It will require a remedy apparatus larger than anything ever devised.

24 comments:

J at IHB and HFF said...

Do we get to REAL 1999 house prices by general deflation or by general inflation with a $5 loaf of bread?

Anonymous said...

.



He's kinda purdy in that pictur.

Wonder if he'd squeal like a piggy for us.

Anonymous said...

Who is that a picture of? Does that girl have a mustache!?!

LauraVella said...

Hell, forget about the 1990's....

We're going back to late 1980's pricing.

If some of you doubt this, take into consideration - no job creation and stagnant pay, rising healthcare costs, food costs, gasoline, maintance costs/property taxes, home and personal insurance....all these expenses will bring down the prices of houses.

Not to mention, more homes and condos are still being built, increasing housing inventory more than during any other real estate boom in the history of this country.

Get ready for great prices in the future.

In two to three years time, houses will fall to the lowest prices seen in 50 years.

The reason I'm saying this is that I have never, ever, in my entire life seen house prices so out of control and totally fueled by the corrupt banking industry and Wall Street.

I blame the diverative market and the revision to the 1999 banking clause which allowed the banking industy to hook up with Wall St.

This is all so unbelievable and surreal to see history being made right before our very eyes.

Mammoth said...

"Get ready for great prices in the future."
------------------------
Ummmmm...only for houses, Lauravella.

I don't think that we'll be seeing decreases in the costs of insurance, medical care, or food.
=============================
Re: the 'Way-Back Machine,' it has already taken us back to 1992.

The economy is tanking, everyone is either worried or pissed, and a Clinton is running for president.

-Mammoth

Lin said...

Keith, I have to had it to you. You pick the best photos to accompany your stories. It really adds to the humor.

Anonymous said...

God it's been a long time...Did Donna Summer really have a mustache?

I was doin' so much coke and weed back then I never really paid attention to what she looked like.

Anonymous said...

You won't believe it, but I say
late 1940's. To the prices when the older houses were built.

Why, because this situation has the earmarks of an unprecedented historical collapse; therefore a much longer cycle with a mean appropriate to that cycle.

This is some kind of Great crank of the wheel of history. Maybe of the history of interest and leveraging.

Interest was verboten by religion until about 1100 AD. Certainly
I am not suggesting a reversion to that time, but something big is happening here. Much bigger than our lifetimes I think, and I was born in 1944. It will be hard to wrap our minds around; this is difficult for the top financial minds of this time to grasp.

What do you think that implies about our ability to stop the slide of the slag heap beginning to move down on us?

PKK

Anonymous said...

YOU CANNOT HAVE THE COLLAPSE OF THE DOLLAR AND THE COLLAPSE OF HOME PRICES AS WELL.

Pick one or the other morons.

Anonymous said...

Anon 7:12 - Here are a few rules to live by:

1) Don't try and fight the last war.
2) Expect the unexpected
3) Never say never.

Anonymous said...

Is that Dave Chappell serving pancakes after playing basketball with his entourage? LOL Chappell is a wacko.

Anonymous said...

YOU CANNOT HAVE THE COLLAPSE OF THE DOLLAR AND THE COLLAPSE OF HOME PRICES AS WELL.

Pick one or the other morons.


Yes, we can! Yes, we can! Si se puede!

Anonymous said...

:YOU CANNOT HAVE THE COLLAPSE OF THE DOLLAR AND THE COLLAPSE OF HOME PRICES AS WELL.

True, however, it is possible to have a weakening (though cascading through range bound channels) USD and a dollar indexed decrease in RE prices so that although the prices may slip to a total of 20-30% devaluation (as in the Houston/Dallas oil patch bust of the 80s), however, from a dollar indexed pov, it's truly 50% over the long haul.

Anonymous said...

How low can prices go?

Think about this...

How much would houses cost if there was no financing available?

It happened during the Great Depression and housing prices fell 90% from their peak.

What do you think about that?

Jymkata

Gabor said...

It today's dollars the lowest prices you can hope for will be 1999 prices. It just can't get much lower than than. Remember, we have doubled the number of dollars in circulation since 2000 so 1999 prices is still very low. Now in real terms--in gold terms--it could be very very low, maybe even the lowest prices since the country was founded.

Gabor said...

And remember, they can print so much money that house prices actually start going up again in dollar terms.

chris g said...

I think it's extreme to say we could go back to 1999 prices. I think many people have underestimated the downturn in prices, but this is a rare example of overestimating the downturn.

The only way we see 1999 prices is if we see mortgage interest rates return to the levels seen in the early to mid 80's. Remember that home prices didn't start moving above trend until around 1997-1998. Average mortgage rates were somewhere around 8%, materially higher than today.

Anonymous said...

LARGER THAN ANYONE CAN IMAGINE, LIKE LARGER THAN THE GOVERNMENT CAN BAIL OUT???

LauraVella said...

mammonth said:"Ummmmm...only for houses, Lauravella."


Yes, that's right Mammoth. I ment it's just for real estate prices, but everything else we 'need' will keep going up in price.

Anonymous said...

Hey schmuko - the dollar IS collapsing and home prices ARE collapsing - AT THE SAME TIME !!!!!!!!!!!!

Anonymous said...

Come on youngsters!! That's Prince! Great artist, lots of interesting history, some great songs, remember
"Little Red Corvette"? sexy song! He still hosts the best Hollywood parties, even the young hot stars want to be seen at his place. He's kind of Male/Female, ya know?

prince the original metrosexual said...

YOU CANNOT HAVE THE COLLAPSE OF THE DOLLAR AND THE COLLAPSE OF HOME PRICES AS WELL.
---------------

Anon, you "sort of" got it right. you cannot have collapsing house prices AND inflation at the same time.

Anonymous said...

"Little Red Corvette" and much of the '1999' CD was classic.

I'd never understood why 'Purple Rain' was his mega album of the decade (and career), it wasn't nearly as good.

-1999 (6 million sales)

-PR (20 million sales)

-Around the World in a Day (5 million sales)

-Parade (UCM) (4 million sales)


It never really made sense to me? Much of his stuff, before and after PR, was better.

Anonymous said...

"Much of his stuff, before and after PR, was better"

Think of Metallica and the untitled Black Album, all the speed metal stuff before it was better metal, such as "Master of Puppets", "For Whom the Bells Toll", and "One", and the alternative stuff afterwards, "Bleeding Me", "Thorn Within", and "Memory Remains", was better '90-ish hard rock. Yet, the Black Album was the single most successful hard rock album, in terms of charting, awards, and worldwide sales. Being a pivotal CD makes it hard to appeal to either crowds; Purple Rain was a such a CD for Prince.

In the decades ahead, Metallica's Load and to a lesser extent Re-Load, will be seen as greater creative efforts than the oversold (and overrated) Black Album. That's kinda the effect of time.