A time capsule of the greatest financial mania in the history of mankind, told in real-time by regular folks and patriots. May future generations better understand the madness of crowds, and how power and money corrupt.
In all previous housing recessions the bottom came within 5 years of peak. Peak this time around was either in 2005 or 2006 depending on how you do the numbers. So bottom will most likely be 2010, at the latest 2011.I think we are close to the bottom now. I sold my home in 2006 for $700K. Identical homes are now listed for $425K which means they can be had for $375K. It's at the point where I start thinking, do I wait for it to go to $325K and rent another year or two? Or do I just say fuck it, I may lose $50K but who cares since I made $350K+ by selling at the peak and I want to end being a renter asap.I'm getting closer and closer to the latter answer.
Talked to mine buddy in Bend/Redmond Oregon area and he said things are bad and will get worse for housing. Last year this area had issued around 450 building permits, now around 40. Lots of construction type people out of work and not making or spending money. It can only get worse, it has not hit bottom, yet
The other day I saw a remark somewhere that housing in the US was deemed overvalued by the late 1980s. A long decline in values was "predicted" based on the fact that the baby-boom demographics were no longer operative. Maybe the subsequent years of EZ-Money, "Investment Properties" and innovative mortgages have only delayed this unwinding, and the conversion of housing back into a durable consumer good is just beginning. This is a refreshing view, at least.
The guy doesn't even believe his own words. Poor sad tool who will say anything for his paycheck.
“Get the down payment from the generation above us”What, ask mom and dad for the cash? Yeaaaa, problem solved, everything’s OK folks move along………
I loved the part where the guy said new home buyers could get the down payments from theit parents. How many boomers out there got an extra $40,000 or so they don't need? I keep reading that the average boomer can't retire because they haven't saved any money, they were counting on all the money they would make selling their homes for a bazillion dollars. Alt-A ARM's are just starting to reset and the default rate graph is headed almost straight up. Neither of them mentioned this. They didn't mention that hitting bottom means that house prices have to drop to their historic mean. That means another half trillion or so will have to be written off as that equity evaporates. I wish we were at the bottom but pretending we are will not make it happen.
BREAKING NEWS....BREAKING NEWS...BRDES PLAINES, IL - McDonald’s Corp. held a press conference today to unveil its latest sandwich: the Big Freddie Mac. Priced at 50 cents, the Big Freddie Mac is the first fast food hamburger to be subsidized by the federal government. “The economy - not that there’s anything wrong with it - is causing Americans to cut back on eating hamburgers,” explained McDonald’s spokesperson Donald McDonald (no relation). “Washington has decided that the burger is too big to fail, so the Treasury Department has agreed to kick in three bucks for every Big Freddie Mac sold.”The Big Freddie Mac, while similar in appearance, is significantly different from the McDonald’s mainstay - the Big Mac. Big Freddie’s bun is inflated to look twice as large as it actually is, while the two all-beef patties are actually one all-beef patty sliced in half width-wise and pumped up by puffy lettuce. The “special” sauce is French dressing which is this week’s “special” at the dollar store next to McDonald’s headquarters. The number of sesame seeds has been reduced to one with a promise of more in two years if the burger market bubble continues. Each Big Freddie Mac comes in a special wrapper printed with suggestions on how to “flip the burger” for profit by selling it to people who are new to fast foods or kids who haven’t learned to read yet. The Big Freddie Mac program does not mean we will be bailing out other fast food menu items,” said Federal Reserve Chairman Ben Bernanke. “As they say in the business, it’s for a ‘limited time only’.” However, he did not rule out a similar plan to help Starbucks, which has recently been forced to close 600 stores. Rumors out of Starbucks headquarters in Seattle hint that the company is about to roll out a government-subsidized coffee called the Frappe Mae.
And how is a seller supposed to give the buyer a 10% down payment there Bob? Those programs aren't available anymore. Thank you so much for letting us know the housing crisis is over. I was worried it was going to go on as long as your forehead.
Bottom calling is dead simple now. But the pumpers are too stupid to figure it out.When the implied 1 year future price rise on the Case Shiller housing futures (take out interest rate effects) equals the implied 1 year inflation rate, then housing has bottomed out.I bet this indicator will be 99% accurate.It sure hasn't bottomed yet.
I love the part when he says that the ninja loans are so expensive they don't make financial sense, as if they ever made financial sense.
Mark Zandi also calls possible bottom in early 2009, I think he could be right. (not an inflation adjusted bottom)Easy credit drove up prices. The disappearance of private sector easy credit has been driving prices back down.If the mortagage business is nationalized, and the Democrats continue their commitment to "preserve homeowner equity gains", can't the government simply offer a sufficient quantity of easy credit to stop the price decline, or even re-inflate the bubble? Reckless government lending will cost U.S. taxpayers, just like reckless private lending cost Bear Stearns stockholders, but if the President, 60 Senators and a majority in the House are willing to pay the price they can successfully prop up housing prices.
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