Discussion in 'Economy' started by hvactec, Apr 17, 2011.
[ame=http://www.youtube.com/watch?v=QwrO6jhtC5E]YouTube - The next housing shock[/ame]
Your link does not work but this is old news. Confirmation of forged documents go back to 04 or 05 in most places where the housing bubble really took off.
The next RE shock is an after-shock of the original one.
The market is moribund because banks have tightened up lending, and are curtailing giving out those variable rate NINJA loan that drove the prices so high for about ten years or so.
As soon as those viaible rate kicked up to their much higher interest rates, and the buyers could not longer pay their monthly nuts, the market went south.
But given that the market was mainlining amphetamines in the form of vairable rate NINJA loans, that's to be expected.
Based on the median US family's income (roughly $50 K before taxes) the median home price in this nation ought to be about $100,000.
Still some way to go before we get there.
I think you are overoptimistic on several fronts.
The median income income is lower than that.
After this big of a boom, one reason New Orleans has not recovered from Katrina is that real estate was down all over the gulf due to overbuilding prior to the hurricane, the bottom is way down there. 1X annual income or less is the probable bottom. While no one sector of housing is wildly overbuilt nationally between condos, trailer parks, RV parks, extended stay hotels and so forth total housing stock is way over the more or less normal supply of 111% of local population in 90+% of markets. Short of the big one hitting and forcing the evacuation of say California or the mid-Mississippi I see no possibility of 2X income housing prices becoming the long range norm again.
Real incomes are dropping due to non-core inflation, food and fuel, squeezing housing budgets.
Construction costs are going down and have been doing so for at least 40 years. If existing homes have to compete with lower cost and higher quality new construction then they will have to drop in price a lot.
This is extremely messy and will get much worse.
Housing crisis creates generation of renters...
Troubled home market creates generation of renters
5/24/2011 WASHINGTON For many Americans a home now feels too costly, too risky or unlikely to appreciate
Uncle Ferd waitin' till dey givin' houses away...
US Housing Prices Fall
May 31, 2011 - A wave of foreclosures and a glut of unsold homes pushed U.S. housing prices down in March.
'Double dip' in home prices is official, and prices could drop more
May 31, 2011 - Home prices fell sharply during the first quarter of 2011, according to the S&P/Case-Shiller index. The 'double dip' means they dropped below their Great Recession low point, reached in early 2009.
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