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[ame=http://www.youtube.com/watch?v=QwrO6jhtC5E]YouTube - The next housing shock[/ame]
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I think you are overoptimistic on several fronts.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.
A growing number of Americans can't afford a home or don't want to own one, a trend that's spawning a generation of renters and a rise in apartment construction. Many of the new renters are former owners who lost homes to foreclosure or bankruptcy. For others who could afford one, a home now feels too costly, too risky or unlikely to appreciate enough to make it a worthwhile investment. The proportion of U.S. households that own homes is at its lowest point since 1998. When the housing bubble burst four years ago, 31.6 percent of households were renters. Now, it's at 33.6 percent and rising. Since the housing meltdown, nearly 3 million households have become renters. At least 3 million more are expected by 2015, according to census data analyzed by Harvard's Joint Center for Housing Studies and The Associated Press. All told, nearly 38 million households are renters.
Among the signs of a rising rental market:
The pace of apartment construction has surged 115 percent from its October 2009 low. It's still well below a healthy level. But permits for apartments, a gauge of future construction, hit a two-year peak in March. By contrast, permits for single-family home are on pace for their lowest annual level on records dating to 1960.
The number of completed apartments averaged about 250,000 a year before the boom. They fell to 54,000 last year and will probably number around the same this year. But then the number will likely double to about 100,000 in 2012 and hit 250,000 by 2013 or 2014, according to the CoStar Group, a research firm. The lag is due to the time it takes for an apartment building to be completed: an average of 14 months.
Demand is driving up rents. The median price of advertised rents rose 4.1 percent between the end of 2009 and the end of 2010, census data shows. Few expect the higher prices to stem the flood of renters, though. One reason: Younger adults don't value homeownership as earlier generations did and many prefer to rent, studies show.
Rental housing is giving builders more work just as construction of single-family homes has dried up. Still, that economic lift won't make up for all the single-family houses not being built. Apartments account for only about one-fourth of homes. And renters are outspent roughly 2-to-1 by homeowners, who pay for items from lawn care to remodeling and help drive the economy.
More Housing crisis creates generation of renters - Business - Personal finance - Real estate - msnbc.com
Tuesday's report from the closely-watched Case-Shiller index of property values in 20 U.S. cities was 3.6 percent below the same month a year earlier. High unemployment means many people lack the income needed to buy a home, while others may be worried they may not keep their jobs and do not want to take on major new debts.
Banks have also tightened lending standards, meaning fewer people can qualify for mortgage loans to buy homes. A separate study by private research group, the Institute for Supply Management, showed business activity growing more slowly in May in the U.S. Midwest.
The downbeat reports and high gasoline prices are among the reasons U.S. consumers grew more pessimistic in May as U.S. consumer confidence fell to a six-month low. Economists watch consumer confidence for clues about the consumer spending that drives most U.S. economic activity.
US Housing Prices Fall | USA | English
A widely watched index of home prices has fallen to a level below its recession low point, an official sign that the US housing market is in a so-called "double dip" downturn. Home prices fell sharply during the first quarter of the year, according to Standard & Poor's Case-Shiller index of US home prices. That leaves home prices below the bottom they reached early in 2009, as the United States was mired in a financial crisis and deep recession. The news, released by S&P on Tuesday, confirms that the housing market is beset by ongoing challenges, even as the broader economy has stabilized and shown modest job growth this year.
The key problems:
Credit is tight for would-be buyers. Even though interest rates are low, banks are being unduly stringent in approving loans, say some real estate experts.
Uncertainty runs high. It's hard for potential homebuyers to make a major financial commitment if they feel uncertain about job security or about whether home prices will keep falling.
The supply of homes for sale is huge. The continuing tide of foreclosures puts downward pressure on prices, by keeping a glut of homes on the market at distress-sale prices. The problem feeds on itself, since many homeowners default in part because they see the value of their properties declining – leaving them with less incentive to make the effort to stay current on their mortgage payments and more incentive to let lenders take over the properties.
The foreclosure wave may have already peaked, but the numbers of loans in serious delinquency remain at historically high levels. "Weak demand, foreclosures, and a glut of homes for sale should translate into at least another 5 percent drop in the Case-Shiller composite indices," economist Patrick Newport of the forecasting firm IHS Global Insight wrote in an analysis Tuesday. He said a key reason that further price declines are "etched in stone" is that so many homeowners have seen their home values fall well below the balances due on their loans.
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