Where will Real Estate Bottom?

[skeptic]

What is the difference in cost between building a concrete and wood framed house?

That depends on the details and what costs you include. You won't want to have to pay to heat a concrete house in South Dakota. On the other hand the cheapest house you can build is adobe, with a clay floor. The adobe house can be a much nicer (more comfortable, attractive) home than a stick framed house.

 

[william the wie]

The main reason for the current oil crisis is the high cost of food worldwide and it will get much worse if Russia has the greater than average spring flooding expected.

 

[skeptic]

The main reason for the current oil crisis is the high cost of food worldwide.

I can't even imagine a supportive rationale for that statement. In fact I can't even figure out what oil "crisis" you are referring to.

 

[william the wie]

The main reason for the current oil crisis is the high cost of food worldwide.

I can't even imagine a supportive rationale for that statement. In fact I can't even figure out what oil "crisis" you are referring to.

Have you seen news about the Mid-East, looked at pump prices or heard about the EPA's ethanol increase?

 

[Toro]

Buffett said yesterday that he expects the value of residential real estate to begin rising next year. I'm thinking more like 2013, maybe 2014. That's when all the excess inventory gets wiped away.

 

[Pepe]

Buffett said yesterday that he expects the value of residential real estate to begin rising next year. I'm thinking more like 2013, maybe 2014. That's when all the excess inventory gets wiped away.

I am not nearly as wealthy as Warren but my "oracle" says that Housing will continue to crater until 2020-2025.

No one knows the actual amount of "shadow inventory."

As robotics, automation and IT continue to displace workers in industries that cannot or will not move offshore, UE will continue to be a drag on the economy.

Another Banking Crisis is currently in the works with Banks "borrowing short" and lending long."

States and Municipalities will "pink slip" a million Public Parasites in the coming year. They may be parasites but they did buy "stuff."

Many Cities, States, Counties, and Municipalities are in danger of outright Default or having the "cost of money" so steep as to be impossible to "borrow."

The Liberals (Dems&Pubs) will continue their out of control spending until either there is a political revolt or more likely the Bond Market slaps the Imperial Mandarins in DC right across the chops.

Ad nauseum.

 

[skeptic]

The main reason for the current oil crisis is the high cost of food worldwide.

I can't even imagine a supportive rationale for that statement. In fact I can't even figure out what oil "crisis" you are referring to.

Have you seen news about the Mid-East, looked at pump prices or heard about the EPA's ethanol increase?

yes, I am aware of all that. I still can't see how food would be driving oil prices or how a mild oil price spike would be a crisis. Higher prices for food and commodities are to be expected as the population exceeds the Earth's carrying capacity.

Oil prices drive food prices sometimes, I am not sure the inverse has ever occurred once. Or that it ever will.

 

[skeptic]

Buffett said yesterday that he expects the value of residential real estate to begin rising next year. I'm thinking more like 2013, maybe 2014. That's when all the excess inventory gets wiped away.

The problem with predicting the future is that before your prediction can be realized the conditions that cause events to unfold have changed.

We may reach today's bottom in 12 months, the bottom that is the sum of today's influences. But in 12 months the conditions that cause the "bottom" to be what it is may be completely different and the new bottom may still be unreached.

Butterfly effect. The Butterfly Effect - Chaos & Fractals

 

[skeptic]

It seems to me as if we are already watching the unraveling of the suburban lifestyle model. Of course none of us will know that until the decay is well advanced to the point of being clearly systemic.

What impacts that trend will have on real estate markets and the "bottom" are unknowable. But expect a trend toward multiple occupancy conversions and a spectrum of value shifts in the real estate inventory as units that are better located increase in value (eventually) and many units lose essentially all of their value. Like Detroit only scattered across the nation.

I also do not see America becoming more prosperous/capita for a generation or three. With a similar trend toward further stratification in income equality. How that will impact the RE market is any fool's guess. But again I expect increases and decreases in unit values as result.

 

[B. Kidd]

Buffett said yesterday that he expects the value of residential real estate to begin rising next year. I'm thinking more like 2013, maybe 2014. That's when all the excess inventory gets wiped away.

The 'oracle' made the same prediction in 2009 for 2011. Maybe he should start forecasting the weather instead of real estate.