Tuesday, July 06, 2010

Housing outlook grim

The Washington Post illustrates the growing bearish view of the housing market, even as it misleads readers about historical housing prices.
After showing signs of a fledgling recovery from the worst downturn in decades, the U.S. housing market appears to be heading back toward the doldrums, as the expiration of a lucrative tax credit for buyers and increased uncertainty about the economy cause home sales to plummet.

The sudden weakness in residential real estate has struck nearly every region of the country, according to recent government and industry data, driving down sales of new and previously owned homes alike in May. On Thursday, the National Association of Realtors said an index that measures sales contracts signed on existing homes plunged 30 percent in May, more than twice what analysts had forecast, to the lowest level since the group started tracking the numbers in 2001.

Those sharp declines come despite record-low mortgage rates and historically cheap home prices. The market's renewed fragility highlights concerns about whether the U.S. economy will hurtle back into recession and illustrates the impact of the nation's high unemployment rate...
Check the graph in the sidebar, home prices are not "historically cheap."

33 comments:

  1. I love that little blip at the end there. I remember all the bulls we talking so much trash as it was going up....

    I told them in a couple of posts that it will be a blip and it wont even be visible when prices drop like a rock again.....

    Where are those morons? I guess when we have another blip in a year or two, they will come back to talk nonsense again.

    Just remember guys, Japan took 20 years....we are doing EXACTLY what they did. Do they same thing, expect the same results.

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  2. We have not come to any idea of what our capacity for % of home ownership can be with unemployment as high as it is and 50% of the working force either having faced unemployment or underemployment in the last 2 years. What is real estate normal? http://qedrealestate.wordpress.com/2010/07/06/what-is-real-estate-normal/

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  3. hmmmm...a bell shaped curve continues (except for the government meddling blip). Of course, that meddling will turn the would-have-been bell curve to a will-be sine curve. WAL.

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  4. The blip is still very much alive and well in DC. Going on 12 months straight now.

    http://mysite.verizon.net/vzeqrguz/housingbubble/washington.html

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  5. I have a question. Will prices in DC go down soon? Or we have to wait for some economic disaster or something??

    Bill

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  6. I have a question. Will prices in DC go down soon? Or we have to wait for some economic disaster or something??

    Bill

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  7. I have a question. Will prices in DC go down soon? Or we have to wait for some economic disaster or something??

    Bill

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  8. They probably wont go down Bill. However I can say with 100% certainty, they will NOT go up. NOT AT ALL!!!!!

    The most likely scenario is that prices will stay flat for the next 20-25 years until salaries catch up to the prices.

    So my advice is dont buy, cause renting is cheaper. Buy a home somewhere else if you want to buy as an investment.

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  9. Well, to be the devil's advocate, the current historicaly low interest rates may well mean that PAYMENTS on a median house given a conventional 30yr FRM may be historicaly low. Certainly any sort of noticeable appreciation in real prices is NOT in our future. OTOH, in many markets the prices probably ARE closer to bottom than top. The idea that interest rates could go up even while prices stabilize/stagnate at levels near to current ones is NOT absurd. At least not absurd compared to the idiocy of a permanantly high plateau that we sometimes heard about in 2006. --Jim A.

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  10. "nonpartisan said...
    hmmmm...a bell shaped curve continues (except for the government meddling blip)."

    Hey Nonpartisan, I fogot to ask, did you see Case Shiller this month? Nearly the entire mild price weakness we saw for the entire winter was wiped away in a single month.

    Caw! Caw! Caw!!!

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  11. "PAYMENTS on a median house given a conventional 30yr FRM may be historicaly low."

    Being that nobody stays in their 30 year mortgage longer than 6 years, means that the payment doesnt matter much...

    cause when you try to sell 5, 6 or 7 years later, you home will be worth less than you bought it and all savings from lower payments will be wiped out.

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  12. Hey partisan, let's see how often you post here in a few months when local housing bumbers start to show their true colors. Enjoy your lemonade now because come autumn it will be all lemons for you!

    CAW, CAW, CAW

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  13. Ill be here anonypussy, just like I was last autumn as prices eased. I always said 160 was a possibility.

    Hey anonypussy, why dont you give us your prediction? 140? 120? 100? Give us something so we can mock you as it fails to come true.

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  14. That's right you will be here. You have nothing else better to do with your pathetic life. You are a real bore!

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  15. He will be here, because prices will slowly decline in DC for another 15 years or so. Im sure 2 or 3 years he will get tired of the same arguments he has given in the last 2 or 3....

    but none the less, prices will be lower 3 years from now, just like they are lower than they were 3 years ago....

    and they will be even lower 3 years after that too!

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  16. And yet, prices in NOVA just keep going up... +10.9% for the year...

    http://www.mris.com/reports/stats/route.cfm

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  17. UP? I JUST SOLD MY HOME FOR A LOSS. ARE YOU SERIOUS? TO SAY THAT ALL HOMES HAVE GONE UP 10% IS A. CARELESS STATEMENT.

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  18. Hey - I dont make up the stats. I just know how to read them (hint "+" means prices are going up)...

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  19. There really was a BUBBLE?
    Really?

    But they said there was no bubble. But a different they said the recession is over.

    Can't believe either 'they' it seems.

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  20. "Anonypussy said...
    That's right you will be here. You have nothing else better to do with your pathetic life. You are a real bore!"

    So noted. And let me ask again, your price predictions are...

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  21. Anon 7:14. In a normal market, if you're only going to live somwhere 5 years, you SHOULD probably rent. The common practice of "moving up" when you just started to pay down a bit of principal on your 30yr FRM is STUPID. Jim A.

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  22. "So noted. And let me ask again, your price predictions are..."

    Im not the same guy calling you out. However, I already told you my prediction. 15-20 years of slow steady straight declines. Just like Japan.

    See you in 20 years to tell you "I told you so!", if you arent around...I will see you in 3 years to laugh at how prices have declined from now. You will be here, I know.

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  23. Jim A,

    Im not talking about me, Im talking about 99% of everyone who buys moves out to "move up" in 7 years. Its the facts. In 7 years, anyone who bought in the DC/NoVa area will have lost money, even with lower interest rates.

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  24. "Annonypussy said...

    Im not the same guy calling you out. However, I already told you my prediction. 15-20 years of slow steady straight declines. Just like Japan."

    OK lets put that in numerical terms Case Shiller DC for April 2010 are 179.49.

    So according to your theory, prices in DC at the following times will be:

    Nov 2010 ________
    Apr 2011 ________
    Nov 2011 ________
    Apr 2012 ________
    Nov 2012 ________
    Apr 2013 ________

    Fill in the blanks. Give us numerical values so we can
    laugh at you as your predictions fail one by one.

    Im going to make one prediction right now. You will fail to make any of the predictions above and will either (a) respond spewing a bunch of questionably relevant factors, or (b) just disappear into the either and not answer altogether.

    Whats it gonna be anonnypuss?

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  25. (a) it is then, as I suspected...

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  26. "Fill in the blanks. Give us numerical values so we can
    laugh at you as your predictions fail one by one. "

    Easy. That magic 100 number that you say we will never be at? We will be there or even lower in 2023.

    If you want 2013 or any other year, average the decline over all the years and pull any year you want from my prediction.

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  27. So if my math is correct, your values are as follows:

    Nov 2010 176.43
    May 2011 173.38
    Nov 2011 170.32
    May 2012 167.26
    Nov 2012 164.20
    May 2013 161.15

    I'll mark this post and we will check again in 6 months to see how you are doing.

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  28. So if the price is 161 in Nov, Im still wrong. I cant win either way, which is why Im not playing the "whats the price in 6 months" game. Its not what I said.

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  29. Ill happily give you the downside anonypuss.

    That said, if you want to pussy out now, I understand. I never expected you to stand behind anything being as you post "anonymous" and all.

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  30. well, Ive only posted twice in this thread. I would also guess about 5 times tops on this entire blog. I dont even have a "blogger" account. Im not going to register just so that I can argue with you.

    As far as standing behind what I have said, I dont give a shit what you think of me. How does that make your self importance feel?

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  31. Im quite sure you post pretty religiously on this blog.

    Im also sure you care quite a bit what I think of you. So much so, that its likely you will feel COMPELLED to post again and tell me "its not true" that you spend alot of time posting here...

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  32. Partisan is Pussy. It is evident that you are one in the same.

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  33. A punk is a person who posts under the name "Anonymous". Comments deleted.

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