BusinessWeek: Why housing could fall 25%

[jpinpb]

That was a great article. I enjoyed reading it. I think the best part was the way they ended it: “The Times of London ran a commentary by a geography professor Chris Hamnett titled, “Great news! House prices are down.” His point: By making homes more affordable, a big price drop will be good for the market’s long-term health.”

I think some newspapers here have to adopt that attitude.

[HLS]

“…if you can take riding it out, take it off the market and stop trying to sell something unsellable”

THAT is denial…..

The market is always good when there are buyers, it’s the bubbles that were the problem.

This is the root of the crisis. The carrying costs today are not affordable to many who bought in 2004-2006. They can barely afford their current payment, and looking straight into an 18 wheeler heading straight for them when their ARM adjusts.

The house CAN be sold, but only at today’s price. It’s DENIAL to think that it is really worth more, because it isn’t. Hanging on is just a gamble.

The sickness of human nature is that people think they are entitled to break even (or make money). Nobody cares what anybody paid for their house, except them. It’s worth what it’s worth today. Same applies to stocks. Hanging on to not take a loss is often a worse decision than having bought in the first place.

Nobody likes to admit they were wrong and don’t understand the concept of “cutting their loss”

The biggest mistake many people are making is throwing good money after bad by continuing to pay a dollar for something that is worth 50c, thinking that they will eventually get their dollar back. They are going to waste time and money.

Some savings and retirement accounts have been depleted because of DENIAL. Some people will never recover.

Down the road, there will be people who will be living on SSI, talking about how rich they had been and the homes that they “owned” before the depression came.

There is a good chance that it’s going to be worth 40c long before it’s worth 60c, and it may never be worth $1.00 again, or not for a very long time.

[HLS]

“…if you can take riding it out, take it off the market and stop trying to sell something unsellable”

THAT is denial…..

The market is always good when there are buyers, it’s the bubbles that were the problem.

This is the root of the crisis. The carrying costs today are not affordable to many who bought in 2004-2006. They can barely afford their current payment, and looking straight into an 18 wheeler heading straight for them when their ARM adjusts.

The house CAN be sold, but only at today’s price. It’s DENIAL to think that it is really worth more, because it isn’t. Hanging on is just a gamble.

The sickness of human nature is that people think they are entitled to break even (or make money). Nobody cares what anybody paid for their house, except them. It’s worth what it’s worth today. Same applies to stocks. Hanging on to not take a loss is often a worse decision than having bought in the first place.

Nobody likes to admit they were wrong and don’t understand the concept of “cutting their loss”

The biggest mistake many people are making is throwing good money after bad by continuing to pay a dollar for something that is worth 50c, thinking that they will eventually get their dollar back. They are going to waste time and money.

Some savings and retirement accounts have been depleted because of DENIAL. Some people will never recover.

Down the road, there will be people who will be living on SSI, talking about how rich they had been and the homes that they “owned” before the depression came.

There is a good chance that it’s going to be worth 40c long before it’s worth 60c, and it may never be worth $1.00 again, or not for a very long time.

[HLS]

“…if you can take riding it out, take it off the market and stop trying to sell something unsellable”

THAT is denial…..

The market is always good when there are buyers, it’s the bubbles that were the problem.

This is the root of the crisis. The carrying costs today are not affordable to many who bought in 2004-2006. They can barely afford their current payment, and looking straight into an 18 wheeler heading straight for them when their ARM adjusts.

The house CAN be sold, but only at today’s price. It’s DENIAL to think that it is really worth more, because it isn’t. Hanging on is just a gamble.

The sickness of human nature is that people think they are entitled to break even (or make money). Nobody cares what anybody paid for their house, except them. It’s worth what it’s worth today. Same applies to stocks. Hanging on to not take a loss is often a worse decision than having bought in the first place.

Nobody likes to admit they were wrong and don’t understand the concept of “cutting their loss”

The biggest mistake many people are making is throwing good money after bad by continuing to pay a dollar for something that is worth 50c, thinking that they will eventually get their dollar back. They are going to waste time and money.

Some savings and retirement accounts have been depleted because of DENIAL. Some people will never recover.

Down the road, there will be people who will be living on SSI, talking about how rich they had been and the homes that they “owned” before the depression came.

There is a good chance that it’s going to be worth 40c long before it’s worth 60c, and it may never be worth $1.00 again, or not for a very long time.

[HLS]

“…if you can take riding it out, take it off the market and stop trying to sell something unsellable”

THAT is denial…..

The market is always good when there are buyers, it’s the bubbles that were the problem.

This is the root of the crisis. The carrying costs today are not affordable to many who bought in 2004-2006. They can barely afford their current payment, and looking straight into an 18 wheeler heading straight for them when their ARM adjusts.

The house CAN be sold, but only at today’s price. It’s DENIAL to think that it is really worth more, because it isn’t. Hanging on is just a gamble.

The sickness of human nature is that people think they are entitled to break even (or make money). Nobody cares what anybody paid for their house, except them. It’s worth what it’s worth today. Same applies to stocks. Hanging on to not take a loss is often a worse decision than having bought in the first place.

Nobody likes to admit they were wrong and don’t understand the concept of “cutting their loss”

The biggest mistake many people are making is throwing good money after bad by continuing to pay a dollar for something that is worth 50c, thinking that they will eventually get their dollar back. They are going to waste time and money.

Some savings and retirement accounts have been depleted because of DENIAL. Some people will never recover.

Down the road, there will be people who will be living on SSI, talking about how rich they had been and the homes that they “owned” before the depression came.

There is a good chance that it’s going to be worth 40c long before it’s worth 60c, and it may never be worth $1.00 again, or not for a very long time.

[HLS]

“…if you can take riding it out, take it off the market and stop trying to sell something unsellable”

THAT is denial…..

The market is always good when there are buyers, it’s the bubbles that were the problem.

This is the root of the crisis. The carrying costs today are not affordable to many who bought in 2004-2006. They can barely afford their current payment, and looking straight into an 18 wheeler heading straight for them when their ARM adjusts.

The house CAN be sold, but only at today’s price. It’s DENIAL to think that it is really worth more, because it isn’t. Hanging on is just a gamble.

The sickness of human nature is that people think they are entitled to break even (or make money). Nobody cares what anybody paid for their house, except them. It’s worth what it’s worth today. Same applies to stocks. Hanging on to not take a loss is often a worse decision than having bought in the first place.

Nobody likes to admit they were wrong and don’t understand the concept of “cutting their loss”

The biggest mistake many people are making is throwing good money after bad by continuing to pay a dollar for something that is worth 50c, thinking that they will eventually get their dollar back. They are going to waste time and money.

Some savings and retirement accounts have been depleted because of DENIAL. Some people will never recover.

Down the road, there will be people who will be living on SSI, talking about how rich they had been and the homes that they “owned” before the depression came.

There is a good chance that it’s going to be worth 40c long before it’s worth 60c, and it may never be worth $1.00 again, or not for a very long time.

[jpinpb]

I’m not real estate expert, but I believe real estate is cyclical. This downturn will recover eventually, I think. At least historically that seems to be the case. It may take many years, for sure. But if someone bought before the peak and are not forced to sell b/c of job transfer, divorce, job loss, etc, then they may have staying power. It would not be denial to take it off the market and wait it out a few/several years.

This theory certainly wouldn’t apply to flippers or people who are upside down and in constraints. Those people will have to come to terms w/cutting their losses.

I was fortunate enough to ride out the last boom/bubble burst. Admittedly I bought at the peak the last time and sold prematurely, but I was able to live in a nice house during that time and walk away ahead.

Are you of the belief this market will never recover?

[jpinpb]

I’m not real estate expert, but I believe real estate is cyclical. This downturn will recover eventually, I think. At least historically that seems to be the case. It may take many years, for sure. But if someone bought before the peak and are not forced to sell b/c of job transfer, divorce, job loss, etc, then they may have staying power. It would not be denial to take it off the market and wait it out a few/several years.

This theory certainly wouldn’t apply to flippers or people who are upside down and in constraints. Those people will have to come to terms w/cutting their losses.

I was fortunate enough to ride out the last boom/bubble burst. Admittedly I bought at the peak the last time and sold prematurely, but I was able to live in a nice house during that time and walk away ahead.

Are you of the belief this market will never recover?

[jpinpb]

I’m not real estate expert, but I believe real estate is cyclical. This downturn will recover eventually, I think. At least historically that seems to be the case. It may take many years, for sure. But if someone bought before the peak and are not forced to sell b/c of job transfer, divorce, job loss, etc, then they may have staying power. It would not be denial to take it off the market and wait it out a few/several years.

This theory certainly wouldn’t apply to flippers or people who are upside down and in constraints. Those people will have to come to terms w/cutting their losses.

I was fortunate enough to ride out the last boom/bubble burst. Admittedly I bought at the peak the last time and sold prematurely, but I was able to live in a nice house during that time and walk away ahead.

Are you of the belief this market will never recover?

[jpinpb]

I’m not real estate expert, but I believe real estate is cyclical. This downturn will recover eventually, I think. At least historically that seems to be the case. It may take many years, for sure. But if someone bought before the peak and are not forced to sell b/c of job transfer, divorce, job loss, etc, then they may have staying power. It would not be denial to take it off the market and wait it out a few/several years.

This theory certainly wouldn’t apply to flippers or people who are upside down and in constraints. Those people will have to come to terms w/cutting their losses.

I was fortunate enough to ride out the last boom/bubble burst. Admittedly I bought at the peak the last time and sold prematurely, but I was able to live in a nice house during that time and walk away ahead.

Are you of the belief this market will never recover?

[jpinpb]

I’m not real estate expert, but I believe real estate is cyclical. This downturn will recover eventually, I think. At least historically that seems to be the case. It may take many years, for sure. But if someone bought before the peak and are not forced to sell b/c of job transfer, divorce, job loss, etc, then they may have staying power. It would not be denial to take it off the market and wait it out a few/several years.

This theory certainly wouldn’t apply to flippers or people who are upside down and in constraints. Those people will have to come to terms w/cutting their losses.

I was fortunate enough to ride out the last boom/bubble burst. Admittedly I bought at the peak the last time and sold prematurely, but I was able to live in a nice house during that time and walk away ahead.

Are you of the belief this market will never recover?

[robson]

[img_assist|nid=6384|title=Shiller Long Term House Index|desc=|link=node|align=center|width=466|height=300]

Pretty sure this has been shown here before, but I thought I would point out that it is now being displayed in the MSM.
The last time prices spiked like this-around 1895, they didn’t catch back up, adjusting for inflation, for about 95 years. At first I thought the argument that housing prices would never reach this point again seemed absurd. The data seems to say otherwise. Could very well be another 100 years before we’re above 2005 levels in Real dollars. Now that’s a longterm investment. Guess those 100 year mortgages Do make sense.

[robson]

[img_assist|nid=6384|title=Shiller Long Term House Index|desc=|link=node|align=center|width=466|height=300]

Pretty sure this has been shown here before, but I thought I would point out that it is now being displayed in the MSM.
The last time prices spiked like this-around 1895, they didn’t catch back up, adjusting for inflation, for about 95 years. At first I thought the argument that housing prices would never reach this point again seemed absurd. The data seems to say otherwise. Could very well be another 100 years before we’re above 2005 levels in Real dollars. Now that’s a longterm investment. Guess those 100 year mortgages Do make sense.

[robson]

[img_assist|nid=6384|title=Shiller Long Term House Index|desc=|link=node|align=center|width=466|height=300]

Pretty sure this has been shown here before, but I thought I would point out that it is now being displayed in the MSM.
The last time prices spiked like this-around 1895, they didn’t catch back up, adjusting for inflation, for about 95 years. At first I thought the argument that housing prices would never reach this point again seemed absurd. The data seems to say otherwise. Could very well be another 100 years before we’re above 2005 levels in Real dollars. Now that’s a longterm investment. Guess those 100 year mortgages Do make sense.

[robson]

[img_assist|nid=6384|title=Shiller Long Term House Index|desc=|link=node|align=center|width=466|height=300]

Pretty sure this has been shown here before, but I thought I would point out that it is now being displayed in the MSM.
The last time prices spiked like this-around 1895, they didn’t catch back up, adjusting for inflation, for about 95 years. At first I thought the argument that housing prices would never reach this point again seemed absurd. The data seems to say otherwise. Could very well be another 100 years before we’re above 2005 levels in Real dollars. Now that’s a longterm investment. Guess those 100 year mortgages Do make sense.

[Author]

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