BusinessWeek: Why housing could fall 25%

[denverite]

I thought there was a significant qoute in the article.

“”I know you’re not supposed to say I told you so,’ but I’m at the age where I can do it: Homeownership was oversold,” says 67-year-old House Finance Committee Chairman Barney Frank (D-Mass.). ”

What, a powerful liberal Democrat, conceding this? … perhaps we won’t be subsidizing the RE bubble after all.

On a slightly different note, the News Hour held a town hall metting that consisted of San Diego bankers, mortgage brokers, realtors, speculators, counselors, and a few home owner/foreclosed individuals. I was disappointed when Gwen Ifill (softball on all subjects) provided the moderator role, but did catch the last 2/3’s of the segment. No one even mentioned the home valuation as the problem. A Pigg point of view should have been there to straighten them out. They really danced anround anything of substance, however, one participant did say that he was starting to see some PANIC in SD. I hope this is a portent of things to come.

[sdrealtor]

Interesting graph Robson. I dont remeber seeing one go this far back. While it took 100 years to get back to the trendline, it also to 25 years and the Great Depression to begin the overshoot. By then many of us would no longer be around.

I wonder how good the data is from 100+ years ago. Where the heck could they even find it? If it is good data, I’m impressed they could go that far back.

[sdrealtor]

Interesting graph Robson. I dont remeber seeing one go this far back. While it took 100 years to get back to the trendline, it also to 25 years and the Great Depression to begin the overshoot. By then many of us would no longer be around.

I wonder how good the data is from 100+ years ago. Where the heck could they even find it? If it is good data, I’m impressed they could go that far back.

[sdrealtor]

Interesting graph Robson. I dont remeber seeing one go this far back. While it took 100 years to get back to the trendline, it also to 25 years and the Great Depression to begin the overshoot. By then many of us would no longer be around.

I wonder how good the data is from 100+ years ago. Where the heck could they even find it? If it is good data, I’m impressed they could go that far back.

[sdrealtor]

Interesting graph Robson. I dont remeber seeing one go this far back. While it took 100 years to get back to the trendline, it also to 25 years and the Great Depression to begin the overshoot. By then many of us would no longer be around.

I wonder how good the data is from 100+ years ago. Where the heck could they even find it? If it is good data, I’m impressed they could go that far back.

[sdrealtor]

Interesting graph Robson. I dont remeber seeing one go this far back. While it took 100 years to get back to the trendline, it also to 25 years and the Great Depression to begin the overshoot. By then many of us would no longer be around.

I wonder how good the data is from 100+ years ago. Where the heck could they even find it? If it is good data, I’m impressed they could go that far back.

[(former)FormerSanDiegan]

I wonder how good the data is from 100+ years ago. Where the heck could they even find it? If it is good data, I’m impressed they could go that far back.

This chart has been around for a long time. My main issue with it is that it is inflation adjusted based on official government figures. Inflation calculations have changed a lot since 1900. For example, in the early 1990’s the US changed the way inflation was calculated. I believe that the result is that inflation as currently measured is more than 1% less than the pre-Clinton method. I wonder how much of the recent spike is due to mis-measurement of inflation. It could easily be distorted by 15-20% if we under-report inflation by 1% per year since the early 1990’s.

I think the best measure of prices is to look at carrying costs of owning relative to rent. At some point, it will make financial sense as a business to buy and rent out property for profit. That’s what I would look at, not this inflation-adjusted graphic. This chart is good at demonstrating the excessive prices, but there are too many issues to use it quantitatively and apply it practically.

[(former)FormerSanDiegan]

I wonder how good the data is from 100+ years ago. Where the heck could they even find it? If it is good data, I’m impressed they could go that far back.

This chart has been around for a long time. My main issue with it is that it is inflation adjusted based on official government figures. Inflation calculations have changed a lot since 1900. For example, in the early 1990’s the US changed the way inflation was calculated. I believe that the result is that inflation as currently measured is more than 1% less than the pre-Clinton method. I wonder how much of the recent spike is due to mis-measurement of inflation. It could easily be distorted by 15-20% if we under-report inflation by 1% per year since the early 1990’s.

I think the best measure of prices is to look at carrying costs of owning relative to rent. At some point, it will make financial sense as a business to buy and rent out property for profit. That’s what I would look at, not this inflation-adjusted graphic. This chart is good at demonstrating the excessive prices, but there are too many issues to use it quantitatively and apply it practically.

[(former)FormerSanDiegan]

I wonder how good the data is from 100+ years ago. Where the heck could they even find it? If it is good data, I’m impressed they could go that far back.

This chart has been around for a long time. My main issue with it is that it is inflation adjusted based on official government figures. Inflation calculations have changed a lot since 1900. For example, in the early 1990’s the US changed the way inflation was calculated. I believe that the result is that inflation as currently measured is more than 1% less than the pre-Clinton method. I wonder how much of the recent spike is due to mis-measurement of inflation. It could easily be distorted by 15-20% if we under-report inflation by 1% per year since the early 1990’s.

I think the best measure of prices is to look at carrying costs of owning relative to rent. At some point, it will make financial sense as a business to buy and rent out property for profit. That’s what I would look at, not this inflation-adjusted graphic. This chart is good at demonstrating the excessive prices, but there are too many issues to use it quantitatively and apply it practically.

[(former)FormerSanDiegan]

I wonder how good the data is from 100+ years ago. Where the heck could they even find it? If it is good data, I’m impressed they could go that far back.

This chart has been around for a long time. My main issue with it is that it is inflation adjusted based on official government figures. Inflation calculations have changed a lot since 1900. For example, in the early 1990’s the US changed the way inflation was calculated. I believe that the result is that inflation as currently measured is more than 1% less than the pre-Clinton method. I wonder how much of the recent spike is due to mis-measurement of inflation. It could easily be distorted by 15-20% if we under-report inflation by 1% per year since the early 1990’s.

I think the best measure of prices is to look at carrying costs of owning relative to rent. At some point, it will make financial sense as a business to buy and rent out property for profit. That’s what I would look at, not this inflation-adjusted graphic. This chart is good at demonstrating the excessive prices, but there are too many issues to use it quantitatively and apply it practically.

[(former)FormerSanDiegan]

I wonder how good the data is from 100+ years ago. Where the heck could they even find it? If it is good data, I’m impressed they could go that far back.

This chart has been around for a long time. My main issue with it is that it is inflation adjusted based on official government figures. Inflation calculations have changed a lot since 1900. For example, in the early 1990’s the US changed the way inflation was calculated. I believe that the result is that inflation as currently measured is more than 1% less than the pre-Clinton method. I wonder how much of the recent spike is due to mis-measurement of inflation. It could easily be distorted by 15-20% if we under-report inflation by 1% per year since the early 1990’s.

I think the best measure of prices is to look at carrying costs of owning relative to rent. At some point, it will make financial sense as a business to buy and rent out property for profit. That’s what I would look at, not this inflation-adjusted graphic. This chart is good at demonstrating the excessive prices, but there are too many issues to use it quantitatively and apply it practically.

[NotCranky]

“it also to 25 years and the Great Depression to begin the overshoot. By then many of us would no longer be around.”

The last two cycles fell continuosly and formed nice troughs under the trendline that were of equal or greater proportion to the previous boomlets.Anyway I am sure everyone can see that. Does that prove what will happen to this mega boom? If the recent pattern continues, I am sure most of us will be around for it.

What I don’t understand is why people seem to think they know the answer, with so much authority as to where this thing is going when and how? There is too much variabilty possible in politics,the economy, world order etc. What we are sure about is that things are a real mess right now, related to this topic, and they aren’t smoothing out yet.

[NotCranky]

“it also to 25 years and the Great Depression to begin the overshoot. By then many of us would no longer be around.”

The last two cycles fell continuosly and formed nice troughs under the trendline that were of equal or greater proportion to the previous boomlets.Anyway I am sure everyone can see that. Does that prove what will happen to this mega boom? If the recent pattern continues, I am sure most of us will be around for it.

What I don’t understand is why people seem to think they know the answer, with so much authority as to where this thing is going when and how? There is too much variabilty possible in politics,the economy, world order etc. What we are sure about is that things are a real mess right now, related to this topic, and they aren’t smoothing out yet.

[NotCranky]

“it also to 25 years and the Great Depression to begin the overshoot. By then many of us would no longer be around.”

The last two cycles fell continuosly and formed nice troughs under the trendline that were of equal or greater proportion to the previous boomlets.Anyway I am sure everyone can see that. Does that prove what will happen to this mega boom? If the recent pattern continues, I am sure most of us will be around for it.

What I don’t understand is why people seem to think they know the answer, with so much authority as to where this thing is going when and how? There is too much variabilty possible in politics,the economy, world order etc. What we are sure about is that things are a real mess right now, related to this topic, and they aren’t smoothing out yet.

[NotCranky]

“it also to 25 years and the Great Depression to begin the overshoot. By then many of us would no longer be around.”

The last two cycles fell continuosly and formed nice troughs under the trendline that were of equal or greater proportion to the previous boomlets.Anyway I am sure everyone can see that. Does that prove what will happen to this mega boom? If the recent pattern continues, I am sure most of us will be around for it.

What I don’t understand is why people seem to think they know the answer, with so much authority as to where this thing is going when and how? There is too much variabilty possible in politics,the economy, world order etc. What we are sure about is that things are a real mess right now, related to this topic, and they aren’t smoothing out yet.

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