Housing won’t hit bottom ’til 2012

[Anonymous]

FSD, in your case things might have worked out okay (up to now) but that is only because LIBOR is at a historic low. This just demonstrates how fragile the housing market is.

It also proves that the real reason behind the FED QE has been to minimize the foreclosure crisis due to the ARM loans resetting in 2010-2012 (as identified in the reset chart).

But we can debate all day long about the severity of the reset chart but one thing is certain, these resets are not going to help the housing recovery. Furthermore, if interest rates creep up in the next two years (at this point they are so low the only way they could move is up)it is going to exacerbate the problems and induce more foreclosures out of those resets.

So again, best case scenario (fed is successful in keeping rates at historic lows for the next two years, economy recovers, jobs recover, etc) RE prices will remain flat to slightly up. But worst case scenario things could get very, very ugly. Again, the prudent thing to do is wait until all of the ARMs resets are flushed out of the system because the potential down side is much greater than the upside.

[briansd1]

[quote=ocrenter][quote=CA renter]

Yes, I’m a VERY frustrated buyer…[/quote]

understand the frustration. I think most of us under-estimated the amount of government interference and bank inefficiency which synergistically lead to the slow leak of foreclosures rather than the foreclosure tsunami that would have come otherwise.

hind-sight is 20/20, but it does make sense given the scope of the problem and the general incompetence of the banks that how things ended up playing out.

rather than staying frustrated, I’ve always felt the best strategy is to have other areas in mind.

the best example I can give is say a frustrated Carmel Valley buyer. rather than continue the relentless search in CV, just drive 15 min inland and “settle” for something much nicer and cheaper in 4S for now. real estate WILL rise once again, that’s the nature of the historic curve. Some of the areas that have not seen much price drop will unlikely see significant increase in price when the curve start to move upward. But on the other hand, some of the areas that have fallen significantly will rise a lot more when that curve start moving upward. This is when the illogically wide spread in price difference between the two areas will close in. If that someone is still yearning for CV, they would have some equity that’s built up in 4S to make the move to CV.[/quote]

I agree ocrenter. The proportional spread between neighborhoods and areas will narrow back to historical over time.

That’s why I’m investing in other areas of the country. Places that I travel to frequently and can easily manage.

The bubble regions went too high and they will stagnate while others catch up. That principle applies on the regional, state, national and international levels.

[briansd1]

[quote=ocrenter][quote=CA renter]

Yes, I’m a VERY frustrated buyer…[/quote]

understand the frustration. I think most of us under-estimated the amount of government interference and bank inefficiency which synergistically lead to the slow leak of foreclosures rather than the foreclosure tsunami that would have come otherwise.

hind-sight is 20/20, but it does make sense given the scope of the problem and the general incompetence of the banks that how things ended up playing out.

rather than staying frustrated, I’ve always felt the best strategy is to have other areas in mind.

the best example I can give is say a frustrated Carmel Valley buyer. rather than continue the relentless search in CV, just drive 15 min inland and “settle” for something much nicer and cheaper in 4S for now. real estate WILL rise once again, that’s the nature of the historic curve. Some of the areas that have not seen much price drop will unlikely see significant increase in price when the curve start to move upward. But on the other hand, some of the areas that have fallen significantly will rise a lot more when that curve start moving upward. This is when the illogically wide spread in price difference between the two areas will close in. If that someone is still yearning for CV, they would have some equity that’s built up in 4S to make the move to CV.[/quote]

I agree ocrenter. The proportional spread between neighborhoods and areas will narrow back to historical over time.

That’s why I’m investing in other areas of the country. Places that I travel to frequently and can easily manage.

The bubble regions went too high and they will stagnate while others catch up. That principle applies on the regional, state, national and international levels.

[briansd1]

[quote=ocrenter][quote=CA renter]

Yes, I’m a VERY frustrated buyer…[/quote]

understand the frustration. I think most of us under-estimated the amount of government interference and bank inefficiency which synergistically lead to the slow leak of foreclosures rather than the foreclosure tsunami that would have come otherwise.

hind-sight is 20/20, but it does make sense given the scope of the problem and the general incompetence of the banks that how things ended up playing out.

rather than staying frustrated, I’ve always felt the best strategy is to have other areas in mind.

the best example I can give is say a frustrated Carmel Valley buyer. rather than continue the relentless search in CV, just drive 15 min inland and “settle” for something much nicer and cheaper in 4S for now. real estate WILL rise once again, that’s the nature of the historic curve. Some of the areas that have not seen much price drop will unlikely see significant increase in price when the curve start to move upward. But on the other hand, some of the areas that have fallen significantly will rise a lot more when that curve start moving upward. This is when the illogically wide spread in price difference between the two areas will close in. If that someone is still yearning for CV, they would have some equity that’s built up in 4S to make the move to CV.[/quote]

I agree ocrenter. The proportional spread between neighborhoods and areas will narrow back to historical over time.

That’s why I’m investing in other areas of the country. Places that I travel to frequently and can easily manage.

The bubble regions went too high and they will stagnate while others catch up. That principle applies on the regional, state, national and international levels.

[briansd1]

[quote=ocrenter][quote=CA renter]

Yes, I’m a VERY frustrated buyer…[/quote]

understand the frustration. I think most of us under-estimated the amount of government interference and bank inefficiency which synergistically lead to the slow leak of foreclosures rather than the foreclosure tsunami that would have come otherwise.

hind-sight is 20/20, but it does make sense given the scope of the problem and the general incompetence of the banks that how things ended up playing out.

rather than staying frustrated, I’ve always felt the best strategy is to have other areas in mind.

the best example I can give is say a frustrated Carmel Valley buyer. rather than continue the relentless search in CV, just drive 15 min inland and “settle” for something much nicer and cheaper in 4S for now. real estate WILL rise once again, that’s the nature of the historic curve. Some of the areas that have not seen much price drop will unlikely see significant increase in price when the curve start to move upward. But on the other hand, some of the areas that have fallen significantly will rise a lot more when that curve start moving upward. This is when the illogically wide spread in price difference between the two areas will close in. If that someone is still yearning for CV, they would have some equity that’s built up in 4S to make the move to CV.[/quote]

I agree ocrenter. The proportional spread between neighborhoods and areas will narrow back to historical over time.

That’s why I’m investing in other areas of the country. Places that I travel to frequently and can easily manage.

The bubble regions went too high and they will stagnate while others catch up. That principle applies on the regional, state, national and international levels.

[briansd1]

[quote=ocrenter][quote=CA renter]

Yes, I’m a VERY frustrated buyer…[/quote]

understand the frustration. I think most of us under-estimated the amount of government interference and bank inefficiency which synergistically lead to the slow leak of foreclosures rather than the foreclosure tsunami that would have come otherwise.

hind-sight is 20/20, but it does make sense given the scope of the problem and the general incompetence of the banks that how things ended up playing out.

rather than staying frustrated, I’ve always felt the best strategy is to have other areas in mind.

the best example I can give is say a frustrated Carmel Valley buyer. rather than continue the relentless search in CV, just drive 15 min inland and “settle” for something much nicer and cheaper in 4S for now. real estate WILL rise once again, that’s the nature of the historic curve. Some of the areas that have not seen much price drop will unlikely see significant increase in price when the curve start to move upward. But on the other hand, some of the areas that have fallen significantly will rise a lot more when that curve start moving upward. This is when the illogically wide spread in price difference between the two areas will close in. If that someone is still yearning for CV, they would have some equity that’s built up in 4S to make the move to CV.[/quote]

I agree ocrenter. The proportional spread between neighborhoods and areas will narrow back to historical over time.

That’s why I’m investing in other areas of the country. Places that I travel to frequently and can easily manage.

The bubble regions went too high and they will stagnate while others catch up. That principle applies on the regional, state, national and international levels.

[briansd1]

[quote=deadzone]FSD, in your case things might have worked out okay (up to now) but that is only because LIBOR is at a historic low. This just demonstrates how fragile the housing market is.

It also proves that the real reason behind the FED QE has been to minimize the foreclosure crisis due to the ARM loans resetting in 2010-2012 (as identified in the reset chart).

But we can debate all day long about the severity of the reset chart but one thing is certain, these resets are not going to help the housing recovery. Furthermore, if interest rates creep up in the next two years (at this point they are so low the only way they could move is up)it is going to exacerbate the problems and induce more foreclosures out of those resets.

So again, best case scenario (fed is successful in keeping rates at historic lows for the next two years, economy recovers, jobs recover, etc) RE prices will remain flat to slightly up. But worst case scenario things could get very, very ugly. Again, the prudent thing to do is wait until all of the ARMs resets are flushed out of the system because the potential down side is much greater than the upside.[/quote]

I agree with deadzone. And I would add that the effects of unemployement (as opposed to the effects of real estate speculation) are only beginning to be felt.

Historically unemployment leads to a housing downturn that lags the economic recession (resulting in real estate prices continuing to drop even as the economy recovers).

This time, real estate is suffereing a double whammy: 1) the unravelling of speculation and 2) the worse unemployment since the Great Depression.

[briansd1]

[quote=deadzone]FSD, in your case things might have worked out okay (up to now) but that is only because LIBOR is at a historic low. This just demonstrates how fragile the housing market is.

It also proves that the real reason behind the FED QE has been to minimize the foreclosure crisis due to the ARM loans resetting in 2010-2012 (as identified in the reset chart).

But we can debate all day long about the severity of the reset chart but one thing is certain, these resets are not going to help the housing recovery. Furthermore, if interest rates creep up in the next two years (at this point they are so low the only way they could move is up)it is going to exacerbate the problems and induce more foreclosures out of those resets.

So again, best case scenario (fed is successful in keeping rates at historic lows for the next two years, economy recovers, jobs recover, etc) RE prices will remain flat to slightly up. But worst case scenario things could get very, very ugly. Again, the prudent thing to do is wait until all of the ARMs resets are flushed out of the system because the potential down side is much greater than the upside.[/quote]

I agree with deadzone. And I would add that the effects of unemployement (as opposed to the effects of real estate speculation) are only beginning to be felt.

Historically unemployment leads to a housing downturn that lags the economic recession (resulting in real estate prices continuing to drop even as the economy recovers).

This time, real estate is suffereing a double whammy: 1) the unravelling of speculation and 2) the worse unemployment since the Great Depression.

[briansd1]

[quote=deadzone]FSD, in your case things might have worked out okay (up to now) but that is only because LIBOR is at a historic low. This just demonstrates how fragile the housing market is.

It also proves that the real reason behind the FED QE has been to minimize the foreclosure crisis due to the ARM loans resetting in 2010-2012 (as identified in the reset chart).

But we can debate all day long about the severity of the reset chart but one thing is certain, these resets are not going to help the housing recovery. Furthermore, if interest rates creep up in the next two years (at this point they are so low the only way they could move is up)it is going to exacerbate the problems and induce more foreclosures out of those resets.

So again, best case scenario (fed is successful in keeping rates at historic lows for the next two years, economy recovers, jobs recover, etc) RE prices will remain flat to slightly up. But worst case scenario things could get very, very ugly. Again, the prudent thing to do is wait until all of the ARMs resets are flushed out of the system because the potential down side is much greater than the upside.[/quote]

I agree with deadzone. And I would add that the effects of unemployement (as opposed to the effects of real estate speculation) are only beginning to be felt.

Historically unemployment leads to a housing downturn that lags the economic recession (resulting in real estate prices continuing to drop even as the economy recovers).

This time, real estate is suffereing a double whammy: 1) the unravelling of speculation and 2) the worse unemployment since the Great Depression.

[briansd1]

[quote=deadzone]FSD, in your case things might have worked out okay (up to now) but that is only because LIBOR is at a historic low. This just demonstrates how fragile the housing market is.

It also proves that the real reason behind the FED QE has been to minimize the foreclosure crisis due to the ARM loans resetting in 2010-2012 (as identified in the reset chart).

But we can debate all day long about the severity of the reset chart but one thing is certain, these resets are not going to help the housing recovery. Furthermore, if interest rates creep up in the next two years (at this point they are so low the only way they could move is up)it is going to exacerbate the problems and induce more foreclosures out of those resets.

So again, best case scenario (fed is successful in keeping rates at historic lows for the next two years, economy recovers, jobs recover, etc) RE prices will remain flat to slightly up. But worst case scenario things could get very, very ugly. Again, the prudent thing to do is wait until all of the ARMs resets are flushed out of the system because the potential down side is much greater than the upside.[/quote]

I agree with deadzone. And I would add that the effects of unemployement (as opposed to the effects of real estate speculation) are only beginning to be felt.

Historically unemployment leads to a housing downturn that lags the economic recession (resulting in real estate prices continuing to drop even as the economy recovers).

This time, real estate is suffereing a double whammy: 1) the unravelling of speculation and 2) the worse unemployment since the Great Depression.

[briansd1]

[quote=deadzone]FSD, in your case things might have worked out okay (up to now) but that is only because LIBOR is at a historic low. This just demonstrates how fragile the housing market is.

It also proves that the real reason behind the FED QE has been to minimize the foreclosure crisis due to the ARM loans resetting in 2010-2012 (as identified in the reset chart).

But we can debate all day long about the severity of the reset chart but one thing is certain, these resets are not going to help the housing recovery. Furthermore, if interest rates creep up in the next two years (at this point they are so low the only way they could move is up)it is going to exacerbate the problems and induce more foreclosures out of those resets.

So again, best case scenario (fed is successful in keeping rates at historic lows for the next two years, economy recovers, jobs recover, etc) RE prices will remain flat to slightly up. But worst case scenario things could get very, very ugly. Again, the prudent thing to do is wait until all of the ARMs resets are flushed out of the system because the potential down side is much greater than the upside.[/quote]

I agree with deadzone. And I would add that the effects of unemployement (as opposed to the effects of real estate speculation) are only beginning to be felt.

Historically unemployment leads to a housing downturn that lags the economic recession (resulting in real estate prices continuing to drop even as the economy recovers).

This time, real estate is suffereing a double whammy: 1) the unravelling of speculation and 2) the worse unemployment since the Great Depression.

[sdrealtor]

CAR
That’s better. However, by now you should know that you are in the minority in this world as an heir/longtime homeowner regarding your feelings toward RE. MOst would not look at it as you did.

sdr

PS We both know there is not a chance that I’ll be paying for dinner. My house would have to drop into the mid 500’s which I will say now more than ever will never happen again. BTW, I have the bet bookmarked.

[sdrealtor]

CAR
That’s better. However, by now you should know that you are in the minority in this world as an heir/longtime homeowner regarding your feelings toward RE. MOst would not look at it as you did.

sdr

PS We both know there is not a chance that I’ll be paying for dinner. My house would have to drop into the mid 500’s which I will say now more than ever will never happen again. BTW, I have the bet bookmarked.

[sdrealtor]

CAR
That’s better. However, by now you should know that you are in the minority in this world as an heir/longtime homeowner regarding your feelings toward RE. MOst would not look at it as you did.

sdr

PS We both know there is not a chance that I’ll be paying for dinner. My house would have to drop into the mid 500’s which I will say now more than ever will never happen again. BTW, I have the bet bookmarked.

[sdrealtor]

CAR
That’s better. However, by now you should know that you are in the minority in this world as an heir/longtime homeowner regarding your feelings toward RE. MOst would not look at it as you did.

sdr

PS We both know there is not a chance that I’ll be paying for dinner. My house would have to drop into the mid 500’s which I will say now more than ever will never happen again. BTW, I have the bet bookmarked.

[Author]

Posts