Housing won’t hit bottom ’til 2012

[Anonymous]

You guys are smoking crack on the stock market to real estate correlation. The greatest stock market bubble in history crashed spectacularly in 2000 and most incices have never re-gained their highs from that time. Yet the greatest housing bubble in history was just getting started.

Sorry, the correlation is not significant.

[Anonymous]

Looking at the last 10 years a macro level RE price to Stock correlation does exist to some degree, but it is not for the reason you guys are saying. It has nothing to do with individuals feeling more wealthy from their stock portfolios. It has everything to do with the Fed’s interest rate policy.

As we saw in the early 2000s and again in 2009, the easy money from the Fed acts to juice the equity markets. In the case of the 2001 interest rate cuts it also helped launch the housing bubble.

[Anonymous]

Looking at the last 10 years a macro level RE price to Stock correlation does exist to some degree, but it is not for the reason you guys are saying. It has nothing to do with individuals feeling more wealthy from their stock portfolios. It has everything to do with the Fed’s interest rate policy.

As we saw in the early 2000s and again in 2009, the easy money from the Fed acts to juice the equity markets. In the case of the 2001 interest rate cuts it also helped launch the housing bubble.

[Anonymous]

Looking at the last 10 years a macro level RE price to Stock correlation does exist to some degree, but it is not for the reason you guys are saying. It has nothing to do with individuals feeling more wealthy from their stock portfolios. It has everything to do with the Fed’s interest rate policy.

As we saw in the early 2000s and again in 2009, the easy money from the Fed acts to juice the equity markets. In the case of the 2001 interest rate cuts it also helped launch the housing bubble.

[Anonymous]

Looking at the last 10 years a macro level RE price to Stock correlation does exist to some degree, but it is not for the reason you guys are saying. It has nothing to do with individuals feeling more wealthy from their stock portfolios. It has everything to do with the Fed’s interest rate policy.

As we saw in the early 2000s and again in 2009, the easy money from the Fed acts to juice the equity markets. In the case of the 2001 interest rate cuts it also helped launch the housing bubble.

[Anonymous]

Looking at the last 10 years a macro level RE price to Stock correlation does exist to some degree, but it is not for the reason you guys are saying. It has nothing to do with individuals feeling more wealthy from their stock portfolios. It has everything to do with the Fed’s interest rate policy.

As we saw in the early 2000s and again in 2009, the easy money from the Fed acts to juice the equity markets. In the case of the 2001 interest rate cuts it also helped launch the housing bubble.

[sdrealtor]

js
I cant disagree that for higher priced RE the rent vs buy looks better. However for many people (not all) renting is a substandard lifestyle. It typically means moving every couple years and sometimes more often than that. It means not having control over the place you live. For many people their home is the core of their existence. I hate moving, I hate answering to anyone other than my children and I love the sense of security our home provides us. There are alot of people like me. This means you can take your calculator and toss wherever you want because all things considered a home is and will remain a good store of value (throwing out the crazy the few year we went through which we all agree was an extreme outlier period) because there will always be someone who wants what we homeowners have around here.

So if you want to live your life under the auspices of calculators you should do so. I on the other hand enjoy the rewards of my hard work be it a nice bottle of wine, a ticket to see Roger Waters play The Wall live in concert that I missed 30 years ago or on my home that makes no sense to own when you compare buy vs rent. I can live with that.

[sdrealtor]

js
I cant disagree that for higher priced RE the rent vs buy looks better. However for many people (not all) renting is a substandard lifestyle. It typically means moving every couple years and sometimes more often than that. It means not having control over the place you live. For many people their home is the core of their existence. I hate moving, I hate answering to anyone other than my children and I love the sense of security our home provides us. There are alot of people like me. This means you can take your calculator and toss wherever you want because all things considered a home is and will remain a good store of value (throwing out the crazy the few year we went through which we all agree was an extreme outlier period) because there will always be someone who wants what we homeowners have around here.

So if you want to live your life under the auspices of calculators you should do so. I on the other hand enjoy the rewards of my hard work be it a nice bottle of wine, a ticket to see Roger Waters play The Wall live in concert that I missed 30 years ago or on my home that makes no sense to own when you compare buy vs rent. I can live with that.

[sdrealtor]

js
I cant disagree that for higher priced RE the rent vs buy looks better. However for many people (not all) renting is a substandard lifestyle. It typically means moving every couple years and sometimes more often than that. It means not having control over the place you live. For many people their home is the core of their existence. I hate moving, I hate answering to anyone other than my children and I love the sense of security our home provides us. There are alot of people like me. This means you can take your calculator and toss wherever you want because all things considered a home is and will remain a good store of value (throwing out the crazy the few year we went through which we all agree was an extreme outlier period) because there will always be someone who wants what we homeowners have around here.

So if you want to live your life under the auspices of calculators you should do so. I on the other hand enjoy the rewards of my hard work be it a nice bottle of wine, a ticket to see Roger Waters play The Wall live in concert that I missed 30 years ago or on my home that makes no sense to own when you compare buy vs rent. I can live with that.

[sdrealtor]

js
I cant disagree that for higher priced RE the rent vs buy looks better. However for many people (not all) renting is a substandard lifestyle. It typically means moving every couple years and sometimes more often than that. It means not having control over the place you live. For many people their home is the core of their existence. I hate moving, I hate answering to anyone other than my children and I love the sense of security our home provides us. There are alot of people like me. This means you can take your calculator and toss wherever you want because all things considered a home is and will remain a good store of value (throwing out the crazy the few year we went through which we all agree was an extreme outlier period) because there will always be someone who wants what we homeowners have around here.

So if you want to live your life under the auspices of calculators you should do so. I on the other hand enjoy the rewards of my hard work be it a nice bottle of wine, a ticket to see Roger Waters play The Wall live in concert that I missed 30 years ago or on my home that makes no sense to own when you compare buy vs rent. I can live with that.

[sdrealtor]

js
I cant disagree that for higher priced RE the rent vs buy looks better. However for many people (not all) renting is a substandard lifestyle. It typically means moving every couple years and sometimes more often than that. It means not having control over the place you live. For many people their home is the core of their existence. I hate moving, I hate answering to anyone other than my children and I love the sense of security our home provides us. There are alot of people like me. This means you can take your calculator and toss wherever you want because all things considered a home is and will remain a good store of value (throwing out the crazy the few year we went through which we all agree was an extreme outlier period) because there will always be someone who wants what we homeowners have around here.

So if you want to live your life under the auspices of calculators you should do so. I on the other hand enjoy the rewards of my hard work be it a nice bottle of wine, a ticket to see Roger Waters play The Wall live in concert that I missed 30 years ago or on my home that makes no sense to own when you compare buy vs rent. I can live with that.

[jstoesz]

AN I tend to agree.

I think the link is not so much causative as correlative.

Lower stock prices harm the economy, and when the economy is harmed home prices drop.

So stock prices do have a causative effect on the economy, there link is not DIRECTLY causative to home values. Sometimes, some other asset class is waiting in the wings (a la 2001).

One other note regarding rent vs. buy. Even in markets outside of california, a favorable rent vs. buy is not enough to buoy the market.

In MN (probably in NV too, but I have no anecdotal evidence there) homes can easily cash flow. My friends who have bought in the last 2 years are still underwater even though they can cash flow their home. Psychologically it helps them stay current, but it is still interesting to note.

[jstoesz]

AN I tend to agree.

I think the link is not so much causative as correlative.

Lower stock prices harm the economy, and when the economy is harmed home prices drop.

So stock prices do have a causative effect on the economy, there link is not DIRECTLY causative to home values. Sometimes, some other asset class is waiting in the wings (a la 2001).

One other note regarding rent vs. buy. Even in markets outside of california, a favorable rent vs. buy is not enough to buoy the market.

In MN (probably in NV too, but I have no anecdotal evidence there) homes can easily cash flow. My friends who have bought in the last 2 years are still underwater even though they can cash flow their home. Psychologically it helps them stay current, but it is still interesting to note.

[jstoesz]

AN I tend to agree.

I think the link is not so much causative as correlative.

Lower stock prices harm the economy, and when the economy is harmed home prices drop.

So stock prices do have a causative effect on the economy, there link is not DIRECTLY causative to home values. Sometimes, some other asset class is waiting in the wings (a la 2001).

One other note regarding rent vs. buy. Even in markets outside of california, a favorable rent vs. buy is not enough to buoy the market.

In MN (probably in NV too, but I have no anecdotal evidence there) homes can easily cash flow. My friends who have bought in the last 2 years are still underwater even though they can cash flow their home. Psychologically it helps them stay current, but it is still interesting to note.

[jstoesz]

AN I tend to agree.

I think the link is not so much causative as correlative.

Lower stock prices harm the economy, and when the economy is harmed home prices drop.

So stock prices do have a causative effect on the economy, there link is not DIRECTLY causative to home values. Sometimes, some other asset class is waiting in the wings (a la 2001).

One other note regarding rent vs. buy. Even in markets outside of california, a favorable rent vs. buy is not enough to buoy the market.

In MN (probably in NV too, but I have no anecdotal evidence there) homes can easily cash flow. My friends who have bought in the last 2 years are still underwater even though they can cash flow their home. Psychologically it helps them stay current, but it is still interesting to note.

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