How fast will the bounce back be?

[EconProf]

BobS
There will not be a “bounce back”. History shows that housing and building cycles are a lot longer than economic cycles. The latter have averaged 3 – 6 years peak-to-peak (or trough-to-trough) since WWII. Housing cycles more like 10 – 12 years. Public sentiment propels the housing cycle, and it takes longer to turn around, and is not always correlated with the state of the economy.
Consider: CA housing prices had their big run-ups toward the end of the 1970’s, then the 1980’s, and then the 1990’s, with the last one lasting longer and being more powerful than normal.
If you believe that the strength of this downswing is rooted in and dependent upon the excesses of the previous upswing, then this decline will be all the more powerful. Accordingly, crowd behavior should lean heavily against real estate investing once we bottom out a long time from now.

[VanMorrisonFan]

I think the only way there could be a “bounce back” would be if some new financing scheme emerges. If we go back to 20% down as the only way to buy a house it will take a very long time before the market bounces back. There aren’t that many people who have accumulated 20% down payment and are willing to go out and spend it right now. After the carnage, when there is a lot more blood in the street, many people will be even more reluctant to part with their dough.

However…builders, realtors, lenders, etc., may go to the govt. and argue for some new special “scheme” to “jump start” the housing market…so there may be some new program to get people into housing, and that could jump start the cycle.

[VanMorrisonFan]

I think the only way there could be a “bounce back” would be if some new financing scheme emerges. If we go back to 20% down as the only way to buy a house it will take a very long time before the market bounces back. There aren’t that many people who have accumulated 20% down payment and are willing to go out and spend it right now. After the carnage, when there is a lot more blood in the street, many people will be even more reluctant to part with their dough.

However…builders, realtors, lenders, etc., may go to the govt. and argue for some new special “scheme” to “jump start” the housing market…so there may be some new program to get people into housing, and that could jump start the cycle.

[VanMorrisonFan]

I think the only way there could be a “bounce back” would be if some new financing scheme emerges. If we go back to 20% down as the only way to buy a house it will take a very long time before the market bounces back. There aren’t that many people who have accumulated 20% down payment and are willing to go out and spend it right now. After the carnage, when there is a lot more blood in the street, many people will be even more reluctant to part with their dough.

However…builders, realtors, lenders, etc., may go to the govt. and argue for some new special “scheme” to “jump start” the housing market…so there may be some new program to get people into housing, and that could jump start the cycle.

[VanMorrisonFan]

I think the only way there could be a “bounce back” would be if some new financing scheme emerges. If we go back to 20% down as the only way to buy a house it will take a very long time before the market bounces back. There aren’t that many people who have accumulated 20% down payment and are willing to go out and spend it right now. After the carnage, when there is a lot more blood in the street, many people will be even more reluctant to part with their dough.

However…builders, realtors, lenders, etc., may go to the govt. and argue for some new special “scheme” to “jump start” the housing market…so there may be some new program to get people into housing, and that could jump start the cycle.

[VanMorrisonFan]

I think the only way there could be a “bounce back” would be if some new financing scheme emerges. If we go back to 20% down as the only way to buy a house it will take a very long time before the market bounces back. There aren’t that many people who have accumulated 20% down payment and are willing to go out and spend it right now. After the carnage, when there is a lot more blood in the street, many people will be even more reluctant to part with their dough.

However…builders, realtors, lenders, etc., may go to the govt. and argue for some new special “scheme” to “jump start” the housing market…so there may be some new program to get people into housing, and that could jump start the cycle.

[Coronita]

I think the only way there could be a "bounce back" would be if some new financing scheme emerges. If we go back to 20% down as the only way to buy a house it will take a very long time before the market bounces back. There aren't that many people who have accumulated 20% down payment and are willing to go out and spend it right now. After the carnage, when there is a lot more blood in the street, many people will be even more reluctant to part with their dough.

However…builders, realtors, lenders, etc., may go to the govt. and argue for some new special "scheme" to "jump start" the housing market…so there may be some new program to get people into housing, and that could jump start the cycle.

I got a new funding scheme that I can propose.

Offering 40,50,60 year fixed rate mortgages.

That way 40,50,60, someone will have to pay all the way up tho their golden years and beyond.  You might wonder how someone would pay for a 60 year mortgage if they take one out when your 30years old? Ah, simple. These new mortgages would  also be tide into a life insurance policy where the mortgagee pays the insurance premium as part of the mortgage, and the beneficiary of the policy is the creditor. 

So as part of mortgage, you not only have to to pay PMI if you put less than 20%, you also pay LIFE insurance premium to cover if you croak over before you finish paying all 60 years. Of course, the life insurance premium would be steep, just like Universal Life or Whole Life. But, don't worry, it would also be tax deductible. 

Creative isn't it? I should have worked for wall street.

 

[Coronita]

I think the only way there could be a "bounce back" would be if some new financing scheme emerges. If we go back to 20% down as the only way to buy a house it will take a very long time before the market bounces back. There aren't that many people who have accumulated 20% down payment and are willing to go out and spend it right now. After the carnage, when there is a lot more blood in the street, many people will be even more reluctant to part with their dough.

However…builders, realtors, lenders, etc., may go to the govt. and argue for some new special "scheme" to "jump start" the housing market…so there may be some new program to get people into housing, and that could jump start the cycle.

I got a new funding scheme that I can propose.

Offering 40,50,60 year fixed rate mortgages.

That way 40,50,60, someone will have to pay all the way up tho their golden years and beyond.  You might wonder how someone would pay for a 60 year mortgage if they take one out when your 30years old? Ah, simple. These new mortgages would  also be tide into a life insurance policy where the mortgagee pays the insurance premium as part of the mortgage, and the beneficiary of the policy is the creditor. 

So as part of mortgage, you not only have to to pay PMI if you put less than 20%, you also pay LIFE insurance premium to cover if you croak over before you finish paying all 60 years. Of course, the life insurance premium would be steep, just like Universal Life or Whole Life. But, don't worry, it would also be tax deductible. 

Creative isn't it? I should have worked for wall street.

 

[Coronita]

I think the only way there could be a "bounce back" would be if some new financing scheme emerges. If we go back to 20% down as the only way to buy a house it will take a very long time before the market bounces back. There aren't that many people who have accumulated 20% down payment and are willing to go out and spend it right now. After the carnage, when there is a lot more blood in the street, many people will be even more reluctant to part with their dough.

However…builders, realtors, lenders, etc., may go to the govt. and argue for some new special "scheme" to "jump start" the housing market…so there may be some new program to get people into housing, and that could jump start the cycle.

I got a new funding scheme that I can propose.

Offering 40,50,60 year fixed rate mortgages.

That way 40,50,60, someone will have to pay all the way up tho their golden years and beyond.  You might wonder how someone would pay for a 60 year mortgage if they take one out when your 30years old? Ah, simple. These new mortgages would  also be tide into a life insurance policy where the mortgagee pays the insurance premium as part of the mortgage, and the beneficiary of the policy is the creditor. 

So as part of mortgage, you not only have to to pay PMI if you put less than 20%, you also pay LIFE insurance premium to cover if you croak over before you finish paying all 60 years. Of course, the life insurance premium would be steep, just like Universal Life or Whole Life. But, don't worry, it would also be tax deductible. 

Creative isn't it? I should have worked for wall street.

 

[Coronita]

I think the only way there could be a "bounce back" would be if some new financing scheme emerges. If we go back to 20% down as the only way to buy a house it will take a very long time before the market bounces back. There aren't that many people who have accumulated 20% down payment and are willing to go out and spend it right now. After the carnage, when there is a lot more blood in the street, many people will be even more reluctant to part with their dough.

However…builders, realtors, lenders, etc., may go to the govt. and argue for some new special "scheme" to "jump start" the housing market…so there may be some new program to get people into housing, and that could jump start the cycle.

I got a new funding scheme that I can propose.

Offering 40,50,60 year fixed rate mortgages.

That way 40,50,60, someone will have to pay all the way up tho their golden years and beyond.  You might wonder how someone would pay for a 60 year mortgage if they take one out when your 30years old? Ah, simple. These new mortgages would  also be tide into a life insurance policy where the mortgagee pays the insurance premium as part of the mortgage, and the beneficiary of the policy is the creditor. 

So as part of mortgage, you not only have to to pay PMI if you put less than 20%, you also pay LIFE insurance premium to cover if you croak over before you finish paying all 60 years. Of course, the life insurance premium would be steep, just like Universal Life or Whole Life. But, don't worry, it would also be tax deductible. 

Creative isn't it? I should have worked for wall street.

 

[Coronita]

I think the only way there could be a "bounce back" would be if some new financing scheme emerges. If we go back to 20% down as the only way to buy a house it will take a very long time before the market bounces back. There aren't that many people who have accumulated 20% down payment and are willing to go out and spend it right now. After the carnage, when there is a lot more blood in the street, many people will be even more reluctant to part with their dough.

However…builders, realtors, lenders, etc., may go to the govt. and argue for some new special "scheme" to "jump start" the housing market…so there may be some new program to get people into housing, and that could jump start the cycle.

I got a new funding scheme that I can propose.

Offering 40,50,60 year fixed rate mortgages.

That way 40,50,60, someone will have to pay all the way up tho their golden years and beyond.  You might wonder how someone would pay for a 60 year mortgage if they take one out when your 30years old? Ah, simple. These new mortgages would  also be tide into a life insurance policy where the mortgagee pays the insurance premium as part of the mortgage, and the beneficiary of the policy is the creditor. 

So as part of mortgage, you not only have to to pay PMI if you put less than 20%, you also pay LIFE insurance premium to cover if you croak over before you finish paying all 60 years. Of course, the life insurance premium would be steep, just like Universal Life or Whole Life. But, don't worry, it would also be tax deductible. 

Creative isn't it? I should have worked for wall street.

 

[4plexowner]

what we have to watch for is any mention of “land banks” which is one of the many logically flawed Keynesian economic policies – the idea is to establish a bank that will provide cut-rate loans on real estate regardless of LTV and also buy real estate and hold it in their portfolio – in essence, the land bank becomes the lender and buyer of last resort in an attempt to circumvent the price discovery process in an open and free market

this idea is already being floated as part of the bailouts – the idea is that local governments (ie, city, county, state) would establish and grant municipal bonds to subsidize the FB’s in their region – the only problem is that very few local govts have the finances to do this and many of them have credit rating problems that would make the issuance of bonds problematic

interesting times …

~

has anyone noticed that all the money being raised by the failing financial institutions is being done in the form of preferred stock?

homework assignment: in a bankruptcy, what is the priority order for paying off liabilities and where does the common shareholder fall?

[4plexowner]

what we have to watch for is any mention of “land banks” which is one of the many logically flawed Keynesian economic policies – the idea is to establish a bank that will provide cut-rate loans on real estate regardless of LTV and also buy real estate and hold it in their portfolio – in essence, the land bank becomes the lender and buyer of last resort in an attempt to circumvent the price discovery process in an open and free market

this idea is already being floated as part of the bailouts – the idea is that local governments (ie, city, county, state) would establish and grant municipal bonds to subsidize the FB’s in their region – the only problem is that very few local govts have the finances to do this and many of them have credit rating problems that would make the issuance of bonds problematic

interesting times …

~

has anyone noticed that all the money being raised by the failing financial institutions is being done in the form of preferred stock?

homework assignment: in a bankruptcy, what is the priority order for paying off liabilities and where does the common shareholder fall?

[4plexowner]

what we have to watch for is any mention of “land banks” which is one of the many logically flawed Keynesian economic policies – the idea is to establish a bank that will provide cut-rate loans on real estate regardless of LTV and also buy real estate and hold it in their portfolio – in essence, the land bank becomes the lender and buyer of last resort in an attempt to circumvent the price discovery process in an open and free market

this idea is already being floated as part of the bailouts – the idea is that local governments (ie, city, county, state) would establish and grant municipal bonds to subsidize the FB’s in their region – the only problem is that very few local govts have the finances to do this and many of them have credit rating problems that would make the issuance of bonds problematic

interesting times …

~

has anyone noticed that all the money being raised by the failing financial institutions is being done in the form of preferred stock?

homework assignment: in a bankruptcy, what is the priority order for paying off liabilities and where does the common shareholder fall?

[4plexowner]

what we have to watch for is any mention of “land banks” which is one of the many logically flawed Keynesian economic policies – the idea is to establish a bank that will provide cut-rate loans on real estate regardless of LTV and also buy real estate and hold it in their portfolio – in essence, the land bank becomes the lender and buyer of last resort in an attempt to circumvent the price discovery process in an open and free market

this idea is already being floated as part of the bailouts – the idea is that local governments (ie, city, county, state) would establish and grant municipal bonds to subsidize the FB’s in their region – the only problem is that very few local govts have the finances to do this and many of them have credit rating problems that would make the issuance of bonds problematic

interesting times …

~

has anyone noticed that all the money being raised by the failing financial institutions is being done in the form of preferred stock?

homework assignment: in a bankruptcy, what is the priority order for paying off liabilities and where does the common shareholder fall?

[Author]

Posts