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Home › Forums › Housing › John Mauldin writes: Where is the Bottom in Housing?

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  • March 31, 2008 at 4:13 AM #12292
    susa
    Participant

    http://www.frontlinethoughts.com/pdf/mwo032808.pdf

    “..temptation to simply walk away is going to be large.

    It will take many years for a homeowner to have any equity. One bright spot? Homes in the bubble areas are going to once again become affordable to middle-class citizens. Teachers, policemen, and firemen who could not afford to live in the cities they worked for will now have an opportunity, as will the young who have yet to buy their first home…”

    March 31, 2008 at 7:31 AM #178712
    Ex-SD
    Participant

    Loved the last few paragraphs:

    “So, let’s wrap things up. Those who think we are close to a bottom in the housing bubble are engaged in wishful thinking. You read above what those who really do their homework are saying. If we had more space, I could give you even more statistics and forecasts from Gary Shilling, Greg Weldon, Dr. Nouriel Roubini and others who do their homework, rather than trying to see a trend in one month’s statistics. Many of the home sales from February are foreclosures. Those are going to rise. The key pieces of data to look at will be the months of supply of homes for sale and foreclosures. Until the supply of homes gets back to 6 months, we will probably not have seen the bottom. Until we have worked through the millions of foreclosures that are in front of us, it is hard to think in terms of a bottom.
    We are in a recession, and that means rising unemployment and falling consumer spending. It means tighter profit margins. Etc. It is going to take a long time for the economy to recover. Welcome to Muddle Through.
    One final thought: If we do end up with a government bailout, and I agree that it’s likely, I sincerely hope that no one who cannot document that the information they submitted for their no-documentation loan was accurate will be given any assistance. If you lied, you do not deserve taxpayer money. If you took out a loan on which you could not demonstrate that you could make the payments, just because you wanted to profit from a resale of a home which was “surely” going to rise, you should not get tax-payer money. For every person we help like that, we keep a house from going down to a price that someone who deserves a home and has played by the rules could buy. Just my take.”

    This guy understands, doesn’t he? This should be required reading for the potential home buyers who come on this site stating that even though they know the dangers, they just HAVE to buy NOW. They really don’t get it that they’re going to pay 100’s of thousands more in principal & interest by buying now plus higher real estate taxes based on their sales price.

    March 31, 2008 at 7:31 AM #179169
    Ex-SD
    Participant

    Loved the last few paragraphs:

    “So, let’s wrap things up. Those who think we are close to a bottom in the housing bubble are engaged in wishful thinking. You read above what those who really do their homework are saying. If we had more space, I could give you even more statistics and forecasts from Gary Shilling, Greg Weldon, Dr. Nouriel Roubini and others who do their homework, rather than trying to see a trend in one month’s statistics. Many of the home sales from February are foreclosures. Those are going to rise. The key pieces of data to look at will be the months of supply of homes for sale and foreclosures. Until the supply of homes gets back to 6 months, we will probably not have seen the bottom. Until we have worked through the millions of foreclosures that are in front of us, it is hard to think in terms of a bottom.
    We are in a recession, and that means rising unemployment and falling consumer spending. It means tighter profit margins. Etc. It is going to take a long time for the economy to recover. Welcome to Muddle Through.
    One final thought: If we do end up with a government bailout, and I agree that it’s likely, I sincerely hope that no one who cannot document that the information they submitted for their no-documentation loan was accurate will be given any assistance. If you lied, you do not deserve taxpayer money. If you took out a loan on which you could not demonstrate that you could make the payments, just because you wanted to profit from a resale of a home which was “surely” going to rise, you should not get tax-payer money. For every person we help like that, we keep a house from going down to a price that someone who deserves a home and has played by the rules could buy. Just my take.”

    This guy understands, doesn’t he? This should be required reading for the potential home buyers who come on this site stating that even though they know the dangers, they just HAVE to buy NOW. They really don’t get it that they’re going to pay 100’s of thousands more in principal & interest by buying now plus higher real estate taxes based on their sales price.

    March 31, 2008 at 7:31 AM #179073
    Ex-SD
    Participant

    Loved the last few paragraphs:

    “So, let’s wrap things up. Those who think we are close to a bottom in the housing bubble are engaged in wishful thinking. You read above what those who really do their homework are saying. If we had more space, I could give you even more statistics and forecasts from Gary Shilling, Greg Weldon, Dr. Nouriel Roubini and others who do their homework, rather than trying to see a trend in one month’s statistics. Many of the home sales from February are foreclosures. Those are going to rise. The key pieces of data to look at will be the months of supply of homes for sale and foreclosures. Until the supply of homes gets back to 6 months, we will probably not have seen the bottom. Until we have worked through the millions of foreclosures that are in front of us, it is hard to think in terms of a bottom.
    We are in a recession, and that means rising unemployment and falling consumer spending. It means tighter profit margins. Etc. It is going to take a long time for the economy to recover. Welcome to Muddle Through.
    One final thought: If we do end up with a government bailout, and I agree that it’s likely, I sincerely hope that no one who cannot document that the information they submitted for their no-documentation loan was accurate will be given any assistance. If you lied, you do not deserve taxpayer money. If you took out a loan on which you could not demonstrate that you could make the payments, just because you wanted to profit from a resale of a home which was “surely” going to rise, you should not get tax-payer money. For every person we help like that, we keep a house from going down to a price that someone who deserves a home and has played by the rules could buy. Just my take.”

    This guy understands, doesn’t he? This should be required reading for the potential home buyers who come on this site stating that even though they know the dangers, they just HAVE to buy NOW. They really don’t get it that they’re going to pay 100’s of thousands more in principal & interest by buying now plus higher real estate taxes based on their sales price.

    March 31, 2008 at 7:31 AM #179080
    Ex-SD
    Participant

    Loved the last few paragraphs:

    “So, let’s wrap things up. Those who think we are close to a bottom in the housing bubble are engaged in wishful thinking. You read above what those who really do their homework are saying. If we had more space, I could give you even more statistics and forecasts from Gary Shilling, Greg Weldon, Dr. Nouriel Roubini and others who do their homework, rather than trying to see a trend in one month’s statistics. Many of the home sales from February are foreclosures. Those are going to rise. The key pieces of data to look at will be the months of supply of homes for sale and foreclosures. Until the supply of homes gets back to 6 months, we will probably not have seen the bottom. Until we have worked through the millions of foreclosures that are in front of us, it is hard to think in terms of a bottom.
    We are in a recession, and that means rising unemployment and falling consumer spending. It means tighter profit margins. Etc. It is going to take a long time for the economy to recover. Welcome to Muddle Through.
    One final thought: If we do end up with a government bailout, and I agree that it’s likely, I sincerely hope that no one who cannot document that the information they submitted for their no-documentation loan was accurate will be given any assistance. If you lied, you do not deserve taxpayer money. If you took out a loan on which you could not demonstrate that you could make the payments, just because you wanted to profit from a resale of a home which was “surely” going to rise, you should not get tax-payer money. For every person we help like that, we keep a house from going down to a price that someone who deserves a home and has played by the rules could buy. Just my take.”

    This guy understands, doesn’t he? This should be required reading for the potential home buyers who come on this site stating that even though they know the dangers, they just HAVE to buy NOW. They really don’t get it that they’re going to pay 100’s of thousands more in principal & interest by buying now plus higher real estate taxes based on their sales price.

    March 31, 2008 at 7:31 AM #179089
    Ex-SD
    Participant

    Loved the last few paragraphs:

    “So, let’s wrap things up. Those who think we are close to a bottom in the housing bubble are engaged in wishful thinking. You read above what those who really do their homework are saying. If we had more space, I could give you even more statistics and forecasts from Gary Shilling, Greg Weldon, Dr. Nouriel Roubini and others who do their homework, rather than trying to see a trend in one month’s statistics. Many of the home sales from February are foreclosures. Those are going to rise. The key pieces of data to look at will be the months of supply of homes for sale and foreclosures. Until the supply of homes gets back to 6 months, we will probably not have seen the bottom. Until we have worked through the millions of foreclosures that are in front of us, it is hard to think in terms of a bottom.
    We are in a recession, and that means rising unemployment and falling consumer spending. It means tighter profit margins. Etc. It is going to take a long time for the economy to recover. Welcome to Muddle Through.
    One final thought: If we do end up with a government bailout, and I agree that it’s likely, I sincerely hope that no one who cannot document that the information they submitted for their no-documentation loan was accurate will be given any assistance. If you lied, you do not deserve taxpayer money. If you took out a loan on which you could not demonstrate that you could make the payments, just because you wanted to profit from a resale of a home which was “surely” going to rise, you should not get tax-payer money. For every person we help like that, we keep a house from going down to a price that someone who deserves a home and has played by the rules could buy. Just my take.”

    This guy understands, doesn’t he? This should be required reading for the potential home buyers who come on this site stating that even though they know the dangers, they just HAVE to buy NOW. They really don’t get it that they’re going to pay 100’s of thousands more in principal & interest by buying now plus higher real estate taxes based on their sales price.

    March 31, 2008 at 8:10 AM #178721
    EconProf
    Participant

    BobS
    This article is a great summary of our housing situation and where it is going. Well-documented, thoughtful and sober.

    March 31, 2008 at 8:10 AM #179179
    EconProf
    Participant

    BobS
    This article is a great summary of our housing situation and where it is going. Well-documented, thoughtful and sober.

    March 31, 2008 at 8:10 AM #179083
    EconProf
    Participant

    BobS
    This article is a great summary of our housing situation and where it is going. Well-documented, thoughtful and sober.

    March 31, 2008 at 8:10 AM #179090
    EconProf
    Participant

    BobS
    This article is a great summary of our housing situation and where it is going. Well-documented, thoughtful and sober.

    March 31, 2008 at 8:10 AM #179098
    EconProf
    Participant

    BobS
    This article is a great summary of our housing situation and where it is going. Well-documented, thoughtful and sober.

    March 31, 2008 at 9:40 AM #179114
    jpinpb
    Participant

    “One final thought: If we do end up with a government bailout, and I agree that it’s likely, I sincerely hope that no one who cannot document that the information they submitted for their no-documentation loan was accurate will be given any assistance. If you lied, you do not deserve taxpayer money. If you took out a loan on which you could not demonstrate that you could make the payments, just because you wanted to profit from a resale of a home which was “surely” going to rise, you should not get tax-payer money. For every person we help like that, we keep a house from going down to a price that someone who deserves a home and has played by the rules could buy.”

    That should be required reading by everyone in government before they contemplate any more “rescues”!

    March 31, 2008 at 9:40 AM #179200
    jpinpb
    Participant

    “One final thought: If we do end up with a government bailout, and I agree that it’s likely, I sincerely hope that no one who cannot document that the information they submitted for their no-documentation loan was accurate will be given any assistance. If you lied, you do not deserve taxpayer money. If you took out a loan on which you could not demonstrate that you could make the payments, just because you wanted to profit from a resale of a home which was “surely” going to rise, you should not get tax-payer money. For every person we help like that, we keep a house from going down to a price that someone who deserves a home and has played by the rules could buy.”

    That should be required reading by everyone in government before they contemplate any more “rescues”!

    March 31, 2008 at 9:40 AM #179122
    jpinpb
    Participant

    “One final thought: If we do end up with a government bailout, and I agree that it’s likely, I sincerely hope that no one who cannot document that the information they submitted for their no-documentation loan was accurate will be given any assistance. If you lied, you do not deserve taxpayer money. If you took out a loan on which you could not demonstrate that you could make the payments, just because you wanted to profit from a resale of a home which was “surely” going to rise, you should not get tax-payer money. For every person we help like that, we keep a house from going down to a price that someone who deserves a home and has played by the rules could buy.”

    That should be required reading by everyone in government before they contemplate any more “rescues”!

    March 31, 2008 at 9:40 AM #179105
    jpinpb
    Participant

    “One final thought: If we do end up with a government bailout, and I agree that it’s likely, I sincerely hope that no one who cannot document that the information they submitted for their no-documentation loan was accurate will be given any assistance. If you lied, you do not deserve taxpayer money. If you took out a loan on which you could not demonstrate that you could make the payments, just because you wanted to profit from a resale of a home which was “surely” going to rise, you should not get tax-payer money. For every person we help like that, we keep a house from going down to a price that someone who deserves a home and has played by the rules could buy.”

    That should be required reading by everyone in government before they contemplate any more “rescues”!

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