Karl Case sees normalcy in housing market

[temeculaguy]

You may be right Cash, but I have to give Case a little benefit of the doubt. I think he is looking at greater metro markets as opposed to micro markets. He is also studying data as opposed to your field visit, so you have a slight advantage in that specific micromarket. He and Schiller have always been fundamentalists, they look a the fundamentals of income and price. Roubini and Schiff have had much more dramatic views but Case/Schiller are a little more moderate yet they called the bubble and have spent their careers tracking it in broad terms.

The point of my support and comment was that karl may see normalcy but he doesn’t see it where we live,so the headline is misleading. If someone thinks things will be fine unless you live in California, then what should we Californians take from that…..that we are not fine, were heading there in a handbasket, that’s what i took from his interview.

[(former)FormerSanDiegan]

The guy seems too reasonable to ignore.

[(former)FormerSanDiegan]

The guy seems too reasonable to ignore.

[(former)FormerSanDiegan]

The guy seems too reasonable to ignore.

[(former)FormerSanDiegan]

The guy seems too reasonable to ignore.

[(former)FormerSanDiegan]

The guy seems too reasonable to ignore.

[peterb]

The key word here is “normal”. As in a “normal” economy? I’ve closely analyzed the last 2 real estate cycles in CA over the last 25 years and the greatest contributing factor is the level of unemployment. I think this holds true for the entire nation. Whether one looks at Dallas, Chicago, Detroit or LA. At about 6.5% and up, the real estate market starts to really tank and doesnt come back until the number goes below 6%. One can certainly argue that states like TX did not see a bubble like much of CA, but that doesnt mean that they are immune from a down-turn due to growing unemployment. In CA we’re seeing a bubble (Liar loans) collapse followed by a recession. So we’ve got a double whammy going on that will cause it to drag out for a while. But other parts of the country arent off the hook just because they didnt have a bubble in their market.

[peterb]

The key word here is “normal”. As in a “normal” economy? I’ve closely analyzed the last 2 real estate cycles in CA over the last 25 years and the greatest contributing factor is the level of unemployment. I think this holds true for the entire nation. Whether one looks at Dallas, Chicago, Detroit or LA. At about 6.5% and up, the real estate market starts to really tank and doesnt come back until the number goes below 6%. One can certainly argue that states like TX did not see a bubble like much of CA, but that doesnt mean that they are immune from a down-turn due to growing unemployment. In CA we’re seeing a bubble (Liar loans) collapse followed by a recession. So we’ve got a double whammy going on that will cause it to drag out for a while. But other parts of the country arent off the hook just because they didnt have a bubble in their market.

[peterb]

The key word here is “normal”. As in a “normal” economy? I’ve closely analyzed the last 2 real estate cycles in CA over the last 25 years and the greatest contributing factor is the level of unemployment. I think this holds true for the entire nation. Whether one looks at Dallas, Chicago, Detroit or LA. At about 6.5% and up, the real estate market starts to really tank and doesnt come back until the number goes below 6%. One can certainly argue that states like TX did not see a bubble like much of CA, but that doesnt mean that they are immune from a down-turn due to growing unemployment. In CA we’re seeing a bubble (Liar loans) collapse followed by a recession. So we’ve got a double whammy going on that will cause it to drag out for a while. But other parts of the country arent off the hook just because they didnt have a bubble in their market.

[peterb]

The key word here is “normal”. As in a “normal” economy? I’ve closely analyzed the last 2 real estate cycles in CA over the last 25 years and the greatest contributing factor is the level of unemployment. I think this holds true for the entire nation. Whether one looks at Dallas, Chicago, Detroit or LA. At about 6.5% and up, the real estate market starts to really tank and doesnt come back until the number goes below 6%. One can certainly argue that states like TX did not see a bubble like much of CA, but that doesnt mean that they are immune from a down-turn due to growing unemployment. In CA we’re seeing a bubble (Liar loans) collapse followed by a recession. So we’ve got a double whammy going on that will cause it to drag out for a while. But other parts of the country arent off the hook just because they didnt have a bubble in their market.

[peterb]

The key word here is “normal”. As in a “normal” economy? I’ve closely analyzed the last 2 real estate cycles in CA over the last 25 years and the greatest contributing factor is the level of unemployment. I think this holds true for the entire nation. Whether one looks at Dallas, Chicago, Detroit or LA. At about 6.5% and up, the real estate market starts to really tank and doesnt come back until the number goes below 6%. One can certainly argue that states like TX did not see a bubble like much of CA, but that doesnt mean that they are immune from a down-turn due to growing unemployment. In CA we’re seeing a bubble (Liar loans) collapse followed by a recession. So we’ve got a double whammy going on that will cause it to drag out for a while. But other parts of the country arent off the hook just because they didnt have a bubble in their market.

[limo_888]

Peter, that is a really good point. What you are saying is that in “normal housing market”, the home value must align with income and rent and that the unemployment should be less than 6.5% in regardless of region or states. So, if the economy is in a recession, the umemployment rate will increases, wages will be stagnant and rent will be less which put pressure on home value. Did I get that right?

[limo_888]

Peter, that is a really good point. What you are saying is that in “normal housing market”, the home value must align with income and rent and that the unemployment should be less than 6.5% in regardless of region or states. So, if the economy is in a recession, the umemployment rate will increases, wages will be stagnant and rent will be less which put pressure on home value. Did I get that right?

[limo_888]

Peter, that is a really good point. What you are saying is that in “normal housing market”, the home value must align with income and rent and that the unemployment should be less than 6.5% in regardless of region or states. So, if the economy is in a recession, the umemployment rate will increases, wages will be stagnant and rent will be less which put pressure on home value. Did I get that right?

[limo_888]

Peter, that is a really good point. What you are saying is that in “normal housing market”, the home value must align with income and rent and that the unemployment should be less than 6.5% in regardless of region or states. So, if the economy is in a recession, the umemployment rate will increases, wages will be stagnant and rent will be less which put pressure on home value. Did I get that right?

[Author]

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