Mortgage broker predicts further collapse in housing

[4plexowner]

[img_assist|nid=12709|title=Martin Armstrong – housing bubble|desc=|link=node|align=left|width=429|height=354]

Martin Armstrong – Behind The Curtain
http://economicedge.blogspot.com/2009/04/martin-armstrong-behind-curtain.html

Martin isn’t talking about prices here, he is talking about trends

I find it interesting that based on economic cycle theory, Martin arrives at 2033 for the end of the downtrend in housing

Bubble analysis suggests to me that real estate as an asset class will be avoided for a full generation – is that 26 years? – don’t know but seems reasonable to me

Two different analysis methods providing similar answers – interesting …

[UCGal]

Given the recent report that says 23% of houses that have mortgages have negative equity… I’d say we still have a bubble that needs correction.

The negative equity is heavily concentrated in five states – and California is one of them.

According to the report there are 2.4 Million mortages with negative equity in California alone.

http://www.calculatedriskblog.com/2009/11/negative-equity-report-for-q3.html

Some percentage of that will hit the market through short sale, foreclosure, deed-in-lieue… causing a downward pressure on prices.

[UCGal]

Given the recent report that says 23% of houses that have mortgages have negative equity… I’d say we still have a bubble that needs correction.

The negative equity is heavily concentrated in five states – and California is one of them.

According to the report there are 2.4 Million mortages with negative equity in California alone.

http://www.calculatedriskblog.com/2009/11/negative-equity-report-for-q3.html

Some percentage of that will hit the market through short sale, foreclosure, deed-in-lieue… causing a downward pressure on prices.

[UCGal]

Given the recent report that says 23% of houses that have mortgages have negative equity… I’d say we still have a bubble that needs correction.

The negative equity is heavily concentrated in five states – and California is one of them.

According to the report there are 2.4 Million mortages with negative equity in California alone.

http://www.calculatedriskblog.com/2009/11/negative-equity-report-for-q3.html

Some percentage of that will hit the market through short sale, foreclosure, deed-in-lieue… causing a downward pressure on prices.

[UCGal]

Given the recent report that says 23% of houses that have mortgages have negative equity… I’d say we still have a bubble that needs correction.

The negative equity is heavily concentrated in five states – and California is one of them.

According to the report there are 2.4 Million mortages with negative equity in California alone.

http://www.calculatedriskblog.com/2009/11/negative-equity-report-for-q3.html

Some percentage of that will hit the market through short sale, foreclosure, deed-in-lieue… causing a downward pressure on prices.

[UCGal]

Given the recent report that says 23% of houses that have mortgages have negative equity… I’d say we still have a bubble that needs correction.

The negative equity is heavily concentrated in five states – and California is one of them.

According to the report there are 2.4 Million mortages with negative equity in California alone.

http://www.calculatedriskblog.com/2009/11/negative-equity-report-for-q3.html

Some percentage of that will hit the market through short sale, foreclosure, deed-in-lieue… causing a downward pressure on prices.

[briansd1]

Very good points, UCGal

Other than the bursting of the bubble, we also have the job recession what even in normal times would cause a real estate downturn.

If jobs don’t pick-up, the foreclosures will keep on piling up.

Sure the government is trying to create an artificial floor, but how long can that be sustained? Eventually, the government will have to terminate the support programs and that could start the resumption of the price drops (or elongate the stagnation).

[briansd1]

Very good points, UCGal

Other than the bursting of the bubble, we also have the job recession what even in normal times would cause a real estate downturn.

If jobs don’t pick-up, the foreclosures will keep on piling up.

Sure the government is trying to create an artificial floor, but how long can that be sustained? Eventually, the government will have to terminate the support programs and that could start the resumption of the price drops (or elongate the stagnation).

[briansd1]

Very good points, UCGal

Other than the bursting of the bubble, we also have the job recession what even in normal times would cause a real estate downturn.

If jobs don’t pick-up, the foreclosures will keep on piling up.

Sure the government is trying to create an artificial floor, but how long can that be sustained? Eventually, the government will have to terminate the support programs and that could start the resumption of the price drops (or elongate the stagnation).

[briansd1]

Very good points, UCGal

Other than the bursting of the bubble, we also have the job recession what even in normal times would cause a real estate downturn.

If jobs don’t pick-up, the foreclosures will keep on piling up.

Sure the government is trying to create an artificial floor, but how long can that be sustained? Eventually, the government will have to terminate the support programs and that could start the resumption of the price drops (or elongate the stagnation).

[briansd1]

Very good points, UCGal

Other than the bursting of the bubble, we also have the job recession what even in normal times would cause a real estate downturn.

If jobs don’t pick-up, the foreclosures will keep on piling up.

Sure the government is trying to create an artificial floor, but how long can that be sustained? Eventually, the government will have to terminate the support programs and that could start the resumption of the price drops (or elongate the stagnation).

[briansd1]

[quote=4plexowner][img_assist|nid=12707|title=US Home Ownership Bubble|desc=|link=node|align=left|width=400|height=340]

Here’s another way of looking at the bubble – the chart shows the percentage of homes in America that are owned

Bubble theory says we will retrace this bubble to its start in 1995 or so

There may have been some structural changes in our economy such that this bubble will only collapse to the 65/66% level and not all the way to 64%

On the chart I have marked:
– 1987 when Greenspan became Fed Chairman – did the credit/debt bubble start all the way back then?
– 1997 when the capital gains exemption was enacted (http://www.nytimes.com/2008/12/19/business/19tax.html)
– 1998 when San Diego metrics departed from their historic range
– 2002 when massive monetary easing began
– 2006/7 when San Diego’s peak occurred

To do a thorough job of analyzing the housing bubble we might want to ask the question, “Is this JUST a housing bubble or is there a bubble in credit/debt that is collapsing along with the housing markets?”

IF there is a credit/debt bubble collapsing, we might have to go all the way back to 1987 when Greenspan took over the printing presses or even 1971 when Nixon closed the gold window

Regardless of where the ultimate bottom is, that bottom is far below current levels …[/quote]

I love the chart.

jpinpb would periodically remind of of the effects of the 1997 capital gains exemption. That got homeowners to play the property ladder and speculate on their own houses.

I would add the massive liquidity pumped into the economy prior to Year 2000. Remember the Y2K bug was going to cause the ATM and credit card machines to stop working? What a scam that was.

[briansd1]

[quote=4plexowner][img_assist|nid=12707|title=US Home Ownership Bubble|desc=|link=node|align=left|width=400|height=340]

Here’s another way of looking at the bubble – the chart shows the percentage of homes in America that are owned

Bubble theory says we will retrace this bubble to its start in 1995 or so

There may have been some structural changes in our economy such that this bubble will only collapse to the 65/66% level and not all the way to 64%

On the chart I have marked:
– 1987 when Greenspan became Fed Chairman – did the credit/debt bubble start all the way back then?
– 1997 when the capital gains exemption was enacted (http://www.nytimes.com/2008/12/19/business/19tax.html)
– 1998 when San Diego metrics departed from their historic range
– 2002 when massive monetary easing began
– 2006/7 when San Diego’s peak occurred

To do a thorough job of analyzing the housing bubble we might want to ask the question, “Is this JUST a housing bubble or is there a bubble in credit/debt that is collapsing along with the housing markets?”

IF there is a credit/debt bubble collapsing, we might have to go all the way back to 1987 when Greenspan took over the printing presses or even 1971 when Nixon closed the gold window

Regardless of where the ultimate bottom is, that bottom is far below current levels …[/quote]

I love the chart.

jpinpb would periodically remind of of the effects of the 1997 capital gains exemption. That got homeowners to play the property ladder and speculate on their own houses.

I would add the massive liquidity pumped into the economy prior to Year 2000. Remember the Y2K bug was going to cause the ATM and credit card machines to stop working? What a scam that was.

[briansd1]

[quote=4plexowner][img_assist|nid=12707|title=US Home Ownership Bubble|desc=|link=node|align=left|width=400|height=340]

Here’s another way of looking at the bubble – the chart shows the percentage of homes in America that are owned

Bubble theory says we will retrace this bubble to its start in 1995 or so

There may have been some structural changes in our economy such that this bubble will only collapse to the 65/66% level and not all the way to 64%

On the chart I have marked:
– 1987 when Greenspan became Fed Chairman – did the credit/debt bubble start all the way back then?
– 1997 when the capital gains exemption was enacted (http://www.nytimes.com/2008/12/19/business/19tax.html)
– 1998 when San Diego metrics departed from their historic range
– 2002 when massive monetary easing began
– 2006/7 when San Diego’s peak occurred

To do a thorough job of analyzing the housing bubble we might want to ask the question, “Is this JUST a housing bubble or is there a bubble in credit/debt that is collapsing along with the housing markets?”

IF there is a credit/debt bubble collapsing, we might have to go all the way back to 1987 when Greenspan took over the printing presses or even 1971 when Nixon closed the gold window

Regardless of where the ultimate bottom is, that bottom is far below current levels …[/quote]

I love the chart.

jpinpb would periodically remind of of the effects of the 1997 capital gains exemption. That got homeowners to play the property ladder and speculate on their own houses.

I would add the massive liquidity pumped into the economy prior to Year 2000. Remember the Y2K bug was going to cause the ATM and credit card machines to stop working? What a scam that was.

[briansd1]

[quote=4plexowner][img_assist|nid=12707|title=US Home Ownership Bubble|desc=|link=node|align=left|width=400|height=340]

Here’s another way of looking at the bubble – the chart shows the percentage of homes in America that are owned

Bubble theory says we will retrace this bubble to its start in 1995 or so

There may have been some structural changes in our economy such that this bubble will only collapse to the 65/66% level and not all the way to 64%

On the chart I have marked:
– 1987 when Greenspan became Fed Chairman – did the credit/debt bubble start all the way back then?
– 1997 when the capital gains exemption was enacted (http://www.nytimes.com/2008/12/19/business/19tax.html)
– 1998 when San Diego metrics departed from their historic range
– 2002 when massive monetary easing began
– 2006/7 when San Diego’s peak occurred

To do a thorough job of analyzing the housing bubble we might want to ask the question, “Is this JUST a housing bubble or is there a bubble in credit/debt that is collapsing along with the housing markets?”

IF there is a credit/debt bubble collapsing, we might have to go all the way back to 1987 when Greenspan took over the printing presses or even 1971 when Nixon closed the gold window

Regardless of where the ultimate bottom is, that bottom is far below current levels …[/quote]

I love the chart.

jpinpb would periodically remind of of the effects of the 1997 capital gains exemption. That got homeowners to play the property ladder and speculate on their own houses.

I would add the massive liquidity pumped into the economy prior to Year 2000. Remember the Y2K bug was going to cause the ATM and credit card machines to stop working? What a scam that was.

[Author]

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