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LA_Renter
Participant“You suggest the housing bears come here to see their perspective supported. Ever since you first posted, I’ve wondered why you’re here. Might I suggest that you’re the one with doubt seeking reinforcement.”
That’s exactly what I was thinking. And to think of it I have seen a little blip of new posters in the last few weeks that seem to be defending their recent purchases or rationalizing their upcoming purchase. Now the foundation of this blog is the presupposition that we are in a housing bubble.
“Southern California Housing Bubble News and Analysis”
That is very clear and concise. Anybody taking the time to come to this site and read posts and then take the time to post either wants to have their current views on housing confirmed (guilty , I also need this as an outlet as I wait it out)) or has serious concerns and doubts about the current state of housing. I think that Myito’s post was very sincere and authentic and I personally think post like these enrich this site. What I see in this thread is what I think is the greatest conflict in this current state of housing. The potential devastating financial consequences of the housing bubble as clearly outlined in Rich’s blog juxtaposed to nesting instincts. There is an unspoken social contract that owning your ouwn home enhances your security and much of this is predicated on a myth that home prices never fall. IMO the current state of housing does not offer this security. Look at the front page of this blog and look at that graph of NOD’s and NOT’s. That is nothing less than shocking and unprecedented. There is a human story for each and every one those NOD’s and NOT’s filed. Some were greedy and stupid and deserving and some were just everyday people that don’t have the time to truly analyze the financial consequences of their actions and got caught up in group think. It will be interesting to see how that social contract of owning RE is altered after this thing plays out.
Participant“Not even remotely”
I’m open to hearing peoples thoughts on this but elaboration is necessary.
The point I’m making is this the first domino to fall?
Participant“Not even remotely”
I’m open to hearing peoples thoughts on this but elaboration is necessary.
The point I’m making is this the first domino to fall?
ParticipantIn theory if we get strong signs that we are going into a recession, traditionally the stock market will correct and you will have a flight to quality i.e. bonds which will send interest rates down. Usually this results in an inverted yield curve which generally precedes that recession. It also signals the FED is getting ready to cut rates. The wild card we are facing is the global economy. We are looking at probably one of the worst housing corrections in this country’s history yet the stock market is on a bull run and interest rates are rising primarily due to the strong 4% to 6% growth in the global economy. We are also feeling the effects of a 30% drop in the US dollar and traditional foreign buyers of our bonds chasing higher yielding assets around the globe. I guess the answer to your question is “you got me”.
The thought that keeps running in my head is that much of the global economy is dependent on the good ole USA consumer. If the US consumer goes so goes the global economy. Now think about this, higher interest rates at this stage of the housing bubble more than likely will prove to be devastating. Especially California. We just had the weakest May since 1995 which was the weakest May of that entire decade. At this stage of the last housing bust of the early 1990’s the FED was already in the process of lowering rates. What would the housing bust of the 90’s looked like if interest rates were going up?? It makes a case that we are sitting on ground zero of a global economic downturn. Do you think June will be any better when interest rates just shot up?? This is really getting interesting don’t you think.
ParticipantIn theory if we get strong signs that we are going into a recession, traditionally the stock market will correct and you will have a flight to quality i.e. bonds which will send interest rates down. Usually this results in an inverted yield curve which generally precedes that recession. It also signals the FED is getting ready to cut rates. The wild card we are facing is the global economy. We are looking at probably one of the worst housing corrections in this country’s history yet the stock market is on a bull run and interest rates are rising primarily due to the strong 4% to 6% growth in the global economy. We are also feeling the effects of a 30% drop in the US dollar and traditional foreign buyers of our bonds chasing higher yielding assets around the globe. I guess the answer to your question is “you got me”.
The thought that keeps running in my head is that much of the global economy is dependent on the good ole USA consumer. If the US consumer goes so goes the global economy. Now think about this, higher interest rates at this stage of the housing bubble more than likely will prove to be devastating. Especially California. We just had the weakest May since 1995 which was the weakest May of that entire decade. At this stage of the last housing bust of the early 1990’s the FED was already in the process of lowering rates. What would the housing bust of the 90’s looked like if interest rates were going up?? It makes a case that we are sitting on ground zero of a global economic downturn. Do you think June will be any better when interest rates just shot up?? This is really getting interesting don’t you think.
Participant“Maybe someone can copy this add with the next part of the roller coaster going down even more. That would b e funny.”
Along that topic does anybody think we will se steeper median and avg price declines as the market recovers and the bottom is more heavily weighted. Thats what I see happening, when affordability returns to the market you will see median home prices plummet rapidly. Ironically that will be the first sign of health returning to the market.
Participant“Maybe someone can copy this add with the next part of the roller coaster going down even more. That would b e funny.”
Along that topic does anybody think we will se steeper median and avg price declines as the market recovers and the bottom is more heavily weighted. Thats what I see happening, when affordability returns to the market you will see median home prices plummet rapidly. Ironically that will be the first sign of health returning to the market.
Participant“What’s wrong with his comment? He appears to tell the truth and that is exactly what is happening here. Am I missing something?”
Bob Casagrand is correct
The ad is misleading.
Participant“What’s wrong with his comment? He appears to tell the truth and that is exactly what is happening here. Am I missing something?”
Bob Casagrand is correct
The ad is misleading.
ParticipantMaybe somebody should counter this ad with one corresponding to the Case Shiller Index.
ParticipantMaybe somebody should counter this ad with one corresponding to the Case Shiller Index.
Participant“visits from adult children and eventually grandchildren”
That is the casualty of the current California housing market. Those visits will be fewer and farther apart due to those children leaving the state in search of affordable housing. Thats happening everyday.
Participant“visits from adult children and eventually grandchildren”
That is the casualty of the current California housing market. Those visits will be fewer and farther apart due to those children leaving the state in search of affordable housing. Thats happening everyday.
ParticipantI see where the SD realtors are coming from. You all have a front line perspective and share that data. The housing debate tends to be more emotional than other market debates due to the nature of the product. Your talking about our castles here. On one side you do have the perma bulls and now I am seeing a trend of perma bears on the other side. This is another way of saying we have ideologues on both sides. I think that happens due to the nature of the product. The realtors are confirming that yes people are buying in the face of these fundamentals. I get frustrated when I read those post but i don’t doubt that its true. I was recently in Michigan (talk about a housing bust) and there were still exurbs of Detroit holding up just fine. This is nothing out of the ordinary in a housing correction.
Personally what I am watching is the disappearing food chain. The bottom of the market has dried up and it is getting worse. I guess what you see in the more desirable areas as being reported by the realtors is the last vestiges of a pipeline that was once overflowing. If you take out the bottom of the market and combine that with a net out migration of “monied” population then it is safe to say there is not much entering the pipeline right now. That takes time but it will be felt eventually. IMO I think you are going to start seeing this more concretely in the 3rd and 4th qtr of this year. 2008 is going to be a very tough year for all segments of the market.
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