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unlawflcombatnt
ParticipantAnother telling indicator of where the economy is going is the declining GDP growth. There is a great article titled ” The Big Picture: Actual GDP: ~0%” describing the still unbelievable 3rd quarter GDP growth of 1.6%. The author points out the lower-than-expected GDP deflator (1.8% instead of the predicted 2.8%) as well as the “surprise” increase in auto sales of 26%. He suggests that 3rd quarter GDP will be revised down to 0% growth.
Many economists are now calling for a recession in the near future. And it’s the bursting of the housing bubble that’s leading the way. Both the loss of home equity loan-financed consumer spending and massive job loss in real estate-related fields will exacerbate the slowdown.
Home prices will take an even greater hit with the income loss from employment declines in real estate-related fields.
ParticipantI like this comment: “I don’t think you’re going to settle and buy just any old house, just because you found a cheap one. Are you?””
Yes, in fact, I will settle for “any old house” if I can afford it. And the “right house” has no application whatsoever unless I can afford it. This line is just wishful thinking on the part of realtors. Quality and specifics have no application at all if it’s out of the buyer’s price range. “Adding something” doesn’t increase a buyer’s ability to afford a house any at all.
I won’t be searching at all for a home until prices come down a lot. And the only factor under consideration at this moment is price.
ParticipantThe main benefit to the Dems winning is that they’ll have subpoena power. If they’re in the majority in the House, they’ll have the power to investigate some of the abuses that have occurred under Bush. Whether they’ll actually use that power remains to be seen.
ParticipantHow can anyone claim a jobs report of only 92,000 is good, following the previous month’s 148,000 jobs created? An increase of 150,000 per month is considered necessary to keep up with labor force growth. Over the last 2 months we’ve averaged only 120,000. Combine this with a 3rd quarter GDP growth of only 1.6%, which would have been only 0.9%, were it not for the artifactual 26% increase in auto production. Looks like the Bush administration is really struggling to find something positive to crow about.
ParticipantThe mean it will revert to will be the mean relationship between home prices and income. San Diego is far above that relationship in price-to-income. So is most of the rest of the country. A reversion to the mean price-to-income ratio means a price drop of over 50%.
unlawflcombatnt
ParticipantYes indeed. The Titanic was a big ship that turned slowly, and sank rapidly.
unlawflcombatnt
ParticipantThanks for the link and the article. That’s exactly what’s going to happen in LA again. And the real estate agents are currently making all the same claims. One of the more interesting lines in the article was “Asking prices stayed high, but nothing sold.” Home sellers simply refuse to accept that less people can afford homes. And the number is continuing to decline. Spin is still leading in it’s battle with reality dissemination.
unlawflcombatnt
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