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Replies (4)
- SteadyState
- Contributions:783
REAs should know better than to cherry pick sentences from study to distort the facts but they do it anyway.
Lets get to the facts from the study (not NAR cherry pickings):
1. The study was funded by the FDHLB, Freddie Mac, NAHB, NAR etc and Harvard University states the the study does not necessarily represent Harvard University views .
2. Higher income and down payment requirements, tighter credit underwriting, will prevent buyers from obtaining loans they would have obtained in the 1990s before the boom and bust. Translation - buyers may want to buy but they cannot afford or be eligible for the loan.
3. At last measure (2009) 19.4 million Americans spend more than 50% of their income for housing (purchased or rented). Home (rent or buy) affordability is worsening. Translation - home prices are too expensive and must fall.
4. In 2010 Home owner equity is 6.1 Trillion but their debt is $10 Trillion. Translation - home owners cannot sell and if they sell or walk away, they or the banks will have to cover the $4 Trillion in losses.
5. As of March 2011, 2 Million home owners were over 90 days delinquent, 2.2 Million properties are in the foreclosure pipeline. The foreclosure crisis continues. Translation - more of your customers will become homeless.
6. Most important: The predicted recovery in the study is based on two assumptions that were made in March 2011 and believed to hold in March 2011:
a) 200K+ jobs will be created each month going forward and
b) Energy prices continue to go down.
Translation: No housing recovery without major gains in employment and simultaneous low energy prices (kiss the recovery good bye)
Lets get to the facts from the study (not NAR cherry pickings):
1. The study was funded by the FDHLB, Freddie Mac, NAHB, NAR etc and Harvard University states the the study does not necessarily represent Harvard University views .
2. Higher income and down payment requirements, tighter credit underwriting, will prevent buyers from obtaining loans they would have obtained in the 1990s before the boom and bust. Translation - buyers may want to buy but they cannot afford or be eligible for the loan.
3. At last measure (2009) 19.4 million Americans spend more than 50% of their income for housing (purchased or rented). Home (rent or buy) affordability is worsening. Translation - home prices are too expensive and must fall.
4. In 2010 Home owner equity is 6.1 Trillion but their debt is $10 Trillion. Translation - home owners cannot sell and if they sell or walk away, they or the banks will have to cover the $4 Trillion in losses.
5. As of March 2011, 2 Million home owners were over 90 days delinquent, 2.2 Million properties are in the foreclosure pipeline. The foreclosure crisis continues. Translation - more of your customers will become homeless.
6. Most important: The predicted recovery in the study is based on two assumptions that were made in March 2011 and believed to hold in March 2011:
a) 200K+ jobs will be created each month going forward and
b) Energy prices continue to go down.
Translation: No housing recovery without major gains in employment and simultaneous low energy prices (kiss the recovery good bye)
- HomeSand.net, "White Picture"
- Contributions:4393
By the way, the banks do not know what to do with the foreclosures for the time being, actually!!!
- Pasadenan
- Contributions:21453
Not to mention, the "over construction" over the past decade has created a 10 year supply "surplus", which is why new construction has been cut back. There will be no "shortage" as the builders are ready to build more any time there are actual buyers for it. But the population is not increasing fast enough to use it, and new households numbers are not sufficient to compensate for retiring baby-boomers. And the government has stated they won't open the border, so households need to have 2 houses to use up the supply. Either that, or more people need to get separated and divorced and still use up single family housing.
- Craig1976
- Contributions:69
Sam, you really should try reading the report before posting something like that. You will discover that the overall message is extremely cautious at best and could not be further from your title. It is like the NAR hired Karl Rove or something. I knew they were totally full of it and growing desperate, but using Harvard's name and twisting the report like that is over the top.
Harvard Housing Studies: Major Housing Shortage Projected
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- 4.9/5.0
- (5 reviews)
Contributions:3472Researchers at Harvard University's Joint Center for Housing Studies are forecasting that the lack of new construction building in the current real estate market will create a long-term shortage in housing availability.
"With inventories of new homes at historic lows, a turnaround in demand could quickly result in tighter markets," the report notes. "Over the longer term, the number of younger households is set to rise sharply, supporting growth in the population that fuels growth in both new renters and first-time buyers. The path of the economy and evolution of the mortgage market will determine when and if this increased demand materializes."
The report predicts a need for greater housing units for several reasons. For example, the report projects demand for 1 million new homes a year is needed to meet population growth in the coming decade. The report also predicts a surge in smaller homes, estimating that 3.8 million baby boomers will be looking to downsize their homes within the next decade. Also in adding to the increase in housing units needed, Immigration growth, the need to replace existing homes, and demand for second homes will contribute to rising demand, the report notes. Therefore, researchers conclude at least 16 million new housing units will be needed over the next decade. "
Report
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