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Replies (10)
- Dan, "the_country_hick"
- Contributions:4699
The WSJ obviously missed a few things.
The banks have a 3 year inventory of foreclosures on their books. That alone will push house prices further south.
I do not expect the numbers of distressed house sales to drop by 2013. The time needed to foreclose is close to 500 days now according to some reports. It will be at least 2014 before distressed sales drop and even then there will be a lot more left to go.
The banks have a 3 year inventory of foreclosures on their books. That alone will push house prices further south.
I do not expect the numbers of distressed house sales to drop by 2013. The time needed to foreclose is close to 500 days now according to some reports. It will be at least 2014 before distressed sales drop and even then there will be a lot more left to go.
- klarek the realist
- Contributions:7044
Can somebody please point me to the article in the WSJ which called the housing bubble? Books were written about it, and economic experts knew there was a housing bubble. The guy that cut my hair knew it. Where was the WSJ's expertise in the housing market circa five to eight years ago?
- SteadyState
- Contributions:787
Sam - Does the NAR pay you to cherry pick planted stories and post them on Zillow (see here for your last NAR cherry pick). Here is a quote from the article:
"But the long-term benefits of homeownership remain very much intact. For now, at least, you can deduct the mortgage interest on your taxes—a big perk for people in higher tax brackets. You get to paint your walls any color you wish, without having to clear it with a landlord. And assuming you can buy a home for about the same price as you can rent one, buying will give you the ability one day to live rent-free. Come retirement time, a paid-off mortgage means your monthly expenses are significantly reduced, and you have a chunk of equity to play with."
Notice the NAR selling points in the quote. Moreover - every parameter suggesting home prices will dropped is answered by some long term improvement. For example,
1) Tight Credit - credit will be easier in six months based on a single quote who is an ex-employee of CitiCorp (maybe he was fired because he was too losse with credit?)
2. Low employment - Dallas TX is seeing job growth (wow - a single city's expected job growth backed by quotes from one family that moved to Dallas and one RE agent that claims 20% of his sales are to relocating clients into Plano, TX).
3. Renting is cheaper than buy - this is explained by assertions that rents are rising and home prices are falling. A single positive example is given for one home buyer in Ann Arbor Michigan. For other areas it is simply sated that if the trend continues home buying will become more attractive.
Once again Sam I ask you - do you read the article before you post it as propaganda on Zillow?
"But the long-term benefits of homeownership remain very much intact. For now, at least, you can deduct the mortgage interest on your taxes—a big perk for people in higher tax brackets. You get to paint your walls any color you wish, without having to clear it with a landlord. And assuming you can buy a home for about the same price as you can rent one, buying will give you the ability one day to live rent-free. Come retirement time, a paid-off mortgage means your monthly expenses are significantly reduced, and you have a chunk of equity to play with."
Notice the NAR selling points in the quote. Moreover - every parameter suggesting home prices will dropped is answered by some long term improvement. For example,
1) Tight Credit - credit will be easier in six months based on a single quote who is an ex-employee of CitiCorp (maybe he was fired because he was too losse with credit?)
2. Low employment - Dallas TX is seeing job growth (wow - a single city's expected job growth backed by quotes from one family that moved to Dallas and one RE agent that claims 20% of his sales are to relocating clients into Plano, TX).
3. Renting is cheaper than buy - this is explained by assertions that rents are rising and home prices are falling. A single positive example is given for one home buyer in Ann Arbor Michigan. For other areas it is simply sated that if the trend continues home buying will become more attractive.
Once again Sam I ask you - do you read the article before you post it as propaganda on Zillow?
- John Stewart, "nwhome.us"
- Contributions:2166
Chicken Little said: "The sky is falling, the sky is falling."
The WSJ said: "It's a good time to buy."
Which one should I believe?
Banks have 3 years of inventory; are they stupid investors? Are they going to unload that inventory at something below market value?
Take a look at the market in Vancouver, BC. Completely off the charts from any analytical perspective, yet people keep buying. Like lemmings to the cliff. Do they never learn? There must be someting more to it than finance. Is it something emotional?
It's all pretty confusing, if you ask me. Until I just look at the project in front of me and ask: is this a home that I want to own and what is it going to take for me to buy it, today? If I'm dissatisfied with my current situation and see some great potential in the property, there is a number that is going to work for me and the seller. How dissatisfied am I and how much potential do I see? Those are pretty personal and emotional aspects of buying.
I don't give a hoot about the lemming mentality. The same kind of hype and stale data sources that took us up, are taking us further down than we need to go.
If you want current raw data for the Seattle neighborhood markets that I work in, please email me the request. I will be happy to share it with you. It certainly isn't all roses and sunshine, but there are a lot of people who are making decisions to move this economy ahead.
The WSJ said: "It's a good time to buy."
Which one should I believe?
Banks have 3 years of inventory; are they stupid investors? Are they going to unload that inventory at something below market value?
Take a look at the market in Vancouver, BC. Completely off the charts from any analytical perspective, yet people keep buying. Like lemmings to the cliff. Do they never learn? There must be someting more to it than finance. Is it something emotional?
It's all pretty confusing, if you ask me. Until I just look at the project in front of me and ask: is this a home that I want to own and what is it going to take for me to buy it, today? If I'm dissatisfied with my current situation and see some great potential in the property, there is a number that is going to work for me and the seller. How dissatisfied am I and how much potential do I see? Those are pretty personal and emotional aspects of buying.
I don't give a hoot about the lemming mentality. The same kind of hype and stale data sources that took us up, are taking us further down than we need to go.
If you want current raw data for the Seattle neighborhood markets that I work in, please email me the request. I will be happy to share it with you. It certainly isn't all roses and sunshine, but there are a lot of people who are making decisions to move this economy ahead.
- SteadyState
- Contributions:787
"It certainly isn't all roses and sunshine, but there are a lot of people who are making decisions to move this economy ahead."
If only individuals could make the economy work. Emotions, calls to patriotism, analogies, metaphors can not obscure facts:
1. The US has to de-leverage more - $14Trillion is debt is not going to go away because I am a proud American.
2. Home prices are still to expensive - even in your market Seattle, WA - median income is $46K and the median home price is $381K. By historical standards the median home price should be: $184 (I was generous and made it 4 times median income). Thus from an affordability perspective Seattle has another 50% to drop before the market comes to the point where the average person can afford a home.
I do not base my conclusions on emotions and I never say the glass is half full or empty. I measure the volume of the glass and then the volume of the water and then draw conclusions based on what I need the water (or the glass for). I am happy with an empty glass if I need to fill it with scotch and I am not very with a full glass when I need to fill it with scotch.
If only individuals could make the economy work. Emotions, calls to patriotism, analogies, metaphors can not obscure facts:
1. The US has to de-leverage more - $14Trillion is debt is not going to go away because I am a proud American.
2. Home prices are still to expensive - even in your market Seattle, WA - median income is $46K and the median home price is $381K. By historical standards the median home price should be: $184 (I was generous and made it 4 times median income). Thus from an affordability perspective Seattle has another 50% to drop before the market comes to the point where the average person can afford a home.
I do not base my conclusions on emotions and I never say the glass is half full or empty. I measure the volume of the glass and then the volume of the water and then draw conclusions based on what I need the water (or the glass for). I am happy with an empty glass if I need to fill it with scotch and I am not very with a full glass when I need to fill it with scotch.
- klarek the realist
- Contributions:7044
Banks have 3 years of inventory; are they stupid investors?
Look at why we're in this mess. Yes, they're stupid. They're also selfish. It's about restricting supply to keep sales prices ABOVE where the market value were to be had they not withheld this inventory.
And as an agent, you have NO right to call people "chicken little" because they saw the bubble for what it was while you were telling buyers it was "the best time to buy".
Look at why we're in this mess. Yes, they're stupid. They're also selfish. It's about restricting supply to keep sales prices ABOVE where the market value were to be had they not withheld this inventory.
And as an agent, you have NO right to call people "chicken little" because they saw the bubble for what it was while you were telling buyers it was "the best time to buy".
- John Stewart, "nwhome.us"
- Contributions:2166
In complete agreement that the current leveraged position is untenable but am confident that individuals can make a difference and that emotions and gut feelings for taking risk are critical elements in successful investment.
And where would we be if every average person could afford a home or wanted to buy a home? Back to the new housing starts in 2005? The median income and price relationship is completely unfounded in the reality of why people enter home ownership. There is no reason to make a decision based on that criteria unless you are a lemming or buying short in the market. You aren't buying short are you?
You'll note that I've learned from your perspective and am pointing out a very scary event taking place in Vancouver, BC right now. I count myself in the description of Chicken Little and recognize that it is falling on deaf ears. I think that the event is currently affecting the US real estate market by sending Canadian buyers into our more competitive market and in the longer term will be generating real downward pressure on housing prices in Vancouver. I'm counseling my sphere there to sell now and rent.
And, OBTW, I really don't like the slogan "it's a great time to buy." My counsel to buyers is: "If you are interested in buying a specific home, feel comfortable that you can take care of it and afford it. Don't expect to gain appreciation in the asset without making some real improvements to it and holding it for at least 5 years. Make the purchase for as little cost as possible." The great time to buy is when those elements come together no matter what the lemmings are doing..
And where would we be if every average person could afford a home or wanted to buy a home? Back to the new housing starts in 2005? The median income and price relationship is completely unfounded in the reality of why people enter home ownership. There is no reason to make a decision based on that criteria unless you are a lemming or buying short in the market. You aren't buying short are you?
You'll note that I've learned from your perspective and am pointing out a very scary event taking place in Vancouver, BC right now. I count myself in the description of Chicken Little and recognize that it is falling on deaf ears. I think that the event is currently affecting the US real estate market by sending Canadian buyers into our more competitive market and in the longer term will be generating real downward pressure on housing prices in Vancouver. I'm counseling my sphere there to sell now and rent.
And, OBTW, I really don't like the slogan "it's a great time to buy." My counsel to buyers is: "If you are interested in buying a specific home, feel comfortable that you can take care of it and afford it. Don't expect to gain appreciation in the asset without making some real improvements to it and holding it for at least 5 years. Make the purchase for as little cost as possible." The great time to buy is when those elements come together no matter what the lemmings are doing..
- sunnyview
- Contributions:25139
That sounds like wise counsel nwhome. My thumb to you.
- hpvanc
- Contributions:2579
Good point NWHome, I had not thought about the spill over effect from Vancouver to Seattle. People in Vancouver are talking about it, I sat through a dinner with clients (that do not work in real estate but all of them had sold and were renting) with a spirited discussion of why housing prices in Vancouver were defying incomes and gravity. I would be wondering how much downward pressure it will generate in the Seattle area if Vancouver crashes and those border crossing buyers are suddenly taken out of the Seattle market.
- klarek the realist
- Contributions:7044
nwhome, my apologies, and I concur.
Wall Street Journal: Why It's Time To Buy
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- 4.9/5.0
- (5 reviews)
Contributions:3472The Wall Street Journal's recent report on the state of the real estate market makes the case that even with current economic conditions, there are enough positive factors in housing to make buying a good prospect. Interest rates and affordable prices drive the conclusion:
"...there are growing indications that it is a good time to buy. Mortgage rates, which fell to 4.55% for the week ending June 2, according to Freddie Mac, are near 50-year lows. Homes have become more affordable than they have been in years: According to Moody's Analytics, the ratio of home prices to income is now 20.9% lower than the 15-year average through 2010, and 12.5% lower than the 1989-2004 average. A historic glut of homes, meanwhile, has created a buyer's market: There were about 15 million vacant homes in the U.S. last year, according to John Burns Real Estate ConsultingInc.-some 3.1 million more than normal.
Such conditions might not last long. Moody's Analytics predicts that the number of distressed sales will begin to fall in 2013, and that prices will begin to edge upward then. Home building is at a virtual standstill, so the supply overhang isn't likely to get much worse. Meanwhile, demographic indicators such as "household formation"-the number of new households each year-are on the rise, and promise to take a bite out of the glut in coming years.
The upshot: "While we might not see rapid growth in the next couple of years, there are a tremendous number of positive signs that could lead to a rebound," says Anthony Sanders, a real-estate finance professor at George Mason University."
WSJ Article
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