Economists Fear Weak Demand For Homeownership Will Fester
Posted on 10/27/2007 7:03:24 AM PDT by shrinkermd
Edited on 10/27/2007 7:40:24 AM PDT by Admin Moderator. [history]
The percentage of U.S. homes that are vacant and for sale remained at elevated levels during the third quarter, and the percentage of people who own their homes continued to decline, according to a Census Department report. These are the starkest signs yet of the severity of the damage in the housing market caused by speculation, overbuilding and rising foreclosures.
(Excerpt) Read more at online.wsj.com ...
There will be weak demand for housing for at least 3-5 years. And prices will need to drop by 50% (or wages increase by 100%)
Deport a few more illegals and prices will go down further.
Yes, I am waiting to buy a house in late 2008 when the mother of all ARM resets should have crested, resulting in a further depression of housing prices.
How about the Junk Media quit hyping the news and manufacturing imaginary crises and simply go back to straight forward REPORTING of the facts.
You have to subscribe to read the article. Does this "reporter" actually name the economists and quote them fully or are we just suppose to accept his word for what they are saying?
I doubt that very seriously. People right now are playing chicken with the market.
True, if you look at the value of a home twenty years ago and calculated it's value based upon the time and value of money during the same period of time and you would be close to what current market value should be.
The population is still GROWING and people have to live somewhere.
1. Homes - on average - historically barley beat inflation 2. Homes (and all buildings) are a depreciating asset 3. Homes - historically - were priced at about 3x the prevailing wage.
1. Homes - on average - historically barley beat inflation 2. Homes (and all buildings) are a depreciating asset 3. Homes - historically - were priced at about 3x the prevailing wage.
1. Homes - on average - historically barley beat inflation 2. Homes (and all buildings) are a depreciating asset 3. Homes - historically - were priced at about 3x the prevailing wage.
The housing market has actually been worse than what was predicted since last year. The gov't and National Association of Realtors estimates have been revised downward (as in bad) nearly every month during the last year.
Apartments
Builders put up about two million more homes than are needed right now. Illegals getting no-doc loans were filling some of that gap - now we'll just have to wait until demand catches up with supply.
Economists Fear Weak Demand For Homeownership Will Fester
Nonsense! No one can possibly know when the supply/demand equation will come into balance. Homes in fact ARE selling albeit at a slower pace then they are being put on the market. People may just stop listing their homes in a market like this and that happening the over all supply shrinks ans prices begin to rise. There is not necessarily a lack of demand as much as people playing a wait and see game to see how low prices will go. As soon as the sheeple perceive prices are not heading lower they will en mass flood the market. One thing I will predict though. When buyers do jump back into the market this R.E. downturn will reverse as quickly as it came on us and prices for homes will again leap. There will a pent up demand needing to be satisfied. How long will that take? No one knows, all we all can know is it will happen.
I may be totally wrong, but I can envision a scenario where people who have been burned out will take their insurance money and buy existing properties that have been languishing on the market.
Nonsense! No one can possibly know when the supply/demand equation will come into balance.
Of course no one can predict the future. However - we can look at historical averages (rent/purchase or income/house price) and see how things will eventually have to change.
BTW - I am talking real dollars. If housing prices stay the same in price for 10 years - that is about a 50% reduction in price due to inflation.
As pleased as I am to see the housing bubble burst (and I am thrilled, believe me) this part “...the percentage of people who own their homes continued to decline...” strikes me as overstated. It may have indeed declined, but I can’t imagine it has delcined very much at all.
Generally that does not happen. During most RE downturns and the subsequent turnaround the prices came back slowy but steady. It happened in Texas in the '80's and Ca in the 90's. In both areas it took 8-10 years for prices to recover.
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