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Peter Schiff: Housing still has at least 20% on downside to go.
Business Insider ^ | December 30, 2010 | Gregory White

Posted on 12/30/2010 1:16:40 PM PST by GlockThe Vote

Peter Schiff: Here's Why Home Prices Have To Decline At Least 20% And Probably More Gregory White | Dec. 30, 2010, 12:09 PM | 6,520 | 25

House prices have to decline at least another 20.3% to come back to the historical trend and may have much further to fall, according to Peter Schiff of Euro Pacific Capital.

Writing in the Wall Street Journal, Schiff breaks down the horrible state of the U.S. residential real estate market just days after a negative Case-Shiller number pretty much confirmed we're in a housing double-dip.

Schiff explains that, if we all believe that we were in a housing bubble, then house prices need to come back to the historical trend line before we're actually through this.

But that 20.3% is only the beginning of the break.

From Peter Schiff (in the WSJ, emphasis ours):

With a bleak economic prospect stretching far out into the future, I feel that a 10% dip below the 100-year trend line is a reasonable expectation within the next five years, particularly if mortgage rates rise to more typical levels of 6%. That would put the index at 114.02, or prices 28.3% below where we are now. Even a 5% dip would put us at 120.36, or 24.32% below current prices. If rates stay low, price dips may be less severe, but inflation will be higher.

Read more: http://www.businessinsider.com/peter-schiff-home-prices-2010-12#ixzz19dBDDWwY

(Excerpt) Read more at businessinsider.com ...


TOPICS: Business/Economy; Constitution/Conservatism; Culture/Society; News/Current Events
KEYWORDS: housingbubble; peterschiff
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I agree with Schiff 10000000%
1 posted on 12/30/2010 1:16:40 PM PST by GlockThe Vote
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To: GlockThe Vote

Obama and Bernake should just print up a fresh 120 Trillion and be done with it.


2 posted on 12/30/2010 1:19:23 PM PST by screaminsunshine (Americanism vs Communism)
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To: GlockThe Vote

Housing prices aren’t the problem. It’s how much people owe on the inflated products they bought that is the problem. Now we have this huge oversupply that’s hurting everyone.


3 posted on 12/30/2010 1:25:43 PM PST by umgud
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To: GlockThe Vote

I’m in Real Estate. We are hoping it only goes down 20% more. There are so many bank owned out there that one has a hard time seeing an end to this in the next couple years. We also have the added benefit of interest rate going up dramatically any minute.


4 posted on 12/30/2010 1:26:46 PM PST by Lazlo in PA (Now living in a newly minted Red State.)
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To: umgud

I have been on the sidelines for a few years because i know we are still way off the bottom.


5 posted on 12/30/2010 1:27:16 PM PST by GlockThe Vote (Who needs Al Queda to worry about when we have Obama?)
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To: GlockThe Vote
House prices have to decline at least another 20.3% to come back to the historical trend and may have much further to fall, according to Peter Schiff of Euro Pacific Capital.

Karl Denninger (Market-Ticker.org) agrees.

6 posted on 12/30/2010 1:27:48 PM PST by Oberon (Big Brutha Be Watchin'.)
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To: Lazlo in PA

I have been telling my GF that prices are still 20 - 40% too high based on historical criteria, and she used to yell at me for not buying, but no longer.

I have been following Schiff/Celente for years and they have been spot on.


7 posted on 12/30/2010 1:29:05 PM PST by GlockThe Vote (Who needs Al Queda to worry about when we have Obama?)
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To: GlockThe Vote

Has Schiff ever been wrong? I remember when he was ridiculed about five years ago for predicting that real estate prices were going to crash and burn.


8 posted on 12/30/2010 1:29:20 PM PST by forgotten man (forgotten man)
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To: Oberon

I am 35 y/o and do ok, but not great, and still can’t even remotely afford a starter home in Westchester County, NY.

Housing is simply unaffordable and still way too high in most areas fo people under 40 y/o to afford.


9 posted on 12/30/2010 1:32:25 PM PST by GlockThe Vote (Who needs Al Queda to worry about when we have Obama?)
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To: forgotten man

Schiff is my go to guy on most issues.

I almost feel like I should send him a check for the education he has given me on economics on his youtube page.

If you have never seen his web videos - check them out on yuotube.

I actually met him and got him to sign his book for me. he is a cool guy.

Between him and Celente - I trust those two on most issues before anyone else.


10 posted on 12/30/2010 1:36:54 PM PST by GlockThe Vote (Who needs Al Queda to worry about when we have Obama?)
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To: GlockThe Vote
There is a house across the street here where I live on .56 acres, pool and 2,200 square feet going for 140k.

The house I'm in now I rent from a friend of mine, is a little bit smaller, but he paid 190k cash for it 11 years ago.

11 posted on 12/30/2010 1:41:12 PM PST by Las Vegas Ron (The Tree of Liberty did not grow from an ACORN!)
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To: GlockThe Vote

The problem is also the lending.

Banks have raised the bar so high that no one except cash buyers can qualify for the credit requirements.

A realtor friend said she couldn’t complete a sale for a couple with something like 30% down and a high 700s credit score.


12 posted on 12/30/2010 1:47:53 PM PST by dk88 (Keep your laws off my body)
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To: Las Vegas Ron

Schiff still says renting is better than buying for many reasons.


13 posted on 12/30/2010 1:48:07 PM PST by GlockThe Vote (Who needs Al Queda to worry about when we have Obama?)
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To: GlockThe Vote

Come to Vegas. We’re at 2000 levels, which was affordable then, and is a downright steal now.

Will it go down further here? It could, but there are tentative signs we’re bouncing along the bottom in Las Vegas.

I’m guessing Schiff is talking about the national average when he says we have 20% to go. This may be, but I suspect in the hardest hit markets much of the damage has already been done.


14 posted on 12/30/2010 1:48:43 PM PST by VegasCowboy ("...he wore his gun outside his pants, for all the honest world to feel.")
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To: dk88

The prices are still grossly too high, as are the property taxes, insurance, etc.


15 posted on 12/30/2010 1:49:31 PM PST by GlockThe Vote (Who needs Al Queda to worry about when we have Obama?)
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To: GlockThe Vote

How much did housing prices drop across the whole nation during 2010? Does anyone know? There were expectations at the beginning of the year that the drop would be 12%.


16 posted on 12/30/2010 1:51:42 PM PST by Jack Hydrazine (It's the end of the world as we know it and I feel fine!)
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To: dk88
A realtor friend said she couldn’t complete a sale for a couple with something like 30% down and a high 700s credit score.

That's hard to believe. What is probably happening is that the agreed upon price was deemed to be above market value based upon the appraisal. Most banks are dying to lend to qualified borrowers (check out bank balance sheets - lots of cash earning virtually no yield). A problem you're seeing now is appraisers being overly conservative after they were all made to look fools during the bubble years.
17 posted on 12/30/2010 1:51:59 PM PST by VegasCowboy ("...he wore his gun outside his pants, for all the honest world to feel.")
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To: VegasCowboy
Come to Vegas. We’re at 2000 levels,

It's actually worse, at least in this area (North West) See my #11

18 posted on 12/30/2010 1:54:19 PM PST by Las Vegas Ron (The Tree of Liberty did not grow from an ACORN!)
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To: GlockThe Vote

May just be time to walk from my house (100k upside down), save money for a year while being foreclosed on and rent / buy another house at a deep discount. Sounds moraly questionable but the banks dont exactly apply morals to what they do now do they?


19 posted on 12/30/2010 1:56:21 PM PST by Moleman
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To: GlockThe Vote

Well if you hold out longer you can get a McMansion on Cape Cod prices. There are two factors that no one is talking about in this mix.

1) Mellennials are gun shy and super conservative. They are trending toward renting for life to avoid the issues their parents are experiencing owning a home these days. No one is buying starter homes like they used to.

2) Baby boomers who bought these McMansions are getting too old to want the hassle of the big house. They are willing to take huge losses to get out of the overhead and retire in a more suitable home. That is leaving a lot of these on the market and it will only get worse.

Factor in bank owned stuff that they want off their books and that leaves what I read was almost a 12 supply of existing housing.

I can’t imagine seeing a sellers market again for a few decades if ever.


20 posted on 12/30/2010 1:56:31 PM PST by Lazlo in PA (Now living in a newly minted Red State.)
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To: Las Vegas Ron

Problem is thatwages are so low and stagnated that most people cant afford the carry costs of even a remotely mainstream home.

Housing became like everything else in this country - PONZINOMICS.


21 posted on 12/30/2010 1:56:50 PM PST by GlockThe Vote (Who needs Al Queda to worry about when we have Obama?)
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To: Las Vegas Ron

Yeah, it’s rough here. The less developed areas are really ugly. I live in one of the newer areas, and I don’t even bother looking at values around me. It’s too depressing.

The State’s foreclosure mediation rules are definitely not helping. All they are accomplishing is the extension of the foreclosure process and delaying the establishment of true bottom. Like I said, I think we’re close on the average, but it all depends on where the home is located.


22 posted on 12/30/2010 1:58:59 PM PST by VegasCowboy ("...he wore his gun outside his pants, for all the honest world to feel.")
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To: GlockThe Vote

And of course the AP and Fox News (who are infiltrated by a number of liberals) reported this morning on the their radio how the housing market had upward signs with sales and increased interest rates...and never mentioned any of this.


23 posted on 12/30/2010 2:02:30 PM PST by Paul Ross (Ronald Reagan-1987:"We are always willing to be trade partners but never trade patsies.")
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To: Paul Ross

I don’t watch Fox News as it is TV for morons, as are most other cable stations.

I honestly feel less intelligent after watching Fox News for more than 5 minutes or more.

I rely on people like Schiff/Celente/Chapman/Denninger/ZEROHedge/ et al for reality and real news.

Cable news is for morons.


24 posted on 12/30/2010 2:06:43 PM PST by GlockThe Vote (Who needs Al Queda to worry about when we have Obama?)
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To: Bullish; CJ Wolf; houeto; Quix; B4Ranch; Whenifhow; Silentgypsy; blam; FromLori; Lurker; ...
Habitative-easing ping.

"Economic Holocaust" ping.

Increasing volume ping list watching the slow motion Economic Holocaust.

FReepmail me if you want on or off
The Comedian's "Economic Holocaust" ping list...


Frowning takes 68 muscles.
Smiling takes 6.
Pulling this trigger takes 2.
I'm lazy.

25 posted on 12/30/2010 2:08:06 PM PST by The Comedian (Government: Saving people from freedom since time immemorial.)
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To: GlockThe Vote; VegasCowboy
Somehow the annual income/home cost ratio got out of whack.

Seems that right around the mid 70’s everything went haywire.....Carter and the CRA were just about that time, hmmmmm.

26 posted on 12/30/2010 2:09:10 PM PST by Las Vegas Ron (The Tree of Liberty did not grow from an ACORN!)
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To: GlockThe Vote

Anyone relying on Fox News or other outlets for news needs their head examined.

Fox is “news” for idiots. MSNBC is news for bigger idiots.

Best thing to do is seek ot news and commentary with a proven track record of being right and follow those people.


27 posted on 12/30/2010 2:09:12 PM PST by GlockThe Vote (Who needs Al Queda to worry about when we have Obama?)
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To: Las Vegas Ron

Just think of the basic economics and demographics at play.

Housing is over for DECADES! That is, unless we re-do immigration and import millions of Asians and Euro’s and get rid of the lower class scum.

Think about it - Millions of boomers tryin to sell their homes cause they cant afford it. Who is going to buy those homes? Answer - NOBODY!

The Gen X’ers and Gen Y’ers are barely making it as it is.

College kids are strapped with school loans, etc.

People need to wake the hel up and smell the coffee. We are screwed royally for decades unless we change our immigration policies drastically to where we deport the crap and import the best and brightest fom Asia and Europe.

There is no other way.


28 posted on 12/30/2010 2:13:18 PM PST by GlockThe Vote (Who needs Al Queda to worry about when we have Obama?)
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To: GlockThe Vote; Lazlo in PA; Oberon; Las Vegas Ron; dk88; VegasCowboy; Moleman; All

Schiff is an optimist!

Based on the experience of other countries who have undergone similar economic circumstances, housing prices will fall 90 percent or more in real terms when we begin to experience more of the effects of serious inflation / hyperinflation. Here are some of the reasons why:

Vastly increased supply. Vastly decreased demand. You do the math.
29 posted on 12/30/2010 2:18:58 PM PST by Zakeet (Always trust in the five G's: God, Gold, Guns, Grub, and the Government screwing up)
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To: GlockThe Vote

No doubt unchecked immigration of third world illiterates had and is still having an impact too.

For every one cause that can be cited there are a hundred effects to go along with them...decades indeed, if ever.


30 posted on 12/30/2010 2:19:42 PM PST by Las Vegas Ron (The Tree of Liberty did not grow from an ACORN!)
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To: Zakeet

Yikes, I’d hate to see his pessimistic views.


31 posted on 12/30/2010 2:24:25 PM PST by Las Vegas Ron (The Tree of Liberty did not grow from an ACORN!)
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To: Zakeet

I often feel like i should send Schiff a check for like 10k for al that he has taught me via his books, his youtube videos, his commentary, and reading recommendations.


32 posted on 12/30/2010 2:25:37 PM PST by GlockThe Vote (Who needs Al Queda to worry about when we have Obama?)
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To: GlockThe Vote
Schiff still says renting is better than buying for many reasons.

I came to the same conclusion. In any state under the reach of the Dark Messiah, property rights mean nothing right now. I've decided on long terms leases. Owning anything here and now that can be seized, nationalized, or otherwise stolen by the illegitimate regime is simply too dangerous.


Frowning takes 68 muscles.
Smiling takes 6.
Pulling this trigger takes 2.
I'm lazy.

33 posted on 12/30/2010 2:26:45 PM PST by The Comedian (Government: Saving people from freedom since time immemorial.)
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To: Las Vegas Ron

Have you ever seen this?

Make sure you hve not eaten anything within the lat hour or two.

Schiff is almost always dead on right.

This video is why i refuse to watch Fox News most of the time. They laughed at Peter!

http://www.youtube.com/watch?v=tZaHNeNgrcI


34 posted on 12/30/2010 2:27:47 PM PST by GlockThe Vote (Who needs Al Queda to worry about when we have Obama?)
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To: GlockThe Vote

I agree with his partial analysis, but there’s more to be considered. It appears that commodities—especially fuel—will be going up over the next year and a half. Imagine retirees with mortgages, after heating fuel (propane, coal-fired electricity, natural gas, etc.), vehicle fuel and food go up another 25% or so. Many unforeseen foreclosures result—not just the ARMs coming home to roost next year.


35 posted on 12/30/2010 2:34:28 PM PST by familyop (cbt. engr. (cbt), NG, '89-' 96, Duncan Hunter or no-vote.)
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To: GlockThe Vote
I am 35 y/o and do ok, but not great, and still can’t even remotely afford a starter home in Westchester County, NY.

I zillowed a rather drab house on the market in Yonkers. Asking price is $450K with property taxes of $9K. That house would likely fetch around $160K where I live. I couldn't even find a house listed for $200K, just condos. The median household income for Yonkers is about the same where I live. Something doesn't add up...

36 posted on 12/30/2010 2:35:45 PM PST by EVO X
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To: GlockThe Vote

does that include residential apartment buildings?


37 posted on 12/30/2010 2:35:47 PM PST by Chickensoup (Protecting US interests ONLY if US interests move back into the States and give US citizens jobs.)
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To: GlockThe Vote

Thanks, am watching now.


38 posted on 12/30/2010 2:41:15 PM PST by Las Vegas Ron (The Tree of Liberty did not grow from an ACORN!)
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To: EVO X

Ha ha ha ha - no kidding - thisis why people are fleeing N.Y. and myself included as soon as I can.

Yonkers, is literally the border city of NYC, 15 minutes to downtown NYC.

And yonkers is considered affordable compared to the rest of westchester.

I actually have a client wh pays 60k a year in taxes in scarsdale for a nice, ut not extravagant house.


39 posted on 12/30/2010 2:42:21 PM PST by GlockThe Vote (Who needs Al Queda to worry about when we have Obama?)
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To: forgotten man

He overestimate the intelligence of Chinese politicians imho. I don’t see them any different to US politicians. Both of them think devaluing currency is the way of prosperity. Peter constantly think that Chinese politicians will wake up one day and realize their error. I don’t see that happening. I see hyperinflation happening in China before the US


40 posted on 12/30/2010 2:42:51 PM PST by 4rcane
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To: GlockThe Vote
House prices have to decline at least another 20.3% to come back to the historical trend and may have much further to fall, according to Peter Schiff of Euro Pacific Capital.

His analysis is too simple. It would be more appropriate to see regional numbers. Plus, houses now are not the same as houses 100 years ago or even twenty years ago.

41 posted on 12/30/2010 2:43:42 PM PST by SeeSac
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To: SeeSac

Head in the sand.


42 posted on 12/30/2010 2:46:53 PM PST by GlockThe Vote (Who needs Al Queda to worry about when we have Obama?)
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To: SeeSac

Show me a video remotely as accurate as this as Peter has been:

http://www.youtube.com/watch?v=tZaHNeNgrcI

NOTICE THE MORONS ON FOX NEWS LAUGHING AT HIM!


43 posted on 12/30/2010 2:48:10 PM PST by GlockThe Vote (Who needs Al Queda to worry about when we have Obama?)
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To: GlockThe Vote

Housing will be down in some regions, flat or going up in others.

The Rocky Mtn states, for instance, continue to have a growing population that puts an upward demand on housing units.


44 posted on 12/30/2010 2:50:58 PM PST by lurk
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To: Las Vegas Ron

Until someone can show me another person even 50% as accurate as Schiff will take his advice over the hacks attacking him.


45 posted on 12/30/2010 2:50:58 PM PST by GlockThe Vote (Who needs Al Queda to worry about when we have Obama?)
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To: lurk

I disagree. Demographics, inflation, taxes, carrying costs, young people saddled wth debt, etc is going to keep houisng in the toilet for decades.


46 posted on 12/30/2010 2:52:28 PM PST by GlockThe Vote (Who needs Al Queda to worry about when we have Obama?)
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To: GlockThe Vote
Head in the sand.

?????????????????????????????????

47 posted on 12/30/2010 2:53:02 PM PST by SeeSac
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To: Paul Ross
"And of course the AP and Fox News (who are infiltrated by a number of liberals) reported this morning on the their radio how the housing market had upward signs with sales and increased interest rates."

Yes. One local real estate company (Colorado ski resort area) advertises that the rising interest rates signal a "housing" recovery and the time to buy. It sounds like a car dealer ad. Meanwhile, their are many legals pages in the local papers (foreclosures), and the market is flat except for the rare cash sales.

The survivalism market may be more active than real estate.

Intelligent Investing Panel
Going Great Guns
Forbes
David Serchuk, 04.23.09
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[...]
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[...]
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48 posted on 12/30/2010 2:55:12 PM PST by familyop (cbt. engr. (cbt), NG, '89-' 96, Duncan Hunter or no-vote.)
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To: GlockThe Vote

Ditto that.

He has been amazingly accurate...but there will be some here who think they know better.


49 posted on 12/30/2010 2:57:50 PM PST by Las Vegas Ron (The Tree of Liberty did not grow from an ACORN!)
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To: SeeSac

Prices are going to going down across the board. As they are forced to raise interest rates and local taxes skyrocket, the value of the home will go lower and lower and be seen as more an albatross than anything else.

And who do we have to thank for this? Fed Reserve and the Fed/State/city govt.


50 posted on 12/30/2010 2:59:05 PM PST by GlockThe Vote (Who needs Al Queda to worry about when we have Obama?)
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