Not all markets fluctuated equally. California's bubble was not indicative of the conditions here in Tulsa. That's a big reason national statistics don't represent (all) local markets.
zillow.com is showing my house in Phoenix being worth less now than what I paid for it in 1984.
They have just started the recovery process of coming back from government manipulation of the housing market by PRICES DROPPING BACK TO A REASONABLE LEVEL!
Balderdash.
The stagnant economy is weeding out the home buyers who were in over their heads. Foreclosures are resulting in rental demand for those who forfeited ownership. Conversely, long-term renters with good credit and savings are now able to purchase homes for less than rent.
People whose equity is higher than current value will stay put.
Real Estate speculators will buy up cheap houses as income property or HUD will step in.
Losers and winners, winners and losers.
bookmark
If by never recover, the author is referring to markets located in the slums, he may be right. Otherwise....in our lifetime? Uh...that’s just wrong.
IMHO...
Real Estate is local; the “sand” states are far worse than the national averages. Some of the better R/E areas around the nation are getting by ok in terms of being able to sell property.
Also, the R/E problem is exacerbated in states where the politics is liberal. Many people know the local economy will be better in conservative states, so the migration will continue until local liberalism is abandoned and then some.
Also, big corporate builders are not the way to go in terms of having a healthy economy and R/E market, but that’s what we have doing much of the building out there.
Once again, small business on the short end and the national economy follows suit.
It’s not the answer many people want, but nonetheless, it’s simple arithmetic.
Shedlock’s analysis is based on the assumption that we do not get runaway inflation of 10% or more. Long term, housing always goes up with the rate of inflation, assuming income inflation roughly keeps up at the same rate more or less. So if we get to a 10% annual inflation, which is less than the late 70s/early 80s, then we could easily see nominal house values quickly rise back to peak values.
Shedlock’s assumption is, absent stout inflation, assuming we remain in this deflationary climate for the rest of our lifetimes, then yes the peak nominal house values in bubble ares may not be seen again for the rest of many of our remaining lifetimes. I’m 53 so that is only 25 years for me. Fortunately, I bought in California long after the peak decline in values, so while I took a haircut, my value didn’t suffer much and I still am locked into 5% in the event we get that horrific inflation at some point.
Bubble = gov’t intervention.