-Espiritu-
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-0.5%
expectation + 1.0%
Keep in mind:
* lowest interest rates in generation
* prices already declined 20-40% on average
* tax incentified marketplace
* devaluation of dollar
And we still can't jump start housing. What happens when interests rates rise, water finding its own level?
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SoBaKi
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-Espiritu- posted:
DAMNIT! Why can't I force demand?
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Akza
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i might buy a house next year. i doubt any large up swing in real estate will happen by next year. too many people holding onto their houses waiting for better prices that once it goes up a bit, market gets dumped on. i expect that downward pressure for awhile.
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ZigmundZag
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Eh. It's certainly not good news, but I don't see it as the defining factor in an incoming double-dip, either. I don't think housing is going to pick up until significant gains in the job market are made or until the seven-year credit mark is cleared for the deadbeats that walked away from their mortgages. In the meantime, housing prices will probably hold or drop a little bit more in most markets.
As for interest rates, the fed has made it pretty clear they're not going up any time soon.
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B_Shinkicker
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Gas prices have almost quadrupled over the last ten years. Grocery prices have doubled. Health care costs have doubled. Child care costs have tripled...
Yet incomes have declined almost 10% over ten years.
I can't imagine why house prices haven't leaped back up to 2006 levels by now!
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-Espiritu-
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@ZZ - I think you're missing the point in regard to the Fed and interest rates. Replace "we're not going to increase rates" with "we can't increase rates", and you get a more realistic view of the Fed's current situation. I'd love to hear how we are different from Japan, who hit 0.0% benchmark rate in 1999 and hasn't been able to successfully raise rates back up since then.
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theredkay1
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Feb 2012 was 8% above Feb 2011. 0.2% above the prior 3 month average. And it was higher than the initial Jan 2012 number reported last month.
1 month of data doesnt make a trend and this number isnt a bad one.
edit - this is a seasonally adjusted number. The unadjusted number was 12% above January and 11% above Feb 2011.
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Eager_Igraine
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Housing will take a long while to recover if only because of the glut of new starter homes and new (vacant) lots in new subdivisions waiting for a buyer. In many areas the market is super saturated.
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theredkay1
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-Espiritu- posted:
@ZZ - I think you're missing the point in regard to the Fed and interest rates. Replace "we're not going to increase rates" with "we can't increase rates", and you get a more realistic view of the Fed's current situation. I'd love to hear how we are different from Japan, who hit 0.0% benchmark rate in 1999 and hasn't been able to successfully raise rates back up since then.
Japan has increased interest rates several times since then only to push them back down when the economy slowed.
Japan has tied itself in a knot. The government has tried large fiscal stimulus to push demand and growth, while the Bank of Japan has stomped on the economy every time inflation inched up.
So far the Fed has not shown the same zeal for eliminating inflation (and growth)
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ineenia
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If we want any chance of keeping our middle class and the upward mobility of the lower income earners property and housing values need to keep dropping IMO at least in relation to the average wage.
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-Espiritu-
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So far inflation has only affected the things people have to buy. I wonder how staunch the Fed will be after six months of $4+ gas. Heck, bananas went up 10% in February. Will another 20-30% in food stuffs be easilly absorbed by the US consumer? As was stated earlier, there still hasn't been a recovery in wages to match.
I agree that the Fed will not raise rates. I'm really just questioning whether they could if they wanted to.
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B_Shinkicker
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theredkay1 posted:
Feb 2012 was 8% above Feb 2011. 0.2% above the prior 3 month average. And it was higher than the initial Jan 2012 number reported last month.
1 month of data doesnt make a trend and this number isnt a bad one.
edit - this is a seasonally adjusted number. The unadjusted number was 12% above January and 11% above Feb 2011.
For 50 or more years before the housing bubble, on average, interest rates hovered around 8 or 9%. This must have been a healthy average for some reason. If this is equilibrium, then surely we'll find it again. Savers have to stop being punished at some point.
When interest rates rise, and they have to start rising at some point, it will continue to drive house prices down.
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imaloon1
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theredkay1 posted:
-Espiritu- posted:
@ZZ - I think you're missing the point in regard to the Fed and interest rates. Replace "we're not going to increase rates" with "we can't increase rates", and you get a more realistic view of the Fed's current situation. I'd love to hear how we are different from Japan, who hit 0.0% benchmark rate in 1999 and hasn't been able to successfully raise rates back up since then.
Japan has increased interest rates several times since then only to push them back down when the economy slowed.
Japan has tied itself in a knot. The government has tried large fiscal stimulus to push demand and growth, while the Bank of Japan has stomped on the economy every time inflation inched up.
So far the Fed has not shown the same zeal for eliminating inflation (and growth)
You do realize that you are making no sense and no point right?
I'm sure you do.... You always say this shit like it means a damn thing....
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theredkay1
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The Fed really doesnt have much influence on the price of oil. If Chinese consumers decide to buy a million new cars and the shale plays taper off quicker than expected, the Fed really should not respond by slowing the American economy. That would make no sense. As long as Bernanke is there I dont think the Fed would do something so foolish. The Fed targets inflation, not the short term price level of certain items.
Im not sure why they would have trouble raising rates if they wanted to. Japan and Europe both had success raising their equivalent of the Fed Funds rate (and shrinking the money supply). This may not mean higher interest rates on govt debt since thats really set by the market and not directly by the Fed. Although the market will likely respond with lower interest rates on gov't debt from a premature interest rate hike....as the long term outlook for the US economy would look quite bleak if the Fed decides to slow the US economy every time China buys a bunch of SUV's.
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Blue_arrow
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nationwide average reg gas $3.90 it's china or http://ecx.images-amazon.com/images/I/51zgqWRN41L._SL250_.jpg
Meanwhile, natural gas futures hit a new 10-year low $2.226 per 1,000 cubic feet
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theredkay1
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imaloon1 posted:
theredkay1 posted:
-Espiritu- posted:
I'd love to hear how we are different from Japan, who hit 0.0% benchmark rate in 1999 and hasn't been able to successfully raise rates back up since then.
Japan has increased interest rates several times since then only to push them back down when the economy slowed.
Japan has tied itself in a knot. The government has tried large fiscal stimulus to push demand and growth, while the Bank of Japan has stomped on the economy every time inflation inched up.
So far the Fed has not shown the same zeal for eliminating inflation (and growth)
You do realize that you are making no sense and no point right?
Bank of Japan has responded to the slightest whiff of inflation by raising rates and they have done this multiple times. The Fed has not done this and they have cryptically implied they will continue to tolerate some inflation. So this is one very key difference in how the two countries are handling their economy.
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theredkay1
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B_Shinkicker posted:
theredkay1 posted:
Feb 2012 was 8% above Feb 2011. 0.2% above the prior 3 month average. And it was higher than the initial Jan 2012 number reported last month.
1 month of data doesnt make a trend and this number isnt a bad one.
edit - this is a seasonally adjusted number. The unadjusted number was 12% above January and 11% above Feb 2011.
For 50 or more years before the housing bubble, on average, interest rates hovered around 8 or 9%. This must have been a healthy average for some reason. If this is equilibrium, then surely we'll find it again. Savers have to stop being punished at some point.
Maybe this is just wordplay....but....
Savers arent being punished. Savings rates ultimately rely on the future growth rate and the supply of savers. If future growth looks stronger, people will pay more to get your savings and do something productive with it. If there is a shortage of savers, people will pay more to access the limited capital available. Right now growth looks slow and everyone on the planet is trying to save with the US government...and the US government is mostly responding by reducing their investments in the future.
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GrilledCheez
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We are in an extremely depressed labor market. Most of the country is labor. The end.
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Elkad
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Of course housing is down. The low interest rates are falsely inflating prices, who would buy now?
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-Espiritu-
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http://www.businessinsider.com/shiller-real-chance-of-japan-like-housing-slump-2012-3
suburban housing will not rebound in our lifetime.
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Eager_Igraine
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-Espiritu- posted:
http://www.businessinsider.com/shiller-real-chance-of-japan-like-housing-slump-2012-3
suburban housing will not rebound in our lifetime.
That seems a bit too pessimistic to me, but I imagine it will take several years. Unless you mean rebound to (artificially inflated) 2004 prices, which may take a lot longer. But the charge into rentals seems like part of the housing cycle rather than a departure from it.
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Abaddon_Ambrosius
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-Espiritu- posted:
http://www.businessinsider.com/shiller-real-chance-of-japan-like-housing-slump-2012-3
suburban housing will not rebound in our lifetime.
It probably won't in my parents' lifetimes. They're in their 60's.
I doubt we'll see even significant price action in most zip codes for another 5 years.
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Thanks a lot Obama!
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Abaddon_Ambrosius
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theredkay1 posted:
My understanding of monetary policy is downright comical.
We know. You don't have to repeatedly prove it.
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Yukishiro1
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Black people and poor people started moving into the suburbs 5-10 years ago. So now rich people and white people are moving back into the cities. It's an apparently never ending cycle of American life.
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Eager_Igraine
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I've seen the beginnings of a lot of plans involving new construction or renovation of apartment buildings / revitalization of downtown areas in the city and near suburbs. The developers are the same kinds of folks who were chasing the middle and the end of the single family home subdivision bubble and many of them will likely either not get funding to continue or will end up bankrupt (again). But in the meantime, there is an eruption in apartment desirability and demand. This should be good if it drives up the rents and those increased rents make comparable mortgages more attractive, which should lead to a renewed interest in home ownership as the cycle continues.
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B_Shinkicker
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Eager_Igraine posted:
-Espiritu- posted:
http://www.businessinsider.com/shiller-real-chance-of-japan-like-housing-slump-2012-3
suburban housing will not rebound in our lifetime.
That seems a bit too pessimistic to me, but I imagine it will take several years. Unless you mean rebound to (artificially inflated) 2004 prices, which may take a lot longer. But the charge into rentals seems like part of the housing cycle rather than a departure from it.
If incomes from 2010 to 2020 do the same thing that incomes did from 2000 to 2010, then Robert Shiller is correct. Right now there is absolutely no reason for house prices to rebound.
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theredkay1
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Abaddon_Ambrosius posted:
theredkay1 posted:
My understanding of monetary policy is downright comical.
We know. You don't have to repeatedly prove it.
NOU!
The stick up your butt must be massive. And Im sure you think very highly of it. 
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If you want some glimmers of hope, the housing market in Arizona is showing signs of recovery. We were among the first and worst hit by the collapse, along with Nevada, so it isn't surprising that we may start recovering sooner than other places.
If you put a decent house on the market right now, you're going to have multiple offers almost immediately. Inventories are significantly lower right now and it is turning into a seller's market.
We do still have a lot of abandoned and/or foreclosed homes that aren't going anywhere, but regular sales and new sales are picking up.
I've been waiting for the market to bottom out myself and will be buying a house within the next year.
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Eager_Igraine
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Places like Nevada scare me, and possibly its just ignorance, but how's that water supply going and how long will it last? I'm glad to know the market seems to be recovering there though, the horror stories were pretty bad a few years ago.
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GrilledCheez
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Don't they use lake mead for most of their water? I dnt' think it's goin anywhere any time soon. I'd think Phoenix would be more susceptible to water supply problems than nevada.
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Eager_Igraine
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I dunno GC, it just seems like the southwestish states are having more and more water resources issues as time goes on.
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