A sense the housing market has bottomed.

electronics , and other consumer goods are dropping in price and still no buyers. gas, food not dropping . thats what happens.

bgp

 

With respect to continuous complains about sky-high US house prices I have to smile.
I live in London and here a shed in Brixton (shit neighborhood) costs more than penthouse on lower Manhattan. The fact that prices in US went up a lot during past few years does not mean that they are high - they were just very low before.

US housing problem is not in the house <i>prices</i> but it is in the house inventory, i.e. it is a supply driven - not a demand driven. Hence the correct question is “Why are inventories high?”
In my opinion the reason is that builders built houses everywhere – not where people want to live - but everywhere! Initially, desperate to get into the market, people kept buying – and they bought everywhere.
As soon as the speculative demand to buy <I>anything</I> dried up (and people did not want to buy house in the middle of Nevada desert anymore) inventories started to creep up (and prices stopped rising).
This had obviously some impact on the whole market – people started to be more cautious and postpone buying – they thought, “maybe I will buy cheaper later”. Well, maybe not.
As soon as they realize that housing slowdown is not a broad based slowdown the prices will start to go up - and up in a big way. Of course this applies only to <I> quality</I> living. Note that by that time builders will not be building anything else. After all I suspect that call options on land they were recently selling were exactly on the land that is not going to be needed anymore.
Somebody actually already said it on this thread without understanding what is going on – “I want to buy a house but the one I want to buy is not cheapening”. Bingo. She/He likely does not want to buy a bad house – and price of quality is only going to go up.
I agree that some work down of inventories is needed but it will likely be over by the end of first half of 2007. At the end of the day there are still a lot of fools that will buy house in the middle of nowhere if you give them free LCD TV.
Of course there are going to be soft spots (like condos) but in one year I bet that prices (on average) are going to be higher than today by more than funding costs (i.e. 6%+).

 

Adobian you must be on some cheap crack....

 

You are too funny, you narrow down a few things that happens in the last 16 months and called this infalation.

Let me remind you that the home prices has plunged in the last 16 months. By your standard, I should call "defaltion" is happening right now. And home mortgages are the bigest ticket, mind you.

Let me remind you the rents has dropped tremendously since the time people start to look into owning homes. These days, the same people are selling their homes to move into rental properties, which makes more sense than owning a home now.

An Audi V8 Quattro in 1990-1992 went fot 68K . The same caliber car 2007 A8 with much better features goes for the same amount brand new.

http://www.lotpro.com/cars/2006/audi/a8/

I am getting tired talking to FI.

 

well yes you can always buy cheaper things if you want. The people over at BLS uses this type of thinking as a way to make CPI seem low, look up substitution. But come on, in most cases the same item that you bought 10 yrs ago costs A LOT more today!

 

with this attitude you may become a central banker one day. Just remember that inflation has nothing to do with fellatio or phallus.

 

well i guess just place your bets and watch.

signing off,
bgp

 

Hey Surf, realestate is becoming more and more regionalized, with regional implications, but the famous real estate reporter dudes and dudettes are still stuck in the old way of thinking. There needs to be an adjustment in the way everybody looks at real estate.

1. The south is the largest growing area in the U.S. right now, I don't include South Florida in this because have lived there for over 30 years I know it is a horse of a different color. Having recently moved to Wake Forest N.C. I will tell you that whatever they build in this area is bought up instantly, there is a small town called Rollesville were lennar put up some homes on 100x100 lots and sold them all in about 8 months for over 300k a piece, this is a town where the post office is about 400 square feet.
2. The North, Northeast and some of the mid west is dying. Look at Detroit, Syracuse, Cleveland etc. Why? The heavily intensive labor industries are no longer there, and these whole areas will either become repositories of those belonging to the welfare state or will revert back to their natural state.

If you want some good realestate bargins, buy swamp land on the coast of South Carolina, and North Carolina.

Much of the housing "Boom" in Fla was caused by pure speculation, and some who I personally know, are now in Deep debt and wondering how to get rid of the 3 pieces of land and the 2 extra spec homes they bought, there will always be pockets of opportunity and disasters waiting to happen. It is my observation that we have been seeing a correction, and once the correction is over we will return to a more normal and sustainable growth rate.

But then again what do I know, I trade spot forex

The Ever Lovin A Minimum Of One Acre For MY Home VIPER

 

I know the definition of stagflation: worthless trinkets go down in price (lcd tvs, ipods etc etc) while stuff you need goes up (health care, food, gas), hehe

BTW home prices have plunged?
in the good areas in los angeles prices are UP, and rents are WAY UP.....

 

Isn't housing interest rate dependant, apart from employment. Surf, what is your belief in housing bottoming here? I see a possible sideways, rather than anything drastic.