Where is the bursting of the bubble?

Discussion in 'Economics' started by Daal, Apr 25, 2007.

  1. Daal


  2. Prices won't need to fall in dollar terms if the value of the dollar declines faster than the value of the homes. But that's cheating.

    The correct answer would more likely be when rates go way up like in 1980. I wonder if that will happen again?

    Another possibility would be if we go into a recession, I'd guess.

    A third possibility would be if we see the credit crunch get worse.
  3. From National Assn of Homebuilders today:

    April 25, 2007
    By David F. Seiders
    NAHB Chief Economist

    Home Buyer Demand Shifts Downward — Again
    A variety of indicators strongly suggested that the demand for single-family homes had stabilized late last year following a substantial downward correction from the record sales pace (gross and net) recorded during the second half of 2005. However, more recent signals point toward renewed downward pressure on home sales and renewed upward pressure on sales cancellations. [more]

    The Subprime-Related Tightening of Mortgage Lending Standards Is Behind the Demand Shift [more]

    Heavy Inventories of Vacant Housing Units Are Weighing on the Markets [more]

    The Supply-Demand Imbalance Is Exerting Downward Pressure on Home Prices [more]

    The Short-Term Outlook for Housing Production Has Weakened [more]

    HousingEconomics.com: Want to Know Your State's Forecast for 2008? [more]

    For more information or to contact us directly, please visit www.NAHB.org l ©2007, National Association of Home Builders
  4. I just cant believe people keep trying to call bottoms when all the indicators are accelerating.

    This isnt the stock market. Liquidity and ECN's of stock do NOT exist.

    Real Estate markets move in slow motion compared to the stock market.

    If the NAZ took 2 years to crash, multiply by 8 and you have the housing market.

    In any case, crashes will only occur in the hot markets, like florida, california, nevada, etc, not everywhere.

    The national numbers wont show all the bleeding going on in the hot markets.

    There are areas in san diego that are 40% of the peak already!
  5. I think it depends if the rest of the economy goes down with it.

    If that is "allowed" to happen, you have bad situation similar to the US in the 1930's or Japan the past 15 years.

    Now, the question is, with all the debt and deficits out there, what are the odds they can prevent it from trashing the rest of the economy. Its already gone from housing to lending, and lending to autos. Where does it spread to next, and how quickly or slowly?

    Could be a double dip scenario. Maybe 1st dip and a bit of a bounce before the 08 election, then the big nasty after the election. That seems to be the typical cycle. I don't know it will repeat, but I sure wouldn't be buying a home unless I could pay cash, or knew my income was rock solid, and still I'd wait till after the Fed eases at least twice, so I'd know they were for sure back to easing. Home values can't hold at these levels unless the Fed eases significantly, IMO, and that isn't happening anytime soon, I don't think, not until they see how abysmal Q1 and Q2 were for housing, and see it turning everything else to crap.
  6. With an aging baby boomer population, and the number of fixed income citizens exploding, how long can they hold rates this low?

    With low rates, even more captial will be diverted from the US to elsewhere.

    For what? To save the real estate market?
    Lets see which group of people have the most power.
  7. TOM134



    Here's what is going to happen:

    ".....What is the dollar cost of these misadventures? Joseph Stiglitz, Nobel-prize winner in economics, estimates a total cost to-date of Iraq II alone at about $2 trillion - includes ongoing veterans benefits, equipment repair, etc. Meanwhile, the U.S. is trying to militarize space - further adding to our military expenditures and indebtedness.

    Finally, Johnson sees our military costs eventually bankrupting the U.S. (if our escalating trade deficit doesn't first), aka Rome.

    Unfortunately, it all makes sense to me."

    You must read:

    Nemesis: The Last Days of the American Republic:


    Our $ will be worthless in a very short time!

  8. Daal



    Show in the NUMBERS why the US aint gonna go the same way. Merely bursting out statistics from extremely biased sources such as roubini aint gonna do it

  9. A fake crisis to keep the worry warts on the sidelines while the pros make all the money in the stock market, it also gives the fed cover. The fed can say we are worried about subprime and hold rates.
  10. the NAHB mailing has usually been looking thru rose colored glasses on the positive side.

    I guess the positive you can find there is that every single item is negative, so at worst case it just flatlines.
    #10     Apr 26, 2007