Skip to comments.Is the Housing Bust Over? Or in Purgatory?
Posted on 07/14/2012 11:45:43 AM PDT by whitedog57
Sam Chanden from Chanden Economics was quoted in the Wall Street Journal saying that the housing bust is over.
Or is it in purgatory?
True, Mr. Chandan points to the same data points that many industry analysts point to 1) all-time low mortgage rates, 2) improving new home sales and 3) improving house prices. All true (sort of).
But countering Mr. Chandans optimism are some daunting economic facts 1) the economy continues to slow, 2) mortgage purchase applications are really low by historic standards, 3) much of the new home sales are multifamily, 4) and many Americans cannot qualify for a mortgage despite historic low mortgage markets.
Throw in the increase in foreclosures into the brew (Realty Trac) and we have some concerns about the housing bust being over.
Finally, the labor market is still in bad shape with more people going on disability and food stamps than are getting jobs since July 2010.
To be sure, the housing market is improving faster in some cities than in others. According the FNC 10 and 100 city home price indices, at least the spread between large cities (10) and smaller cities (100) is declining (but still elevated).
Is the housing bust over? I would say that the evidence points towards purgatory. We need SERIOUS economic growth and improvement in employment to call an end to housings problems.
Housing and mortgage purgatory with the government policy spider preventing markets from healing (and creating additional problems). Instead of 21 plagues in the Book of Revelations, we have 14 Administration mortgage refinancing programs and attorneys generals lawsuits.
(Excerpt) Read more at confoundedinterest.wordpress.com ...
“Sam Chanden from Chanden Economics (and an adjunct professor at Wharton) was quoted in the Wall Street Journal saying that the housing bust is over...”
Sorry, but it took me a few minutes to get off the floor laughing. According to the ‘experts’ the housing bust has been over since 2005...in other words, just before it began. They been saying that the bust is over NON-STOP for the past 7 years, and they will say it, WRONGLY, for the next 7 years.
The housing market is SICK, very sick, there are foreclosures all over the place and millions of houses that are not occupied. It will take at least a decade to clear them out...it is simple supply and demand, nothing more.
So, if we want to end the housing bust there are two options: (1) Increase demand by either improving the economy (fat chance), or increasing the number of people that need housing via Amnesty (who knows - maybe). Or (2) decrease the supply - simply knock down the extra housing. They’re doing that in Detroit and some other cities, and they’ve taken down some really bad, new, neighborhoods in California.
But if neither is done on a large scale, then we must wait for a combination of economics (i.e., more people being able to afford to live on their own), or demographics (more population). We’ll, eventually, get there, but we would have already been there had the government (Bush, the Fed, and Obama) not juiced the market so much with near-zero interest rates that we’re still building houses (albeit at a very slow rate).
I think we have seen NOTHING yet regarding the negative aspects of the real estate market.
In addition, the Democrats are moving to try and raise property taxes everywhere to make sure living in your own home is the same as paying rent.
Forget about the death tax as well.
Wy save, get a home or try to be productive with a government trying to confiscate everything including your last breath.
Can’t argue that. I’ve got some cash, and I’d love to buy land, but the whole market is juiced, so I do nothing with it.
From different things I read the housing market may not come back for another 10 or 12 years. That might be based on if Obama stays in office for another four years.
What a joke this article is. We moved from Orange County to Riverside County, CA in 2005. Since that time, the assessed value of our home has decreased every year since 2007. We just checked the county assessor’s website where assessed valuations for the upcoming tax year are listed. Our assessed value is down another .7%. It is now $273,000 below where it would have been assessed under Prop. 13 had the housing bubble not burst. If you own a home in California, and you purchased it between 2000 and 2007, as long as you do not want to sell, you are benefiting significantly as your property taxes have continued to decrease, usually by several thousand dollars a year.
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