Seven in 10 Consumers Expect Housing Bubble to Burst

Gallop Poll ^ | 4/19/2006 | Dennis Jacobe

[ex-Texan]

The Commerce Department reported Tuesday that single-family housing starts fell 12% last month. Privately owned housing starts fell 7.8% to the lowest level since March 2005, while new building permits fell 5.5%. * * * Labor Department reported that wholesale prices rose 0.5% last month as oil and gasoline prices are approaching new record highs. * * *

New findings from the April Experian/Gallup Personal Credit Index survey suggest that many Americans believe [the housing bubble may burst] * * *

National Housing Bubble

Seventy-one percent of consumers believe it is very likely (24%) or somewhat likely (47%) that housing prices will collapse in housing markets across the nation as a whole within the next year, according to the April Experian/Gallup Personal Credit Index survey. * * *

Housing has been one of the key drivers of economic activity in the United States over the past several years. Building new homes not only creates jobs but also stimulates the purchase of a variety of consumer durables including appliances and home furnishings. More importantly, the growth of housing equity has had a pronounced wealth effect not only on consumer spending, but also on consumer borrowing.

Currently, the housing sector is under assault from the double-whammy of increasing interest rates and surging energy prices. * * *

The most significant impact, however, may involve the effect of a housing slowdown on the overall U.S. economy. A significant economic slowdown during the second half of this year could lay bare many of the housing finance excesses of the past several years. In turn, this could make the pessimism 7 in 10 consumers have about the potential for a bursting of the housing bubble seem prescient later this year.

View Gallop Poll Data and Graphs:

[RegulatorCountry]

Hardly.

[M. Espinola]

Thanks for that link.

When Iran was 'allowed'(by Carter's crowd) to trigger the last energy hostage situation America should have proceeded with sugar, corn ethanol, nuclear, hydrogen, wind, oil shale, solar national coal gasification, drilled offshore & more in Alaska, promoted domestic tax incentives & on & on, but the Dems were in control then. In 2006 we better do something before Iran or Arabia pull another stunt holding the West hostage - again.

As Brazil Fills Up on Ethanol, It Weans Off Energy Imports

Brazil is dominating the worlds’ sugar and ethanol markets.

A couple of examples of what can be done to get US unhooked from OPEC:

Pennsylvania Incentives for Renewable Energy

The Nazis derived over 25% of there aviation fuel from underground coal gasification plants utilizing the 'Fischer-Tropsch Gas-To-Liquids (GTL)' developed in the late 1920's. American troops captured the plans for such plants in May of 1945. Coal gasification plants were indeed constructed in the U.S. beginning in the late 1940's early 1950's, but a full scale national plan was abandoned since imported oil from the Persian Gulf was "cheaper". It's not any more.

The United States has a 1500-year supply of coal, and 54% of the electricity produced in the country comes from coal combustion, averting the need to use large amounts of imported oil and gas for generating electricity from such terrorist promoting nations as OPEC's 'nuclear-jihad' Iran and Wahhabist Arabia.

TVA’s Bull Run coal-fired power plant in East Tennessee.(Photo by Tom Cerniglio)

The Great Plains Synfuels Plant near Beulah, N.D., began operating in 1984 in response to the 1970s energy crisis and today produces more that 54 billion cubic feet of natural gas using the Fischer-Tropsch process.

Underground coal-gasification plant under construction at Majuba The South African company Sasol currently makes 150,000 barrels of oil per day from coal.

There is no reason Americans or Canadians should be pushed into ugly dinky cars when the technology has existed for many years allowing full size cars to get 50mpg+.

Finally, a car fuel you can drink.

In the coming months are far broader confrontation shall be brewing. The friend of our enemy is our enemy.

Russia will deliver air defense systems to Iran - top general Hydrogen

[ReyDM]

I have mixed feelings about the GA market, at least metro Atlanta. On the one hand, we haven't participated in the insane runup in prices that the coastal markets have experienced. You can still buy a decent 4BR/2 bath house here for under 200k, especially if you don't mind living far away from the city.

On the other hand, I saw on another site that this market has the highest inventory of anywhere in the US. The new homes keep going up, including infill "McMansions" where a developer buys a 20-40 year old ranch on 1-2 acres of property, bulldozes it and puts up 3-6 cluster mansions. Typically these go for much higher prices, in the 600-800k range. Not sure how much longer that party is going to last ...

[proudpapa]

Here is my supporting evidence, from the Seattle PI:

http://seattlepi.nwsource.com/national/1110AP_Fleeing_Big_Cities.html

Census: Americans are fleeing big cities

By STEPHEN OHLEMACHER
ASSOCIATED PRESS WRITER

WASHINGTON -- Americans are leaving the nation's big cities in search of cheaper homes and open spaces farther out.

Nearly every large metropolitan area had more people move out than move in from 2000 to 2004, with a few exceptions in the South and Southwest, according to a report being released Thursday by the Census Bureau.

[M. Espinola]

"Hardly."

Then what is the problem? He is merely reporting some economic realities.

Do you feel $80 to $100 oil will have a deleterious effect, not only taking the steam out of the housing bubble, but the U.S. and global economy in general?

If those jihad possessed lunatics in Iran are not stopped and soon, their insane goal is to bring the Western world to our knees since the only lucrative commodity (oil) they abuse (for terrorism) coupled with the rest of the OPEC dictatorships have, is still unfortunately the main source of fuel running our economy. Overseas imported crude oil.

There is a far larger picture here then only the American what's transpiring within the U.S. housing market.

Russia dismisses U.S. call to stop cooperation with Iran

These jihad instigating thugs are clear and present danger to the stability of the U.S. and global economy

[proudpapa]

Here is my supporting evidence, from the Seattle PI:

http://seattlepi.nwsource.com/national/1110AP_Fleeing_Big_Cities.html

Census: Americans are fleeing big cities

By STEPHEN OHLEMACHER
ASSOCIATED PRESS WRITER

WASHINGTON -- Americans are leaving the nation's big cities in search of cheaper homes and open spaces farther out.

Nearly every large metropolitan area had more people move out than move in from 2000 to 2004, with a few exceptions in the South and Southwest, according to a report being released Thursday by the Census Bureau.

[antceecee]

Wow, I wish there was a decent home you could buy in So. Calif. for under 200k. We have some of what you call McMansions (lol!) going up especially in Riverside County and parts of San Diego. The prices on some of these are pretty high.

[RegulatorCountry]

"Then what is the problem? He is merely reporting some economic realities."

What would you call accepting pay-per-click money from Google AdSense, which was placing ads featuring homes for sale onto someone's blog (or website), when that blog or website relentlessly talks down residential real estate? Such behavior has at least the appearance of impropriety. It might even begin warranting some interest, due to growing advertiser complaints:

http://www.freerepublic.com/focus/f-news/1618436/posts

[ex-Texan]

You are talking through your hat, Regulator. In point of fact, you are talking about things you do not understand. That site does NOT even work with Google Ad Sense. Please stop lying. Just because you believe some nonsense posted here by other cowards does not make the allegations true. Time to grow up and face reality.

[M. Espinola]

What does any of that have to do with inflation brought about by higher overall energy costs and effecting the housing market? All the did is report a poll relating to the US housing boom. Is it the source of the poll, or the results are not to your liking? If you don't like the results of the poll why attack the messenger? Speak on the issues dealing with the poll.

Polls are a dime a dozen but since the vast majority of consumer based polls clearly indicate apprehension about the future of the general economy. Most thinking people are nervous about trigger happy Islamic metal cases in Iran. I can't speak about polls wherever you reside, however in the Northeast there is a concern.

The high cost of energy has no effect on you? Even if you take the subway you still have to shop at the supermarket. The higher cost of transportation is accelerating the price of consumer goods, air travel, cab rides, everything. It's called inflation, the same as that over inflated housing market.

I asked you some other questions pertaining to Iran & posted a link and you declined to answer them. I wonder why?

[kx9088]

I don't want to see people lose money but at the same time I think in many areas of the country real estate growth has far outgrown pay raises. Average house price last year went about 13% I believe, cost of living went up almost close to 5%, raises were about 2-3%.

Some has got to give.

[Joe Brower]

Very eye-opening. Many thanks for that most informative post!

[RegulatorCountry]

"Please stop lying."

Oh, please. Just because you open up an account on blogger.com under a pseudonym doesn't mean you can link to it from FR, have Portland as the first city discussed, and not be called out on it. The posting history is there for anyone who wants to search.

[M. Espinola]

"Very eye-opening. Many thanks for that most informative post!"

Any questions, feel free to ask. I might not know the answer but ask anyway :)

[RegulatorCountry]

"I asked you some other questions pertaining to Iran & posted a link and you declined to answer them. I wonder why?"

Because they're tangential. Are you absolutely certain, that you're in any position to demand an answer of anyone here? I don't believe you are.

[ex-Texan]

Another lie: Your "blogger.com" comment.

[RegulatorCountry]

LOL! You wouldn't admit to a lie if it smacked you all the way into section 8, you old fraud.

[M. Espinola]

"Because they're tangential. Are you absolutely certain, that you're in any position to demand an answer of anyone here? I don't believe you are."

I asked you numerous economic related questions and the dangers of Iran. Instead of a reasonable conversation you resort to blatant slander and insults not only to me but vicious attacks on the guy who posted this thread because you disagree with a poll(?)

That's a real cowards way of ducking complex issues you can't respond to, since you are incapable of carrying on a civilized discussion concerning American economic realities.

[ex-Texan]

As usual, your posts are "right on." Gold Hits Multi-Decade Record High Today

[On the Road to Serfdom]

Wow, I guess opposites do attract. (You have been consistently wrong for 2 years about real estate prices.)

For the record, if someone took you seriously when you first predicted a crash, and sold his house 2 years ago, waiting to buy back in at lower prices, how much would prices have to fall from today's levels for him to come out ahead?

Off the top of my head I would guess they would have to fall by 40-70% in some of the markets you have been focusing on for your two-year posting campaign to considered 'correct'.

I think we need to establish a benchmark so you don't try to claim you are right when after five years of 20% gains each year, houses fall 5% or 10% in some market.