There is no housing bubble. Please continue to take out 0% down, interest only, variable rate loans to buy investment property.
Posted on 09/01/2006 7:00:09 AM PDT by Hydroshock
Look away, if you can.
File this under car wreck, as in, you don't really want to see it, but you cannot look away. I'm talking about the latest batch of housing numbers. They all show pretty much the same thing: sales slacking off, inventories rising.
Builders like Toll Bros. are saying they've never seen anything so bad in, oh, half a century. Builders, of course, aren't the only companies to see their stocks get whacked. Lenders like Accredited Home Lenders and Countrywide Financial have been hammered, as has H&R Block, which announced one of what I suspect will be many charges for bad loans. Oh hey, and put First Horizon into the group that's hurting for lack of lending.
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The home 'investment' industry I'm sure others have noticed, as I have, the increasingly desperate pleas from the housing-bubble cheerleaders, especially National Association of Realtors Chief Economist David Lereah. A longtime bubble denier ¡ª who, I think, is more interested in protecting his constituency of six-percenters than in offering realistic housing-market commentary ¡ª Lereah began asking the Fed to protect his bubble a couple months back. At the same time, he and his associates have tried to spin the situation with the news media, who, hungry for soundbites, are usually all too happy to parrot headlines such as "Existing-home sales down with softening prices."
(Excerpt) Read more at msnbc.msn.com ...
we are doomed
The beginning never ends.
and vice versa.
Why is this surprising or NEWS. Surely everyone knows what goes up,up, up will come down. The market always works this way. I think people are dumb. Just like in the 1990's everyone acted like the dot.com bubble would last forever. Cry me a river.
There is no housing bubble. Please continue to take out 0% down, interest only, variable rate loans to buy investment property.
This is one of the worst written articles I've ever read. What is the authors stand on the state of the housing/lending market? Did a professional write this?
Good! I'm going to be looking for a vacation home soon.
This guy is late. The doom and gloom bandwagon left last week.
So, if we bought before the market peaked and have no intention of selling in the next five years, how scared should we be?
Call me an amused spectator.
The stocks for all the major home builders hit bottom at the end of June and are up about 10% since then.
A great time to start deporting the ILLEGAL alien carpenters, etc.
The home 'investment' industry I'm sure others have noticed, as I have, the increasingly desperate pleas
Okay .. here we go with the gloomy economy stuff right before an election.
We're going to see more and more stuff like this: "... they've never seen anything so bad in, oh, half a century ...". When in reality, it's only the typical slow down which normally occurs within the housing industry. But .. here in CA it's barely on the radar .. and nobody is talking about it being "so bad", etc.
We cannot allow the dems to use "it's the economy stupid" against us again .. because this economy is ROARING .. and the unemployment numbers are WAY BELOW what they were during the Clinton admin - and we need to tell people that.
It's like the global warming thing .. I just print out the opposite stories and give it out to people who aren't paying attention. If you need good economic news for people, go to the RNC website and they have a list of all the good stuff that's going on with the economy.
And .. the deficit has been reduced by half - and we're still funding a war.
I could not agree more.
"So, if we bought before the market peaked and have no intention of selling in the next five years, how scared should we be?"
Better yet, if you sold an expensive house and bought a cheaper home, as my mother did in a old age downsizing move, should you be smiling at this news?
If you are in a home and wanting to keep property taxes lower, you might be glad for lower valuations.
And other winners are would-be new home buyers: Crazy housing prices made it impossible for some to buy, and that was a bad thing.
Some of the froth will recede and has receded, but that's not much worse than the fact that the computer you bought last year is cheaper.
The only real losers in the burst bubble environment are realtors, house flippers, and to some extent builders (although there will always be some demand for new housing, albeit at lower rate).
Also, I believe a hidden reason for housing price pressure has been the flood of immigrants in recent years. Does a burs t bubble therefore indicate that perhaps that flood has slowed a bit?
Bottom-line, the news is a mixed bag, but they report all news as bad.
A return to prudent lending standards (at least 15% down and solid documentation of income/debt ratio) would be an even Better Thing.
What we see now is a normal business cycle at work. Since mortgage rates are still relatively low the current slowdown will be short and not too painful.
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