ping
Wait, how bad can it be with the economy so good?
The answer is "yes."
Besides the housing stocks are already off by 25-to-30% since May 10th of this year.
It is usually best to buy when everyone is fearful, and to sell when everyone is greedy. Good advice, but hard to follow. :)
a big duh, yes.
I remember when people insisted OWNING was stupid when the market provided better returns. So the savy rented and put the money in stocks. When the market fell, they became the house flippers.
Meaningless fearmongering gobbletygook to get people to get hits on their site. "Is it good? Is it bad? Is it both?"
Yes, it can.
Money that would of gone into buying property will go into securities investments.
What a bunch of garbage. Even the McCain scandal (Keating) of the late 80's and subsequent distortion of an otherwise healthy housing market didn't kill the DOW.
So, GodGunsGuts, is weak housing or strong housing bad this week? It's hard to keep track.
(more good news) S&P 500 notches a 5 1/2-year high
Interesting juxtaposition!
Whats going on with housing is that the great post-war baby boom has finished moving into the family home phase, which is the main driver of the real estate market. So, from now on you won't have ever larger numbers of families moving into the market every year. Hence the market is plateau-ing.
If want to make money in real estate, you need to figure out what will be the housing preferences for boomer retirees. Anybody got any ideas?
The NAHB index has fallen by over 50% so I wouldn't buy any stocks for the next 12 months.
October is seldom a good month for the stock market. Hopefully the worst of the decline holds off until next year.
BUMP
Can Wall Street withstand weak housing?
No.
Real estate provides leverage. If I invest $50,000 in RE, the appreciation is based upon an investment of $500,000. Or I can invest the $50,000 in the market or metals and it increases from a base of $50,000. Sounds like it's time to buy real estate.
The housing hoopla is overstated. there will be a mild reduction but not serious enought to make a real problem.
Why would anyone quote MSNBC? It is a virtual nonentity with less viewers than several well watched local cable access channels.
There is a theory that says a weak housing market translates into a great stock market.
People will lose faith in real estate a an investment and instead invest in shares of companies.
There is some evidence for this:
The Australian housing market peaked in 4Q 2003. The Australian housing boom lasted from about 1998-2003. During this time the All Ordinaries well under performed the US SP500 and DOW.
In 2003 the All ORDS stood at about 3300. Since 4Q 2003, some housing values in Sydney's eastern suburbs has fallen by over 40%. Yet the All ORDS has risen from 3300 to about 5000 today.
Excess liquidity has to go somewhere. The NASQAQ and DOT.com meltdown in 2000-2002 was partly the reason for the housing boom in 2002-2005 in the US. Investors lost faith in the US share markerts. Now investors will lose faith in real estate and will reasonable valuations, a decline in home values could mean a booming stock market.
Like a time-capsule. See where we are now...