See these new maps of the 100 biggest US housing markets
http://money.cnn.com/popups/2006/fortune/invguide_realestate/index.html
There's my cue to buy.
Now, however, it's quite clear that the consumer is being affected -- whether one looks at the sales data from Wal-Mart and other retailers, or at the Liscio Report's data on state sales-tax receipts. To quote from Liscio's latest survey: "The weakening consumption trend is now established, and the majority of our tax contacts expressed real concern about a slowing in sales-tax collections. It now appears clear that consumers are not spending the billions of dollars they have saved on gas in recent months." Furthermore, when I e-mailed Liscio to share my view that we are entering a recession, here's the response I received: "We note with a shudder that our indexes look a lot the way they did in fall of 2000, especially the weakening and then big drop in the sales tax survey. The SDI led us into the last recession, and the states that led are very weak right now, as well."
Tell me ALL about it. I could write for a solid hour about the denial I see in school children who think they can avoid homework, not study, remain ignorant and STILL demand the same pay and benefits that an educated person is going to earn. Pay day has to come or all of God's laws, economic laws, etc. will have been broken.
Doomed. Doomed I say.
Depends. I live in one of the five fastest growing towns in MA. There is no slow-down here in housing with over 1,000 building permits pulled last year.
" The bubbles are mainly coastal, "
Beware of the "isolated bubbles" fallacy -- it's the equivalent of saying something like, "Those leaks in the dam are over there; it looks just fine where I am."
When the dam bursts, the whole valley gets washed away....
Based on what? The author is either an idiot or a Democrat.
Hey extexan, remember calling me a jerk & a liar for saying housing values in my area have not dropped? This map says exactly what i have claimed for my area, that house prices are not dropping.
Are you ready to apologize yet for calling me a jerk and a liar, because the facts are, you are just wrong.
By the time it's all over, I predict the percentage losses in real estate value will be greater in the low-demand areas of the country than in the high demand areas. Meaning, the coastal bubbles will fall first, but won't ultimately unwind as far as the flyover country non-bubbles.
worth a listen to,streaming audio, about 50 minutes long. One of the guys is a Bush hating/antiwar economist, but otherise, I think the economic analysis is interesting.
http://globaleconomicanalysis.blogspot.com/2006/12/contrarian-debate-janszen-vs-mish.html
There is no transcript available but following are Mish's views on the parallels between now and 1929 and why this is not a repeat of the 70's. Let's discuss the 70's first.
70’s Rerun
Similarities
War in Vietnam war then vs. the war in Iraq now
Rising oil and commodity prices
Differences
Rising Oil prices [demand side shock vs. supply side shock]
Spiraling wages then vs. declining wages now
Wage and price controls then
Consumer Debt levels – Significant ability to take on more debt in the 70's
Housing down payments – 20% then 0% now
Two family incomes now vs. one family income then
The power of unions - then
Globalization & Global wage arbitrage - now
Outsourcing - now
Productivity improvements - The internet and other innovations - now
Declining credit standards - now
Downfall of communism
Long term interest rates under 5% - now
New creative financing ideas running rampant - now
Massive use of derivatives - now
China, India, and Emerging Markets
The differences noted above are staggering and Eric agreed.
20's Rerun
Throughout the 1920s, the Fed deliberately and unwisely stimulated the stock market by keeping the “call rate,” that is, the interest rate on bank loans to the stock market, artificially low. – Margin rates were just lowered here and the FF rate which was lowered to 1% supported a big housing boom.
In the late 1920s, bank credit propelled a massive real estate boom in New York City, in Florida, and throughout the country. We now have the biggest housing bubble in history.
In the 1920’s there was a massive infusion of money (gold) from war torn Europe stimulating our economy. We currently have a massive stimulus of cheap money from Japan and China via and various carry trades and cheap credit supporting our economy.
In the 20’s we intervened in foreign exchange markets to enhance or stabilize Europe’s power to buy our exports. We currently are involved in disputes with China over currency issues attempting to get China to buy more of our goods.
There were massive productivity improvements in the 20’s along with the industrial revolution and assembly line processing. The 90’s – 2000’s productivity miracle was the internet. Huge boom periods on account of disruptive innovation. By contrast there was no such innovative disruptions in the 70’s.
In late 20’s credit was expanding at a rapid pace but there was no need for additional productive capacity. Today GDP is rapidly falling but credit is still rising. There is no pent up demand for homes, restaurants, retail stores, strip malls, autos, truck, etc, just as there was no need for additional assembly line production in 1929. Speculation replaced productive capacity just as it is today.
In 1929 leverage was extreme via stock margin. In 2006 credit derivatives leverage is extreme to the tune of 340 trillion dollars worth with no one really understand exactly what the counterparty risk is.
A few days before leaving office in March 1929, Coolidge called American prosperity “absolutely sound” and assured everyone that stocks were “cheap at current prices.” Based on the “Treasury Model” and unsustainable earnings growth due to financing activities, we are once again told time and time again that “the economy is sound” and stocks are cheap at current prices.
"Keynesian Folly", along with other massive government interventions managed to convert what would likely have been a short, sharp recession into a chronic, permanent, stagnation with an unprecedented high unemployment that only ended with World War II. Massive government interventions between 2002 and 2005 prevented a badly needed recession and instead created the biggest asset bubble in history.
In 1933 gold coins were confiscated – now we have a threat of nickels being confiscated.
At the time, the stock market of 1929 was the biggest asset bubbles in history. We have now vastly exceeded all previous credit bubbles.
The Smoot-Hawley Tariff was signed into law on June 17, 1930. There are renewed threats of tariffs in the U.S. Congress right now.
wow, so I guess the fact that many teachers, nurses, cops, and other professionals around here making North of 70,000 per year mean nothing to the value of housing...
but then again I guess neither does the low interest rates.
Another stupid sh*t analysis about the real estate market from people living in trailers.
"Gee Suzy Anne, I can't see why they'd pay so much for a house when they can live like you and me!! There must be a housing bubble, 'cause we be so educated.... We say stupid little quotes all the time with no substance like:
If there ain't no foundation then it must be on wheels, or
Bubbles float to the top of the can and spill on the floor only to be licked up by the pig.Or,
I'm so stupid that I'm a bitter dumb ass."
Ahmmm!The census bureau estimated Florida's 2002 population to be 16,713,149. State demographers believe Florida will replace New York as the third largest state in 2030, with an estimated population in that year of 24.5 million. (McGovern, Bernie, ed. Florida Almanac 2004-2005. Gretna: Pelican Publishing, 2004.)
This will require about 6-7 million acres of new housing.
"Statewide, the existing-home median price rose 3 percent to $257,800 last month; a year ago, it was $249,800, according to the Florida Association of Realtors® (FAR)."
"Home sales are projected to ease modestly but should stay within a relatively narrow range over the balance of the year -- signs that the market is stabilizing, according to NAR housing industry analysts. Still, NAR (National Association of Realtors) expects 2006 to be the third strongest sales year on record."
No State income taxes,the "Save Our Homes" act, limits property tax raises to 3% annually.Additional Homestead Exemption for Persons 65 and Older,state of the art medical
facilities throughout the region.
In addition,as baby boomer's pass on, their children are inheriting considerable assets.These are not trust fund babies.
The only bubble we are facing down here are lack of rental
housing as more and more apartment complexes convert themselves into condominiums.
Wake me when the foreclosures aren't selling. That's when we will be in trouble.
you da man - great link to map. The power of the net comes from an army of Davids. You know how to put the good stuff out where answers to burning questions are waiting!! Thanks.