Posted on 12/30/2010 1:16:40 PM PST by GlockThe Vote
Peter Schiff: Here's Why Home Prices Have To Decline At Least 20% And Probably More Gregory White | Dec. 30, 2010, 12:09 PM | 6,520 | 25
House prices have to decline at least another 20.3% to come back to the historical trend and may have much further to fall, according to Peter Schiff of Euro Pacific Capital.
Writing in the Wall Street Journal, Schiff breaks down the horrible state of the U.S. residential real estate market just days after a negative Case-Shiller number pretty much confirmed we're in a housing double-dip.
Schiff explains that, if we all believe that we were in a housing bubble, then house prices need to come back to the historical trend line before we're actually through this.
But that 20.3% is only the beginning of the break.
From Peter Schiff (in the WSJ, emphasis ours):
With a bleak economic prospect stretching far out into the future, I feel that a 10% dip below the 100-year trend line is a reasonable expectation within the next five years, particularly if mortgage rates rise to more typical levels of 6%. That would put the index at 114.02, or prices 28.3% below where we are now. Even a 5% dip would put us at 120.36, or 24.32% below current prices. If rates stay low, price dips may be less severe, but inflation will be higher.
Read more: http://www.businessinsider.com/peter-schiff-home-prices-2010-12#ixzz19dBDDWwY
(Excerpt) Read more at businessinsider.com ...
And what did you mean when you posted "Head in the sand"? Did you mean some people or were you directing that to me?
The Chinese still have most of their population living on the farm. You can't fail if you are a rice farmer. You can't fall any lower.
In the US, most people live in huge cities and do little or nothing directly related to the production of a product of any kind.
They (we) have a LONG WAY TO FALL...
Parasites are the first to die when the host falls seriously ill. Passive income parasites are no different.
there are makers, takers, and fakers. The US seems a country of fakers run by a mob of takers.
Over 1.5 million fled between 2000 and 2008. Can't find the figures for the last 2 years..
Ask his clients. The dude is always apologizing for losing their money.
Average median home price historically adjusted for inflation is 100k...we are still about 170-180k average...has to drop below 100k before rising to equalize at the historical average...watching this metric is key it will be the best indicator on when to buy!
There will be huge opportunities for those that are patient and watch the market closely.
Like when he predicted a five year bear market in 2002? Like when he apologized to his clients in 2008 for 'accounts that suffered badly'?
General media “consensus”.
Great post.
I don’t feed trolls.
I thought of this article when Iread your comment:
Problem is that my small biz is way down too w bama’s economy so falling prices will only be good if my income recovers.
I agree. There's no peaceful way back from here.
Krugman agrees:
Krugman: We're Going To Have To Default On Our Debt One Way Or Another
It isn’t like everyone who ever studied the Austrian economists didn’t warn you all what was coming and why.
I talked my father inlaw out of the real estate business in 2002.
We have had a ponzi-madoff economy for too long now.
You talked him out in ‘02? Boy, family functions must suck. You talked him out at the beginning of one of the biggest booms ever in real estate since the late 40’s early 50’s. If
I were him I would be an angry camper. All that lost wealth.
Chinese Pro-Democracy Activist Explains How Inflation Will Cause The Collapse Of The Regime
"Everyone recognizes the economic dangers of inflation in China."
But the black swan in the room is regime change.
I have a buddy here in Vegas that I rent a house from.
He bought it in 1999 for cash, it is now worth 40-50k less than what he paid for it.
You might want to re think your post.....just sayin.
Now if you sold at the right time, that would be a whole different scenario.
Bump for when I need a dose of reality
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