Peter Schiff: Housing still has at least 20% on downside to go.

Business Insider ^ | December 30, 2010 | Gregory White

[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

[Lazlo in PA]

“Now if you sold at the right time, that would be a whole different scenario.”

Bingo.

Flippers were moving houses so quick that they generally saw what was happening and got out.

I’m a slumlord and I am in it for the long haul so it doesn’t matter again. Unless your landlord is in need of cash tomorrow, he is fine if he paid cash. Even if he didn’t, interest rates were so low that it was still a good deal. It will keep itself afloat just as it did in good times.

I assumed the guy I was commenting to father in law was in sales, but either way, losing the income from between ‘02 and ‘07 is crazy and bad business. Being chicken little is no way to live. You may as well become a Wall Mart greeter and move into studio apartment with your 3 cats.

The gains made in the good years offset the loss we took at the end deleveraging and taking cover. The problem now is what to do, but I am glad to have kept riding the train till it got to the station.

[blam]

‘Unexpected’ U.S. Home Price Decline Is A Serious Reason To Worry About Economy

[DeaconBenjamin]

He overestimate the intelligence of Chinese politicians imho. I don’t see them any different to US politicians. Both of them think devaluing currency is the way of prosperity. Peter constantly think that Chinese politicians will wake up one day and realize their error. I don’t see that happening. I see hyperinflation happening in China before the US

It is my understanding that he recommends investment in Chinese firms where they have reviewed the market and believe in the fundamentals. I don't recall ever hear him expressing confidence or reliance in Chinese officials (except to say that they actually allow businesses to operate, unlike the US).

[SeeSac]

I don’t feed trolls.

Nice response since you can't deny my facts.

[mojitojoe]

LOL I see you already nailed him. I just made his acquaitence too. My guess is dual name or retread.

[mojitojoe]

LOL I see you already nailed him. I just made his acquaintance too. My guess is dual name or retread.