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You had a list of good points as to why lack of demand for single family houses is largely generational. I quoted only one because it's the only one I disagree with. Yes, boomers are retiring, but when you consider the large number of years of birth over which the boomer generation is spread, their retirements will be occurring rather gradually. Also, people don't necessarily put their house up for sale just because they have retired. Lots and lots of people stay put - in the same city/town and in the same house.
I would agree that this phenomenon isn't going to happen overnight, but I don't think that's what was meant. If you notice, assisted living & other retirement homes are going up everywhere right now. That segment is definitely growing & we haven't hit the meat of the boomers retiring yet.
No homeowner wants the market to decline, but it will. Talking about it does not lower prices.
Quite true. That our economy is in decline is not good news nor a happy event, but being in denial about it is not useful. As the much maligned Secretary Rumsfeld famously said: "We fight a war with the army we have, not the one we wish we had."
Given the housing disaster that has affected nearly every American, there will likely be little confidence in housing appreciation again in our lifetimes. This has all happened before.
Quite true. That our economy is in decline is not good news nor a happy event, but being in denial about it is not useful. As the much maligned Secretary Rumsfeld famously said: "We fight a war with the army we have, not the one we wish we had."
Given the housing disaster that has affected nearly every American, there will likely be little confidence in housing appreciation again in our lifetimes. This has all happened before.
Interesting that you say "this has all happened before" yet conclude "there will likely be little confidence in housing appreciation again in our lifetimes"
It seems to me many of the "this has all happened before" folks are waiting for prices to take off again at any moment. The fact that fundamentals never supported previous highs be damned.
I definitely still get that in my area. In fact just this week I talked to a family who is relocating for a job opportunity, yet they're not going to sell their house because "we don't want to lose a fortune by selling at the bottom of the market" so they're looking at becoming accidental landlords while they wait for their fortune to build again.
Personally I think they're making a really stupid move, especially since I know they won't be cash flow positive on the rental, and they're planning to buy in their new location as well. Talk about doubling down on a risky bet.
Anyway, long story just to say I'm not necessarily seeing the loss of confidence you speak of - yet. I don't disagree that it may come. Could be because of where I live though. Belief in rapid housing price appreciation is deeply held here.
Maybe there needs to be an acceptance that it hasn't "all happened before" at least not to this extent. JMO
Anyway, long story just to say I'm not necessarily seeing the loss of confidence you speak of - yet. I don't disagree that it may come. Could be because of where I live though. Belief in rapid housing price appreciation is deeply held here.
Honestly, I don't know why it seems that some people WANT the housing market to decline. Even if you don't own your own home, the housing market has such an effect on the US economy.
Think about just this ONE section: with less housing being built, plumbers, builders, electricians, etc., etc., etc. have less work. With less work, they have less money to spend. Less money being spent means grocery stores layoff workers, even Wal Mart's sales are down. Less jobs are needed. And it just goes on and on. Why would this make anyone happy?
Vicki
maybe some people don't want to spend the rest of their lives with a bankers noose around their necks.
I honestly think many homeowners here believe prices have crashed from normal values. Thus they're waiting for a magical market turn around, when they think prices will not only quickly recover to peak valuations, but will begin to appreciate 5% or more per year.
I think that's nonsense.This isn't a typical real estate boom/bust cycle, it's much bigger than that. Previous high values were an illusion.
But I'm admittedly one of those renegades who think lower housing prices is actually better for the economy as a whole. If housing is affordable people have more disposable income and they can diversify their investments. Although with the dismal savings rate, I guess there is something to be said for forced savings in the form of homeownership... minus HELOC abuse of course.
I'm not sure why you quoted me before posting this article?
My point was that IMO this isn't a typical real estate boom/bust cycle, it's much bigger than that, so it hasn't all happened before. Yet I think many people are viewing it as typical, as per my comments above.
ITA that housing has not been a good investment historically.
It will take 46 months to clear the market’s supply of distressed homes, or the shadow inventory, according to estimates from Standard & Poor’s Rating Services based on first-quarter 2012 data
It will take 46 months to clear the market’s supply of distressed homes, or the shadow inventory, according to estimates from Standard & Poor’s Rating Services based on first-quarter 2012 data
I wouldn't be quoting anything from Standard and Poor's. Weren't they the same people who claimed all those toxic loans were triple A graded.
Bottom line. No prediction is reliable from any agency these days. Proceed with caution with any "projections"
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