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You could suddenly have a shortage of housing in 2012, or 2010, or even today in 2008...and it still wouldn't matter when it comes to home prices. The insane appreciation we saw in 2004 to 2006 in Phoenix was largely based on the fact that Joe Shmo Mcdonalds Fry cook could get a 1.2 million dollar loan and purchase 5 homes on speculation.
Now Joe is livin with Mom and Dad. And that aint changin'.
''don't be surprised to find that your home values start increasing next summer, particularly for homes in the $150-$300K range'''
HAHAHAHAHAHAHAHAAHAHHAAA. Look I want to get out of this abyss as much as the next guy but surely you don't think this nation's biggest housing crash to date will recover in 2 years???? The last one took way longer and it was smaller! Pass me some of those shrooms, I need some.
Yeah, but you live in Southern California, which was Ground Zero for stupid builders, not to mention the speculative bidding-up that rivalled the Dutch Tulip Craze.
Where I live, there has not been a wholesale plunge in home prices, more like a 5% fall-off. And while activity has been subdued, the market isn't dead. And there isn't block after block of foreclosures sitting around.
So while my theory may sound absurd in your neck of the woods, it sure isn't in mine.
''don't be surprised to find that your home values start increasing next summer, particularly for homes in the $150-$300K range'''
HAHAHAHAHAHAHAHAAHAHHAAA. Look I want to get out of this abyss as much as the next guy but surely you don't think this nation's biggest housing crash to date will recover in 2 years???? The last one took way longer and it was smaller! Pass me some of those shrooms, I need some.
Maybe Im off here as Im by no means an expert. What area of $150,000 to $200,000 houses is crashing?
The ones crashing are the areas where housing prices are completely unattainable for the income level.
Edit: Didn't read the post above and it states the same thing.
Don't worry about a housing shortage. If McCain wins and subsequently kicks the bucket, there will be a mass exodus by the affluent in this country as soon as Redneck Mama gets sworn in as the Leader of the Free World!
A theory I shared with a developer friend of mine a few months ago. At the time, he said I was crazy. The other day, he came back to me and said, "You know. You might be right."
Part of the current credit crisis is because of overbuilt housing inventory over the past several years. Seriously. These guys were building left and right without regard to whether a market existed for their product or not.
Well, about a year ago, they started dropping like flies. There were not enough buyers, so the spec home builders went belly-up and the banks were holding the bag. Today, one in every four homebuilders has declared bankruptcy. The rest are hanging on by their fingernails.
Yet, the amount of actual unsold inventory in this country has begun to plummet. 7% last month in fact.
Right now, that means we have about 10.4 months of inventory left to be sold in this country. That sounds like a glut on the market, right?
Here's the problem. With a fourth of all builders now bankrupt, and bankers extremely gun shy about lending money to the rest, we may very well be looking at very little new construction over the next 2-3 years. If that happens, expect housing prices to surge once again, particularly in markets that maintain positive economic growth such as the South. What's more, with permitting, infrastructure, turning dirt, and actual construction, new homes won't be available for another year, even if developers started today.
Now, I fully acknowledge big huge gaping caveats with this theory. Namely, if the economy completely tanks. If that's the case, nobody is going to be buying a house anywhere. Further, tightening credit rules will mean that fry cooks at McDonald's won't be getting a house anytime soon. So feel free to tell me I'm smoking crack.
Yet, if the economy survives the next couple of months and recovers, don't be surprised to find that your home values start increasing next summer, particularly for homes in the $150-$300K range that remain very affordable for the average middle-class couple--particularly if interest rates remain in their current range. It's an interesting blip in the data that really bears watching.
credit tightening and unemployment soaring. i don't know how old you are but there was a time when sibblings used to share bedrooms. grandma and pa used to stay in the spare room and uncle tom in the other. that might give you some idea of where the 4 million new beds are going to come from.
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