A New Housing Boom? Don’t Count on It (Houston: sales, real estate)

[mask438]

What are you thoughts on this article?

A New Housing Boom? Don’t Count on It
By ROBERT J. SHILLER

http://www.nytimes.com/2013/01/27/bu...ouds.html?_r=0

[Dopo]

There's no "Good housing market"
it's either a buyers housing market or a sellers housing market.

[cheryjohns]

Real estate is local. Some states/cities are still in a slump. Houston is lucky - it's the jobs.

[desertsun41]

The Author is a Professor of Economics. The man never swung a hammer or pushed a saw in his life. He crunches numbers, most taken from the government. And we all know how truthful this govt is.

While I too hear some quivering of lips cautiously saying things are looking up in the housing industry, I see little evidence, not no evidence, just a little. Never forget the damage the current economic depression has caused that will take many decades to correct.

Think of all those who lost their homes through no fault of their own. They will never again be homeowners with their credit, maybe in 10 years if they are lucky. They are eternal renters. So you have that group of potential buyers out of the picture. Now you have many more with something less then an 800 FICO which pretty much eliminates them from qualifying for any mortgage. I think I previously posted only 12 % of United States residents have a FICO that high. Banks just are not lending so the low interest rate advertised is completely irrelevant.

When first time buyers can't buy that first home then the second time buyers can't move up and up the ladder it goes. 30% of all home sales in this country are 2nd home vacation purchases. That kinda suggests to me that the majority of buyers are wealthy and virtually unaffected by the economic depression.

32% of all home sales in America are by investors. Most are all cash purchases.

Our own crappy newspaper here in Houston reported that cash rich investors accounted for almost 4% of all sales in this city where we don't nearly have as many foreclosures as anywhere else. The hardest hit areas like Las Vegas and Phoenix the vast majority of home purchases are by investors snapping up what they feel are deals. Yet purchases by first time buyers continue to fall everywhere. One can't buy a home without a job. That statement holds anywhere but not so much for here where minimum wage jobs are plentiful. But no one ever qualified to buy a home on minimum wage salaries.

Sorry I don't see it and my finger is right on the pulse of my industry. I subscribe to nearly every construction journal read by only industry professionals and unbiased by any govt figures or college professors making side money writing articles.

[Bideshi]

Originally Posted by desertsun41

Sorry I don't see it and my finger is right on the pulse of my industry. I subscribe to nearly every construction journal read by only industry professionals and unbiased by any govt figures or college professors making side money writing articles.

But, but, the real estate industry and mass media say it's time to buy or we'll miss the boat!!

[hbcu]

why are they building $180K homes way out in Hockley now if there wasn't a boom?

[ToyYot]

Originally Posted by desertsun41

Now you have many more with something less then an 800 FICO which pretty much eliminates them from qualifying for any mortgage. I think I previously posted only 12 % of United States residents have a FICO that high. Banks just are not lending so the low interest rate advertised is completely irrelevant.

Not sure where you're getting that from, I had a 680 and got 2.99%, banks were falling all over themselves to lend to me. Could have bought WAY more house than I could afford, jumbo mortgage, secondary loans, the works.

[Lost_In_Translation]

Originally Posted by BDFP

Not sure where you're getting that from, I had a 680 and got 2.99%, banks were falling all over themselves to lend to me. Could have bought WAY more house than I could afford, jumbo mortgage, secondary loans, the works.

Yeah, I think desertsun is exaggerating, but asking for not too extravagant an amount with that credit score its not surprising you could get a loan. Loans are much more restrictive if your credit score is below 600 or you're stretching your budget. But it's nothing like what desertsun is suggesting. In the end if Fannie/Freddie are still buying mortgages, banks want to become servicers.

[crbcrbrgv]

A lot of 20 somethings are extending their stays in apartments and rentals despite being able to afford to buy.

Can't say I blame them.

[laiall]

Originally Posted by desertsun41

The Author is a Professor of Economics. The man never swung a hammer or pushed a saw in his life. He crunches numbers, most taken from the government. And we all know how truthful this govt is.

While I would normally agree with you here, this isn't just any professor. He is a highly regarded Yale Economics Professor who called both the dot com and housing bubbles before they hit. He is also the co-creator of the Case-Shiller Home Price Index which is one of the most widely used metrics in regards to housing prices.

I haven't read the article yet, but knowing its from him its definitely worth a read..