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Do you have an specific warning or action levels for the Shiller? I am comfortable with the Shiller under about 30.
I love when Shiller is on the tube or in the news and I just follow his words and thought. He was on recently and echoed what you said he wasn't worried yet and is capital YET. He steered me right in timing the sale of my house as the market slowed in 07/08. Similar housing concern emerging
What is the similar housing concern that you see? Prior to 08 there were lots of risky mortgages with low amounts down and future balloon clauses. The bad mortgages were being bundled up and sold in a big game of musical chairs. I see none of that. Folks with lots of equity have been able to refinance but at least in my area there are very few new mortgages and most of them require 20 or 30% down even for borrowers with high credit scores and good incomes.
What is the similar housing concern that you see? Prior to 08 there were lots of risky mortgages with low amounts down and future balloon clauses. The bad mortgages were being bundled up and sold in a big game of musical chairs. I see none of that. Folks with lots of equity have been able to refinance but at least in my area there are very few new mortgages and most of them require 20 or 30% down even for borrowers with high credit scores and good incomes.
20-30% down payments aren't the norm for new mortgage underwriting. I'd say 10% or less would collect the majority, FHA loans still allow 3.5% down, VA is 0% I think
The ratio of buyers to sellers with cash investors leaving the market, a lack of wage growth in middle to lower income groups, student loan debt with folks who should be in the house hold formation stage, rising interest and loan rates lowering the mortgage amount people can a train etc etc. Many people don't realize the number of prior sales that are often needed to get a buyer able to buy your house especially as prices increase. Can start with a first time row home buyer in the city followed by a succession of move up buyers until someone sells their home to buy yours. They needed a buyer and that buyer may have needed a buyer etc.
The ratio of buyers to sellers with cash investors leaving the market, a lack of wage growth in middle to lower income groups, student loan debt with folks who should be in the house hold formation stage, rising interest and loan rates lowering the mortgage amount people can a train etc etc. Many people don't realize the number of prior sales that are often needed to get a buyer able to buy your house especially as prices increase. Can start with a first time row home buyer in the city followed by a succession of move up buyers until someone sells their home to buy yours. They needed a buyer and that buyer may have needed a buyer etc.
Where are you getting data about the ratios? The houston housing market is slanted with inventory still being rather low and buyers out numbering sellers
Where are you getting data about the ratios? The houston housing market is slanted with inventory still being rather low and buyers out numbering sellers
Not now but regional patterns are emerging. Some areas as before will remain stronger than others. Some of it reflected in the most recent housing data. Houston like North is a growth area. The problem down the road can be people elsewhere being unable to sell to move there. It can start in lower income areas and work its way up the price range as move up buyers begin to disappear. Rental demand is way up and their are life style changes among affluent younger folks preferring luxury renting.
[quote=mathjak107;37181964]good question , what good is events and history in these studies since those events and sequences may never repeat. that is true , but:
today everything can be quantied in to numbers. the events change ,but the underlying numbers that were reflected by those events do not change.
....quote]
Not now but regional patterns are emerging. Some areas as before will remain stronger than others. Some of it reflected in the most recent housing data. Houston like North is a growth area. The problem down the road can be people elsewhere being unable to sell to move there. It can start in lower income areas and work its way up the price range as move up buyers begin to disappear. Rental demand is way up and their are life style changes among affluent younger folks preferring luxury renting.
So what data are you using to formulate your opinion? Or is it just your feeling?
Home prices in Dallas in August were up 7.3 percent from a year ago – one of the highest increases in the country according to the latest Standard & Poor’s/Case-Shiller Home Price Index.
Nationwide home prices rose by 5.5 percent in August.
“The deceleration in home prices continues,” S&P’s David M. Blitzer said in the report. “The Sun Belt region reported its worst annual returns since 2012.”
The largest year-over-year price gains were in Miami, 10.5 percent, and Las Vegas, 10.1 percent.
Dallas-area home prices are now about 12 percent higher than they were before the recession and at a record level in the Case-Shiller index. Prices in the area are now almost 30 percent ahead of where they were at the worst of the housing bust in early 2009.
But the rate of increase is slowing. Dallas’ August increase was the smallest annual gain since March 2013 and down from 10.2 percent in December.
In a transient nation or what was a transient nation slowdowns can begin in one place and spread elsewhere when sellers in one area can't in order to buy in another. Note Cleveland.
The problem is that once the equilibrium scale tips away from sellers and to buyers the slope down can be steep and if paired with a economic burb or belch can be a quick and sharp slope down. Housing isn't like stock or ETF's or especially mutual funds. If I want to sell a mutual fund I can at 4:00 buyer be damned. Others may need a buyer but the ability to sell even at a loss is often there. Housing not so. Not at that point now and may not be but by the time most realize the train has left the station. I went through this in 2006/2007 and sold at about 95% market peak. My neighbor sold three days later for 35K less with a horrible buyer financial situation and the biggest losing unlucky soul sold over a year later at a reduction of over $150K.
Last edited by TuborgP; 11-07-2014 at 10:58 AM..
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