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I would not be suprised if real estate had another 10 years of a bear market. I lived through the late 80's bear market that pretty much lasted through the 90's into the early 2000's before it turned around.
This time around it appears different. Were in a global market and we have not adjusted yet. So, were into this mess 5 years already and have another 10 years to go. Seems about right, hold on to your hats.
Well ... in a lot of ways this could be a good thing to continue to drive out the speculation that created the bubble and hopefully bring value back to real world levels. Now this may be "not so good" for homeowners but for investors this could be the very best decade to make money in the market.
We have investor friends in the Phoenix, Las Vegas and Florida markets getting properties way below replacement cost due to the inventory, but RENTS are still high so the are generating positive cash flow and paying down these investment properties FAST so IF the market falls ... and rents fall ... they will be still in cash flowing positions and if the market goes up ... that's just another winner.
I guess it's a matter of perspective - because even if the market still is sunk for the next 10 years ... it can be HIGHLY profitable for those that know how to capitalize on it!
The pool of qualified buyers keeps getting smaller by the day. As the baby boomers are starting to retire right now, and downsize, who is going to buy their house?
- The share of long-term unemployment is at its highest level since the Great Depression (42%).
- Fully 54% of college degree graduates under the age of 25 are either unemployed or underemployed.
- 45 million Americans are on food stamps — one in seven residents.
- 47% of Americans are on some form of government assistance.
- The employment-to-population ratio for 25-54 year olds is now 75.7%, lower than it was when the recession supposedly ended in June 2009.
- The number of people not in the labour force has swelled eight million since the recession ended; absent that effect, the unemployment rate would be 12% right now (about the same as President Obama's election chances would be).
- The number of people confident enough to leave their jobs fell 11% in May for the second month in a row to 891k, the lowest since November 2010.
- The ranks of the unemployed who have been looking fruitlessly for work for at least 27 weeks jumped 310k in May, the sharpest increase since May 2011.
- The unemployment rate for males aged 16-19 is 27% and for males between 20 and 24 it is 13%. Draw your own conclusions from a social (in)stability standpoint.
- One in seven Americans are either unemployed or underemployed.
- Only one in six of the youth are working full-time and three-in-five are living with their folks or another relative (as per the NYT).
- A mere 16% of the 2009-2011 graduating class has found full-time work, while 22% are working part-time. Even those hired from 2006-08, just 23% are working full-time.
- According to a poll cited in the NYT, just 14% of high-school grads today believe they will have a more successful financial future than their parents Line of the day, as depressing as it is, comes from an 18-year old: "Thank God I had a buddy at Burger King who could help me out". Fast-food has emerged as the fast-growing industry in a country once led by technology. Even tech now is fuelled more by companies that produce nifty consumer gadgets and feed our narcissistic needs than those who focus on improving the nation's capital stock which is the ultimate trailblazer for productivity growth and durable gains in our standard-of-living.
I have bid on several properties in the last two years only to be outbid by cash speculators. The price has gone down since then and their flips are not selling. How much reckless cash is there out there to keep losing in this market?
How much reckless cash is there out there to keep losing in this market?
I know some boomers who have rolled their 401k into a self directed IRA, then used it to buy investment real estate. So the pool of reckless cash is pretty big. The average 401k balance is $23k, but many people have hundreds of thousands in their 401k they are using to buy real estate.
Is it smart? Depends. Only the future will tell. Self directed IRA fees are climbing and national real estate prices are falling.
There are also groups of investors pooling money to flip properties, and other sources of funding.
PS. I've also seen flips sit empty on MLS for as much as two years. Most of them take about 8 months to sell.
I have bid on several properties in the last two years only to be outbid by cash speculators. The price has gone down since then and their flips are not selling. How much reckless cash is there out there to keep losing in this market?
You do realize many investors buy $50K-75K condos. Doesn't really matter if those values go down.
Many investors I know are still generating 10% return per year on their money off rents after expenses. Rents are up in many parts of the country even if housing prices are down.
Most people buying aren't flipping them. They are renting them out and getting income generated.
Will we get a triple-dip in housing? We might... Source
The banks unexpectedly and abruptly slowed their rate of REO processing to create a shortage of MLS inventory. This MLS shortage has resulted in bidding wars, rising prices, and falling sales volumes. But.... the shadow inventory is growing by about 20k units per month right now.
But because it all continues to be about can kicking, housing will go into a ”triple dip” in the next couple of quarters, which will last a couple of quarters at which time rates will be forced under 3% in order to recreate the same conditions that came on 3.5% this time around.
Arizonahome loans more than 30 days late but not yet in foreclosure stood at 5.9%, the same as the previous month.
Loans in foreclosure dropped from 2.9% to 2.6% and total non-current loans fell from 8.8% to 8.5%.
Arizona continues to improve its delinquency rates at the fastest speed in the nation, with the total non-current rate down 24.8% in the last 12 months
The pool of qualified buyers keeps getting smaller by the day. As the baby boomers are starting to retire right now, and downsize, who is going to buy their house?
- The share of long-term unemployment is at its highest level since the Great Depression (42%).
- Fully 54% of college degree graduates under the age of 25 are either unemployed or underemployed.
- 45 million Americans are on food stamps — one in seven residents.
- 47% of Americans are on some form of government assistance.
- The employment-to-population ratio for 25-54 year olds is now 75.7%, lower than it was when the recession supposedly ended in June 2009.
- The number of people not in the labour force has swelled eight million since the recession ended; absent that effect, the unemployment rate would be 12% right now
- The number of people confident enough to leave their jobs fell 11% in May for the second month in a row to 891k, the lowest since November 2010.
- The ranks of the unemployed who have been looking fruitlessly for work for at least 27 weeks jumped 310k in May, the sharpest increase since May 2011.
- The unemployment rate for males aged 16-19 is 27% and for males between 20 and 24 it is 13%. Draw your own conclusions from a social (in)stability standpoint.
- One in seven Americans are either unemployed or underemployed.
- Only one in six of the youth are working full-time and three-in-five are living with their folks or another relative (as per the NYT).
- A mere 16% of the 2009-2011 graduating class has found full-time work, while 22% are working part-time. Even those hired from 2006-08, just 23% are working full-time.
- According to a poll cited in the NYT, just 14% of high-school grads today believe they will have a more successful financial future than their parents Line of the day, as depressing as it is, comes from an 18-year old: "Thank God I had a buddy at Burger King who could help me out". Fast-food has emerged as the fast-growing industry in a country once led by technology. Even tech now is fuelled more by companies that produce nifty consumer gadgets and feed our narcissistic needs than those who focus on improving the nation's capital stock which is the ultimate trailblazer for productivity growth and durable gains in our standard-of-living.
Add this into shadow inventory, and people who are finally grateful to unload a property....The market is very fragile and unpredicatable, at least for another decade from what a broker with 35 yrs experience recently told me.
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
LOL- they may be waiting 15 years.
Some regions of the US were not hit like Cali.or Florida, but they were still affected.
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... it can be HIGHLY profitable for those that know how to capitalize on it! 
