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It is my belief that housing is approaching a bottom. I believe this is a result not so much of rising housing values, but of continuing inflation.
With housing removed from the inflation index, we are looking at approximately 8% inflation.
That is what is putting in the bottom on housing prices, at least here in San Diego.
With dollar devaluation continuing, and interest rates as low as they are, the pay off for borrowing at today’s dollar value and repaying at future value is compelling for investors.
Those of us who are old enough to have lived through the inflationary period of the 70's understand just what a runaway train inflation is once it becomes entrenched in peoples mindset.
The increase in housing sales has little to do with expectations of profit, and much more to do with investors looking for a safe haven that will not be ravaged by the coming inflationary period.
My uncle is a foreclosure expert in Illinois. His estimate is 2013. You dont realize, but the banks spoon feed the foreclosure market. Obviously if they foreclosed on everyone who owed 6 months past due, they would flood the market with supply.
Essentially they are sitting on a back log of pending foreclosures whose default in payments go back a year and a half or MORE. IMO we are close, but not at the bottom.
Also, if the Euro and global markets take a turn for the worse, we are F'ed royally. Everything is too shaky in the global economy for me to consider buying right now.
Anyone interested in this thread topic can find additional discussion in the Real Estate Forum. While all real estate is ultimately local, it does seem to be a general consensus that we are indeed close to the bottom. Further declines are likely to be small. However, most knowledgeable people seem to think that we will continue to bump along the bottom for a few more years.
The Yahoo Finance article and interview with Gary Shilling is from July 13, 2011. While Shilling is very credible, that was too long ago to be very meaningful.
The MSN Money piece is within the last few days, however.
I heard one r.e. professional tell me that in our area, you can be in your home for a full two years before anyone comes after you at at all. That is how backed up they are here. (live in a large metro area)
I heard one r.e. professional tell me that in our area, you can be in your home for a full two years before anyone comes after you at at all. That is how backed up they are here. (live in a large metro area)
exactly.
it is all still extend and pretend.
how does anyone expect it to be any different?
we have no job growth, therefore no stability:
Real earnings are falling and the number of jobs you can actually live on remains stuck at 115 million--all the "added jobs" are marginal: marginal hours worked, marginal security (temp), marginal pay (part-time=low pay and no benefits).
Would we as a nation be better off dealing with the truth rather than believing fantasies that prop up the Status Quo and the Fed's dearly beloved measure of the economy, the stock market? How often does accepting illusion help us navigate real life? Short answer: never. (charles hugh smith)
i walk my dogs around my neighborhood and see a huge number of vacant homes (some are seasonal, of course). there is so much FRAUD on the housing market that it isn't funny. the nicest vacant houses don't even hit the market-and the banks release the houses that they would have a harder time selling. there is one really nice house in my neighborhood that has been vacant for 3 years, virtually untended, with notices to clean the yard up every so often.
i guess they are waiting for prices to rise, but all of those houses represent falling property values with non-maintained properties, taxes that aren't being collected from individuals, and a shortage in the local government revenues.-not to mention keeping the prices artificially higher than they should be for people trying to enter the housing market.
Last edited by floridasandy; 03-10-2012 at 04:35 AM..
It is location specific. I would say it is a good buy if your mortgage related expenses are less or equal to the cost of renting in the area. Sellers are being a little more cooperative because they want to upgrade to a nicer home. Two are already in contract in my development and neither one of them are a short sale or a foreclosure.
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