Comments on: The next real-estate bust A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 By: killben Mon, 11 Jan 2010 07:11:40 +0000 “WALK AWAY IF YOU CAN! WALK AWAY WHILE YOU CAN!”

I would like to see the effect on the banks and the banksters’ bonus!!

Want to stick it to the banksters .. you cannot get a BETTER WEAPON…

By: DanHess Sun, 10 Jan 2010 21:10:03 +0000 @Owensuppes —

I agree that the economy is a mess and then that a lot of folks are financially flat on their back. I also think unemployment will stay awful. That is why prices have **already collapsed**.

The historical housing affordability index seems to be around 125. It plummeted to 100 as house prices shot up during the bubble. Now that prices have collapsed (and interest rates remain low), affordability this November clocked in at 167. These are near record levels. Regionality matters. Affordability in the northeast and on the west coast are around 135, decent but not incredible. Meanwhile, in the south and midwest affordability was recently at 173 and 211 respectively. Incredible values there.

See 1/30/housing-affordability-at-record-hig h/

and ceb370040dbafbf94cd9d88cdadd79a/REL0911A .pdf?MOD=AJPERES&CACHEID=dceb370040dbafb f94cd9d88cdadd79a

There is groupthink on the way up and on the way down! The irony is so rich! Suddenly the prevailing worldview is that house prices can only go down!

By: Anonymous Sun, 10 Jan 2010 15:39:24 +0000 Why is the onus of ‘bad behavior’- walking away, placed solely on homeowners? Today’s business ‘ethics’ have folks walking away from mortgages, business loans, and a host of ill-conceived loopy get rich quick schemes. What goes around comes around. Not that I encourage irresponsible behavior.

By: owensuppes Sat, 09 Jan 2010 11:33:28 +0000 You do the math, toxic derivatives own the better part of 600 trillion dollars worldwide. Lehman brothers owned near to 90 trillion of those bets before falling. Falling equals instant default on bets they couldn’t cover(the world couldn’t cover those bets). So the derivative bubble bursts, but not on the balance sheet. That’s why banks won’t lend to each other. They don’t know what horrors lurk off the balance sheet of a bank with it’s hand out. So guess what, there’s no help there and you can bet that the house of cards is still falling…the car crash is due for a lengthy pile up. That’s why expecting housing prices to continue their retreat is “good call”. Oh the suckers will rally, but for the next few years prices will feel around for their true value. The commercial prices are due for a tumble too.

How can anyone predict a solid housing rally? The average Joe is under water, the levels are rising and his neighbors are out of work, so they won’t be buying Joes product, which will pummel his profit margin, and his civic taxes are due to rise, his domestic debt is out of hand..etc. So where does the market find enough buyers to create a sellers market? Where does the nation do to find it’s confidence in home equity after all this pain?

And all of the factors that brought the house of cards down are still in place.

By: DanHess Sat, 09 Jan 2010 02:55:38 +0000 @rdavi —

Is your house built of gold? Because that is awesome!

Actually I am talking about oil, which is the basis for many building materials. If you think oil is going back to $13 as it was a few years ago, I’d be happy to take the other side of that bet…

All this bearishness about housing is brilliant. It’s like like showing up at the scene of a car crash and saying there’s about to be an accident. A little late on that call.

By: PatMcGroin Sat, 09 Jan 2010 01:19:20 +0000 lol, “Dan Hess,” you’re not fooling me…I know your REAL identity is former NAR economist David Lereah.

ha ha, give it rest, Dave.

By: rdavi Fri, 08 Jan 2010 23:18:39 +0000 * Houses are built with materials and energy, both of which have reset at permanently higher levels because of China and other developing nations


Permanently higher levels? When someone says prices can’t/won’t go down I instantly discount the value of that person’s input to zero. Ah, silliness. This somehow leads me to ponder the TV and radio commercials – paid for by the folks currently holding lotsa gold – telling the rest of us to GET OUT THERE AND BUY LOTSA GOLD RIGHT NOW!!!…because, you know, they have lotsa gold that they’d like to sell before the bubble pops.

By: JackMack Fri, 08 Jan 2010 21:52:13 +0000 Can anyone else imagine how much better off we would be today if we had simply let all the banks fail in 2008? Yes, 2009 would’ve been a horrible year – more wretched, I am sure, than it was anyway – but by now capital would be flowing to real opportunity, and entrepreneurs would be out in force creating the restored America of the future.

Instead, however, we assured Lloyd Blankfein and friends some extended comfort, and most assuredly assured ourselves the total destruction of our nation.

Thanks a bunch, Congress. Thanks a bunch.

By: IntoTheTardis Fri, 08 Jan 2010 21:25:24 +0000 It’s a funny conundrum, this rent or own option. Things are not always as clear cut as they at first seem. For the first 15 years of our marriage my wife and I always rented. We were what is sometimes referred to as academic nomads. Three years here, three years there, so the reality of renting always seemed the way to go. Then we (or she, actually) got a permanent position and we finally committed to buying a house. It seemed so right, so American, and we have no regrets. But, looking back on our wandering years I have come to realize that we always had more disposable income then than now, even though we earned less than we do today. After all, we only had to pay the rent, the basic utilities and the phone bill. Even water and trash pick-up were included in the rents. Whenever anything broke, which invariably happened, the landlord sent someone over, and like magic it was taken care of (I’m only talking about responsible landlords mind you, not the other bozos.)

As a homeowner you quickly learn that there’s a lot more to factor in than just the mortgage (which includes property taxes and insurance). If the toilet goes into permanent flush mode, it is I who has to run to the hardware store and buy the repair kit and get a crash education in the intricacies of indoor plumbing. The same is true of the heating/cooling ducts in the crawl space. Who knew they could separate at the seams? When the thermostat let out a puff of smoke and died, you got it, another trip to the store. And, if something major goes, say the washer or drier or water heater or air conditioner, you have no choice but to call a professional. Now, that’s real money!

So, when I read these articles on whether one should walk away from an onerous or underhandedly contrived mortgage that is eating someone alive, I shake my head and laugh. Sure. Walk away. Your credit will be trashed for a number of years, but that will pass. And you will find that your money woes decrease dramatically. One word of advice though, make sure your car is paid off. It will be some time before you’ll ever be able to finance one again.

By: DanHess Fri, 08 Jan 2010 21:16:23 +0000 If you are looking for a real estate crash, Felix, look to Britain. They had a stunning run-up and very little of the downside so far. Prices there are quite out of line with rents still. Australia too.

Prices really have come back in line with rents in most parts of America. Except of course New York, where rents have dropped almost of much as prices, correcting little of the relative overpricing. Then again, some of the ownership market in Manhattan consists of status symbols by the uber-rich from all over the world, while renting is utilitarian. Is that quirk enough to support high Manhattan apartment prices?