Amidst all the worrisome and depressing headlines out there today, I’d like to thank CNBC for posting one that actually made me chuckle. Before it moves off of their home page I thought I’d share it here:
The article [You can read it here.] goes on about how low rates MIGHT help the market, but let’s face it, low rates didn’t do much for Japan in their housing bust. Low rates do not a rebound make.
Don’t you love how they anthropomorphize the housing market? How can a market be "ready" to do anything? But hey, I guess if they can do it, I can do it. Rather than seeing the housing market as "ready to rebound", I see the housing market as a deadbeat relative that tells you that if you can just lend them a few hundred to make it through the rest of the month, they’ll be fine because they have money coming in. You know that they are expecting millions to arrive from their Nigerian contact, and when it doesn’t happen, they’ll be calling again.
Housing ready to rebound- I think I’ll be laughing about this one all day.
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I can’t believe their editor released this for posting. Out here in California, all of us nondumb buyers waiting on the sidelines are looking forward to the upcoming year of prime Alt A resets. Not to mention surpassing 9% unemployment. Sweet!
It reminds me of a song “I’ll get by with a little help from my friends”. I am not your friend and you won’t get by without the government bailing you out. 2008 has been a banner year for doomers and next year? Lookout below
Unemployment is easily twice what the statistics indicates. How are people going to buy houses when they are out of work?
Surak-
That was my thought. Not only do out of work people not buy houses, people who are worried that they’ll be out of work don’t buy houses either.
Additionally, in many areas prices will still decline significantly. If you can save an additional 20% or so by waiting a year or two, it can be worth risking interest rates rising.
When housing recovers, it’s going to be after a wide trough- it won’t be a “V”,but the way the MSM goes on, you’d think that the recovery, when it comes, will be another boom.
The spirit of David Lereah lives on, I guess.
Here in DC we’re beginning to see townhouse and condo prices dropping again after stabilizing from April-August. Sort of like stair steps down with level periods in between. We figure this step down will last until the early spring, with yet another step down beginning in the late summer 2009.
Then maybe we’ll buy (after waiting over three years), at which point the prices will be 35-40% off the peak and we’ll be 75k richer for the waiting.
The single most important thing we’ve learned at this site and at CRisk is that you cannot take anything folks with vested interests (realtors, professional analysts, professional media, politicians) say and write at face value. Do your own homework!
DCBeacon-
I always appreciate your DC updates for us. I’m also glad you’ve learned to do your own homework. I learned that the hard way, which is what got me started in the first place. Burned once, I wasn’t going to let it happen again!
You’re absolutely right about doing one’s own homework, twist!
We were again affirmed on this by the 60 Minutes piece just last week, “reporting” on the Alt-A and exotic loan situation as if it were breaking news. If you wait for the responsible media to tell you what’s happening, you are 1-2 years behind the curve. Learning about it here, in 2006, was much better.
As you know the latest “big sell” is the low and still declining mortgage rates. But what realtors won’t tell you is that we have at least a few months to take advantage of this trend, during which time home prices will continue to decline. And they also won’t advise you to weigh this “benefit” against the inevitable reversal of interest rates, which drives home prices down as a function of monthly payments automatically rising. No, they won’t tell you about that.
Nice townhouses in nice DC neighborhoods peaked around $580 per square foot- even more in the more exclusive areas. Then they dropped 15-20% from August 2007 until March 2008, at which point there was a demand surge from suburban flight into the city on account of the gas prices, the commuting situation getting worse, Mayor Fenty doing a good job improving the city and home prices falling faster and sooner in these suburbs.
That wave of knife-catching is over, we’ve passed the strongest selling season (which ends in September here) and prices have resumed their gradual decline. You can now buy these townhouses for $380-$400 psf if you know what you’re doing- 25-30% off the peak.
We expect to see $350 psf/40% off peak when all is said and done. But as always we’ll watch the hard data every day, week and month vs. listening to the “experts.”
When the US housing market bottoms out, nobody will know it happened until after it happens…
When it turns it will turn very quickly because there are ALOT of people not just in the US, but around the world who are waiting to get involved…
Edit: Keep it civil, please. t.
“when it turns it will turn quickly…” based on what? did tech stocks turn quickly? did japanese real estate? tulip bubbles? south sea trading stocks? the nifty fifty stock bubble? florida real estate in the 1920′s bubble? arabian horses after the horse bubble? Have you even studied asset class bubbles at all?
ANYTHING? EVER??
It IS nice to see canadian bacon home prices falling now too, so you guys can quit acting so smug. Yeah, at least your banks are stable, but your real estate association is just as terrible. Now, the canadain prices are adjusted for ‘sales mix’ but strangely, there was no need to adjust for mix on the way up!!!
Lies damn lies, and statistics!
If our GDP is to be based on consumption, and it currently is, how can someone spend all of their money on a house and have no money left over for investments, children, or anything else?? Housing prices are not going to recover, they will again track income, which is down over the last decade when adjusted for inflation. Realtors, investment bankers, hedge funds, they killed the golden goose once called the American economy. Greed is good right up until the point you kill your own customer. California will be particularly bad as the run up here was so intense. The experts can say what they want, but sticking feathers up your butt does not make you a chicken!
Vancouver,
With massive world wide unemployment, I do not think so. Dream on!!
Well gosh, where are these great rates? I think the banksters are in cahoots. Monopoly, oligopoly, whatever you want to call it.
I’m ready to refinance and save, where is this 4.5% interest rate?, do I need to have a garbage credit rating to get that kind of rate or something?
http://www.doctorhousingbubble.com/option-arm-no-one-saw-it-coming-according-to-the-mainstream-media-the-alt-a-and-pay-option-arm-tsunami-quickly-approaches-charting-the-option-arm-and-alt-a-wave/
toysrfun,
was at a friends (mortg broker) yesterday. he actually did have a lender to do 4.65%. all you needed was 740 FICO, 80% loan to value, and tax returns proving the income. NO POINTS either….i’ve seen a few of others in that range, but they all cost points.
Well today was the day, yesterday was the day. I talked to a different broker guy today, not a broker, something else, Ameristar?, he said people were locking in 4.5% loans today, I bet people with big loans want. He said tomorrow could be the day, he’s going to call me in the morning. I’m refinancing, I don’t want to give any more $ to the banks than I have to. I’m glad I didnt pay any points the last time I refinanced. It’s been only a couple of years and I’ve already been paid back for the last refinance.
I’m going to try for a 4.25% loan, anything less than a hundred thousand loan and it’s no more than between a 2-3 year payback, less if you can move a whole point lower. It’s a little ridiculous to be refinancing for the third time in 6 years of ownership just because the rates drop like crazy, half the reason I refinanced to begin with was to drop PMI.
toysarefun -
So does that mean these guys don’t know what they’re talking about? Presumably you don’t have too many twinges about the bondholders:
“New mortgage plan won’t apply to refi’s”, Bloomberg / Mercury News, December 15, 2008.
Oh I forgot … since then Hank has denied there is a Treasury-brand 4.5 revolver at all