Please post your local house search updates, MLS finds, on-topic ideas, and links here.
New from Rasmussen 4/17/2011:
"A new Rasmussen Reports national telephone survey finds that just 15% of homeowners expect the value of their home to go up in the next year while 33% expect the opposite and think the value of their home will decline.
The current figures reflect more pessimism than a month ago when 19% were optimistic and 30% pessimistic about the value of their home over the next year."
7 comments:
http://www.washingtoncitypaper.com/articles/40709/the-economics-of-stephen-fuller/page4/
"“I think sometimes there’s a perception that Steve has been overly optimistic in his forecasts,” says Dave Robertson, executive director of the Council of Governments and a former student of Fuller’s at George Washington. “My guess is it’s closer to right than not.”
Some of that perception could be rooted in Fuller’s projections of massive regional growth as a result of spending on the Iraq war, which never quite came to fruition. It may also come from the fact that there is always an upside to forecasting in the Washington region—the federal government keeps the lows from getting too low, and makes happy projections a generally defensible bet. To be fair, he did sound notes of caution during the go-go years of 2005 and 2006."
Good find pat. I love this choice quote:
"To be fair, he did sound notes of caution during the go-go years of 2005 and 2006."
Heh -- sure thing there Steve -- no revisionist history there...
At BEST this guys "notes of caution" were what we all knew -- that housing prices cannot go up 20% YOY forever. Gee brilliant insight there steve!
Where was the caution about the lax lending standards? What about the explosive sales rates indicating high flipper activity in some areas? Any caution about how huge swaths of the region could see years of price declines? And that says nothing about even hinting at catastrophic declines in places like PWC.
Oh, and what about the flipside?Where were the warnings that the so called "immunozones" were seeing once in a lifetime income and demographic changes, and thus could sustain peak or near peak prices? Any mention of any of those things?
Sorry, but this sort of revisionist history irks me.
"It's going to be sunny and mild tomorrow, with only a 5% chance of rain--a beautiful day for all your outdoor activities, so get out there and enjoy it!"
(the day after, when it rains a half inch)
"I TOLD you that there was a chance of rain! See, I was right."
Anon
The Reason I think there is still lots of room for Downside pressure.
1:25% of all mortgages are underwater around here.
2) The boomers are starting to retire and looking to downsize or sell out.
3) The national economy is sucking wind and that is a huge headwind for the local economy
4) Interest rates risk to rise are substantial risk to prices.
now on the plus side.
There has been a huge whack to prices.
The ecnomy is staggering along here.
Pat -- one of the reasons I sometimes take umbrage with what you say is it doesnt seem to be very well thought out. I think that if you can elaborate on your thoughts, you will find that we are willing to be persuaded to your position. However, in order for that to happen, you need to have a defense to objections we have. For example:
Assertion #1: 25% of all mortgages are underwater around here
Objection: We know that prices quit falling when the underwater rate peaked at about 30% 2 years ago. Further, the rate will not be 0% til we hit a new peak years from now. So, if prices quit falling when we hit 30%, why will they start suddenly falling again at 25%, 24%, 23%, etc?
Assertion #2: The boomers are starting to retire and looking to downsize or sell out.
Objection: The boomer retiring effect, (whatever that may be) started in 2011, and will not end until 2029. Are you really going to wait that out before you buy? Further, the inflection point of boomer retirement will be around the year 2020. Why then are you willing to consider buying in 2012?
Assertion #3: The national economy is sucking wind and that is a huge headwind for the local economy.
Objection: True, however, that has been true since prices first started rising over 2 years ago. Similar to objection #1, if prices locally stopped falling when the naitonal economy was absolutely horrible, why will local prices suddenly start falling again, now that the national economy is not nearly as bad?
Assertion #4: Interest rates risk to rise are substantial risk to prices.
Objection: This one we have been over several times. As we have shown, there is zero, I repeat zero evidence that nominal prices fall when rates rise. As such, why do you continue to believe in something when there is zero evidence for it?
Now, normally when I ask you direct questions like this, you respond in some tangential way -- or you note how it doesnt matter since your rent is cheap. Thats all fine and good.
However, if you really want to have us (or at least me) understand you better, I would appreciate it if you would answer the questions directly.
The names of the main characters in the fable - Chicken Little/Chicken Licken and Henny Penny - and the fable's central phrase - The sky is falling! - have been applied to people accused of being unreasonably afraid, or those trying to incite an unreasonable fear in those around them. The Merriam-Webster Dictionary records the first application of the name Chicken Little to 'one who warns of or predicts calamity, especially without justification’ as dating from 1895,although idiomatic use of the name significantly predates that attestation.
pat,
We haven't spoken in awhile. Sometimes I think that you are not playing devil's advocate, but seek affirmation in your decision to continue renting. You don't need that. It all depends on your comfort level.
If prices fall ala contarian than it really won't matter because the economy will be crushed. If you can't stomach the much more reasonable possibility of a decline of 10-20%, then you are better off sitting tight.
I think that the best deals have come and gone (locally). It doesn't mean I'm right, and the places I've bought in the past two years may not work out as well as I believe they will. I am a risk-taker by nature. Not everyone is.
I'll take RE over the stock market any day.
Post a Comment