Those of you in the market for a house? May want to wait a few more years.

[edjr 5,579]

http://www.oftwominds.com/blogoct08/housin...ref=patrick.net

 

When Will Housing Really Bottom? (Part I) (October 6, 2008)

 

 

This week's theme: How Long Will the Coming Depression Last?

The financial punditry confidently state that the "recession" won't end until housing "recovers." So our first question is: When will housing really bottom?

 

The standard Punditry Party Line (PPL) in the MSM (mainstream media) is that housing will bottom in 2009 and then start "recovering" in 2010.

 

This is (surprise!) wildly optimistic. A fact-based analysis suggests 2012 or 2013 as the most optimistic near-term trough, followed by years of stagnation. Oh, and that's the best-case scenario.

 

Worst case scenario is the complete repudiation of three generations of American cultural/financial faith that "housing will always be your best wealth-building investment." In other words, people finally realise that buying real estate is a capital trap and a poor use of their money. That may or may not happen, but it is certainly in the realm of possibility.

 

Let's start by setting up some essential context for the housing market.

 

1. Housing depends on mortgages, i.e. borrowing vast sums of money.

 

That money begins as savings, i.e. capital, which is then leveraged in our wonderful banking sector about 12 to 1, meaning if savers deposit $100 in a bank, the bank can write a mortgage for $1,200.

 

Yes, there used to be these amazing things called mortgage-backed securities (MBS), which enabled banks to bundle all their mortgages and then sell them to investors/speculators. This got the mortgages off the bank's balance sheet, clearing the way for the bank to write another $1,200 in mortgages for each $100 in deposits.

 

This is all you really need to see.

 

http://www.oftwominds.com/photos08/house-wages1950-2005.png

[thetxstang 0]

http://www.oftwominds.com/blogoct08/housin...ref=patrick.net

 

When Will Housing Really Bottom? (Part I) (October 6, 2008)

This is all you really need to see.

 

http://www.oftwominds.com/photos08/house-wages1950-2005.png

 

We also need the graph that shows FOCKED! on it.

[SUXBNME 1,340]

More doom and gloom

 

[edjr 5,579]

More doom and gloom

 

 

I said if you're in the house for a market, you may want to wait a few years.

 

I hardly see the doom and gloom in that.

 

Sounds more like advise to me, with a link.

[wiffleball 4,649]

I said if you're in the house for a market, you may want to wait a few years.

 

I hardly see the doom and gloom in that.

 

Sounds more like advise to me, with a link.

 

Ya gotta understand that intellectually, Sux is about as deep as a puddle. Sux = Goober. I wonder if he wears that little hat too?

[BLS 313]

So what you're saying is, I should file bankruptcy, lose my house, etc, and by the time I've got good enough credit to buy a house again, prices should be stabilized?

 

[Strike 3,994]

So what you're saying is, I should file bankruptcy, lose my house, etc, and by the time I've got good enough credit to buy a house again, prices should be stabilized?

 

 

No. What you should do is get behind on your payments and then shoot yourself in the head. If you happen to survive the Feds will pay off your house for you

[edjr 5,579]

So what you're saying is, I should file bankruptcy, lose my house, etc, and by the time I've got good enough credit to buy a house again, prices should be stabilized?

 

 

No.

[SUXBNME 1,340]

Ya gotta understand that intellectually, Sux is about as deep as a puddle. Sux = Goober. I wonder if he wears that little hat too?

 

My hat looks more like this.

[SUXBNME 1,340]

So what you're saying is, I should file bankruptcy, lose my house, etc, and by the time I've got good enough credit to buy a house again, prices should be stabilized?

 

Invest in dishwashers

[BLS 313]

No. What you should do is get behind on your payments and then shoot yourself in the head. If you happen to survive the Feds will pay off your house for you

 

 

How about:

 

I get behind on my payments.

Shoot YOU in the head.

Steal your trash.

Rape Sux's kitties.

 

Dance in the streets.

[Strike 3,994]

Rape Sux's titties.

 

[SUXBNME 1,340]

 

He seems to have taken quite the fancy to me lately

[Patriotsfatboy1 1,432]

No. What you should do is get behind on your payments and then shoot yourself in the head. If you happen to survive the Feds will pay off your house for you

... and you will have built in air conditioning for your skull.

[BMoney 0]

How about:

 

I get behind on my payments.

Shoot YOU in the head.

Steal your trash.

Rape Sux's kitties.

 

Dance in the streets as dj edjr spins records on top of the box you now live in.

 

 

someone bought a house in saginaw michigan for $1.75 last week...Id say the market is dropping a bit

[jjsparty68 0]

someone bought a house in saginaw michigan for $1.75 last week...Id say the market is dropping a bit

 

It's obvious you have never been to Saginasty. That house probably appreciated in value.

[needshelp 0]

So you are saying that I shouldn't sell my shares of Countrywide and buy a house?

[peenie 1,691]

oh lord edjr. i can't read all of that. what the heck is it trying to say?

i mean, if it's cheap to buy a house now why not buy it?

won't that mean it's going to be worth more money in 10 yrs when the our financial crisis is over?

[needshelp 0]

oh lord edjr. i can't read all of that. what the heck is it trying to say?

i mean, if it's cheap to buy a house now why not buy it?

won't that mean it's going to be worth more money in 10 yrs when the our financial crisis is over?

Where this article is wrong is that it is only focused on big markets. In middle america, the housing is pretty stable. Its only in the big 20 markets that prices will continue to fall. And they have to fall in order to get back to reality.

[edjr 5,579]

oh lord edjr. i can't read all of that. what the heck is it trying to say?

i mean, if it's cheap to buy a house now why not buy it?

won't that mean it's going to be worth more money in 10 yrs when the our financial crisis is over?

 

That's just it, it's not cheap now, not compared to salaries. It still has a long way to go to fix itself

[needshelp 0]

That's just it, it's not cheap now, not compared to salaries. It still has a long way to go to fix itself

 

Not counting that middle america is already stable. Housing prices do have to have a ratio to salaries. This is why they still need to fall in the top 10 markets.

 

Its very similiar to why oil had to drop. It lost its ratio to the other commodities like gold.