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Housing market analysis forecasts housing prices will continue to fall, declining housing market, 20% price drop since peak in 2006, US economic struggles
2) Your patrons, who have been loyal customers of yours for many years, are currently losing their homes in foreclosure at an alarming, unpresidented rate to toxic ARM rate adjustments, and are forced to move out of town, or in with relatives, if they are lucky, if not, into their cars or onto the street. They almost overnight, while gainfully and honestly employed, are unable to afford the basics of living, let alone the luxury of dining out...
What is that Obama Math?
Uh, around these parts a 3-bedroom apartment is $500 to $750 per month. If you can afford a $2,500 monthly mortgage before an ARM hike, you can afford an apartment and you can afford the luxury of dining out.
If you pulled your head out of your full point of contact you'd know that around here people walked away from their homes not because of ARMs but because of Duke Energy's 30% rate hike.
Yeah, that's right. Big freaking McMansion and no gas or electric. They couldn't afford the $2,000/month mortgage AND the $2,000/month gas and electric bill between November-March.
Location: Sitting on a bar stool. Guinness in hand.
4,428 posts, read 6,507,824 times
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Quote:
Originally Posted by Mircea
Home prices in the Cincinnati market are increasing. By the way, that's Cincinnati, Ohio.
Actually I noticed Texas along the gulf coast is hold or increasing in price as well.
But I been watching you home state a bit. Cleavland, Lorain, and Toledo are being crushed from what I'm observing.
Actually prices are looking really good for long term investors in those areas of Ohio.
I think this really depends on what region you're in.
Home prices have actually edged up in my market recently. What's more, the new home inventory has plunged about 20% in the past three months. What's more, since no builders are getting financed at the moment, that means there's no new construction in the pipeline. The result? A home shortage in my market in about 8-12 months.
I read that homes are generally worth about 2 to 3 times the average wage of the area if any speculative gain is eliminated. As much of the price increases have been far above the wage based index I expect home prices to drop below the index before they eventually stabilize. I also expect most of the losses will be in the McMansion end of the market and not in the price of an inner suburb house built just after WW2.
[SIZE=3] [/SIZE]
How are the tax evaluations going to hold up. I know in my area the county and the school board are still spending like it is 2006. When is that balloon going to burst?
I'm not sure how most areas do it, but our city/county just did a revaluation last year. They have to wait 2 more years before they can do another. So while house prices may fall, the tax structure will stay in place for a couple more years. Then, we'll see some major issues with areas dependent on that inflated value.
I think this really depends on what region you're in.
Home prices have actually edged up in my market recently. What's more, the new home inventory has plunged about 20% in the past three months. What's more, since no builders are getting financed at the moment, that means there's no new construction in the pipeline. The result? A home shortage in my market in about 8-12 months.
I've got to ask. What market are you in?
I have been trying to sell a house in the North East (reported as a strong market), No one is even looking.
Forget buying, I can't even show my house!!!
Edited: Just a word of warning. Forget what you Realtor tell you, or what the N.A.R. says. Its their job to put a Rosie picture on the situation.
That's right up there with convincing the young ones that NOW is a great time to buy.
...The economic caveat, which a good many non homeowners fail to grasp, is that when the value of assets as critical to the economy as home values crashes, the current value of the current owners's COLLECTIVE assets crashes in kind...this is very bad for EVERYONE...even the barista @ Starbucks, who rents a studio apartment in Anywhere, USA.....for example...
1) Your employer, American Bar & Grill, is in the restaurant business. You have been a good and loyal employee for many years... and have been diligently saving for as many years, you see the current housing value declines as a terrific opportunity to finally get your piece of the American Dream...
problem.....
2) Your patrons, who have been loyal customers of yours for many years, are currently losing their homes in foreclosure at an alarming, unpresidented rate to toxic ARM rate adjustments, and are forced to move out of town, or in with relatives, if they are lucky, if not, into their cars or onto the street. They almost overnight, while gainfully and honestly employed, are unable to afford the basics of living, let alone the luxury of dining out...
meanwhile, back at the ranch..
Your senior citizen customers (who we PRAY now own their homes free and clear, if not ,are potential and probable victims of a double jeopardy with regards to the above scenario, with the addition of this next one! ) are seeing their retirement portfolios shrink, and, at 70 something years of age, do not have the luxury of time to recoup the losses...no more senior discount dinners for them, gonna stay home and eat soup...or dog food..don't laugh..this has been played out all to many times in recent history with fixed income seniors...could be you someday....
So, now, my friend, YOUR customer base has been diminished, as has your income, and you have been having to dip into your savings recently, the very savings you were rat holing away to finally use as a downpayment on your home...
..and in as much as your customer base has diminished...the restaurant owner, who you work for, well, that is actually HIS customer base that has diminished...he has his own personal living expenses to pay too...gotta make some difficult decisions....
YOU ARE LAID OFF.....and the paltry remains of that home downpayment savings you have been dipping into recently to offset your decreasing income.?
*****GONE*****
....deflation is far worse than inflation....
Be careful what you wish for.........you just might get it.............
On the other hand some people (like myself) have been trying to startup a new biofuel business but artificially high real estate costs have made it all but impossible. Rural land that was 1,000 an acre went up to 20,000 an acre in 3 years! Our current business suffered as higher living costs caused worker salaries to become worth less. Employees frustrated with high costs decided to leave and seek greener pastures in places like Texas or North Carolina. Inflation caused by the housing bubble drives up the prices of the goods we sell causing us to spend more on inventory.
Fast forward to today....
The real estate bubble bursts and that rural property falls to 7,000 an acre- and is still falling. The prospect of land values falling further makes it desireable to start the business there and wait for the deals to come. Falling commodity prices means that the plastic and steel needed to build the photobioreactors has become less expensive. Investors burned by real estate are more eager to invest in a biofuels startup and capital becomes available. Businesses that laid people off means that there are plenty of employees to choose from. For me real estate deflation is the best thing that can happen. For the economy, it will save the country if allowed to happen. Instead of consumption debt and inflation, there should be savings and investment in manufacturing. Relying on services and coffee shops is just plain dumb.
The quest for real productive investment brutally crowded out in the 2003-2006 period due to inefficient social and monetary policies ....
Quote:
Originally Posted by tallrick
Inflation caused by the housing bubble drives up the prices of the goods we sell causing us to spend more on inventory.
Fast forward to today....
The real estate bubble bursts ... makes it desirable to start the business there and wait for the deals to come ... Investors burned by real estate are more eager to invest in ... and capital becomes available. Businesses that laid people off means that there are plenty of employees to choose from. For me real estate deflation is the best thing that can happen. For the economy, it will save the country if allowed to happen. Instead of consumption debt and inflation, there should be savings and investment in manufacturing. Relying on services and coffee shops is just plain dumb.
Can't give you any more rep, but this is the crux of the entire problem.
Now only if we could replace some of those corrupt idiots making policy in Washington and convince the few reasonable ones to assume real leadership and refocus on real productivity.
The quest for real productive investment brutally crowded out in the 2003-2006 period due to inefficient social and monetary policies ....
Can't give you any more rep, but this is the crux of the entire problem.
Now only if we could replace some of those corrupt idiots making policy in Washington and convince the few reasonable ones to assume real leadership and refocus on real productivity.
You got to it before I did. +1
It never ceases to amaze me that people don't understand the very, very simple concept that production and savings must equal consumption and debt over the long-term. What we have now is simply unsustainable. There's no other way around it. The sooner we realize that, allow the crash to happen, and start picking up the pieces, the better off we'll all be.
People need to understand that the wealth they have in their homes does not extend beyond the home as a place to live. The rest of the wealth - i.e., the paper value of the real estate - is phony. It's not real, it doesn't exist.
The real estate bubble stole almost 5 years of my productive life and I ended up in business reselling products from overseas. My real goal was always to get in energy production and that is my plan now. All that money spent on housing was consumption plain and simple. It could have been spent on wind turbines, solar arrays and algae farms but instead it went into big screen TV's, granite countertops and swimming pools. Where is the return on that? Instead we could be right now driving Diesel vehicles powered by algae, and enjoy electricity powered by free energy. If Government was scaled back thousands of small businesses producing supplies for this industry would be operating right now. Instead we teeter on the brink due to a system that supports malinvestment and exploitation of productive labor. Good thing I am not alone with this view. Energy is the life of any economy and we recieve enough of it from the sun in one day than we can ever use in a lifetime. The 2 Trillion that will be spent to temporarily keep this mess inflated could have been used to make us independant from fossil fuels if it was real, invested capital.
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