A sense the housing market has bottomed.
- Thread starter S2007S
- Start date
ABSOLUTELY. There has been massive asset bubbles globally in almost every sector recently. Equities, commodities, RE, etc. Its all about liquidity. The FED was paranoid about deflation a few years back and flooded the earth with liquidity. That explains pretty much all of it. Lots of available cash chasing a limited amount of assets. Some commods rose due to supply/demand, but way more than they should have. Gobs of liquidity flying into the hedgies drove much of it. Gold? Liquidity. Crude? Yes crude. Liquidity. The press has reasons why these are rising so much, but its mainly a monetary phenomenon.
Getting off point. The RE boom was almost entirely a liquidity fueled boom. Low rates, lots of cash, of course lending will get lax. The more loans you can write the better. The ever rising RE market makes it all low risk.
Oops. It can stop rising? Prices can fall?
Uh oh.
Again, I'm in the real estate biz, which is suffering badly now.
That doesn't make me an expert, but it gives me a ground view of reality.
I can tell you this with near certainty: A huge number of sellers took their homes off the market this past fall and winter, because buyer action was unenthusiastic. They will all put their homes back on the market in the spring, adding to the normal supply, and this supply, plus the new home product, will overwhelm the supply chain.
You will see the biggest glut of existing homes for sale ever, in the next two months.
That doesn't make me an expert, but it gives me a ground view of reality.
I can tell you this with near certainty: A huge number of sellers took their homes off the market this past fall and winter, because buyer action was unenthusiastic. They will all put their homes back on the market in the spring, adding to the normal supply, and this supply, plus the new home product, will overwhelm the supply chain.
You will see the biggest glut of existing homes for sale ever, in the next two months.
Well, with China's economy starting to tank a little, maybe we'll see some of those materials costs coming down somewhat. That would take some of the wind out of the housing market's sales...have to wait and see. Can't help but think that some of the talk about "China is driving the costs up" may be hype to justify higher prices in the construction materials industry.
Huh? If rates went up like you're saying, folks wouldn't sell, and supply would dry up. Why replace a good loan with a much higher rate? Haven't seen much institutional pull back in lending except for the predatory companies I hear about here.
Demand goes up in spring too.
"China consuming all the raw materials" was a much hyped story.
Is China growing, using more commodities? Of course.
Should it have a dramatic effect on the price of sheetrock, lumber, nails and paint we all pay at the lumber yard? Absolutely not.
Suppliers who are 11 degrees removed from China or Russia or Brazil have been lamely using it as an excuse to shove higher prices down everyone's throats.
Is China growing, using more commodities? Of course.
Should it have a dramatic effect on the price of sheetrock, lumber, nails and paint we all pay at the lumber yard? Absolutely not.
Suppliers who are 11 degrees removed from China or Russia or Brazil have been lamely using it as an excuse to shove higher prices down everyone's throats.
SM, for a unique view of the economy you won't find in useless mainstream media, you might find Mish's blog worth a look at http://globaleconomicanalysis.blogspot.com.
If you spend some time reviewing his posts from the last few weeks, I think your optimism about RE and the economy may be tempered just a wee bit. What I like best is that Mish's analysis is usually well thought out and backed up by data. I especially like how he deconstructs economic reports and reveals that most of them are loaded with pure bullshit.
Here's a sample: From the Boston Globe:
January had the highest number of monthly Massachusetts foreclosure filings in at least two decades as local consumers struggled to hang onto their homes, according to a new report.
Last month, 2,207 foreclosure filings - or 110 every business day - were submitted in Massachusetts, more than double the number of a year ago; filings in January 2007 were up 105 percent from 1,076 filings in January 2006, according to ForeclosuresMass.com, a Framingham firm that provides online Massachusetts foreclosure data to investors, real estate agents, and lenders.
"The flood of foreclosures in Massachusetts is not only continuing; it has reached a new high," company president Jeremy Shapiro said in a statement. "The fact we are starting the year with the highest number of foreclosures we've ever recorded for a single month is more than significant - it's ominous."
There's another fun site at http://thehousingbubbleblog.com which is a compilation of articles about RE from around the country.
You said you wanted more facts and data, well, here are some to ponder.
If you spend some time reviewing his posts from the last few weeks, I think your optimism about RE and the economy may be tempered just a wee bit. What I like best is that Mish's analysis is usually well thought out and backed up by data. I especially like how he deconstructs economic reports and reveals that most of them are loaded with pure bullshit.
Here's a sample: From the Boston Globe:
January had the highest number of monthly Massachusetts foreclosure filings in at least two decades as local consumers struggled to hang onto their homes, according to a new report.
Last month, 2,207 foreclosure filings - or 110 every business day - were submitted in Massachusetts, more than double the number of a year ago; filings in January 2007 were up 105 percent from 1,076 filings in January 2006, according to ForeclosuresMass.com, a Framingham firm that provides online Massachusetts foreclosure data to investors, real estate agents, and lenders.
"The flood of foreclosures in Massachusetts is not only continuing; it has reached a new high," company president Jeremy Shapiro said in a statement. "The fact we are starting the year with the highest number of foreclosures we've ever recorded for a single month is more than significant - it's ominous."
There's another fun site at http://thehousingbubbleblog.com which is a compilation of articles about RE from around the country.
You said you wanted more facts and data, well, here are some to ponder.
I'll keep watching. There is one particular neighborhood I monitor because I'd really like to get a good deal on a townhouse there...great area...low vacancies, etc. Has about 100 townhouses there. The prices reached a peak of $135,000 per unit before backsliding to around the $128,000 range. Since then, they've been slowly moving up when available. Day before yesterday, I saw two for $137,500....highest price I've ever seen.
In a second neighborhood in another area of town, there are about 230 townhouses. I regularly record the number of units for sale and for rent to get a feel for the market and keep it in recorded in electronic format. I guess I could upload it here. Anyway, A couple of years ago, I'd regularly see about 13 for sale and 12 for rent at any time. As things slowed down, it morphed into something like 16 for sale, and 6 or 7 for rent. For the last few months, its been running around 15 for sale and 5 for rent. Now there are 11 for sale and 2 for rent as of last week and I saw the highest asking price and the highest rental rate I've ever seen before in there. These are also $135,000 units.
I know that my opinion is stilted by the low-end stuff, but lately I've been shopping for a house for my family and the feedback I get is that the sellers are getting more calls. I put an offer in on a house that sat for at least 6-months, and it was just my luck that another buyer stepped in and outbid me and its now off the market.
I live in North Florida, but we didn't get the bubbly stuff that a lot of coastal areas did. But I can tell ya'll that something is definitely happening from everything I've seen.
SM