Housing doom and gloom - ENOUGH already !!

right now the talking heads are still trying to pump up and sucker in the public into buying stocks. this stock market and economy is in serious trouble, sell short on rallies.

bgp
 
Quote from JaiSreeram:

Wow, what a thread with interesting inputs. So, it seems that the housing situation is serious. Does it have any relation with the stock market? I mean is bearish markets bad for the economy as it seems to cause depression, crashes and losses?

What causes markets to be bullish and bearish? What are their effects?
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This has always been a bitching hard question for me. The answer is probably yes for sure with two groups. The first is those inside of the Wall Street/IB Industrial complex. Those bonuses do seem to go into RE. The other group is the wealthy and market gains and market turmoil (tax policy also) do seem to drive investment in RE. And of course the rest of us emulate the rich in whatever way we can - though far too many of us have to use borrowed money to do it.

Let's face it this was the biggest building boom in a 100 years anyway - probably since Reconstruction era.


"But few gain sufficient experience in Wall Street to command success until they reach that period of life in which they have one foot in the grave. When this time comes, these old veterans of the Street usually spend long intervals of repose at their comfortable homes, and in times of panic, which recur sometimes oftener than once a year, these old fellows will be seen in Wall Street, hobbling down on their canes to their brokers' offices.

Then they always buy good stocks to the extent of their bank balances, which they have been permitted to accumulate for just such an emergency. The panic usually rages until enough of these cash purchases of stock is made to afford a big 'rake in.' When the panic has spent its force, these old fellows, who have been resting judiciously on their oars in expectation of the inevitable event, which usually returns with the regularity of the seasons, quickly realize, deposit their profits with their bankers, or the overplus thereof, after purchasing more real estate that is on the up grade, for permanent investment, and retire for another season to the quietude of their splendid homes and the bosoms of their happy families."

- Henry Clews, Twenty-Eight Years in Wall Street (1887)
 
I guess the trillion + the housing bubble contributed to the economy during its peak years doesnt matter either?

10 year bear minimum...starting in 2005.

see you for an update in 2015.
 
Quote from JaiSreeram:

Wow, what a thread with interesting inputs. So, it seems that the housing situation is serious. Does it have any relation with the stock market? I mean is bearish markets bad for the economy as it seems to cause depression, crashes and losses?

What causes markets to be bullish and bearish? What are their effects?
More...

I'm still trying to find time to answer an earlier post because it requires some detailed input. However on this question, the answer is a very simple no. Just do some historical research on housing price declines.

Over here in the UK, house prices declined from late 89 to mid 95 i.e almost 6 years. The average decline was around 35%, some areas saw declines over 50%. We were in an official recession, unemployment was higher than now and rose substantially, repossessions ( foreclosures) went up to record levels, debt was high, trade and budget deficits were are record levels etc etc ( does this sound familiar). I'm sure you had very similar problems in the US.

What happened in the stockmarket? In that 6 year period, we had one down year.

So go back and look at data and see what happened in other periods of falling house prices, you may be surprised!

People see what they want to see and usually only look at recent history ( recency bias) to make judgements on whats happening now and in the future. Behavourial finance deals with this and I will say more in a later post as I was accused of not taking into account physchology of market.

On the MEW subject, all you believers in those graphs, have you actually done any research into how the figures presented are made up? Please do, don't just believe because it fits with your own beliefs ( another behavioral finance mistake). Break the data down. See if it's possible to come to the same conclusion when you examine the data.

To be continued........
 
Quote from thesharpone:

yes there is a drop, but not 25%, look at the building, it's fucking 60 years old
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building was 56 years old just 4 years ago
 
Quote from balda:

building was 56 years old just 4 years ago
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i think the prices given by zillow are estimates based on the prices in that area, not specifically each and every house
 
Quote from thesharpone:

i think the prices given by zillow are estimates based on the prices in that area, not specifically each and every house
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This is shows how zillow is useless.

but

2004 sold for 575K, 2008 offered at 425K this is exactly 26% drop from 2004 sold price.

or 150K discount

There is more to come.
 
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