RealEstate - THIS WILL BLOW YOUR MIND

Planet reality, where only 5% of the population can qualify for a realistic loan, where the population is moving away, where wages are flat, where foreclosures jumped 96%, where price trends are straight down, where homes sit on the market for 9+ months straight, where the market is extended by 3X the magnitude of the last housing crash, thats where I live :D



Quote from Pa(b)st Prime:

I don't know what planet you're on if you think San Diego is a "bubble" market. San Diego is CHEAP compared to the OC and San Diego had might as well be Detroit when compared to Los Angeles prices.
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What's the average family income in the US - $50k maybe? That's the basis for prices in the housing market and it will always will be this way - because ultimately people will only buy what they can buy.. Do some simple math and calculate at what prices can people with this kind of income afford to buy.... Whatever is high above that number is just emotions and speculation. (of course demographics plays a role in price differences and incomes - so account for that too)
Also, US just wasted trillions in a completely useless war in Iraq in time when their social security and health care is headed for disaster.... Why do you think that in such bleak upcoming economical climate you should have justification for long lasting record housing prices? Do you really think that under such conditions all the worlds investment will flow to the US? I would give it a second thought.. I sure hope that the dems can put the country back on track.
So YES the prices will come down - it's a market like any other market - YES we will see a huge decline even 30% or so. When will this happen that's the real question (maybe it's already happening)...
 
I suspect that both California and Florida are the states with the greatest speculative excesses and will be the states with the biggest real estate problems. I can say that here in SW florida, the most common complaint is that even during our "season" here sellers can't even get someone to LOOK at their house.

Despite this, Flrorida Rock, a company seemingly tied to new home construction, continues to rise from around 43 to 48 in January. Fair disclosure, I am net short some FRK calls. I understand they plan to shift to highway construction and houses are also being built elsewhere in the southeast, but somehow there seems to be a disconnect between housing and stock prices for related companies. In fact, it seems to me that either housing is getting much better, or the market has this whole thing all wrong.
 
Quote from Bazooka:

...In fact, it seems to me that either housing is getting much better, or the market has this whole thing all wrong.
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There are two effects. The market is leading reality by 6 months and the speculators have got in on what they think is a bottom. It is my opinion that new construction is not going to increase substantially for at least 2 years over the entire country. That is not to say that certain areas will not take off though. But it will take that long to clear the excess "marketable" inventory that builders are currently bumping up against that are below their new construction costs. In the interim, barring a weird global slowdown I see material price pressure pushing developers/builders into even higher non-competitive price points that worsen the situation for them. I therefor expect that the large national home builder stocks will cycle back down at least one more time to re-ratify the bottom before the stocks can start to head up again to new near-term highs.

I would hate to be a home builder right now. If it were not for the possibility for wild M&A activities driving individual home builder stocks suddenly higher I'd be shorting the largest national builders/developers for at least 6-8 months.

TS
 
Quote from Bazooka:

. . . it seems to me that either housing is getting much better, or the market has this whole thing all wrong.
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The latter, I think. The psychology looks like the proverbial bearish "river of hope". A simple pause in the decline is cause for joyous proclamations the slide is over. I especially love it when I read "evidence" issued by the professional liars at the NAR who say all gonna be OK.
 
vacancies.png

16.7 million homes sitting vacant in the USA. Who's gonna buy them? Record inventories and some perma-bulls think this is going up? :D
 
Quote from traderdragon2:

16.7 million homes sitting vacant in the USA. Who's gonna buy them? Record inventories and some perma-bulls think this is going up? :D
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16.7 million? Hardly. Try 2.1 million "vacant" homes.
 
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