Housing: Still in the Dumps

• Report this Comment On October 21, 2009, at 6:08 PM, jesse2159 wrote:

  The American dream of home ownership is not dead, it's on hold while the dust settles. The banks are not helping. They received zero interest loans from the Federal Reserve, and still do not lend. The government needs to tell the banks in no uncertain terms to lend out the funds.....or give it back. Home prices won't overshoot the mark. There are many potential buyers out there simply waiting for the first signal that prices are on the way up, provided the mortgage rates remain reasonable. Just don't rely on banks to be reasonable.

• Report this Comment On October 21, 2009, at 6:26 PM, rookie2009 wrote:

  i have subcontracted work for sureguard, the largest servicer of foreclosed and abandoned homes in the country, and let me tell you the numbers are huge! from dumps to palaces you wouldn't believe it if you saw it.

• Report this Comment On October 21, 2009, at 6:48 PM, vrpirata wrote:

  I wouldn't say housing starts have bottomed. The apparent bottom is artificial, as it is being held by stimulus, tax credit, moratoriums. Is artificial because such “help” will create another downturn have removed.

  The 8.5 months supply is also a lie, because it doesn't take into account the shadow inventory Banks are hiding. Why the shadow inventory? Because banks can now report it as assets at peak price (thanks to the bad resolution done by the FASB last year to stop the requirement for mark-to-market valuation). That is the reason Banks have been able to post profits since.

  Now the NAR is lobbying to extend and expand the tax credit. Hopefully they will let the tax credit die. It is putting more money in the housing market, that in combination with the manipulated low mortgage rates, is inflating the bubble again. Some Banks are also lobbying to bring back the interest only loans. Wasn't that kind of attitude that got us in trouble in the first place? When we will understand that falling house prices is part of the solution. The problem was that they were too high, and still are.

• Report this Comment On October 21, 2009, at 7:34 PM, Gorm wrote:

  My main question is: Is housing an investment or shelter?

  Personally, I think Americans are rethinking this and increasingly the shift is towards "shelter." Housing is NOT a good long term investment.

  America is in decline and housing will reflect that.

• Report this Comment On October 22, 2009, at 11:15 AM, Tomohawk52 wrote:

  +1 rec for all comments above. I don't understand how keeping rates low and giving people incentives to buy houses they cannot afford is going to do anything but create another bubble -what happens if the interest rates climb? The government seems like a juggler keeping chainsaws in the air. Eventually they aren't going to drop just one; they will drop them all and slice themselves to bits!

• Report this Comment On October 22, 2009, at 12:43 PM, thisislabor wrote:

  vrpirata,

  man all of america is truly aware that housing subsidies are part of the problem. but there is a world of difference between being aware of the problem and being willing to do something about the problem.

  that's where america is at, we're not undereducated we are just in it for ourselves anymore.

• Report this Comment On October 22, 2009, at 11:10 PM, wtatm wrote:

  Morgan,

  Kudos on a great article. Thanks especially for publishing the annualized housing starts.

  For awhile, I have tried to come up with a "normalized" number of how many annual housing starts we should see. Based on a US population of 307 mil... approximately 1% annual population growth (about 3.1 mil for 2009)... and figures that the housing industry have furnished of about 1 new home for every 4 people... the "normal" rate of new housing starts should be about 800k. You could quibble a little with the numbers, but certainly the figure should be less than 1 mil per year.

  Seeing numbers in the 400k - 600k range for the last year is an encouragement... that builders are cutting back to try to work off inventory. But given that foreclosures are averaging almost 4 mil a year... that there is an unknown "shadow inventory"... and that the Alt-A defaults are just starting to hit, it is hard to see a meaningful homebuilder recovery for years.

  Just my 2 cents.

  Jim

• Report this Comment On October 23, 2009, at 2:22 PM, daustin97222 wrote:

  Keep in mind that "All Real Estate is Local". And it is: Portland OR. and Raleigh/Durham NC are completely different markets than Tampa or Detroit or Vegas. So you need to look past the national numbers and get to the local numbers (even when evaluating builders). Hovnanian has no presence in Oregon, yet Horton is big there.

  I've been a landlord since 1974 and I have seen my share of housing disasters. But through it all: real estate has kicked the stuffing out of my stock portfolios. I don't live in Detroit and would not want to be an owner/operator there, with jobs and population vanishing by the day.

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