« Can You Guess Which Is Which? | Main
OK, I just want to make one thing clear. Many people assume that because of what I've written about in my last two books, at my other blog, and here at Financial Armageddon, I relish the thought that the world is going to hell. Not true. Although I've always been somewhat cynical about things, the fact is that I'd be much happier -- and so would my family and friends -- if we could move past the ugliness of the past four years and return to some kind of normalcy. But every time I look around, it's hard not to see that so many of the problems that got us to this point have not gone away. Indeed, one big contributor to the mess, an inflated real estate market, remains a festering sore. In the following MarketWatch (via Yahoo! Finance) report, "The Housing-Market Recession Is Not Over," an analyst who doesn't appear to be a shill for the National Association of Realtors paints a pretty negative picture:
Why you shouldn't be overly optimistic about real estate right now
After years of hearing how home prices are plummeting and foreclosures are mounting, consumers want to feel hopeful about the housing market "” but maybe they're being too optimistic.
In a presentation to the National Association of Real Estate Editors in Austin, Texas, last week, Stan Humphries, Zillow.com's chief economist, pointed to four myths he said consumers are latching on to as they try to make sense of recent housing statistics.
The four myths:
1. The housing recession is over. It's not, Humphries said. He estimates the bottom in home prices won't come until the third quarter, at least from a national perspective. Doug Duncan, chief economist at Fannie Mae and also a speaker at the conference, agreed with that estimation.
2. After markets hit bottom, prices will rebound to boom levels. Not going to happen, at least for a while, Humphries said. "Once we hit bottom, the bottom is going to be a long and flat affair across the markets," he said. "What we're going to see once we hit bottom is the second phase of the housing recession... that second phase is one of being flat."
3. The worst of the foreclosure mess is behind us. More wishful thinking, according to Humphries. He estimates foreclosures will peak later this year, then remain elevated for a while. Rick Sharga, senior vice president of RealtyTrac, an online marketplace for foreclosure properties, said he doesn't envision foreclosure activity stabilizing until late 2011.
4. The tax credits saved the housing market. With or without a tax credit, those who bought would have done so anyway, Humphries said. "The biggest impact [in home sales] we believe were low prices... low interest rates and the unsung factor here is the ramped up lending by the Federal Housing Administration."
Still, it's easy to understand why many homeowners want look on the bright side.
"They went from what everyone thought was a lucrative asset to something worth a lot less than they owed on it," said Douglas Culkin, president of the National Apartment Association, in a phone interview. "We all want it to get better," he said.
Some want to finally sell their homes and move on with their plans. And homeowners are tired of thinking their houses are bleeding equity, losing value like a new car driving off the dealership lot.
As for prospective home buyers, even if consumers are feeling confident enough to take an extra trip to Wal-Mart these days, many are not going to jump in and spend on a large-ticket item like a house, said Gail Cunningham, spokeswoman for the National Foundation for Credit Counseling.
"The reality of the situation in which we find ourselves today has sunk in with people," she said in a phone interview. "If a foreclosure hasn't been a part of their life, it has been a part of someone else's life... and they've seen the pain that inflicts on the family."
That perception isn't going to fade quickly.
It makes sense to be gloomy
TrackBack URL for this entry:http://www.typepad.com/services/trackback/6a00d83451591e69e2013483c68994970c
Listed below are links to weblogs that reference 'It Makes Sense to Be Gloomy':
flat housing huh?
ya right, with about 9 friggin years of inventory and falling wages? I am not seeing it
Why don't the economists begin to analyze what is going to be happening when the Gulf of Mexico gets shut down, including the mouth of the Mississippi River? I really do believe that scenario would make a cake walk out of unemployment, sales, corporate P&L, housing, and the other "markers" that are used to predict financial status. If one follows the possibilities, and the unknowns on the Gulf oil spill(fracture/leak, all the stock market, bull and bear stuff is useless. We are looking at the complete end game of the US economy if certain scientists are correct, or remotely close to correct. I say back-burner finance, North-South Korea wars, Israel boat boarding, Iran nukes, Afgan/Iraq stuff, and lets all begin to pray that the Gulf of Mexico is not history! Once that hole gets plugged (if that is at all possible) and the mega-disaster is over, then we can figure out wars and economics. Otherwise it is all moot.
Invade a country that posed no threat, directly kill thousands of women and children, and unleash a total hell upon toppling the goverment. And people think they can continue to go around driving expensive cars, living in McMansions like business as usual?
most americans seem to go about being unaffected by the depression. I still see the fake blonde wives acting snooty to the customer service reps (former execs now making minimum wage and who've lost their family, their retirement, their homes, their self worth). Worse are the young punky snotty nosed self righteous bmw brats who still mirror the old Gordon Gekko methodology and bravado. Until they are humbled, we'll just continue to muddle thru until the great masses have been reduced to poverty and the still monied 1% class get the revolution they deserve. Think 1917 St. Petersburg. I hope I'm alive to see it.
There are 25 million nuclear families (mom, dad, kids) in the US. There are 75 million housing units with three or more bedrooms. How is that going to work out?
"Think 1917 St. Petersburg. I hope I'm alive to see it."
Luke, the result of that revolution was tens of millions dead in the gulag.
Y'all are looking in the rearview mirror. Dow 20,000!
Friday, June 11, 2010
Goldman: Give the Money Back
The Young Turks protest Goldman Sachs taking 13 billion dollars in unnecessary bailout funds and ask Geithner at the Federal Reserve to get it back.
http://tinyurl.com/2d4zgxf
This is only a preview. Your comment has not yet been posted.
As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.
Having trouble reading this image? View an alternate.
Read Full Article »
