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John Lounsbury
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John Lounsbury, Managing Editor and Co-founder of Global Economic Intersection, provides comprehensive financial planning and investment advisory services to a small number of families on a fee only basis. He has a background which includes 34 years with a major international corporation, 25... More
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John B Lounsbury CFP
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Global Economic Intersection
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  • lower98th
    , contributor
    Comments (1420) | Send Message
     
    I presume these charts are through Q3, reflecting the uptick of the tax credit driven market. Eventually this will improve, but I suspect the Q4 and Q1('11) picture will show another decline.
    17 Dec 2010, 07:34 AM Reply Like
  • John Lounsbury
    , contributor
    Comments (3993) | Send Message
     
    Author’s reply » lower98th - - -

     

    My best effort to read the x-axis scale and the reference to the last six quarters with reference to 3/31/2009 lead me to believe these graphs have data through 9/30/2010 (3Q/2010). So I agree with your presumption.

     

    What I see in the graphs is a bump off a "bottom" which can be attributed to the federal tax stimulus programs. I agree that prices (on average, not necessarily in all markets) will be lower in the next few quarters, including 4Q/2010. The data so far this quarter indicates the national average (and median) home prices could fall 5% or more from 9/30/2010 to 21/31/2010.

     

    The last market assessment I did is almost 12 months old. I foresaw a most probable point for price decline for 2010 about 10%. It looks like we will get about half that. This analysis needs to be updated. Will anyone be interested in hearing from someone who missed the actual decline by 50%?

     

    I have been reading/hearing dire forecasts for a further housing decline of 20% or more before we eventually bottom. I believe Meredith Whitney has made such a call. A few days ago I watched an interview with Gary Schilling who made a 20% call.

     

    My back of the envelope sense is more like 10% further decline which could take up to 18 months to play out. As I said previously, I need to throw the envelope away and do some serious analysis. Until then I clutch a tattered piece of paper.
    17 Dec 2010, 10:57 AM Reply Like
  • DigDeep
    , contributor
    Comments (2585) | Send Message
     
    John
    The % of equity is interesting for reasons more than this - but I see tighter (harder) trade-ups in the aggregate, with equity so low.
    Who's going to buy all the McMansions when empty nesters want out? I have an older brother (in his mid 60's) trying to sell the family house....equity that was to help fund a nice retirement home.....
    17 Dec 2010, 05:59 PM Reply Like
  • John Lounsbury
    , contributor
    Comments (3993) | Send Message
     
    Author’s reply » DigDeep - - -

     

    I fear he may be able to get out with some reasonable fraction of his "nest egg" in 5-10 years. Of course, there are some locations that have healthier markets than others. Three that come to mind are the NYC area, Washington DC area and Raleigh triangle area in NC. I believe some markets in Texas may not have lost as much either, but I haven't checked the data.
    17 Dec 2010, 06:24 PM Reply Like
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