tedstr

Has the Housing Market Hit Bottom?

This is all you need to read.
en.wikipedia.org/wiki/...

Cheap money fueled by Fannie and Freddie and a politcal agenda to have a poor minorities own homes paid off well over the past 10 years and achieved its purpose...albeit now with a price due.

A natural spinoff of this was an added bubble at all price points.

The only unknown is what happens to an illiquid asset when, looks to me like about 10-15% of the demand, is taken away. I don't know but it would seem pretty certain that at least a 10-15% price decline is in the cards. We're already there, so my guess is that its more like 2-3x that amount so 30-50% nationwide average decline seems a achievable.

But without the government programs to fuel this (and without the wall street CDO enablers) there is no way that we are going to see any kind of return of this demand, which means we have to create it by population expansion and a tiny annual % increase in % population homeownership which is more the historical norm.

With baby boomers downsizing and population growth projections only running about 1% a year this could take some time.

This assumes rates don't go to Pluto with inflation next year when the world get's a little less eager to buy our debt.

Remember the banks were give a reprieve by the govmnt on Mark to Market in May when they were allowed to keep more non performing loans in Tier1. This has no doubt slowed the write offs and foreclosures. By all my local accocunts, short sales are still very diffecult. No one wants to take a haircut. Why would you when you can still carry the loan. But this too shall change