jurp

Where's the Bottom?

One no longer has to explain why one is renting. It is cheaper, and wiser.

House's peak production was 1926-7, and they bottomed about 1940.
they went down 75%.

So, for sake of argument, say all is over in 3.5 years, and only goes 1/4 as far. That gives you a 18% decline, in 1/4 the time.

Then, using the rent to price rational of Fortune Magazine, now 250 times rent, houses will be 188 times rent. Not great, but manageable.

Strategists Continue to Lower Year End Forecasts

A quick analysis seems to show that he firms who were the most "full of it" in 2000 in the dot com boom; are now the caution driven. Note credit suisse, merrill, Citi.

Once burned, twice shy.

UBS: U.S. Bailout for Homeowners Will Arrive by October

140 billion bails out 2 milllion homes. This includes a 50 Interest free mortagage takeover by the government, and 5 years of a 2% reduction in the mortgage interest rate.

But it does avoid another 2 million houses sold at auction.

Time to Cut Your Exposure to Investment Banking and Mortgages

Please remember the 30 trillion house market includes the 30-35% that are fully paid for. Therefore 47% equity drops to only 32% if you look at mortgaged houses.

this means that second mortgages are dead. If someone needs cash, sell the ATV, the boat, the RV, or the 2nd vacation home (if you can)

Why We're Still in the Early Innings of the Bursting of the Housing and Credit Bubbles - And Implications for MBIA and Ambac

Houses have gone from 2 times annual income (philadelphia employed engineer) down to the Long Island Levittown cape cod's for 2.3 starting engineer's annual wage.
Fast forward to today's market the number is 5 times the starting wage.

Therefore, a house is only worth about 150k. Smart people should rent.

Treasury Yields vs. Commodity Prices

I notice gold up 50 times, and houses also, since the depression. Given that, I believe the party will end when americans stop buying goods from china, india, etc.

Their GDP's will decline, commodities will decline, and bonds will be king again.

The author has see 2% goverments, (1945), 14%, and now 5%.
Yes, they will go to 6%; but not any more.

Why, wages are not rising, surplus labor can not buy high priced commodities.

Commodities will drop 25%, wages drop 5%, bonds 6%, house drop
another 10-15%.

Wait it out, in foreign short term bonds. JRP

Inflation's Power: The Dollar in 25 Years

Forget raising prices, Mr. Dentist; there is a practise for salle in the next town, with NO bidders.
People will shun 1100 dollar root canal, and crown in favor of pulling the tooth. and getting, maybe, a bridge.

Yes, they will move into their parent's hose; vice versa, parents into their house.
Then there will be 4 million empty houses, with banks renting 5 br for $300-400 a month.

Is Overindebtedness Pushing Us Into a Deflationary Spriral?

I once showed a fellow where a a shoemaker was, and how new resoles, would save him money to pay off 32k in credit card debt.
(yes, he had a graduate degree)

So, if/when money/loans/job is not available, goods must go down until a buyer is found. Hence the 1921 house I grew up in, declined 5k a year until it was bought for 20 k in 1941.

Unfortunately one has to be 77 years old, like me, to remember WPA workers on the corner, families doubling up in one house.

May the 47 million baby boomers enjoy their forced education in thrift.

Inflationists vs. Deflationists: Who's Right?

Ford Focus and Ranger trucks are advertised for about 10-11k in todays's paper! Almost the same price as 15 years ago.

Of couse, Ford hopes to trade you up to 4 wheel drive, auto, AC and garner another 7k; but the net is deflation if you buy the simple car.
or worse;

Because people won't/can't buy new at any price when they are worried.

Foreclosures: Coming Soon to a Neighborhood Near You

Corrected for inflation, land in Kingston, NY should be sold for 10,000 a lot, with 10K more to develop. Todays 70K for a developed lot is twice the inflation adjusted price.

New England Realty Associates: Baby Thrown Out With the Bath Water

Without knowing the vacancy rate,nor the average rent/unit; I have no way to know if 115k/unit is a good value.

Be a Value Nerd or Follow the Momentum Herd?

But, when using either method, be sure to have some sort of stop loss. e.g. F going from 40 (when Templeton bot it, to 15 then to ??, and now 9)

Does Lennar's Huge Discount Indicate U.S. Land is Overpriced?

Back in 1960, the developer bot the land for 1k, in Ulster Cty, NY improved it for 1k, and made 1k profit when he put a house on it.

Allowing for 10 times inflation, this equals 30k. How did Lennar's lots get to 110k, with some not even developed??

An International Bond ETF for US Investors

With Rowe Ridce and Amer. Century Foreign up alot this year. Now may not be a good entry point for bwx.

Surviving The Housing Bust: Economic Models vs. Reality

1929 real estate in Philadelphia bottoned about 1936-1940 at 20-25% of their highs. This was 5-8 years later than the stock market low.

This shows that people just could not to bear the idea of selling at a loss. The article is right.