Observor

Bad News: House Prices Are Stabilizing

There are a few factors need to be consider:
1. Home price has gone historically large correction
2. People's saving up 10% historically high
3. US Deficit historically high—means future inflation is inevitable
4. Population over 300M, which makes US into high growth rate relative to reducing land and resources supply such as in Indian and China.
5. Single family house has land attached which is always hard assets against inflation historically per say
6. Most important factor: most of (50%) house for sale was foreclosure, which means the excessive inventory is fabricated phenomena. People were driven out of houses rather than true over supply.

Updated Case-Shiller 100 Year Real Estate Chart

I think this chart proved that real estate was a good asset to preserve value against inflation in long run. Regardless what caused the big spike in recent years and how it will bust, it indicates that future value will be trend up. This is just a natural phenomenon. Although I do not know why, but simply consider it might be a reveres process to the resource decline phenomena. Based on the chart, it is going be very difficult to bring the house value below 110 anymore, unless the entire country collapse, which could be happened such as Roma Empire, but I do not think so.

Updated Case-Shiller 100 Year Real Estate Chart

I think this chart proved that real estate was a good asset to preserve value against inflation in long run. Regardless what caused the big spike in recent years and how it will bust, it indicates that future value will be trend up. This is just a natural phenomenon. Although I do not know why, but simply consider it might be a reveres process to the resource decline phenomena. Based on the chart, it is going be very difficult to bring the house value below 110 anymore, unless the entire country collapse, which could be happened such as Roma Empire, but I do not think so.

NCC: Housing Affordability Is Back [Housing Tracker]

The cost of a house and the affordability for a house are two different things although they link each other in a complicated way. Appartment buildings is always the final solutions to this equation, just look at Asian. If you look at this in the other way, then single family houses are valuable assets for long term, especially in primer location.

Defining "Inventory"

Yes, inventory is a dynamic number. It reflects the changes in supply and demand relationship. In skewed market condition, demand was scare away, and supply eager to sale; the inventory will appear extraordinarily high. The opposite can be also seen. In another word the current inventory is not a reliable number to determine if buy or sell a house for long term plan. For buyers you want buy a house at the highest inventory level, which will ultimately benefit you in long term even you may take the roller coaster. For today’s environment, it is especially interesting: if you remove the housing out of the picture, the economy is actually doing very well. Even the high energy that helps create a lot of new jobs. On the supply chain, the new home build plunged 16 year low. The market is full with foreclosed homes, which is creating huge supply deficit for next a few years (those families are driven out of their homes now). Our population is growing at all time high. US population has already passed 300m, which is a pivotal point. What the big picture is? In the near future, housing will boom even stronger than before, not like the media scaring people. The media try to create huge opportunity for bigger investors not for ordinarily people like you and me.

Home Prices Continue Their Descent

It's interested to notice that every sharp fell always follows with a sharp rebond. All rebonds actually took less than a year. If you miss a few month window, you missed a lot!

Home Prices: How Low Can You Go?

Some curves show that in some areas are getting into the "over correction" region. Is housing a good investment depends on area. If you fly over LA, you know why "land is limitted resource". With the material, land, and labor cost going up, today's cost of build a home is certainly more than 2004.