From the WSJ:
Real Home Prices Could Take 17 Years to Return to Peak
Home prices have been growing at a rate that some see as alarming—about twice the rate of wages. But adjusting for inflation, the market still has a long way to go before returning to the frothy state of a decade ago.
Most measures of home prices—including the S&P/Case-Shiller Home Price Index, the CoreLogic Home Price Index and the National Association of Realtors existing home sales report—don’t take inflation into account and show prices nearing or surpassing the peak hit in 2006 or early 2007.
But a new analysis by real-estate information firm CoreLogic finds that when adjusted for inflation, home prices are years away from hitting the lofty heights of the housing boom. Indeed, economists there say that prices are unlikely to surpass 2006 levels until 2023 or beyond, some 17 years past the peak.
“It’s a slow recovery in housing,” said Sam Khater, deputy chief economist at CoreLogic. The rise and fall in prices without adjusting for inflation matter for existing homeowners because they determine whether or not they are underwater on their mortgages. The rapid run-up in prices in recent years has made it easier for people to sell their homes because they no longer owe more on their mortgage than the home is worth.
As of September 2015, CoreLogic’s Home Price index was 7% below its April 2006 peak, not adjusted for inflation. Prices fell 32% from that peak to the trough in March 2011.
But adjusted for inflation, the bust looks far worse. In September 2015, CoreLogic’s Home Price Index was still 20% below the peak in March 2006. It dropped 41% from that peak to the trough in February 2012.
Good morning New Jersey
https://web.archive.org/web/20010915001916/http://nypost.com/postopinion/opedcolumnists/32549.htm
Here in New York, it was easy to get angry listening to Egyptians, Palestinians and the Arabs of nearby Paterson, N.J., celebrate as they received word of the murderous attacks in New York and Washington. But Mayor Giuliani (who has been tireless and magnificent in this crisis) rightly warned New York- ers that it would be wrong to take their anger out on the city’s Arab and Muslim residents. Attacks on Arab-Americans in Paterson or elsewhere are utterly indefensible.
This tells you how good of a buying opportunity it is right now. If you bought in the past 5 years, you killed it, you just don’t realize it yet due to the market still being in the dumps. In 2025, you will realize you killed it, when the next bubble is blowing up.
Point is, real estate never reflects if the purchase was a good one or bad one, based at the immediate time of sale. It takes years to realize if you bought at the wrong time, or right time. So right now, people that bought are still nervous and scared, second guessing themselves if they made the right choice based on the current feelings of the real estate market and economy(feelings of gloom still around). Thing is, economy and market shift fast, when everyone starts feeling good about the market and economy again, those are the times you start getting ready to sell into the emotion. Stock market is the same way. Buy in gloom, and sell in the sun. If you want to make money, you have to have the balls to buy in the bad times, not the good times. So simple, yet the masses continually play in herd like behavior, leaving wolves to take advantage.
“As of September 2015, CoreLogic’s Home Price index was 7% below its April 2006 peak, not adjusted for inflation. Prices fell 32% from that peak to the trough in March 2011.
But adjusted for inflation, the bust looks far worse. In September 2015, CoreLogic’s Home Price Index was still 20% below the peak in March 2006. It dropped 41% from that peak to the trough in February 2012.”
If wage inflation starts to hit in 2017/2018, real estate market will start taking off by 2020, with people flush with two years of new income that could be saved to be put towards a home purchase. If wage inflation comes a little later by 2019/2020, then these guys are right and the boom will start taking off around 2021/2022, passing up 2006 levels by 2023, and then full blown boom market by 2025. Let’s see what happens.
“But a new analysis by real-estate information firm CoreLogic finds that when adjusted for inflation, home prices are years away from hitting the lofty heights of the housing boom. Indeed, economists there say that prices are unlikely to surpass 2006 levels until 2023 or beyond, some 17 years past the peak.”
4- If you can figure out which sector of the economy will experience the most wage inflation, you can target what areas to get the most out of your investment. Meaning, if you expect minimum wage to push up lower middle class/middle class wages, you would focus on buying in places like Elmwood Park, Clifton, Hawthorne, etc. Your middle class areas.
If you would have used the income inequality data around 2009/2010, you would have seen all the gains going to the top. Based on this information, if you had the money to afford the top real estate, you should have bought in 2010 and flipped it by now. The biggest gains in the real estate market in the past 5 years have gone to the top (the income data told you this would happen). It’s no coincidence, those areas demanded by the wealthy have gone up significantly in price. Just follow the income data, they received most of the growth in the economy, so it’s only natural that things they purchase will go up in price.
What areas of real estate have taken the biggest hit? Yes, middle class and poor, they have not enjoyed any of the gains in the economy, so why would the products that they purchase go up? Obviously, this will not keep up, or the economy will crash. The gains will shift to the middle class and poor in the next decade. Be smart and take advantage of the shifting incomes in the data.
You are a turkey.
Grim…Do you still have that chart contain all of our peak to valley predictions from the housing bubble?
2 D-FENS
When those articles and rumors first came out, I dismissed them as bogus. They reported locations that I knew were incorrect. The news reported people on buildings my office overlooked, those roofs were empty.
Looking through the news I came across this arhat says this stems from a single incident with some kids in Paterson.
http://www.nj.com/news/index.ssf/2015/11/trump_claim_of_muslims_celebrating_in_nj_on_911_is.html
Trump is turning into a joke at this point. He says something outrageous and then doubles down rather than walk it back. Maybe he can use “Wasn’t Me!” as a campaign slogan. https://www.youtube.com/watch?v=p50WnKq-x1c I saw it reported that he has spent more on campaign hats that he has on campaign staff on the ground. I will give him credit. Running a campaign on name recognition alone is impressive.
I am still sticking with my call that Trumps done on Super Tuesday. Part of me wants to see him win the GOP nod, to see hard they go after him. Remember the Reagan Democrats, I hearing rumblings of the Clinton Republicans.
Trump is saying what a lot of people think. Of course that means he has filter.
This “boots on the ground” discussion misses one big fact. The country is not in a position to deploy. The equipment that came back from the Middle East is still getting slowly replaced and refurbished. It should be noted that a lot of the deployments in Iraq and Afghanistan were from the National Guard. Controversial at the time, and conveniently forgotten. The Army did not have enough boots to put on the ground and the recruiting pool was empty. Most kids coming out of school, that used to be candidates, couldn’t pass the drug test.
The Captain Phillips argument shows there are still people (even in here) that will do anything to sling mud, Os way. The answer to that argument is simple “OBL”, dispatched to the bottom of the Indian Ocean, with extreme prejudice. But hey, that all Dick Cheney’s doing wasn’t it.
Nice article, that sums up how we got to this point with the GOP.
http://www.politico.com/magazine/story/2015/07/moderate-republicans-donald-trump-tea-party-conservative-fringe-2016-120675
The one big point it misses is that if Hilary gets elected, she is most likely a two term president. That means a 2024 GOP with a very small pool of people with executive branch experience. But that is a different discussion.
#3 for the love of God please stop!! You seem to be really losing it.
Re: 12 3b – Pumpkin is special, queue insane laughter hahahhhaha!