From the Daily Reckoning:
Homeless
By Eric J. Fry
“Ben Bernanke and Alan Greenspan both agree that the housing boom is over and that it will begin an “orderly” decline. We agree that the housing boom is over and that home prices will begin to decline, but we aren’t so sure about the “orderly” part.”
“”It seems pretty clear now that the U.S. housing market is cooling,” Fed Chairman Ben Bernanke recently remarked. “[But] our assessment at this point … is that this looks to be a very orderly and moderate kind of cooling.” Later the same day, the former Fed chief, Alan Greenspan, observed, “This has been quite an extraordinary (housing) boom. The boom is over. I think we can safely say that with
a strong degree of confidence.””
“However, the famously inoffensive Greenspan continued, “[there is] no evidence that home prices will collapse.” Conveniently omitted was the phrase, “…but there is
plenty of evidence that that home prices COULD drop significantly.””
“Home price might indeed dip serenely, like the oars on a lovers’ rowboat…just like Ben Bernanke expects. On the other hand, home prices might become as disorderly as stampeding soccer Hooligans…just like your New York editor expects. No one can say for certain. But your editor’s recent personal experience provides one unnerving
data point…and suggests that the “less orderly” portion of the housing cycle might be fast-approaching.”
“A home is a wonderful thing to own; but it is also a wonderful thing to sell…especially when prices are slumping and buyers are disappearing…and time is of the essence.”
“”Hey, now that I’ve sold my house,” your editor queried a local real estate agent yesterday, “I’ve gotta ask; what’s really happening in the housing market here?””
“”It’s not good…It’s really not good,” came the reply.”
“”So what type of homes are selling?””
“”Not much…A few entry-level homes are selling. But nothing over $1 million. If I were you, I’d rent for a while when you’re out in California. This housing market’s
gonna get worse all over the place. So I’d just wait it out.””
DO NOT BID. NADA NOTH’ING, ZERO.
NO FRIGGEN BIDS!
BABABABABBA
BOYCOTT BIDDING!
DO NOT BE A BAGHOLDING DUMMY.
WAIT! For realtors to be begging for buyers. BEG BEG BEG. Work for 30% price reductions at a minimum.
BOOOOYAAAAAAA
Bob
I don’t think there is anything wrong with buying a house today in non bubble land (pretty much the south outside of Florida and the vacation zones). As long as you can put 10 to 20% down on a 30 yr fixed, have at least 6 months of cash reserves, and can still have a life after making your mtg payment.
Also, before you put in your bid, check with your insurance company for a quote on the replacement value of the home. If the difference between the purchase price and what it costs to replace it is very significant, then walk away.
“..If the difference between the purchase price and what it costs to replace it is very significant, then walk away.”
Agreed.
But why bid when prices are only starting down?
It’s not going to feel good if prices around you at some point are 20-30% lower than your purchase price.
What is the damn rush?
I went up insanely for 5 years now it takes a little time to go down.
If our housing bubble follows Japans Bust, 9 months after Japan’s peak prices the floor fell out of home prices for about 18 months. So the next 18 months prices imo should drop hard and quickly.
BOYCOTT HOUSES
Bob.
Talking to my wife’s uncle yesterday who is a long-standing Morris County realtor. He said “If the price range is over $1M, the property is going to be sitting for awhile in this market.”
Also, he said that “…sellers are not following the advice of their agents and continue to ask prices too high, then they fret when no one is interested.”
Let’em fret all they want!
Buyers are say NO MAAS to ripoff prices!
Just cuz u own a home does NOT entitle you to a guaranteed profit!
NO BIDS! BOYCOOOOOTT BIDDING
Boooooooyaaaaaaa
Bob
Housing Panic – The Bubble Blog with Attitude: Barrons Cover Story “The Big Glut” – announcing the end of the housing bubble and the housing crash underway
Bob,
I absolutley would not buy in NJ or anywhere else in the Northeast, West Coast, Fl, AZ, Vegas. But the non tourist sections of the Carolinas, Georgia, etc that have escaped the bubble are still reasonably priced. Median house is 2.5 to 3 x median income. Not like 5 to 9 times meidan income like most of bubbleville is.
Greenspan and Bernanke can say that there will be an orderly decline because the housing decline will be orderly compared to stock market crashes. Did you ever see a stock selloff when thousands of sell orders come in at the same time? That’s a panic. Having your house sit on the market for 6-12 months with no bids may be orderly, but is nonetheless just as painful.
3-toed Pete
Once I can finally retire we’re more than likely going to build in coastal NC. So I know first hand the concerns about storms.
We own one building very close to the ocean now, but when build I won’t build so close. Too many close calls over the years and NC sees little rarely any, $ for storm erosion beach renourishment.
Unlike NJ, the majority of the $ must come from the local communities directly affected.
I’m just hoping that retirees keep relocating to this area, as I have shifted some of my cashed out NJ equity to property down there. I understand that there will be ups and downs in real estate markets, but I’ve been seeing so many of the “Boomer” generation,from so many locations relocating into the Southeast, I still think the general overall future trend will be upward for most of these areas.
Only time will tell.
Bill
Values in North Carolina are up 50% in the last 4-5 years:
https://www.melissadata.com/lists/ezlists/ezHomeowners.aspx?zip=27513
(triple-click to select long link)
While not as bad as Northern NJ, it’s still bubbly.
But a bubbly $300,000 for a 3,500 square foot, 4BR, 3BA, 3-car-garage, on .5 acres, located 30 minutes from work still isn’t too bad.
An early sell (under 10 years) will probably bring a loss, though.
anon 09:39, thx for the Barron’s link. It reminds me of a song I heard once. I can’t remember the name of it, but it went like this “A long, long time ago. I can still remember how that music used to make me smile. And I knew that if I had my chance, I could make those people dance, and maybe they’d be happy for a while. But February made me shiver, bad news on the doorstep, I couldn’t take one more step…something touched me deep inside, the day, the music died…”
1:13
“American Pie”.
This is a little off the NJ housing topic, but I think alot of people who post here might find this new documentary interesting.
http://www.freedomtofascism.com/
Sorry, the “freedom to fascism” link is simply a bunch of KOOKS, and is not appropriate for this real estate forum.