Housing Bubble Bursting?

[moh malekpour]

Steven and Randolph,
I think both of you have a point regarding the relationship between the long term rate and the short term fed rate.
Conventional wisdom was and has been that the long rate always follows the short rate but the conventional wisdom has been screwed up by the global market participants.
Fed chairman, the Maestro, after 18 years on the job, got confused and surprised when he mentioned the historical word “conundrum” in describing the long term rate behavior after increasing the short term 12 times . The short rate was up 12 times and the long term was going down and it was a shock “conundrum” to Meastro because he expected the long term goes up as well.
Bernarke explained that “conundrum” differently when he was asked about the long rate behavior. He called it a global saving glut.

 

[Fred]

I can see that you obfuscate with words and no data is going to be presented by you so you go around in circles with you arguments. After awhile, people get tired with your word maneuvers and move on. I see that is the appropriate action with you, especially on this one.

And that is from the guy who posted a bogus chart, which took me two seconds to spot as a phony. You never admitted the phony chart was phony, even after it was discredited. You can play tactics all you want, but if the facts were on your side, you would post them instead of attacking me.

So what if I posted a chart illustrating the accuracy of my statement. Would you admit your were wrong twice?

 

[DTB]

Someone much wiser than I posed this question before on this thread. How many of the resident sages who foresaw this disaster cashed out at the top and and are now wealthy tenants?

That question looks familiar. I think a received 1 affirmative answer.

I have kids 2 teens to be precise. No I'm not renting now, I'm still bullish in my market.

IF I felt the bubble coming around the corner, I would cash out and buy in at a later date with a lower price.

It really doesn't matter how you "view" your home ownership, it is the prudent way to operate. Would you really buy a house that you just "LOVE" in a declining area???????

 

[Randolph Kinney]

And that is from the guy who posted a bogus chart, which took me two seconds to spot as a phony. You never admitted the phony chart was phony, even after it was discredited. You can play tactics all you want, but if the facts were on your side, you would post them instead of attacking me.

So what if I posted a chart illustrating the accuracy of my statement. Would you admit your were wrong twice?

Steven, was the chart you refer to the one from "Irrational Exuberance", the one below? If it is, I don't recall that you presented anything in the way of data to refute that chart. You issued a rather subjective analysis and your opinion, neither of which carries any more weight than any other opinion based upon a sophomoric subjective analysis.

No attack Steven, just facts. I have posted mine and the source. You have nothing but your opinions and ad hominem verbiage.

 

[Fred]

There is and was nothing ad hominem or subjective about the FACT that 366 is larger than 83, but not on that chart.

just facts. I have posted mine and the source

Just because you have a source it doesn't make distortions into facts.

 

[Steve Owen]

IF I felt the bubble coming around the corner, I would cash out and buy in at a later date with a lower price.

It really doesn't matter how you "view" your home ownership, it is the prudent way to operate. Would you really buy a house that you just "LOVE" in a declining area???????

That is an astute ovservation, and accurate from an investor's point of view. But, the typical homeowner is not really an investor... they will often hold on in a declining area for one simple reason, all of the other choices are worse. I am not in a declining area (yet), but if I were it might not make much difference... my house payment is just over $400... nothing I could buy at this time in this market with the same functionality would be nearly that inexpensive. And, if the market declined to the point that I could get a similar house for much less, say $200, I would probably not be able to sell this one without at least losing a large portion of the equity. The thing that most of the bubbleheads have missed is that a lot of people will stay in the house they have regardless of what happens to its value. That is one of the things that tends to make the housing market more stable than other investments.

 

[Randolph Kinney]

Steven, you have talked in circles now to such an extent I am lost trying to follow which chart was bogus and that you label as phony (spotted in 2 seconds) that you think I posted and that you discredited.

May be if you concentrated and tried focusing you attention on what it is you are arguing about, you can put a clear, cogent and succinct statement together that some one as low as I am can follow. How about a link to my post that you are arguing over, along with your technical, objective analysis supported with actual facts?

The following link to your response exhibits sophomoric opinion and sophomoric conclusion at its finest.

http://appraisersforum.com/1244489-post28.html

Randolph,
There is something wrong with that graph, but I can’t figure it out. Maybe you can explain the problem.

The housing price index increases 85% but its flaming red line almost flies off the chart like Sputnik. On the other hand, the population increases much more, or 366%, but its cool blue has much more flatter slope. Normally when I make a chart, the line that represent the 366% increase has the greater slope when compared to the line that represents the 85% increase.

Is it possible, someone there is cooking the books?

I really can appreciate your fine example of a technical and objective analysis. Maybe you could give me the same with bogus and phony in that same analysis?

One thing that you missed Steven, besides the source, is the slope or rate of change. Population was not normalized where the housing price index was to 100 at the start and corrected for inflation. But hey, I am telling the technical genius of charts something he already should know.

 

[Randolph Kinney]

Steven, just so you can know that the chart you claim is bogus and phony is actually a representation from Robert J. Shiller, the economist who published the chart in his book, Irrational Exuberance, I am showing the single chart of the house price index history as follows:

I am waiting for your apology or another fine sophomoric analysis with its sophomoric conclusion.

 

[moh malekpour]

Steven, just so you can know that the chart you claim is bogus and phony is actually a representation from Robert J. Shiller, the economist who published the chart in his book, Irrational Exuberance, I am showing the single chart of the house price index history as follows:

I am waiting for your apology or another fine sophomoric analysis with its sophomoric conclusion.

You got to be really blind not to see the housing market sharp progression from 2001 to 2006. It is almost 90 degrees, straight up, vertical, ascendant trendline. It is an usual event in the US housing market history. If this doesn't define the bubble, what does?
The chart shows the ups and downs in housing market throughout history but nothing like the straight up trendline between 2001 to 2006.
From 1890 to 1921, there was a normal fluctuation. from 1921 to 1944, we had two world wars and depression. After two wars and depression, we had few years of prosperity from 1944 to 1950.From 1950 to 2001, there was a normal slight ups and down housing market and after 1921 all the sudden, the housing market took up just like a jet, boom. If it is going to come down the same way that is gone up, there is going to be a crash.
by the way Randolph, how do you past your chart like this. this is very neat.

 

[DTB]

That is an astute ovservation, and accurate from an investor's point of view. But, the typical homeowner is not really an investor... they will often hold on in a declining area for one simple reason, all of the other choices are worse. I am not in a declining area (yet), but if I were it might not make much difference... my house payment is just over $400... nothing I could buy at this time in this market with the same functionality would be nearly that inexpensive. And, if the market declined to the point that I could get a similar house for much less, say $200, I would probably not be able to sell this one without at least losing a large portion of the equity. The thing that most of the bubbleheads have missed is that a lot of people will stay in the house they have regardless of what happens to its value. That is one of the things that tends to make the housing market more stable than other investments.

Steve,

That's exactly the point! Some are telling us they KNEW the bubble was there BEFORE it hit. Show us how how you (they) USED this to your advantage, then perhaps I will believe it.

If you KNEW your house was worth 200K today and in 6-12 months you could buy the model match for let's say 150K. How could you not do it?

Or for those who will NEVER move, why not load up debt on the 200K and buy the bargains at 150K ? I would much rather hear about actions rather than Monday morning quarterbacking.

Kinda like playing football versus being a fantasy league expert. They also have briefcases full of charts hanging out the sides.