I am not trying to dance around calling "it" anything but what it is. If this few measley percent is a bubble, then what words are left for real bubbles? Thermonuclear cloud?Dee Dee said:
What did the NADAQ index lose, 80% of its value?
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Housing Bubble Bursting?
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What did the NADAQ index lose, 80% of its value?
Terrel L. Shields
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And how long and how big does it have to get before your lips can form the word bubble? Is it the % change in price? The reduction in the number of units sold? Is it the area under the curve of a trend line?
Somehow methinks none of that could ever rise to proportions that those who insist that there can be no such thing as a real estate bubble would ever find acceptable...not even in the depression.
Somehow methinks none of that could ever rise to proportions that those who insist that there can be no such thing as a real estate bubble would ever find acceptable...not even in the depression.
Terry
Just let me know when it gets to supernova. You will have run out of hyperbole by then.
I didn't have any trouble saying there was a tech stock bubble. I had been playing in it for years. I was in my car when I heard Greespan say "irrational exuberance." By the time I pulled into a parking lot a cell phoned my Schwab account, those two words cost me $13,000.
The funny thing is, if you look at Shiller's goof graph, his housing price index stays flat from 1921 to 1941. So, actually, it is the great bubble head who is saying there was no real estate bubble in the depression.
Just let me know when it gets to supernova. You will have run out of hyperbole by then.
Dee Dee
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Steven Santora said:
So are you trying to say that the reason you don't want to call it a bubble is because if too many people start saying that's what it is you'll lose money...or did you finally believe it was a bubble when you lost money?
I was beginning to think that that some guys couldn't say it because it sounds kinda gay.
Not at all, it's just not a bubble. It's the same reason I don't call a canary and forklift.
Also, when Greenspeak said irrational exuberance, it wasn't a bubble yet. A few months after, the market started going up faster.
That interpretation of my comments was as off as the term bubble.
Also, when Greenspeak said irrational exuberance, it wasn't a bubble yet. A few months after, the market started going up faster.
That interpretation of my comments was as off as the term bubble.
Tom Fryer
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Housing bubble? Let's call a spade a spade
How about a credit bubble.
"A state of the economy where the rampant borrowing of money causes consumers, businesses and the government to be over indebted. A credit bubble ends in widespread bankruptcy and financial crisis as debtors are unable to pay their debts."
How about a credit bubble.
"A state of the economy where the rampant borrowing of money causes consumers, businesses and the government to be over indebted. A credit bubble ends in widespread bankruptcy and financial crisis as debtors are unable to pay their debts."
Randolph Kinney
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Where Housing Prices Will Fall the Most
Where Housing Prices Will Fall the Most
Businessweek
OCTOBER 10, 2006
By Pallavi Gogoi
Observers with different methods of analyzing the housing market come to some similar—and some dissimilar—conclusions
Prediction is very difficult, especially if it's about the future.
—Niels Bohr, Nobel laureate in Physics
Almost no one is arguing about whether the U.S. housing market is in decline these days. Prices are skidding across the country. Homebuilding stocks like Lennar (LEN ), DR Horton (DHI ), and Pulte Homes (PHM ) have gotten crunched.
Yet many people are wringing their hands over which markets will be the worst hit and how steep the price declines will be. Where will the housing market in Chicago or New York or Miami be next year? Bohr's take on predictions is as true as ever.
CONTRASTING APPROACHES. Into the breach have stepped economists, analysts, and academics. They're trying to predict where housing markets are headed using everything from econometric analysis to gut instinct. Two of these efforts offer a particularly intriguing contrast in approach. On one side is Mark Zandi, chief economist at Moody's Economy.com, who released a mammoth report on housing prices last week. On the other side are traders and speculators at the Chicago Mercantile Exchange (CME). Just a few months ago, they began trading futures and options contracts on housing prices in 10 markets across the U.S.
The contrast couldn't be more extreme. Zandi is one very smart economist, who mined reams of data to come up with his predictions. He sorted through everything, from employment levels in certain regions to historical housing price increases. At the Chicago Mercantile Exchange, the predictions are determined not by one person, but by a crowd of anyone who wants to participate. They may be real estate investors, economists, or simply speculators with a hunch about where prices are headed.
Neither forecasting approach offers much reassurance for homeowners. Zandi says that housing prices will decline in 2007, which would be the "first decline in national house prices since the Great Depression." He adds that the catalyst for the unwinding of the housing boom is higher interest rates and that the unraveling of some of the markets is due to high speculation and short-term investors, or flippers with the objective of purchasing and then quickly selling those homes.
REASONS FOR PESSIMISM. Zandi's predictions for specific markets are sobering. The worst hit metro areas, he asserts, will be Cape Coral, Fla., with an 18.6% decline in housing prices; Reno, Nev., with a 17.2% drop; and Stockton, Calif., with a 15.7% fall. To conduct his analysis, Zandi looked at the supply and demand of housing, changes in mortgage rates, demographic trends, the job market, and new housing (see BusinessWeek.com, 9/19/06, "Can Wall Street Withstand Weak Housing?").
The CME covers just 10 housing markets, rather than the 379 examined by Zandi. The exchange launched the trading in housing prices in May and volumes are still modest, which may affect accuracy. Investors are predicting declines in all 10 cities over the next 12 months. In fact, by August, 2007, when the one-year contract expires, futures traders expect the San Diego real estate prices will have declined 8.2%, Las Vegas 7.9%, and Los Angeles 6.9%. The composite index is expected to fall 6.8%. "The markets are clearly concerned that home prices are going to fall," says Robert Shiller, an economics professor at Yale University. Shiller helped develop the contracts with professor Karl Case and Standard & Poor's (which, like BusinessWeek, is a unit of McGraw-Hill (MHP )).
In the cases where they cover the same ground, Zandi and the CME traders have some uncanny similarities. For instance, Zandi expects San Diego to drop 8.4% through the second quarter of 2008, while the futures market is expecting a drop of 8.2% by August, 2007. In Washington, Zandi expects prices to drop 12% through the second quarter of 2008, and the futures market expects a 7.7% decline by August, 2007 (see BusinessWeek.com, 9/26/06, "Hopeful Glimmers in the Housing Slump").
Who would you put your money on? Zandi is certainly a smart, resourceful economist. But "predictive markets" like those used at the CME have proven surprisingly accurate in forecasting everything from the weather to political races. They're particularly accurate when money is on the line, as it is in Chicago.
As Rick Redding, CME managing director for products and services says: "These products create a liquid and transparent market that can be used…to help reduce risks associated with holding real estate assets." This is no academic experiment. The results of these predictions will be made all too public in the months and years ahead.
Where Housing Prices Will Fall the Most
Businessweek
OCTOBER 10, 2006
By Pallavi Gogoi
Observers with different methods of analyzing the housing market come to some similar—and some dissimilar—conclusions
Prediction is very difficult, especially if it's about the future.
—Niels Bohr, Nobel laureate in Physics
Almost no one is arguing about whether the U.S. housing market is in decline these days. Prices are skidding across the country. Homebuilding stocks like Lennar (LEN ), DR Horton (DHI ), and Pulte Homes (PHM ) have gotten crunched.
Yet many people are wringing their hands over which markets will be the worst hit and how steep the price declines will be. Where will the housing market in Chicago or New York or Miami be next year? Bohr's take on predictions is as true as ever.
CONTRASTING APPROACHES. Into the breach have stepped economists, analysts, and academics. They're trying to predict where housing markets are headed using everything from econometric analysis to gut instinct. Two of these efforts offer a particularly intriguing contrast in approach. On one side is Mark Zandi, chief economist at Moody's Economy.com, who released a mammoth report on housing prices last week. On the other side are traders and speculators at the Chicago Mercantile Exchange (CME). Just a few months ago, they began trading futures and options contracts on housing prices in 10 markets across the U.S.
The contrast couldn't be more extreme. Zandi is one very smart economist, who mined reams of data to come up with his predictions. He sorted through everything, from employment levels in certain regions to historical housing price increases. At the Chicago Mercantile Exchange, the predictions are determined not by one person, but by a crowd of anyone who wants to participate. They may be real estate investors, economists, or simply speculators with a hunch about where prices are headed.
Neither forecasting approach offers much reassurance for homeowners. Zandi says that housing prices will decline in 2007, which would be the "first decline in national house prices since the Great Depression." He adds that the catalyst for the unwinding of the housing boom is higher interest rates and that the unraveling of some of the markets is due to high speculation and short-term investors, or flippers with the objective of purchasing and then quickly selling those homes.
REASONS FOR PESSIMISM. Zandi's predictions for specific markets are sobering. The worst hit metro areas, he asserts, will be Cape Coral, Fla., with an 18.6% decline in housing prices; Reno, Nev., with a 17.2% drop; and Stockton, Calif., with a 15.7% fall. To conduct his analysis, Zandi looked at the supply and demand of housing, changes in mortgage rates, demographic trends, the job market, and new housing (see BusinessWeek.com, 9/19/06, "Can Wall Street Withstand Weak Housing?").
The CME covers just 10 housing markets, rather than the 379 examined by Zandi. The exchange launched the trading in housing prices in May and volumes are still modest, which may affect accuracy. Investors are predicting declines in all 10 cities over the next 12 months. In fact, by August, 2007, when the one-year contract expires, futures traders expect the San Diego real estate prices will have declined 8.2%, Las Vegas 7.9%, and Los Angeles 6.9%. The composite index is expected to fall 6.8%. "The markets are clearly concerned that home prices are going to fall," says Robert Shiller, an economics professor at Yale University. Shiller helped develop the contracts with professor Karl Case and Standard & Poor's (which, like BusinessWeek, is a unit of McGraw-Hill (MHP )).
In the cases where they cover the same ground, Zandi and the CME traders have some uncanny similarities. For instance, Zandi expects San Diego to drop 8.4% through the second quarter of 2008, while the futures market is expecting a drop of 8.2% by August, 2007. In Washington, Zandi expects prices to drop 12% through the second quarter of 2008, and the futures market expects a 7.7% decline by August, 2007 (see BusinessWeek.com, 9/26/06, "Hopeful Glimmers in the Housing Slump").
Who would you put your money on? Zandi is certainly a smart, resourceful economist. But "predictive markets" like those used at the CME have proven surprisingly accurate in forecasting everything from the weather to political races. They're particularly accurate when money is on the line, as it is in Chicago.
As Rick Redding, CME managing director for products and services says: "These products create a liquid and transparent market that can be used…to help reduce risks associated with holding real estate assets." This is no academic experiment. The results of these predictions will be made all too public in the months and years ahead.
Randolph Kinney
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Sellers stuck with real estate slowdown
Sellers stuck with real estate slowdown
http://www.eastvalleytribune.com/index.php?sty=76295
And for the first time in more than 10 years, the year-to-year median home price in the Valley fell, from $263,000 in September 2005 to $256,900 last month. Most median home prices across the East Valley also fell last month.
The median home price in the Valley was about $274,000 during the first quarter of this year, and the median price is expected to drop about 10 percent, or about $27,000, by the first quarter of 2009, according to Moody’s Economy.com.
Craig Bohall isn’t surprised by the slowing market and falling home prices.
“I just hope . . . the rare few buyers there are might come out and want to get some incentives if they’re going to buy a house anyway,” he said.
Sellers stuck with real estate slowdown
http://www.eastvalleytribune.com/index.php?sty=76295
And for the first time in more than 10 years, the year-to-year median home price in the Valley fell, from $263,000 in September 2005 to $256,900 last month. Most median home prices across the East Valley also fell last month.
The median home price in the Valley was about $274,000 during the first quarter of this year, and the median price is expected to drop about 10 percent, or about $27,000, by the first quarter of 2009, according to Moody’s Economy.com.
Craig Bohall isn’t surprised by the slowing market and falling home prices.
“I just hope . . . the rare few buyers there are might come out and want to get some incentives if they’re going to buy a house anyway,” he said.
Couch Potato
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$550,000+ for that butt ugly thing? No wonder he can't sell. I guess they are moving because they think it is too nice.Randolph Kinney said:
The days of the Greater Fool are gone (for now).
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