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Housing Bubble Bursting?

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Austin said:
Foots prints in the sand. How do you know when the bottom is approaching.
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Austin.. I wouldn't say that's a bottom approaching in this particular market cycle.
More like sign that 2nd leg down is imminent.
This bottom might look more like people squabbling over the 1/2 dozen cans actually at the dumpster
- since JoeAverage homeowner has already put them aside -under his mattress- for a really rainy day.

My sign for the Bottom:( is the inverse of cocktail party conversation at the Top:) .

At the Top, everyone is talking about the $$ they made in RE, plus what and why they want to buy.
At the Bottom, they're crying the blues about their losses, or the squeeze they're in since they can't sell their house/houses.
And - If you were to ask them if they're planning to buy RE, the answer will be an unequivocal NO,
plus a look that says, Why would anyone want to buy RE? :shrug:
 
Home prices to keep sliding with no bottom in sight

http://www.reuters.com/article/ousiv/idUSN1235621120071112


NEW YORK (Reuters) - The U.S. housing market's skid is nowhere near over and could extend for another five or even 10 years, according to one of the most-watched housing economists.

Robert Shiller, a Yale University economist and co-developer of Standard and Poor's S&P/Case-Shiller Home Price Indices, told Reuters that declines in home values in the most vulnerable markets could well double the losses recorded thus far.

What's more, Shiller, who is also co-founder and chief economist of the financial firm MacroMarkets LLC, said predictions for a bottom within the next year or so are probably wrong, with price declines in 2008 possibly worse than those seen this year.

"There is a probability of a continuing decline for a period of years, bringing prices in many cities down in the 10s of percent," Shiller said in an exclusive interview.

"The bottom is hard to predict," he said. "I do not see it imminent and it could be five or 10 years too."
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Why a lender needs to foreclose on a home, when the borrower is not able to pay 13%/14% ARM but could pay a fix 7 or 7.5%. To refinance the lender required from the same borrower to have significant equity or to fork over an extra 5% of the value. (if they could pay 5% extra, they would not have problems with the payment at first place)They foreclose on the property and the lender will eat much more like 15%-20% if not higher loss. I do not see the willingness from the lenders to work with the current customers. Same lender issued the loan to customer, with the MB verbal promise that it can be refinanced in the future / convert to fixed rate.
I talked to some people around here in the industry and more and more are telling me that "Bubble Bursting" is politics now.
Can it be the interest for some people to screw the market?
From the media I understand that only bad news are news, but politicians and lenders???
 
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Marcia Langley said:
Real doom & gloom here from one of the big houses.

Is this just spin to convince the feds to lower again?
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Or 2008 Presidential Election.
There might be a knight or knightess on white horse who will rescue the economy, or there might be a good strategy for some candidates if the economy is in deep trouble.
 
Minimum 5 year recovery is reasonable. That's what it took in CA and in TX when the bottom fell out. This time, it may actually take 10 years as there's so much excess inventory and loans that were made to people who really couldn't afford it, on properties that weren't worth it.
 
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