Housing Experts Change Their Tune
Just came across this piece by Seth Jayson over at Motley Fool. He seems to have a pretty good grasp on the housing bubble. I'm going to say this is another must read article. I'm just going to cut a few choice snippets out to tease you into clicking that link.
Housing Experts Change Their Tune
Shhh ... just listen ...It was only a few weeks back that I suggested home shoppers not believe everything they hear from the oft-quoted, so-called Experts regarding the housing market. There was a pretty straightforward reason. Despite much evidence to the contrary, the people with a vested interest in continuing to see prices rise -- like the outgoing Fed chief, Alan Greenspan -- kept telling the soundbite-seeking press that there was no "bubble."
...
And now it's time to ... Change! That! Tune! What a difference a few weeks can make.
...
Even Booger Bob -- the kid who picks his ear with the sharp end of his mechanical pencil and wipes the residue on the soles of his shoes -- even ear-pickin', wax-flickin' Booger Bob could have told you that once the interest rates creep upward, and/or real wages stagnate, and/or "core inflation" begins to bite buyers in the tuckus, putting a lid on monthly "affordability," the only variable left to move, if you want that home to move, is the home price itself. And it's gotta move down, eventually. And if it doesn't move down, well, people stop buying, right?
(I nearly spit out my coffee when I read this part -grim)
...
Maybe we should ask the experts at the Fed, or the National Association of Realtors, and everywhere else, "Just what is it that happens to home prices when the free money becomes less free, and that panicky run to 'get into the market, no matter what it costs,' comes grinding to a halt?" "What happens when the 'wealth of housing returns' goes flat, or even negative?" "Will housing continue 'stimulating the economy?' "
But maybe the final question should be, "Why didn't you talk more about this a few months ago?"
See, I think it is just because we just don't understand expert terminology. The first part is tiny bubblettes forming around the country, those bubblettes turned into regional froth. See, froth, not bubbles. But then someone came in with balloons, but I'm not so sure what those are, I can't seem to find that described in an economics textbook. Until only just recently did a bubble form, but it's OK, because prices only go up.
Caveat Emptor,
Grim
Housing Experts Change Their Tune
Shhh ... just listen ...It was only a few weeks back that I suggested home shoppers not believe everything they hear from the oft-quoted, so-called Experts regarding the housing market. There was a pretty straightforward reason. Despite much evidence to the contrary, the people with a vested interest in continuing to see prices rise -- like the outgoing Fed chief, Alan Greenspan -- kept telling the soundbite-seeking press that there was no "bubble."
...
And now it's time to ... Change! That! Tune! What a difference a few weeks can make.
...
Even Booger Bob -- the kid who picks his ear with the sharp end of his mechanical pencil and wipes the residue on the soles of his shoes -- even ear-pickin', wax-flickin' Booger Bob could have told you that once the interest rates creep upward, and/or real wages stagnate, and/or "core inflation" begins to bite buyers in the tuckus, putting a lid on monthly "affordability," the only variable left to move, if you want that home to move, is the home price itself. And it's gotta move down, eventually. And if it doesn't move down, well, people stop buying, right?
(I nearly spit out my coffee when I read this part -grim)
...
Maybe we should ask the experts at the Fed, or the National Association of Realtors, and everywhere else, "Just what is it that happens to home prices when the free money becomes less free, and that panicky run to 'get into the market, no matter what it costs,' comes grinding to a halt?" "What happens when the 'wealth of housing returns' goes flat, or even negative?" "Will housing continue 'stimulating the economy?' "
But maybe the final question should be, "Why didn't you talk more about this a few months ago?"
See, I think it is just because we just don't understand expert terminology. The first part is tiny bubblettes forming around the country, those bubblettes turned into regional froth. See, froth, not bubbles. But then someone came in with balloons, but I'm not so sure what those are, I can't seem to find that described in an economics textbook. Until only just recently did a bubble form, but it's OK, because prices only go up.
Caveat Emptor,
Grim
8 Comments:
It looks smells and is an insane bubble bursting.
Common sense folks. Unfortunately common snese has been thrown out the door for last 3-5 years.But lessons are not going to be learned. I am glad I will not be one of those debt slaved fools ready to learn a lifetime lesson.
The last of the fools are in so now it's time to patiently wait and watch the bloodbath.
Do not rush into bid. 10% LOL! This is nothing compared to 100% gains last 5 years.
Be careful with condos. 50% drops are a coming.
Houses need 35% imho.
Don't be a fool and buy at these miniscule price reductions. Tell'em you missed out and prices are going down now.
The Crash has begun. You will never hear a commissioned realtor mtg broker or leveraged builder ever say it.
NO MAAS!
Let'em suck it up now. Lean times going to hit these folks. I hope they have saved the windfall bonanza of profits last several years.
D. Lereah of the NAR the poster boy for this bubble will be going into hibernation for a few years. His comments and statements were irresponsible and atrocious. This jerk hurt many homebuyers into believing housing never goes down.
This slug needs to be held accountable for his irresponsible remarks.
I feel bad for people that listen to these so called experts who are whores for an industry.
COMMON SENSE FOLKS. USE IT!
Looks like the mortgage companies are starting to go under, here are the first reports:
Ameriquest Mortgage to Cut 1,500 Workers
Let me just ask readers one question, if the outlook was positive, why would one of the largest mortgage companies in the U.S. lay off 10% of it's workforce?
Caveat Emptor,
Grim
"It's Always a good time to buy a House"
A treasured quote from a commissioned realtor mtg and leveraged greedy builder.
LOL!
Let the crash begin!
Get ready to hear..
"There has never been a better time to be a buyer!"
..for the next 10 years.
grim
I love that site, I routinely show it to anyone that quotes 'experts'.
I'm putting that up on the main page as required reading.
grim
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