RE: Purchases of new homes in the U.S. exceeded forecasts

RE: Purchases of new homes in the U.S. exceeded forecasts (Full Version)

All Forums >> [Community Discussions] >> Dungeon of Political and Religious Discussion

Message

Hillwilliam -> RE: Purchases of new homes in the U.S. exceeded forecasts (2/24/2012 5:48:40 PM)
quote: ORIGINAL: tj444 quote: ORIGINAL: Hillwilliam quote: ORIGINAL: Kana quote: Purchases of new homes in the U.S. exceeded forecasts it was her informed opinion that right now in the US we have enough houses left over from the real estate boom/building glut sitting empty to satisfy US need for the next decade if not one new house is built during that time frame. It depends on where you are. Vacancy rates in my county are under 5%. You can drive down the street and pass 100 or more homes and they all have someone in them. We never boomed so we never depreciated. We have about 64,000 people in this county and as of 10 mins ago, there were 18 foreclosures on the market. Not exactly Ft Myers FL perhaps not but if the real estate market has dropped, prices wise, then how many are underwater and cant move, even if they want to? I would think if what you say is so in your area that there should be more sales than there are.. sorta strange.. Which part of "we never boomed so we never depreciated" did ya miss? Our area has always had very low turnover. People buy a house and stay in it. My house. built in '39. I'm the second owner. Neighbor on one side. built in 45. Neighbor is the second owner. Other side. Built in '42. 3rd owner lives there now.. I have a listing that the most recent deed is from 1906. Just uber stable.

tj444 -> RE: Purchases of new homes in the U.S. exceeded forecasts (2/24/2012 6:04:12 PM)
quote: ORIGINAL: Hillwilliam Which part of "we never boomed so we never depreciated" did ya miss? Our area has always had very low turnover. People buy a house and stay in it. My house. built in '39. I'm the second owner. Neighbor on one side. built in 45. Neighbor is the second owner. Other side. Built in '42. 3rd owner lives there now.. I have a listing that the most recent deed is from 1906. Just uber stable. even places where they say they never boomed, there usually has been some appreciation over the years, certainly not as much, and then some depreciation, perhaps not much. It doesnt take much for someone with a 3% down mortgage to get underwater even with a small amount of depreciation.. But if thats the case then why is the real estate market so slow there?

kalikshama -> RE: Purchases of new homes in the U.S. exceeded forecasts (2/24/2012 6:07:19 PM)
quote: Our area has always had very low turnover. People buy a house and stay in it. My mother's house has been in only 5 families since 1769!

Kana -> RE: Purchases of new homes in the U.S. exceeded forecasts (2/24/2012 6:16:55 PM)
Ok, Let's take a quick peek...and I mean quick. We are working with figures googled in a few minutes. I'll try to keep to hard official (read Govt stats) sources for info as much as possible.. In 2010 The GAO counted 10.3 million empty houses (Note we are only talking empty, not those in foreclosure..and note that we are talking 2010-before things got bad.) http://www.huffingtonpost.com/2011/12/06/vacant-homes-gao_n_1132813.html The same year the census counted 16 million empties-same rules http://money.cnn.com/2011/10/07/real_estate/home_ownership/index.htm Bloomberg, who I trust more than than CNN/HuffPost, reports 18.9 million vacancies with another 4.6 million in foreclosure...a total of 23.5 mil http://www.bloomberg.com/news/2010-07-27/vacancies-climb-as-u-s-home-ownership-falls-to-lowest-level-in-a-decade.html And yahoo finance reports 10 million more forclosures through 2012. (We're adding these because she was building foreclosures into her estimate-in this case we don't have to guess the stats for the first 2 years of the decade because the event has already occurred) So lets ballpark the empty house number at a nice even 30 mil. First time buyers tend to make up between 34-45% of the market. These times suck. Lets call it 40% and be generous, err on the side of caution http://www.usatoday.com/money/economy/housing/2011-03-28-real-estate-first-time-home-buyers.htm Since we are running with 2010 stats as a base (We've added foreclosures) let's be reasonably consistent and use the 2010 existing home sales stats as well (Plus, it was around that time she uttered the remark so it's fair to her too.) In 2010 the US Census reports 9,720,500 existing homes sold. http://www.census.gov/compendia/statab/cats/construction_housing/housing_sales.html (Click existing homes by state, download the excel file, then sum the 2010 state by state figures) 40% of that gives us 3,888,200 first time buyers getting into existing homes. Then take our 30 million available homes on the market, divide by 3,888,200 and we get a grand total of 7.72 years to sell the houses on the market before another needs to be built. Then factor in the number of folks who will die and foreclose in that era and I bet it comes up damn near 10 years. So whattya know-a little digging shows the prof was right :-)

tj444 -> RE: Purchases of new homes in the U.S. exceeded forecasts (2/24/2012 6:42:16 PM)
Interesting,.. thanks,.. I am gonna keep this info.. despite the length of time, I do think the right real estate bought at the right price in the right area and at the right rental income can be a good investment long term..

provfivetine -> RE: Purchases of new homes in the U.S. exceeded forecasts (2/24/2012 6:47:27 PM)
With interest rates and housing prices at their current levels, US housing remains a very attractive asset. People are clearly taking advantage of this. Hopefully, these buyers are locking in a 30 year fixed rate because they will be rocked in the future if they're playing with the fire that is ARM.

Kana -> RE: Purchases of new homes in the U.S. exceeded forecasts (2/24/2012 6:55:17 PM)
I wouldn't be buying new homes construction company stock-that's for sure :-) Personally I think that every bust is someones boom. For folks who are sitting on a lot of cash these are gonna be the golden years. They can buy up snot loads of real estate dirt cheap or foreclosed, get in at damn near invisible interest rates and the sit on it till the tide turns. And when it does, and it will, it always does, they are gonna make baaaaaaaaaaaaank. Course, we could also have hyperinflation, peak oil, another war or three, watch the European financial system crumble into nothingness with resultant disarray, pandemonium and chaos, government gridlock and the whole over exposed system could go belly up, someone may notice that the emperor is garbed in less than the acceptable amount of clothing, in which case those same speculators could end up owning nothing but green pieces of paper that are only good for kindling. Doubtful, but there's always a chance...

tj444 -> RE: Purchases of new homes in the U.S. exceeded forecasts (2/24/2012 7:07:22 PM)
yeah, many builder stocks have increased in price over the last while and nothing i would want to take a chance on... Yes, there could be a double dip and all sorts of possibilities but if you buy right it shouldnt matter much if your a long term thinker..

Edwynn -> RE: Purchases of new homes in the U.S. exceeded forecasts (2/24/2012 7:44:35 PM)
Aw, but the only fun in investing is in a venture where there is some minor potential for ultimate disaster, but you knew that. So then, I asked a question about how future demand was taken into consideration of outlook in future housing market estimations and you responded in terms we both understand. Thank you. Still doesn't mean I'm going whole hog with that, but good info is good info. I am far from being considered an optimist, but so many things have changed that I'm hoping that housing demand will henceforth not be such a prominent indicator of overall economic health that it once was. But I also think that a period of less spending and paying down debt and slow increase in fuel prices are ultimately a good thing in the long run for long term economic benefit, so I'm used to not having many fans. Looking at it now, it was a bit much to expect that a population witnessing the government going hog wild on spending and tax cuts and deregulation and other increased munificence to the highest earning individuals and corporations while seeing their own real wages simultaneously decline more than 4% from 2000 to 2008 could just sit idly by and hold the fort on their own. It is also a bit disingenuous and unthinking to claim that regional and local governments in the US and national governments in Europe acted 'irresponsibly' in their rendering of services when revenue estimations and underlying foundation for that were based on a normal business-cyclic economy (including normally expected down cycles), not taking into account the external shock of legislative regulatory indiscriminate actions as took place in the US. As we discuss things here, 'austerity' is taken as the nostrum for all ills, leaving the cause of the problem sitting comfortably at ease, no serious addressing of the regulation issue forthcoming. I told you I wasn't an optimist, but even with all the above, I am not a fatalist either. We will find a way.

Kana -> RE: Purchases of new homes in the U.S. exceeded forecasts (2/24/2012 8:02:36 PM)
Hey-I was just rechecking my numbers and I double added the total #'s of houses sold in 2010. Apparently the govt did their totals at the top of the page, not the bottom, and I added them in inadvertently. Anyhow, the real figures are 4,908,000 houses sold, 1,936,200 houses sold to new buyers, which gives a total of 15.28 years to sell the existing inventory. -at 15 million vacant it'll take 7.64 years -at 20 million vacant it'll take 10.19 -Taking the most optimistic outlook and saying there are only 10 million vacants with zero deaths/future foreclosures etc...we still have 5.09 years to sell the standing houses. No matter how ya cut it, that's a whole lotta ouch right there. http://www.census.gov/compendia/statab/cats/construction_housing/housing_sales.html (Click existing homes by state, download the excel file, then DO NOT sum the 2010 state by state figures)

Edwynn -> RE: Purchases of new homes in the U.S. exceeded forecasts (2/24/2012 8:27:58 PM)
The supply side figures are convincing. The demand side, not so much. "Sell the existing inventory" is based on an estimation of future demand, which in any case the estimations proposed here I do not dismiss out of hand. It is certainly understandable that the banks flooding the market with houses by way of their glut of speciously rendered loans got us where we are today. It might take as long as you say regarding the housing market, but it might also be possible that other means to advance or to protect wealth might come to attention also. We haven't even got the money market situation fixed yet. Credit is the basis of any market system, but that being dependent on responsible credit practices. The banks succeeded in avoiding their own demise, at expense of nearly bringing about the demise of the society which makes their existence possible. Laws were passed that effectively made it impossible for banks to serve in their normal fiduciary capacity of financial intermediaries. They had no meaningful responsibility anymore. They have made their stand, and obviously they have won the day. It's time to go another route, and there are others, thankfully, much smarter than I seeking that out. I will be an optimist in calling this a Pyrrhic victory on their part.

MrRodgers -> RE: Purchases of new homes in the U.S. exceeded forecasts (2/24/2012 8:35:54 PM)
quote: ORIGINAL: Kana quote: ORIGINAL: Edwynn On what basis of future demand are these numbers given? Just as supply never remains constant, neither does demand. Based on the present demand and the concomitant price elasticity of demand, I wouldn't doubt her numbers, as from current market value contemporaneously applied. Predicting future demand is another matter. Real estate has not always been about simple consideration of whatever measure of 'housing units per population' vs. 'population seeking housing units.' Those formerly seeking better houses in better neighborhoods for purpose of increasing personal wealth have seen demonstrated in most blunt fashion obliteration of the now anachronistic notion that your own house is a good investment. That and the employment and general economic situation are the determiner of housing demand, and that is why it stands where it is at present. I'm not saying that we might ever recover from our current housing density vs. population density limitation that applies in third world countries, but if that were to be the case I sure as heck wouldn't want to brag about it. Really, frankly, I have no idea where she got the numbers. What I do know is that: 1-She did long term in depth financial analysis of the US real estate market concentrating more on private dwellings than commercial real estate. 2-She took a macro rather than a micro view of the market so of course some pockets exist. 3-While I don't know the exact numbers I did work enough with her to know the basic format. When doing long term financial analysis folks build mathematical models of varying degrees of complexity. Each of these is going to be worked at least 3 ways-worst case scenario, best case scenario and average outcome. Now, she built models working on at least 5 different spectrum's, factoring in kinda bad, kinda good scenarios as well. Then you punch the whole thing through regression analysis to make sure your coefficients are actually valid. When discussing results generally, the mid range is used. Thus, her models included population growth, economic growth (Or the lacks thereof) as well as a variety of other scenarios (Fuel prices for instance),then she would extrapolate the results. When she made her "having enough residences for a decade" comment, she was taking the middle of the road. And she wasn't the only one. I've sat in on conferences with her and folks from the Fed, the Treasury as well as the World Bank and she toed the same line with all of em....to the point of commenting that her while her digits came out with a decade, she personally, and professionally, thought the glut was larger than that due to folks stuck underwater in mortgages they couldn't afford who would be defaulting in the near future. And not one of the "experts" blinked at her assessment. Most of them, in private, concurred, and more than a few agreed that her numbers were a bit rosy Yea, I've heard and read the same thing and I would agree in general terms, we are in for a less than a real job producing home market undoubtedly and likely...until at least 2020. However, around the work centers where the population is being drawn for jobs, real estate is selling and appreciating. In my area and all around commuter territory...prices are up 10% a year since 2009.

Kana -> RE: Purchases of new homes in the U.S. exceeded forecasts (2/24/2012 8:49:53 PM)
quote: ORIGINAL: MrRodgers quote: ORIGINAL: Kana quote: ORIGINAL: Edwynn On what basis of future demand are these numbers given? Just as supply never remains constant, neither does demand. Based on the present demand and the concomitant price elasticity of demand, I wouldn't doubt her numbers, as from current market value contemporaneously applied. Predicting future demand is another matter. Real estate has not always been about simple consideration of whatever measure of 'housing units per population' vs. 'population seeking housing units.' Those formerly seeking better houses in better neighborhoods for purpose of increasing personal wealth have seen demonstrated in most blunt fashion obliteration of the now anachronistic notion that your own house is a good investment. That and the employment and general economic situation are the determiner of housing demand, and that is why it stands where it is at present. I'm not saying that we might ever recover from our current housing density vs. population density limitation that applies in third world countries, but if that were to be the case I sure as heck wouldn't want to brag about it. Really, frankly, I have no idea where she got the numbers. What I do know is that: 1-She did long term in depth financial analysis of the US real estate market concentrating more on private dwellings than commercial real estate. 2-She took a macro rather than a micro view of the market so of course some pockets exist. 3-While I don't know the exact numbers I did work enough with her to know the basic format. When doing long term financial analysis folks build mathematical models of varying degrees of complexity. Each of these is going to be worked at least 3 ways-worst case scenario, best case scenario and average outcome. Now, she built models working on at least 5 different spectrum's, factoring in kinda bad, kinda good scenarios as well. Then you punch the whole thing through regression analysis to make sure your coefficients are actually valid. When discussing results generally, the mid range is used. Thus, her models included population growth, economic growth (Or the lacks thereof) as well as a variety of other scenarios (Fuel prices for instance),then she would extrapolate the results. When she made her "having enough residences for a decade" comment, she was taking the middle of the road. And she wasn't the only one. I've sat in on conferences with her and folks from the Fed, the Treasury as well as the World Bank and she toed the same line with all of em....to the point of commenting that her while her digits came out with a decade, she personally, and professionally, thought the glut was larger than that due to folks stuck underwater in mortgages they couldn't afford who would be defaulting in the near future. And not one of the "experts" blinked at her assessment. Most of them, in private, concurred, and more than a few agreed that her numbers were a bit rosy Yea, I've heard and read the same thing and I would agree in general terms, we are in for a less than a real job producing home market undoubtedly and likely...until at least 2020. However, around the work centers where the population is being drawn for jobs, real estate is selling and appreciating. In my area and all around commuter territory...prices are up 10% a year since 2009. I live in Baltimore (in a hot, artsy, yuppie, highly educated neighborhood nonetheless) which is one of the areas kinda sheltered from the crisis due to proximity to DC/availability of federal jobs and my house has lost 1/3 of it's value over five years. Don't know bout elsewhere but that's how it looks at the ground level here. Were houses over-valued then? Sure. But now things have flipped and my house is valued at less than what it should be worth.

Edwynn -> RE: Purchases of new homes in the U.S. exceeded forecasts (2/24/2012 9:20:35 PM)
That's because you used your equity as an ATM, to buy a Mercedes SUV and front row tickets to a Gaga concert for twenty people and all accordant bling therewith. And that is what all these long-owning 80 yr. old retirees did too. That's their (the banks') story and they're sticking to it.

tj444 -> RE: Purchases of new homes in the U.S. exceeded forecasts (2/24/2012 9:21:03 PM)
quote: ORIGINAL: Kana I live in Baltimore (in a hot, artsy, yuppie, highly educated neighborhood nonetheless) which is one of the areas kinda sheltered from the crisis due to proximity to DC/availability of federal jobs and my house has lost 1/3 of it's value over five years. Don't know bout elsewhere but that's how it looks at the ground level here. Were houses over-valued then? Sure. But now things have flipped and my house is valued at less than what it should be worth. I think part of that problem is the appraisals that are basically dictating if houses in your area will sell and at what price. Some of the appraisers could be from way out of the area and have no real idea what a property should sell for. And if the sale price is higher than the appraisal, then its either the buyer comes up with extra cash which most wont, imo,.. or the seller has to agree to lower the sale price. So, at least part is that its the appraisers/bankers that are setting the prices, not the actual market...

MrRodgers -> RE: Purchases of new homes in the U.S. exceeded forecasts (2/24/2012 9:35:58 PM)
quote: ORIGINAL: Kana quote: ORIGINAL: MrRodgers quote: ORIGINAL: Kana quote: ORIGINAL: Edwynn On what basis of future demand are these numbers given? Just as supply never remains constant, neither does demand. Based on the present demand and the concomitant price elasticity of demand, I wouldn't doubt her numbers, as from current market value contemporaneously applied. Predicting future demand is another matter. Real estate has not always been about simple consideration of whatever measure of 'housing units per population' vs. 'population seeking housing units.' Those formerly seeking better houses in better neighborhoods for purpose of increasing personal wealth have seen demonstrated in most blunt fashion obliteration of the now anachronistic notion that your own house is a good investment. That and the employment and general economic situation are the determiner of housing demand, and that is why it stands where it is at present. I'm not saying that we might ever recover from our current housing density vs. population density limitation that applies in third world countries, but if that were to be the case I sure as heck wouldn't want to brag about it. Really, frankly, I have no idea where she got the numbers. What I do know is that: 1-She did long term in depth financial analysis of the US real estate market concentrating more on private dwellings than commercial real estate. 2-She took a macro rather than a micro view of the market so of course some pockets exist. 3-While I don't know the exact numbers I did work enough with her to know the basic format. When doing long term financial analysis folks build mathematical models of varying degrees of complexity. Each of these is going to be worked at least 3 ways-worst case scenario, best case scenario and average outcome. Now, she built models working on at least 5 different spectrum's, factoring in kinda bad, kinda good scenarios as well. Then you punch the whole thing through regression analysis to make sure your coefficients are actually valid. When discussing results generally, the mid range is used. Thus, her models included population growth, economic growth (Or the lacks thereof) as well as a variety of other scenarios (Fuel prices for instance),then she would extrapolate the results. When she made her "having enough residences for a decade" comment, she was taking the middle of the road. And she wasn't the only one. I've sat in on conferences with her and folks from the Fed, the Treasury as well as the World Bank and she toed the same line with all of em....to the point of commenting that her while her digits came out with a decade, she personally, and professionally, thought the glut was larger than that due to folks stuck underwater in mortgages they couldn't afford who would be defaulting in the near future. And not one of the "experts" blinked at her assessment. Most of them, in private, concurred, and more than a few agreed that her numbers were a bit rosy Yea, I've heard and read the same thing and I would agree in general terms, we are in for a less than a real job producing home market undoubtedly and likely...until at least 2020. However, around the work centers where the population is being drawn for jobs, real estate is selling and appreciating. In my area and all around commuter territory...prices are up 10% a year since 2009. I live in Baltimore (in a hot, artsy, yuppie, highly educated neighborhood nonetheless) which is one of the areas kinda sheltered from the crisis due to proximity to DC/availability of federal jobs and my house has lost 1/3 of it's value over five years. Don't know bout elsewhere but that's how it looks at the ground level here. Were houses over-valued then? Sure. But now things have flipped and my house is valued at less than what it should be worth. Funny you should say that...'what my house should be worth.' Just what should any house be worth ? Worth about as much say for example, for me alone to pay off my mortgage typically in 6 years as the market was in the eastern 'suburbs' of the 1870's or worth about as much as to mortgage one now that takes over 1/3 of our two incomes...30 years to pay off even though it could be pretty damn near...the same house ? Houses are 'worth' a factor of a ratio of your income to debt to calculate P & I for a fixed rate 30 year loan. The more you are worth, the more your house is worth (costs) in our consumption based McMansion society. A rambler outside Detroit, moved to Great Falls, Va. would be as much as 10 times as much. I know from my own knowledge and research. Arguably because they got so ridiculously high, my neighborhood is currently at about 60-70% of value as compared to say 2008. Still, they had gone down so far, and demand is on the rise in the professional ranks coming to work, 3-4% mortgages...appreciation is back. Some may even get their roof above water.

SternSkipper -> RE: Purchases of new homes in the U.S. exceeded forecasts (2/24/2012 9:58:20 PM)
quote: Who do you believe? As much as I think Michael Bloomberg, if I gotta choose between his financial news services and yahoo's. I'm sorry, there's just no question. And people who bet real money on this shit also think Bloomberg Reports walks away with it.

SternSkipper -> RE: Purchases of new homes in the U.S. exceeded forecasts (2/24/2012 10:08:24 PM)
quote: Hopefully, these buyers are locking in a 30 year fixed rate because they will be rocked in the future if they're playing with the fire that is ARM. Are they even bothering to pitch ARMs in this climate? I see pretty much all of the lenders pitching with fixed rate packages. In fact I haven't even heard an adjustable rate in any of the national ads either. Though I hate those things so much I could just be filtering them out.

tj444 -> RE: Purchases of new homes in the U.S. exceeded forecasts (2/24/2012 10:18:34 PM)
quote: ORIGINAL: SternSkipper quote: Who do you believe? As much as I think Michael Bloomberg, if I gotta choose between his financial news services and yahoo's. I'm sorry, there's just no question. And people who bet real money on this shit also think Bloomberg Reports walks away with it. Yes, I know, I just thought it was funny. Andd someone that believes one view will find stats and manipulate them to back up their already decided opinion. I dont really trust any "experts" opinion, you can have an expert that is good at one forecast or even a few and then they get the next one soooooo friggin wrong.. no one is right all the time anyway.. i just look at what they say & their stats and decide if they make sense to me or not.

Kana -> RE: Purchases of new homes in the U.S. exceeded forecasts (2/24/2012 11:23:33 PM)
quote: ORIGINAL: MrRodgers Funny you should say that...'what my house should be worth.' Just what should any house be worth ? Worth about as much say for example, for me alone to pay off my mortgage typically in 6 years as the market was in the eastern 'suburbs' of the 1870's or worth about as much as to mortgage one now that takes over 1/3 of our two incomes...30 years to pay off even though it could be pretty damn near...the same house ? Funny you should say that, cuz this was the one phrase I lingered over...and knew someone was gonna pick up on. Technically, the flippant answer is that any commodity is worth what the market will bear. But we all know the market can be wrong (Points at his overvalued house estimates in 2007). At one point my house was appraised at 250. Now that was just wildly out of line-pretty much everyone was aware that we were operating in a speculator driven boom. Now I would be shocked if someone offered 145. Realistically, the house is worth about 170-180-that's a reasonable price, what the finance guys call true market value. Course an accountant would judge it's worth at book cost, but we all know they just juggle numbers anyhow :-)

Page: << < prev 1 [2] 3 next > >>

Collarchat.com © 2025

Terms of Service

0.046875