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ORIGINAL: tj444

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ORIGINAL: Hillwilliam

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ORIGINAL: Kana

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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..

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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.

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Our area has always had very low turnover. People buy a house and stay in it.

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ORIGINAL: Kana

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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

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ORIGINAL: MrRodgers

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ORIGINAL: Kana

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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.

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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.

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ORIGINAL: Kana

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ORIGINAL: MrRodgers

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ORIGINAL: Kana

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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.

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Who do you believe?

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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.

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ORIGINAL: SternSkipper

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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.

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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 ?