Housing Market Collapse: How Bad Can It Get?
The Fed lowered short-term rates for the second time in two months yesterday in an attempt to stop housing market woes from completely dragging down the rest of the economy. The cut came after a Case-Shiller survey showed that prices of homes in 20 major metropolitan areas fell 4.4 percent for the 12 months through…
The Fed lowered short-term rates for the second time in two months yesterday in an attempt to stop housing market woes from completely dragging down the rest of the economy. The cut came after a Case-Shiller survey showed that prices of homes in 20 major metropolitan areas fell 4.4 percent for the 12 months through August—the biggest drop since the survey began in 2001. And the New York City area wasn’t exempt from the trend: Home prices were down 3.8 percent for the year that ended in August. In a statement accompanying yesterday’s rate cut, officials said the housing downturn is likely to slow the economy, and most experts think the worst is still to come. So now the same old questions remain: How much worse can the national housing market possibly get, and are the heretofore unscathed upper ends of the Manhattan and Brooklyn markets finally going to feel the heat?
Home Prices Are Down, and So Is Confidence [NY Times]
Fed Lowers Key Interest Rate by a Quarter Point [NY Times]
“I own my apt but want to buy a house, so I have mixed feelings about this since obviously more affordable houses will mean that it will be harder for me to sell my PS apt.”
SELL-RENT-BUY. After adjusting for inflation, you’ll never see your 2007 value again in your lifetime. Take your profit now (if you’re not underwater). Rent until the sky stops falling. Then buy for a bargain, say 2010. When the market’s going up, buying means downgrading your residence (quality/location). When the market goes down, you can upgrade. It’s quite simple.
“Why does nobody seem to remember the late 80s-early 90s when prices went down significantly even in prime areas of the city?”
Because, at that time, most of these first-time-buyers on this blog were more concerned with their senior prom or SAT scores or “Saved by the Bell” to concern themselves with real estate. I remember, around 1994, telling older guys at work that, “you can’t lose in real estate”, and being vigorously corrected to the tune of “Oh yes you can!”. I never understood them until now.
To do list for 11:52 –
-Get a clue
-Stop smoking crack and drinking koolaid regulurly
-Learn to focus on the real issue (your equity’s going bye bye)
Copycat What
12:24- very well said. I couldn’t agree more that people who deny that prices can/will come down just have blinders on and aren’t looking at historical trends. This is so similar to Dot Com/high tech hysteria. No one believed that those companies were overvalued until all of a sudden the truth was staring them in the face and their portfolios were plummetting.
I have inlaws who live in FL and who bought so much real estate (speculatively) in 2005 believing that there was inherent value in these properties in spite of how ridiculously high they were priced and the ridiculous run up they’d had. Well, we all know the FL real estate story. They are not able to sell their investment properties and are renting them out at a loss right now.
People just forget to use common sense, which perplexes me time and again.
Why does nobody seem to remember the late 80s-early 90s when prices went down significantly even in prime areas of the city? It seems like no one can bear to think of prices going down (owners/brokers that is) even though the run up in the last few years is clearly unsustainable. I have seen prices start to come down. Now, I own my apt but want to buy a house, so I have mixed feelings about this since obviously more affordable houses will mean that it will be harder for me to sell my PS apt. So it’s cuts both ways, but even I’m stunned by the value we were given for our apt which has doubled in the last 5 yrs. Our incomes certainly have not, and the buying power of our savings has not.
To do list for The What –
Get a job
Take medication regularly
Learn to spell
Some day The What will get a grip ……
Hey 9:48 How much exposure do your bank have in Mortgages?
If you can answer that question, you would not argue with me.
“So, you need to face this reality, you baboon: People like me are not suddenly going to become poor. But you might.”
Oh no homeboy, I’m out of everything. I have been poor before and know how to survive. Can you stand to lose everything? I leave that up to you
Good night
The What
Someday this war is gonna end………
Now for the nitecap.
Dow plunges 362 points on credit fears
http://money.cnn.com/2007/11/01/markets/markets_530/index.htm?postversion=2007110118
“It’s continued concern about subprime and the pricing of these securities,” said Owen Fitzpatrick, head of the U.S. equity group at Deutsche Bank.
This after the FED cut rates!!! We’re fucked!!
The What
Someday (soon) this war is gonna end…………………
“”The US is still a major producer of Cars, Wines and Jewelry.”
IF Chukie or Joe Six Pack have no money then, Who going to buy this shit?
TW you show your ignorance (in many ways) but since you brought up the declining dollar’s effect on these industries you should know that if the dollar declines then the people who are going to buy this “shit” is the countries whose currency is strong vs the dollar – making our goods much more competitive; this thereby helps employment and income in these industries which thereby gives Chuckie and Joe $ to buy this shit too”
I had to read your comment 3 times to make sure I wasn’t bugging.
Let ask you 1 question, do you get paid in Euros or British Pound Sterling?
This is called Stagflation. Same wages higher prices!!!!!!!!!!!!
If you do then, this would be true. But Dumbass you get paid in DOLLARS. That are LOSING their value everyday. You have to ether get more DOLLARS or another currency
This statement that you typed shows the ignorance of America.
The What
*** Shakes head ***
Someday this war is gonna end………