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 already own my place. I’m gonna be fine.”
No you wont! When the crash gets going, you hood is fucked. Crime, drugs and unemployment will skyrocket.
Foreclosed houses will be empty. Nice havens for Bums, Drug Dealers and Hookers. Yeah, keep dreaming, now go back to sleep.”
That’s what you say. Who believes you? All you’ve proven is you can rant and copy links to financial stories. As we all know, economists are ALWAYS correct. Uh huh. I’m not a cowardly, worrying loser like you. I’ll be here 20 years from now and we can compare notes.
12:43, a 500K Wall Street earner cannot be compared to a junior law firm associate. They have to at least be compared to a senior associate whose bonus just went from 60K to 110K. If you include the increase in pay at the beginning of the year, that Senior associate is probably bringing home 100K more in 2007 than they did in 2006. This definitely has an impact. The point I’m trying to make is that Wall Street bonuses are not the end all in terms of demand in Brooklyn. There are other high earners in this city.
“I already own my place. I’m gonna be fine.”
No you wont! When the crash gets going, you hood is fucked. Crime, drugs and unemployment will skyrocket.
Foreclosed houses will be empty. Nice havens for Bums, Drug Dealers and Hookers. Yeah, keep dreaming, now go back to sleep.
The American dream requires you to be asleep
The 70’s is back. Welcome to the future. Dumbasses!
The What
Someday this war is gonna end…….
I already own my place. I’m gonna be fine.
(“more affordable housing” will have a much greater negative effect economy than to just hurt the flippers.)
What will hurt the economy is that things that cannot go on forever won’t.
Americans, although they are among the hardest working and most productive people on the planet, have nonetheless spent vastly more than they have produced for years.
This has been possible only because they have taken on debts they can never repay in real money, and will now either not repay or will repay in diminshed money.
High housing prices do not create value, they transfer it from those who already have housing to those who want it, from younger generations to older. As far as I’m concerned, there is too much of that going on in this country as it is.
12:58
My point is that rising home values helped the economy and more people than just homeowners because it gave a lot of people in other industries jobs. Falling home values will result in fewer jobs and people who lose their jobs will not be able to take advantage of falling house values. You wrote “more affordable housing is not “bad” for anyone other than those who bought at the peak looking to flip” and I’m just pointing out that “more affordable housing” will have a much greater negative effect economy than to just hurt the flippers.
“Actually, that’s not true. Many homeowners have been taking out equity loans on their homes and using it to make purchases of appliances, cars, vacations, or paying down credit card debt. Rising home values was a boon to homeowners and falling home values will depress the economy by tightening spending which leads to fewer jobs and probably a rescession.”
Yes — and how many people (including on this Board) could not afford to buy their own home or coop or condo at the current (or the Sping 07) market? Most of the folks in my buidling couldn’t.
“Law Firm bonuses are going to be at a record high this year:”
Yep suing all those Banks, Mortgage companies and Brokers.
Divorce and Bankruptcies will pay well. LOL
The What
Someday this war is gonna end….
Perhaps, but lawyers’ bonuses are paltry, particularly young associates’ bonuses. What will have more of an impact, a 20%-30% decline in banker cash comp from expectations of $500K, or increase in a lawyer’s bonus to a whopping $35K?