Looking for the Bottom
Ever since the real estate bubble burst and market indicators across the board started plummeting, everyone has wanted to know when the market was going to reach bottom. Well, maybe we’re there, nationally speaking. Dean Baker, of the Center for Economic and Policy Research, thinks so; he told AP via Fox News that “the freefall…
Ever since the real estate bubble burst and market indicators across the board started plummeting, everyone has wanted to know when the market was going to reach bottom. Well, maybe we’re there, nationally speaking. Dean Baker, of the Center for Economic and Policy Research, thinks so; he told AP via Fox News that “the freefall is over.” AP cited several nationwide statistics from the past two weeks: “home resales in June are up 9 percent from January, on a seasonally adjusted basis; sales of new homes have climbed 17 percent during the same period; and construction, while still anemic, has risen almost 20 percent since the beginning of the year.” In the Northeast, “home resales in June hit a seasonally adjusted pace of 820,000, up 28 percent from the beginning of the year. Sales of new homes were also up slightly and construction in the region more than doubled.” It is the amateur statistician, however, that reads too deeply in short-term statistics. The improvements in the market, so far, can only provide hope that the worst is behind us, but economists warn that even if this is the bottom of the barrel, we may stay down there for a while longer.
Welcome to the Bottom [Fox News]
Photo by AvarieRiot
I wish this article was entitled “Looking for a bottom” instead
I love how all of Team bear know such things with such certainty.
Deflation means that housing prices are going down. If the price of everything else is falling why should housing prices resist? People are trying to save as cash is the king.
Inflation means that housing prices are going down. Higher interest rates means low housing prices.
There will be no stagnation yet as prices are wildly unaffordable. Houses have to reach a new clearing level where a substantial number of buyers agree to buy. One leg 30% down at least then stagnation.
IRX is 13 week T-Bills. The Fed can keep that where it pleases. They cannot howerver keep anything much beyond 1 Year where they please. You don’t understand the Treasury market. It has been 1.69-1.75 since April. It ain’t moving.
BTW, we are +9.6% in our L/S fund as of June 30.
expect the free-fall to have stopped for now but not the “malaise”. that has just begun to set in. we are EASILY looking at 5-8 years of price stagnation with some periodic up’s and down’s qtr vs qtr and yr v yr. bottom line is that this market (brooklyn) ain’t coming back any time soon and probably still has an easy 20-30% downside.
“The FED is going to keep short rates very low for another 2 years.”
The Fed does not control interest rates Jackass, the Bond market does. Remember I told you to look at the 13 WK (IRX)! Well the IRX and the Fed’s Fund Rate is the same thing!!
Dave I going to take GREAT pleasure watching you get smoked!
Ask the other three people in your “Hedge Fund”.
“This is why the banks that will survive, BAC, JPM, C are such strong buys here.”
2 out of 3 is insolvent..
The What
Someday this war is gonna end…
If you were really in the condo market, you actually saw prices in manhattan start to soften in mid to late 2007.
people who saw prices plummeting helped (and are helping) us save thousands of dollars. these people are always here to remind us what the reality is because every day someone calls the bottom. they deserve respect.
PPI today was -0.9% and expected to be -0.3% MOM. PPI was -6.8% YOY for July. and had been expected to be -5.9%.