Wall Street Experts Can't Agree on Housing Bubble
Goldman Sachs’ chief U.S. economist Jan Hatzius thinks the worst is behind the housing market. “The point of maximum deterioration in housing activity has probably passed,” he wrote in and October 20 research report. “The sharp downturn of the past year seems to have brought total housing starts—single-family starts, multi-family starts, and mobile-home shipments—close to…
Goldman Sachs’ chief U.S. economist Jan Hatzius thinks the worst is behind the housing market. “The point of maximum deterioration in housing activity has probably passed,” he wrote in and October 20 research report. “The sharp downturn of the past year seems to have brought total housing starts—single-family starts, multi-family starts, and mobile-home shipments—close to the level justified by the underlying demographics.” David Rosenberg, North American economist at Merrill Lynch disagrees: “Our research suggests that this housing cycle does not bottom out until starts reach the 1.3 million mark. So contrary to popular opinion, we are barely in the fifth inning of this down-cycle on the construction front.”
Who’s right? If you listen to the markets, it’s Rosenberg. Futures traders playing the Chicago Merc’s housing futures are collectively forecasting another 7% decline over the next 12 months.
Is Housing Out of the Woods? [Business Week]
No what takes balls is to buy low (which is now) and sell high (which is 3 or more years from now). Not buy only at times when it feels “safe” to buy real estate, which means properties are selling well and it’s the top of the market. And yet it must be human nature for all the lemmings, because they do that over and over again in these cycles.
Everybody who bought a home in the last ten years thinks they’re a genius or had “balls”. What took balls and made you a genius is if you cashed out in the summer of 2005. What takes balls now is to not to buy for the next three or four years. Unless you’re planning on staying in your home for a long time or need to post a large financial loss for tax purposes.
WEST — thanks again for the anecdotes. As I said, I don’t think they prove a thing — not yours, not mine. Once again — the claim that because Tribeca lofts are apparently a dime a dozen, price drops in Manhattan are irrelevant to Brooklyn because, you know, they’re not building any more brownstones.
People who bought at the top of the market are already seeing the value of their properties drop, and will see the value drop further in the coming year. No, that doesn’t matter much if you plan to live there for 10 years. But if you hope to sell in five, you may be facing a loss.
Who cares! Talk about a useless endeavor. Everyone posting on this has enough to eat, some place to live, and, I hope, people who love them. Our “obsession” with the “market” is way over the top. At the end of the day those of us living (buying and selling) in the real world can’t rely on the talking heads or B.S numbers. Let ask you all.Does anyone recall what the housing data said five years ago? Two years ago? Two weeks ago? Did you change your behavior in any way when you heard it?
I don’t think that’s what they’re saying. They’re saying that, like you, buying a property is the best investment they ever made. And guess what, any monkey who had enough “balls” to shell out cash in the last twelve years would have made money too smart guy.
Actually what’s really happening on these threads is some people are saying yes values are going to dip a little, but that doesn’t mean people should just never buy real estate in Brooklyn, because ultimately owning real estate is a good thing. And then others counter by saying because there is speculation prices will dip a bit, MAYBE, so anyone who finds a good deal and a place they love, should pass it up because MAYBE they can get a better price next year. And pay for it with higher interest rates.
Yeah, that really sounds logical. Guess what, I’m not the one who is nuts. I’m the one who has made $800,000 income on two different properties over the past twelve years in two different cities, all because I’ve always had the balls to buy not rent. And that’s no exaggeration on that profit. That’s an exact figure.
Nobody is saying that Brooklyn has nothing to do with the national housing market, I believe the readers are saying that other factors have a bigger impact. ie. relatively little new construction and New York City income.
Brooklyn is cheap compared to Manhattan and Manhattan is cheap compared to London, or Paris or Toyko.
Or how about this one?
Brookyn real estate won’t go down because Google’s share price keeps going up. In the last two years, it’s gone up almost 500%. And that matters to the Brookyn real estate market because, you know, people who live in Brooklyn use the Internet and Google and stuff.
Never mind. I figured it out. Any time there’s a comparison that makes it look like NYC real estate prices should fall (say, when you look at real estate prices across the rest of the country) the comparison is inappropriate and doesn’t apply. But any time there’s a comparison that makes it look like NYC real estate prices should keep going up (say, comparing NYC real estate prices to college tuition) the comparison is completely valid. Because, you know, people who live in Brooklyn have children that go to college.
Got it.
Ya’ll are completely nuts (or at least some of you are).