US Housing market slips into Depression territory
 

Is it just giving up the rapid gains of a quick inflationary bubble or is this going to be a long term trend?

Source: http://www.cnbc.com/id/41019790

You left out the best part the White House is not worth what it once was!

I think that in the long run this is going to bring the homes back to a reasonable value. People have lost respect for money.

Home values have fallen 26 percent since their peak in June 2006, worse than the 25.9-percent decline seen during the Depression years between 1928 and 1933, Zillow reported. This seems like a bad sign. This could mean that there is very little profit and little capital gains to be made from selling houses. Of course, people want to buy a house and then ideally see the value of the house increase.

Home prices are insane up here in Toronto. They continue to appriciate year after year.

It was getting silly. I bought a house in Phoenix in 2002 for $220. Average house. Two years later on paper it's worth $500k. That's stupid that an average house doubles in two years.

And I understood why. It was simple. Bank makes loan to buy for someone to buy house. The fact that they didn't qualify didn't matter. They make the payments for a year, default, and then the bank turns around and sells the house to someone else - at a profit. It was win win for them. Right up to the point where the value of the houses started to drop.

I've never understood why the value of a house goes up, while cars go down. They can build my exact house anywhere in the country with the blueprints. In the mean time, my house gets abused, beat up, is missing tiles from the roof, worn, has nicks in the walls, carpet needs replacing, etc etc etc etc.... And yet it's worth more? Meanwhile, try building yourself a brand new 1965 Ford Mustang? You can't.

It makes no sense. An old house that they can build next week brand new goes up in value, while a car that they will never ever make again goes down in value? That's backwards.

A lot of this is right on point. We are (or at least were a few years ago before the housing market collapse) at the first time in the history of this country where the average wage earner could not afford to buy the average home. The average wage in the US is $16 per hour. The average home price (again from a few years ago, I'm not sure what it is now) is $183K. This means after taxes the average person brings in around $1900 per month. But the payment on the average house depending on how much you put down and your property tax rate is around $1,100. So people would have to spend 60% of their income just on their house.

If we are gong to have long term economic stability that needs to change. I think that houses are going to continue to drop in value for the next few years. We had about 5-6 years where banks ran wild with sub-prime mortgages. We are only about 3 years into the collapse of them so I would expect at least another 2 years of foreclosures. This should continue to bring the values down. I have a feeling they will stay there for a while as well. I have a feeling the massive buying and selling we saw for a while won't return for at least several years and that should keep the prices down. It sucks if you bought your house at the top of the bubble, but if you are in the market now, it is a good time to buy.

when are people going to start waking up and see this economy for what it is: A depression.

Fire sale on the White House!

they keep parading that kind of news and sales will hit the floor. People panic at the sound of the word "depression"

The time your house went up from 2002, the Phoenix metro area experienced a huge population boom creating some supply and demand factors that when coupled with the newer lenient loan requirements created a huge supply of new home builds and drove up values until the supply outweighed the demand and the economy tanked.

Don't really see your comparison of a house to a car, there is a continuous supply of new cars so pricing remains stable, if you're talking a classic car like your example then it will continue to appreciate over time in most instances as long as demand remains constant.

I read on one of those real estate mogul blogs that a house is just a wooden box rotting in the rain. What you actually pay for is the land. So true...

And 60%? That's cheap in the YVR market! It's NUTS here. :(

i'm depressed

:1orglaugh:1orglaugh:1orglaugh:1orglaugh:1orglaugh

While it is bad and getting worse, you're totally right - I think the "doom and gloom" scenario isn't quite as bad for 90% of the population as the sensationalist news would have us think.

As someone above pointed out, it's a normal - albeit quite drastic - market stabilization countering the madness that occurred until the fit hit the shan.

I distinctly remember talking to a friend from college in 2005 that was telling me how "crazy" I was "doing the whole internet thing" while he was "playing it safe" by getting married, buying a 3,000 sq ft house, and settling into his "safe" career as a mortgage broker. Needless to say, I've helped float him more than once since then and he and his wife are acclimating to their apartment just fine these days.

Wilkommen to GFY!

This is news? The housing market hasn't even bottomed out yet.

You left out one important piece.

LOCATION!!

If I live say on the beach, nobody between me and the water, there are only so many homes that can have that right?

Now if you are talking about the middle of the desert, and they can just slap down another sub-division, then I see your point totally.

Yep, there are a lot of empty houses out there right now and more on the way. I think we have at least 2 more years of big foreclosures then things in that area will slow down. But that will drive prices of homes down even more. Once it bottoms out people will buy again, but it will be at the lower prices which could further drive down the value of some homes.

I agree that we will likely not see a massive buying and selling period for a long time. I don't know if it will be decades, but it could take several years just for many home owners to not be upside down in their houses.

The economy is fucked, adding fake money that just got stolen by banks only fucked us for even longer. the fact that some people have billions is retarded I'm not a socialist but seriously no system can run with such lop sided dividends. Housing is bad because can't afford to buy them because they have no jobs., You can't imagine what 10% unemployment rate means in families with no homes or money right now. The worst part is saving your money makes it worst. your better off spending it because it's only going to lose value as well.

Based on the article, it's the other way around. People are conscious not to use the D word. It has only become unavoidable when the statistics force us to draw that conclusion :(:helpme

ok, assume "people" wake up and see this as a depression. then what?

Talking about Empty Houses, China has millions due to corrupt coverups. I have a sneaking suspicion that if there is EVER going to be a massive DOUBLE DIP GLOBAL RECESSION, it's going to start with China. See for example: http://seekingalpha.com/instablog/67...on-empty-homes

I hate to break it to you but that value in 2006 was FAKE value. Houses were never really worth that much to begin with. Houses are just falling back to the value they WOULD have been under normal circumstances anyways. Anyone that thinks they can get a 20+% increase in a house per year forever is an idiot. If you average 5% be happy.

Your saying they "make new cars all the time". Well, they make new houses all the time too. You can pull a design from a 100 year old house and make it. I'm forty-two years old, and I've never lived in a "used house". I don't understand why anyone would buy a used house. A ten or twenty year old house means everything is old, used, and subject to break down. The AC, the heater, the water heater, the plumbing, the structure, the roof, etc etc etc.

Why does a house go up in value? It's used.

Don't tell me that it's because they aren't making any land. They have plenty of land to build houses, and once this over they'll be building new houses again.

It was in the desert. Outside of Phoenix. Average house, with a pool - but nearly every house in Phoenix has a pool. Nothing special.

are you sure about that? everything i've read states it will take more than a decade to get things like jobs back on track. and the russian economy was one of the hardest hit in 2008-09

this thread is depressing :winkwink:

Give it another year and then pick up some prime spots for nothing.

Dr Ray Stantz: Fire and brimstone coming down from the skies! Rivers and seas boiling!
Dr. Egon Spengler: Forty years of darkness! Earthquakes, volcanoes...
Winston Zeddemore: The dead rising from the grave!
Dr. Peter Venkman: Human sacrifice, dogs and cats living together... mass hysteria!


But seriously, the majority of people will likely do what the news tells them to do. Whether that's a good or bad thing, I can't decide. On one hand, I'd like to think my fellow humans are capable of logical, rational thought and will make a carefully-weighed decision depending on the circumstances. However, I'm afraid it will more likely look like 30,000 idiots raiding Wal-Marts and and grocery stores for essentials like bread, water, and cheap flat-screen televisions.

Meanwhile, the true entrepreneurs will again thrive and fill a need. As long as their is something to be bartered, an opportunity exists. Take that from me - a "noob" here - as you will.

I do strongly believe that private-sector security firms will thrive in this "brave new world" as the "haves" will continue to claw to keep their belongings and asses a safe distance from the ever-increasing masses of "have-nots."

There are still no bargains to be had in Phoenix/Scottsdale. They're only bargains if you're comparing the price to what the house sold for in 2006. My biz partner and I have been looking for a year for a nice home with some privacy for a shooting house and a US base of operations in the 500K price range. I search the MLS listings regularly and house prices are still too high for what you get. Ugly brown tract homes from 350-500K. There are lots of nicer homes available but they're 800K and up and the banks aren't dumping them for 500K unless you are paying cash.

California and Texas - better deals there.

They always say that during the depression more millionaires were made than before or since. I intend to take advantage for me and mine. :thumbsup

The problem itself lies within the construction industry in my opinion. People in construction are just complete idiots and have no clue how to run a business. when some one asks them to lower a price the do it. if they don't someone else does. there is no common sense of how to say no. ever other business in the world does not lower prices because of a stiff economy to the point of where they don't make money. they make sure they will still turn a reasonable profit and still support the business. Until people in construction learn to say "this is the price" then this economy will be very slow on getting back on track.

Seriously ... if you have a spending problem you can't spend your way out of it. Learn to save, learn to cut costs, and learn to budget .... and try to pass those lessons onto your govt.

it wasnt the spending it was because of all the bad housing loans the bank said they were "forced" to give. It was more of stupidity by the people that really thought they could afford a 250k home on 12 bucks an hour just cuz the bank said they could get the house. everyone has cut costs right now so we are on a slow slow upswing. it will take a long time to get back to normal. then again if these people can get jobs, the over stock of homes will go away assuming they can get clean slate on their credit report.

and where in the American economy do you see hundreds of thousands of GOOD jobs are going to be created? we sold out our manufacturing industries to sweatshops offshore. data processing the same. all we have left are service jobs, broke ass people serving other broke ass people.

country was absolutely raped by corporate America, banks, Wall Street with politicians from both sides of the aisle in their pockets. I remember in school 25 years ago being taught about globalization and the global economy and asking how is that going to work out for the majority of the population when the jobs many of my friends parents had would no longer exist - and the answers back then were lame, retraining/education for skills that would be valuable in the new global economy, they were even suggesting that we'd be going to a 4 day work week in this new global economy, things would be so good we could have the same standard of living working less.

I did say it would take along time. as for 100,000 of good jobs. thats the republicans problem now! they didnt want the dems to handle it so let them spend the money to figure it out.

I dont make the rules. i just think its gonna be slow. not really a debate on where jobs will come from. i cant create them. obama isnt allowed to create anymore because if he does the american people will shit for him spending more money. poor guy oh well

that's right, we're good and fucked, and there's no turning back.
wait until we are all standing in a bread line. :2 cents:

Sounds good to me. We are buying in the next few months...

If we are all standing in the bread line then i am going to invest in bread. do you know a good bread company. i will make millions. everyone needs bread!

Talking about "Forced to Give", details are slowly trickling out about the massiv fraud and coverup involved in the Chinese stimulus plans--one of the main reasons for the 65M abandoned houses in China.

Well the replacement costs of homes go up, materials, labour etc that should have some effect on "used" houses as well. None of the bubble shit though.

Also depending on the resale house you buy renovations, upkeep etc are all factors. Some people take care of their shit, others let it rot away.

They fell 26% in almost 4 years (approx. 6.5% per year) when in many areas single year appreciation was much higher than the loss.

Correction != Depression

People that are stressing about jobs shouldn't. Employment is always a lagging indicator of economic health. First come the profits (and even layoffs like we're still seeing despite profits) and then come the new hires. Businesses need a few more quarters of being healthy before they'll start rehiring en masse. Productivity is up, which will cause a net lose of jobs, but it has been going up for a long time and the displaced always find another way to make money (usually self-employment).

We're not out of this mess yet, but it is not all doom and gloom. Despite the media trying to scare everyone, no country (including China or any in the Middle East) can afford to have the US fail. The worst that will happen is everyone will agree to hit the reset button and then define what the button is.

Things are trending in the right direction and that is what matters.

Take any number you see on the news - double it... And you will have the true number. Thing are much worse than they say because they don't want people to panic and our enemies to smell blood in the water.

You are overlooking one key factor. Land/location. Doesn't do you much good to build your house in North Dakota if your job is in California. Not to mention beachfront, views, crime, schools etc, etc, etc.

really? thats awsome

home prices have stayed stable around here

also a lot of new houses are built like shit, I'll pass on a brand new shit built mcmansion