November 7, 2008

Lawrence Yun at the NAR forecasts nationwide home prices to surge 2.8% in 2009.... Seriously... Roubini says down 20%. Global Insight says down 15%


So, who's right?

Home prices have already fallen 20% from their bubble and fraud peak. So a $500,000 home is now worth $400,000. Down another 20% gets that nice 1-bedroom condo down to $320,000, or 36% below its peak.

But what would that 1-bedroom rent out for? How's that compare to the price of 'owning'? $320,000 is STILL too high. Call me when it hits $150,000, which would be about the same as renting it for $1,000 a month.

In most markets, I'd think another 20% drop is for starters. It was the P/E stupid. It was the moral hazard of making people understand they were better off stopping their payments and turning in the keys. It was the price to income. It was the price to rent. And in 2009 it will also be about the job losses, the foreclosures, the REOs, the inventory, and the complete loss of confidence in housing, realtors and the NAR.

The faster home prices can hit bottom, the faster we can recover. Mark these debt-traps to market and let's move on.

16 comments:

Anonymous said...

Yun is a disgrace

Jay in Mass said...

Yun smokes too much cheeba

Anonymous said...

This sounds like HP blog material.

I know it's all realted but I thought we were moving on to the future topics from here. Why is Lawrence Loon still a topic?

It's like talking about Palin. They've already self-immolated.

Let's move on...

keith said...

I agree, this was straight out of HP, but you'll get 80% thinking and solutions and ideas here but 20% HP for a bit.

The housing panic and stock crash continue. That is what is dictating the need for solutions. Can't ignore it.

I do see this as a think tank for the common guy (instead of the idiots at real think tanks who keep getting sh*t wrong). Let's see how this progresses - work in progress.

vanilla ice said...

"Why is Lawrence Loon still a topic?"

Because he's the leader of one of the most evil and manipulative organizations in the US. The National Association of Realthores deserves ridicule, they deserve to be shut down, and Yun jailed.

Ohio Loan Guy said...

I work in the REIC.
Realtors are s***ing their pants right now.
Hundreds of listings but no buyers.
The buyers that do come around cannot qualify on the stringent lending guidelines. The ones who can have a house to sell that's not selling. Most of the agents who entered the business after 1/2006 have left. I know a lot of the mid-level producers are working other jobs now.
One of the top 20 Coldwell Banker agents in our area has his home in foreclosure.
The manager of another Real Estate company was caught embezzeling from the commissions account.
The real estate companies with in-house lenders have lost most of their loan officers.

The Real Estate industry is in MELTDOWN.

vanilla ice said...

"The Real Estate industry is in MELTDOWN"

Good news, the good news just keeps coming. Love it.

vanilla ice said...

Stock futures up despite terrible employment news. Up is down, green is red in the world of stock trading.

Anonymous said...

Yun is never correct. Haven't we been over and over and over and over and obver this?

Please, No More Yun, No More REIC. We all know they are shitbird liars that can never be trusted again like the defeated and disgraced John McCain and the GOP.

Thank you.

DIE U PIGS

Paul E. Math said...

I, for one, am not completely tired of the housing bubble. The crash is still happening. The NAR still exists. Sunny Yunny is still it's Chief E-con-omist.

Laurence Yun and the NAR are part of the 'soot and ash' from which we are trying to lift ourselves and therefore remain relevant to this blog, as irrelevent as they are to society in general.

Anonymous said...

Pfft....looks like this belongs in HousingPanic, no?

Anonymous said...

I'm a Coldwell Banker REA I'm having a great Year! In fact I'm closing an average of 3 homes per month? West Coast Real Estate under 417k. Reo's and FHA are the driving engines. I have to say the agents leaving are just making my job easier and as far as LO's? Who cares? The strong will survive..

deepcgi said...

The median price where I live is still up at 350k. I don't have 70k to put down on an asset that is likely to continue to depreciate. Who does?

I'd say 2011 at the soonest.

Refuse to buy overpriced said...

Since you are going to continue with 20% HP style posts for a while, I thought you'd love this link.

http://www.nytimes.com/2008/11/07/world/europe/07dutch.html

That right, the Dutch are actually planning to build a giant tulip shaped island off their coast!

Who says that aren't making any more land!

snohomish said...

In so many markets prices have dropped 30+% off the 2005/2006 highs. For many places the mark-to-market has occurred and we are flirting within 10% rock bottom. I rented a place that I know originally sold in 2005 for $723k (tax records) and when we were asked to move out this past August, it was a short sale at $450k. Also, new home builders responded very quickly to drop prices to match these short sales (there are so many of them). But we have been at this pricing stalemate for 6 months now. No pressure to drop, no pressure to rise.

Bear in Cali said...

As a long time HP reader, I followed to Soot&Ashes to see if I would be as interested in the topics.

Here's my take:

It sounds great to come up with ideas about reinventing the U.S. However, I can't remain that interested because we have no impact on what really happens in the real world. Everything we discuss is relevant, but it's in a vacuum. I went to Obama's web site to see if it would be possible to post suggestions on how to fix the U.S. Didn't see it. This would be ideal. Without the possibility of making a difference, discussing solutions on a national level become pointless.

From my perspective, I'm way more interested in Housing. It helps me decide my next move. To I buy in 2009, or wait for yet lower prices. Are lower prices even coming? These discussions actually have an impact. Keep it coming.

Thanks again, Keith.