Met a top housing market analyst today...and this is what she said

[Nords]

As an aside, does anyone know where the trend towards using ellipsis as a substitute for periods began? Just every-day illiteracy, or is it something more?

Where do you get that grammar-police guidance from-- the AP's style book, Strunk & White, or "Eats, Shoots, & Leaves"?

Just wondering"..."

I think Herb Caen would be quite surprised to hear that an ellipsis is so low-class. Or maybe ellipses are the ancestors of emoticons & l33tsp33k...

 

[Sarah in SC]

Gee Grep, thanks for sharing your punctuation insights. I know I missed that class in school and nothing thrills me more than being taken to task by a random stranger on the internet, so I congratulate theFed for his restraint.

theFed, thanks for sharing the substance of your conversation. It is always interesting to see how the "inside money" is thinking and I know that my bosses never miss an opportunity to chat with money managers and finance folks to add more info to the old hopper. Even if it turns out to be more of the same, it is still good to learn.

 

[Bestwifeever]

Grep, don't you mean "everyday" illiteracy (I don't believe "every-day" is a word)?

 

[Gumby]

Some might be offended by the vulgar use of "o.k." for "okay". Additionally, I do believe that when one is making the comparison to plural periods, convention demands that one also use the plural form ellipses, rather than the singular ellipsis. But I would never be so pedantic as to call attention to these failures.

 

[Grep]

I am not an English teacher; I’m a terrible speller, and I can barely tell a noun from an adverb. However, I have enough respect for my readers to at least TRY to write in a readable fashion. I would never "take someone to task" who is doing the same.

Though I’m a science and math geek, I care about language and literacy. It took thousands of years to build up literacy to modern levels, and this was once a matter of personal and national pride. I sometimes despair that it's being torn down in a single generation, in a pell-mell, willful, gleeful, race to the bottom.

By and large, my own (University) students cannot write worth a darn. A shocking number are incapable of creating a sensible paragraph, never mind a professional research paper. This bothers me tremendously, yet it seems there is so little I can do.

I recall there was once a near riot in my class because I dared to ask for a single sentence as an answer in one of my exams. A column of students marched on my Dean with flaming torches and pitch-forks, claiming that this constituted an "unfair essay question." As an aside, I’d say that about a third of my science and math students cannot perform long division, and they pile on me when I expect that, too.

I realize that I’ve been snarky in this particular thread, and that I’m tilting at windmills. My apologies. However, I do maintain that a basic respect for the English language shows self-respect as well as respect for ones' readers. Yes, I’ve become a grumpy old man:

The Return of the Old Grouch - Stanley Fish Blog - NYTimes.com

 

[utrecht]

This isnt a forum for proper grammar, use of english or spelling. Grep...get a grip. Jeez!

Im sure there is a forum somewhere where you can prowl and correct people's writings and be appreciated for it. Around here, its annoying and that should be pretty obvious to you by now.

 

[tuixiu]

I also commend OP for restraint with Grep's attempts to hijack the thread to grind his own personal grammar axe.

Regarding housing market, are you guys thinking three years sideways or further decline? I'd be more curious if we're in "damage is done" mode yet.

 

[Bestwifeever]

Ah, Grep, we was just funning--obviously we love grammar and the English language much as you do!

thefed, will you hold off on buying any more homes to rehab and then sell or rent based on your conversation with the housing analyst?

 

[lets-retire]

My personal opinion is and was, if you are buying a house to live in for many years the price you pay is rather irrelevant. If you are only planning to live in your house for a few years, less than 10, or are buying a house only for an investment then price is important. Personally I would love to buy a little chunk of land, I've had my eye on, but with the DW's job in mortgage banking a little less than secure, I can wait until after I have most of our small amount of debt (car and most of the mortgage) paid off later this year.

 

[W2R]

the few things I remember from our conversation were that at the current rates, 67% of people can now afford a mortgage....and 68% of eligible adults already have one...obviously this illustrates the lack of demand. she also was very hung up on multi family dwellings....because the single family homes are being thrown into foreclosure and being bought rehabbed at a pretty impressive rate (lots of decent homes being bought for cash in our area for 30-50k), the sfh rental market has exploded...weakening the multi family home rental market which is hurting the cashflow of many multi-family dwelling owners...which will soon translate into some absurd amount of defaults on THOSE loans. In her opinion, that's where the deals will be in 6-9 months and where she thinks i should focus my rehabbing/investment goals for next fall.

An impending avalanche of defaults on multi-family properties makes sense, though it is discouraging. I don't think the above argument really justifies focusing on multi-family properties to the exclusion of single family homes in your investment strategies, though.

In another thread, someone stated that the usual buyer will live in a single family home for 4-6 years. If that is true, and the housing slump is in, say, its second or third year, then in the next few years many more people will be desperate to move and putting their single family homes on the market, driving prices down even further.

On our Thanksgiving trip to Missouri, Frank and I went to a few open houses and were amazed at the level of apparent seller desperation we saw. One 2600 square foot FSBO brick home in an excellent neighborhood had beautiful original hardwood floors, a remodeled kitchen, two fireplaces, new roof, and a lovely finished basement on 1/3 acre lot. It was newly painted and appeared to be in good repair. The asking price was $130K but the owner indicated he would come down. I think he would have agreed to a selling price of $115K, or perhaps even less than that. He owed $144K on his mortgage but had accepted a job in south Texas and his wife and daughters had already moved there.

Frank and I are still wondering if we shouldn't have made an offer on that one, though we saw several others that were very nearly as good a deal. We are trying to wait to buy until we retire next year and have sold our present homes. The latter will be our Catch-22, I suppose.

Anyway, the seller was desperate. Housing slump or not, lives go on and eventually people have to move despite their losses. Often a seller can wait for a year or two, but very few could wait for five years IMO.

 

[calmloki]

You know, i read index investors preaching that there is no point trying to forecast the bottom - or the top - just buy and hold. That's pretty much the way i feel about property. Everybody going to wait another 6 months or a year and buy in then? I don't believe it. Betcha you'll (generic non-specific you) be waiting several years from now because the prices got too high - even though they are lower than they were on 12/2007.

As for multi-family housing being hurt by a glut of unsold SF homes - color me dubious. Are the people in the one-bedroom apartments suddenly going to have the scratch to go rent or buy a house? Doubt it. Are the people renting a three bedroom apartment going to have the credit score to spring for a new loan to buy a home? Think they will have the deposit money to sign up for sewer/water/garbage at a house rather than having it provided at the apartments? Doubt that many will go for the extra expense of renting a house rather than an apartment.

Maybe i don't understand what is meant by multi-family being hurt - if the thought is that potential sale prices would be hurt - that could be true, just because money is more difficult to scare up. But in my neck of the woods rents are going up and the tenant pool is swarming, so if one looks just at what the multi-unit earns as a way of determining it's price, multi sale prices should be on the rise. Real value if you will, rather than speculative value. And granted, there has been a disconnect between what a place earns and what it would sell for for the last couple years. Think this is a healthy time for real estate - if i wanted to keep managing i would be buying with both fists, instead i'm loaning so others can buy.

 

[FinanceDude]

I always try to remember two things on this forum:

1)Do your OWN research

2)If you act based on advice on an anonymous Internet forum, you deserve what happens to you, good or bad.

That being said, I was interested in thefed's info....although not enough to do anything about it.........

 

[clifp]

I always try to remember two things on this forum:


That being said, I was interested in thefed's info....although not enough to do anything about it.........

I agree. One of the problems with understanding the real estate market, is I simply don't have much experience with it. Unlike stocks which I have bought and sold hundreds of times over my lifetime, I have only bought two houses in my life. Since it is obvious that if nationwide real estate prices increased by 10%, most of our financial problems would disappear, it would be great to know when (or if) that might occur.

 

[thefed]

hahaha....i love you guys....some of you'ns crack me up....

Bestwifeever: i was planning on waiting it out anyhow, so the conversation really didn't sway me...if i can find what i perceive to be a deal, i'd jump on it. my issue is timing....i need to buy something in sept thru dec to give me enough time to rehab it before my busy season...and my time has passed...i put offers in on 3 homes but never got anything.... i'm in no rush....each time i find another it seems like its a better deal than the prior...so i'll wait


...


...

...

 

[calmloki]

I agree. One of the problems with understanding the real estate market, is I simply don't have much experience with it. Unlike stocks which I have bought and sold hundreds of times over my lifetime, I have only bought two houses in my life. Since it is obvious that if nationwide real estate prices increased by 10%, most of our financial problems would disappear, it would be great to know when (or if) that might occur.

How fast can we print money? Pass out enough free money, inflation goes up 10%, people holding mortgages take a 10% value hit but the stated value of homes pops up. Everybody suddenly has equity in their homes again and can take out more equity loans and good times have returned! No more financial problems!

Oh - and i don't know squat about buying and selling stocks. and only guess on real estate and how the economy works.

 

[clifp]

How fast can we print money? Pass out enough free money, inflation goes up 10%, people holding mortgages take a 10% value hit but the stated value of homes pops up. Everybody suddenly has equity in their homes again and can take out more equity loans and good times have returned! No more financial problems!

Oh - and i don't know squat about buying and selling stocks. and only guess on real estate and how the economy works.

So far the Treasury, and the Fed have down everything short handing out personal printing presses to do this.

"You'll never need money again, with your official US Mint print press, print as many dollar bill as you need, and if you act now will ship you the Abe Lincoln Press capable of printing $5 bill all this for only one Oz. of Gold"

But you underestimate your real estate knowledge since you've made numerous real estate loans, probably more importantly you've passed on even more real estate loans. The problem with getting a handle on real estate is the market varies by city so it is hard to get picture of the overall market.

 

[calmloki]

So far the Treasury, and the Fed have down everything short handing out personal printing presses to do this.

"You'll never need money again, with your official US Mint print press, print as many dollar bill as you need, and if you act now will ship you the Abe Lincoln Press capable of printing $5 bill all this for only one Oz. of Gold"
....

We're all doing what we can: Bogus money goes mainstream - USATODAY.com
These must not have been authorised by the mint print jobs..

 

[brewer12345]

Lots of interesting comments. I think that if you are looking to buy a primary residence that you plan on staying in for a while and you have the net worth and income necessary to afford a house, its probably not a bad time. Definately cheaper than this time last year.

As for an investment, its hard to say. If you can find property that will flow cash with reasonable assumptions baked in and you have a hankering for real estate, its probably not a bad time. After all, if it flows cash and amortizes the mortgage you can afford to sit on it for a long time. In my market, it appears that many/most single family properties still would not flow cash, although I would have to sharpen my pencil to be sure. And since I can find investment grade bonds that yield double digits, I guess I am ultimately too lazy to do the work.

 

[BunsGettingFirm]

Where do you get that grammar-police guidance from-- the AP's style book, Strunk & White, or "Eats, Shoots, & Leaves"?

Just wondering"..."

I think Herb Caen would be quite surprised to hear that an ellipsis is so low-class. Or maybe ellipses are the ancestors of emoticons & l33tsp33k...

Ah, Nords, this is where you're showing your I'm-not-enough-of-a-nerd side. L33t sp33k is so 2001-2003. No one would use l33t crap in his screen name now.

 

[Nords]

Ah, Nords, this is where you're showing your I'm-not-enough-of-a-nerd side. L33t sp33k is so 2001-2003. No one would use l33t crap in his screen name now.

Another fad that blazed overhead at high altitude with no effect... I'm not holding out much hope for Twitter, either.

 

[FANOFJESUS]

A couple of quick points:

1) no, i cant find the shift key all the time...pretend i'm whispering


2)midpack-she never really said, but is sticking to her guns that equities isnt the place to be right now (as she told me in july) . all cash, frm my pov is money markets, high yield checking or the like until the dust clears...

3) the 6 months she referred to is the numbers reports....from the data they analyze, she claims its guaranteed to be all bad housing reports, builders reports, foreclosure #'s etc for that time frame, which is the longest they can predict assuredly with the data they have. of course the whole thing will take longer.

4) nords-maybe i wrote it wrong...but the lack of demand isnt on the financing/refi side, but the number of homes for sale vs. the demand to buy them...all 67 (or whatever)% of people who can afford homes, have homes. the housing stock is piling up which will keep the prices trending downward

5) i never said i believe this woman or put much merit into anything she says, but it's interesting to talk to someone who's making $$ by analyzing this stuff.... to her defense,she did advise me to get out of equities totally in july, and i though she was nuts....she said the proverbial $@!# was going to be hitting the fan, and it did. our whole conversation basically revolved around me and my personal investing goals....the point she was trying to make is WAIT a little while longer to buy another rental,they will be getting cheaper, and there will be fewer able to buy due to the new lending criteria- cash is king

Keep up the good work. Thanks

 

[jazz4cash]

In another thread, someone stated that the usual buyer will live in a single family home for 4-6 years. If that is true, and the housing slump is in, say, its second or third year, then in the next few years many more people will be desperate to move and putting their single family homes on the market, driving prices down even further.

I don't believe the 4-6 years is accurate. I recall the other post also and I started to respond then. I believe the average MORTGAGE is paid off in 4-6 years due to homowners moving or REFINANCING. Seven yrs is the average life of a mortgage that I recall from many yrs ago and I would expect that has been reduced as the cost to refinance has come down.
If the 4-7 yrs is largely due to refinancing that would effect the conclusion that the housing slump would accelerate due to folks being desperate to move.

 

[W2R]

I don't believe the 4-6 years is accurate. I recall the other post also and I started to respond then. I believe the average MORTGAGE is paid off in 4-6 years due to homowners moving or REFINANCING. Seven yrs is the average life of a mortgage that I recall from many yrs ago and I would expect that has been reduced as the cost to refinance has come down.
If the 4-7 yrs is largely due to refinancing that would effect the conclusion that the housing slump would accelerate due to folks being desperate to move.

Good point. I agree - - 4-6 years sounds awfully brief! I will be putting my house on the market in early 2010, after my November 2009 retirement. That would be 8 years after buying it, but the house still seems new to me. The mortgage only lasted 4 years, though.

My parents lived in one house for 25 years, and their retirement house for 25 years as well. My ex and I lived in our first house for just 4 years (due to a job location change), and in our second house for 17 years.

 

[thefed]

here's a link with this lady's name, bio, and credentials. google her name and you'll find tons of stuff


Zelman & Associates - Team