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Not only is the housing market going to crash 'further", the CRE market will follow right along side !!! If you haven't notice the market started tanking 1 month ago.Since wall st. ALWAYS gets ALL the news first hand & months before it will be released to the public; ther're always ahead of the curve..Always when interest rates rise, the market faulters & the housing market will suffer for many reasons….Since the markets going down, expect the first of MANY .25 pt. hikes this summer & the FED always over shoots going up & going down…So we'll be in a bear market the next 3 years as rates will rise for 2 years @ .25 pt. a clip going to somewheres in the 4 to 5 % range !!!!! Put your money in safe bonds for a recession market we're in already or play with fire & short the tanking market…No stock will do well in this mini DEPRESSION that's coming !!!!!!!!!!!!!!!!!!
Mr. SPEARS is mistaken. Rico gets it right.
Analysts at the Fed have recently pointed out that there is a large amount of "performing" mortgages in the system that are teetering on the edge of being underwater. Another 10% drop in real estate prices would cause many more "strategic" mortgage defaults.
The recent robo-signing fracas is just the tip of iceberg for massive bank fraud trouble. Federal government agencies have successfully dodged their responsibility to take corrective actions.
I see no "loosening of credit restraints for mortgages " in the next year. Quite the contrary, requirements for higher FICO scores and solid uninterrupted income qualifications are being adopted by lenders. While rates are down, I have to ask "what is 4.62% of nothing", as this is what the great mass of potential borrowers can qualify for.
In the near future it is possible that the Fed will lose control of it's ability to keep rates low.
Rising mortgage rates always devalue home prices.
The numb-nuts in congress are floating the ideas of; attacking the mortgage interest tax deduction, privatizing the secondary mortgage market, and a host of other evils that will have the effect of adding friction to the mortgage lending system. These actions will be viewed by future economists as "government mistakes".
There could well be, up to, another 20% drop in housing prices.
So what to do?
February Home Depot put options are a little pricey (as of 11/19/10) but with pundits again calling a real estate bottom and adding froth to this stock, this is a short worth watching.
Disappointing Q4 earnings may push this stock down 10-15% from where it now sits ($31.22).
Good luck. Trade with caution.
It seems to my unenlightened mind that there is a whole lot of guessing going on as somesay this and some say that. Whose crystal ball is right.
I have to believe Rico is more attune to the deflationary environment we're living in than the author of this article. With real unemployment holding at 25%, we're not going to see a housing recovery any time soon.
My earlier comment on the housing market is the same, it will rebound and much sooner than reports from Banks banksters the crooks who would have you believe hype. My shirt is on property it allways increases in value sooner than later. Hold on May is a good time.
What makes you so sure gordan??
I have been in RE & Mortgages for 30 years. I have dealt with 12% plus fixed rate markets. I am now seeing that upscale homes are sitting on the market for longer periods of time and in the most influentical areas and vacant. Their will be a market for low end pricing however that is not enough to stablize the market. But the big picture is Cities, Municipalities and their lack of revenue. School boards who keep spending without revenues and putting burdens on the tax payers' to fund these budgets. Banks have loans ( credit cards, mortgages) on their books that have not come to market or a market to market value that is real (hidden in the balance sheet). Foreign countries who control our debt. Fed who is printing money for the world to cover the European Debt (again hidden). We have issues that need to be solved and this could take years. We have a Congress that keeps on regulating businesses to death and increasing costs with no help to the consumer. My money is in commodities and materials that come out of the ground. This is a nightmare that keeps on rolling.
just check out a NY University professor called Nouriel Robinni. Check out what he has to say about the housing market…hell, google the name and you'll get several links to his views. He's considered the most accurate predictor of future financial and demographic events, especially those associated with the U.S. housing markets, financial markets, mortgage business, international trade..etc. He's also got a new book out…" CRISIS ECONOMICS'…a must read for those of you who want the best analysis of comming events affecting us all.
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