RE: Worse Ever?

[don]

Re: Worse Ever?

U.S. Housing Down 80% When Priced in Gold



We all know how far U.S. housing prices have fallen. And they are still falling. But that’s against the weakening dollar. For another perspective, here’s a chart showing the decline in another currency: gold. This chart presents the median single-family home price divided by the price of one ounce of gold. In gold, the price of the median single-family home is down 80% from its 2001 peak.





http://www.chartoftheday.com/

[brent217]

Re: Worse Ever?

U.S. Housing Down 80% When Priced in Gold



We all know how far U.S. housing prices have fallen. And they are still falling. But that’s against the weakening dollar. For another perspective, here’s a chart showing the decline in another currency: gold. This chart presents the median single-family home price divided by the price of one ounce of gold. In gold, the price of the median single-family home is down 80% from its 2001 peak.





http://www.chartoftheday.com/

Wow, thanks Don, lol! How do you find these?

Now that is an interesting chart. I am thinking that when the house prices bottom out as measured in gold is the time to start considering getting into the RE market. I recall someone else saying the best time to buy is 6 months after the markets hit bottom, so I am going to have to watch this one closely for another year or so.

[coolhand]

Re: Worse Ever?

i would only buy a house if you can make it cash flow positive - and if you are occupying it, unless it has land on which you can grow crops or harvest timber, a home is guaranteed to be cash flow negative...which makes gold with no yield favorable by comparison

[zoog]

Re: Worse Ever?

Wow, thanks Don, lol! How do you find these?

Now that is an interesting chart. I am thinking that when the house prices bottom out as measured in gold is the time to start considering getting into the RE market. I recall someone else saying the best time to buy is 6 months after the markets hit bottom, so I am going to have to watch this one closely for another year or so.

Here's another data point to consider. The cost of a new home has been climbing relative to household incomes since the end of WW II. Despite women entering the workforce en masse over the decades to create two-income families, and despite a significant decline in median home prices over the past couple years, housing continues to be expensive relative to what people make. Or maybe it was just ludicrously cheap after the war. When... if ever... is this ratio going to reverse?

[don]

Re: Worse Ever?

Here's another data point to consider. The cost of a new home has been climbing relative to household incomes since the end of WW II. Despite women entering the workforce en masse over the decades to create two-income families, and despite a significant decline in median home prices over the past couple years, housing continues to be expensive relative to what people make. Or maybe it was just ludicrously cheap after the war. When... if ever... is this ratio going to reverse?

It would be nice to see the growth of the real estate industry and related fees (title, mortgage insurance, etc) superimposed over that graph. It's been quite a piling on.

Sheeple "homeowner" is on the bottom

[don]

Re: Worse Ever?

From Shadowland:

4 cities are suing banks for upkeep on shadow inventory. It's just the start, added to all the other lawsuits proliferating against the banks. Expect a foreclosure tsunami soon?

[don]

Re: Worse Ever?

A PDF checklist for due diligence in a RE purchase: http://www.professorbaron.com/defaul...e=DueDiligence

[don]

Re: Worse Ever?

When the prevailing sentiment is you can't sell a house at any price, the bottom is at hand. Another signpost along the way:

http://www.theatlantic.com/business/...rSharingIframe

(the American Adults is a nice touch. Would anyone think this was a poll of preschoolers? Then again . . .)

[c1ue]

Re: Worse Ever?

Expect a foreclosure tsunami soon?

If anything it would be the opposite. So long as the official owner is the resident, the owed property tax isn't the bank's problem.

However, the lawsuits may force disgorgement of shadow inventory.

Unfortunately the lawsuits will drag out for years.

[don]

Re: Worse Ever?

If anything it would be the opposite. So long as the official owner is the resident, the owed property tax isn't the bank's problem.

However, the lawsuits may force disgorgement of shadow inventory.

Wasn't that the point

[flintlock]

Re: Worse Ever?

In the course of my day to day business, I drive through hundreds of neighborhoods. Most have at least a few run down looking homes. Many appear abandoned. Especially in middle to lower middle class neighborhoods. Some really nice and tidy, if modest, neighborhoods are having their values ruined by the presence of these homes that need paint, have foot high grass and weed overgrowth. Makes downsizing to more modest homes a tricky thing. Do you buy that $150k home because that's all you need? Or do you spend more to get a home with covenants, and people more likely to have the means to keep up their homes? So many of the first time buyers, and others pushed into home ownership with the incentives of the last few years, were not ready for the cost of upkeep. They think you just pay the mortgage and that's it. Coming from a life of renting, it can be a rude shock.

[touchring]

Re: Worse Ever?

In the course of my day to day business, I drive through hundreds of neighborhoods. Most have at least a few run down looking homes. Many appear abandoned. Especially in middle to lower middle class neighborhoods. Some really nice and tidy, if modest, neighborhoods are having their values ruined by the presence of these homes that need paint, have foot high grass and weed overgrowth. Makes downsizing to more modest homes a tricky thing. Do you buy that $150k home because that's all you need? Or do you spend more to get a home with covenants, and people more likely to have the means to keep up their homes? So many of the first time buyers, and others pushed into home ownership with the incentives of the last few years, were not ready for the cost of upkeep. They think you just pay the mortgage and that's it. Coming from a life of renting, it can be a rude shock.

It's expensive to maintain a house. Cheaper to live in an apartment.

[Adeptus]

Re: Worse Ever?

And don't forget - even if it's not as bad as the chart indicates - the Alt-A and Option ARM storm's a-commin'.

... Then add about 1.5 to 3 years for litigation and cleaning up the foreclosure fraud mess, another 6 months of an overshoot... See you at bottom 'round 2013 to 2014.

FORECLOSURE MESS VIDEO: http://www.cbsnews.com/video/watch/?id=7361572n

[flintlock]

Re: Worse Ever?

It's expensive to maintain a house. Cheaper to live in an apartment.

Oh no doubt. This ridiculous push to have everyone become a homeowner comes with a steep learning curve. Every time you think you know what something on a home is going to cost, double it!

[flintlock]

Re: Worse Ever?

... Then add about 1.5 to 3 years for litigation and cleaning up the foreclosure fraud mess, another 6 months of an overshoot... See you at bottom 'round 2013 to 2014.

FORECLOSURE MESS VIDEO: http://www.cbsnews.com/video/watch/?id=7361572n

I can agree with that. 2013 at the earliest.