I cannot figure out why people continue to call for a bottom in Real Estate — as if there is going to be this snap back any day now.
Green shoots anyone?
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July 18th, 2009 at 1:24 pm
I see an explosion in real estate coming soon.
It’s all in how you look at it.
If you put your trailer in a traditional trailer park, that’s not real estate because you’re only renting the space and the trailer is personal property. If you put your trailer on your own plot that you own, then, my friend, you an owner of real estate. I see a green shoot on the horizon.
July 18th, 2009 at 1:32 pm
“I see an explosion in real estate coming soon.”
Maybe some time after the unemployment explosion turns around, I agree.
July 18th, 2009 at 1:39 pm
It is a consumer-balance-sheet recession. Yet, Democrats followed the GOP in giving money first to banks and bondholders. That’s like feeding the carriage and expecting the skinny horse to “pull”.
Say “hello” to food stamps, victory gardens, and sweaters.
July 18th, 2009 at 2:04 pm
http://www.miacanalytics.com/PRConf09/Index.html
That might be interesting. Anecdata out of California suggests bottoming in RRE- I am skeptical. Any one buying there nowadays is going to be smacked by a mackerel named ‘Tax Hike’.
They will break the USD before they allow real deflation. The goal is to impoverish.
July 18th, 2009 at 2:19 pm
MRegan Says:
July 18th, 2009 at 2:04 pm
That might be interesting. Anecdata out of California suggests bottoming in RRE- I am skeptical. Any one buying there nowadays is going to be smacked by a mackerel named ‘Tax Hike’.
reply:
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California has a way out. It’s pretty radical but it’s not much different than what GM and Chrysler got.
All California has to do pass a law that no debts, public or private, exist as of a given moment and the power of state law will assist in the non enforcement. Maybe they can be a little selective, but you get the idea. Automatic Reset. Sure, a few people will complain but loads of people will line up to do business with the new California and the new California citizen again because their balance sheets will be pristine once again.
July 18th, 2009 at 2:31 pm
still a lotta inventory around here
Only 43 of the 539 units at Bellevue Towers in downtown Bellevue (WA) have sold since closings began in January… (keep reading that’s just a drop in the bucket)
http://seattletimes.nwsource.com/html/businesstechnology/2009466104_bellevuetowers14.html
and still a lot of people who have not yet been laid off who have been told they will be laid off in the next few months
July 18th, 2009 at 2:53 pm
Bob A Says:
July 18th, 2009 at 2:31 pm
Only 43 of the 539 units at Bellevue Towers in downtown Bellevue (WA) have sold since closings began in January… (keep reading that’s just a drop in the bucket)
reply:
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Maybe if they threw in free drapes they might get lucky. Those floor to ceiling windows would probably get me arrested for indecency just for walking by one unless I took special pains to dress for the public.
July 18th, 2009 at 3:23 pm
“I cannot figure out why people continue to call for a bottom in Real Estate…”
Because sales are down and brokers need more commissions? NOW is always the best time to buy anything, right (at least that is what any salesperson will tell you)?
Tom Waits – Step Right Up (1977)
http://www.youtube.com/watch?v=ByomIJf5n9w
July 18th, 2009 at 3:27 pm
[...] Brownish green vegetation Jump to Comments No shoots here: [...]
July 18th, 2009 at 4:36 pm
@ Dead Hobo
If you leave the wheels on it, and you can haul it somewhere else for two weeks, it’s a ‘temporary dwelling’, and your land is taxed at undeveloped land rates.
…So IMO the only explosions in real estate coming soon are going to be of the demolition variety.
July 18th, 2009 at 5:13 pm
dnarby Says:
July 18th, 2009 at 4:36 pm
If you leave the wheels on it, and you can haul it somewhere else for two weeks, it’s a ‘temporary dwelling’, and your land is taxed at undeveloped land rates.
reply:
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I was thinking more about where the wheels are gone and the utilities are permanently attached. Upscale would mean it’s on a permanent foundation. In essence, I was referring to The Great Downsizing where the definition of real estate is tweaked a little. Take that, Shiller.
July 18th, 2009 at 5:18 pm
DH-
Automatic Reset. Radical, definitely. I have a colleague whose father does something legal with a bank out there and blah blah blah he says that his dad is looking to buy and that ‘everyone is buying’. I am skeptical but what do I know…
All those bonds, and debt instruments wiped out. Jeebus. What would that do to pension funds?
July 18th, 2009 at 5:46 pm
Glad to see that the New Housing Starts line is plumbing new lows. Maybe now we will burn off some of the bloated housing inventory.
Until the overhang is burned off there will be no bottom in Real Estate.
July 18th, 2009 at 5:59 pm
deadhobo writes “All California has to do pass a law that no debts, public or private, exist as of a given moment and the power of state law will assist in the non enforcement. Maybe they can be a little selective, but you get the idea. Automatic Reset. Sure, a few people will complain but loads of people will line up to do business with the new California and the new California citizen again because their balance sheets will be pristine once again.”
__
And a statue that stupid promptly gets enjoined by the Federal COurts as an unlawful taking without due process. Can NOT be done. The creditors have a vested property right in their chose in action (intangible right to collect on the debt they are owed.) They can not be deprived of that right without due process – both substantive and procedural. Passing a statute doesn’t qualify on either ground.
Been there ddone that with the flaky idea of a general cancellation of debt – sometime back around 88BC in Rome. The idea was floated then – and it was an idea of the lunatic fringe then too.
July 18th, 2009 at 6:11 pm
[...] Ritholtz presents the following graph and asks: “I cannot figure out why people continue to call for a bottom [...]
July 18th, 2009 at 8:14 pm
Ann S says:
The creditors have a vested property right in their chose in action (intangible right to collect on the debt they are owed.) They can not be deprived of that right without due process – both substantive and procedural. Passing a statute doesn’t qualify on either ground.
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But, how well did the creditors of GM debt fare in that restructuring? It kinda seemed their rights went out the window along with due process….
July 18th, 2009 at 8:17 pm
[...] Ritholtz presents the following graph and asks: “I cannot figure out why people continue to call for a bottom [...]
July 18th, 2009 at 8:26 pm
AnnS –
I’d like to think DH was joking.
July 18th, 2009 at 8:45 pm
“I cannot figure out why people continue to call for a bottom in Real Estate”
Because there’s inventory to be sold. And everyone knows that there’s no recovery until the bottom in real estate is reached, so prices will stabilize and everyone can start using their houses as an ATM again. Mind over matter. They apparently could care less about unemployment. That’s the bigger mistake.
July 18th, 2009 at 8:56 pm
AnnS
You don’t come here often apparently, or else you would have recognized the droll, cynical, sarcastic humor of our very own dead hobo.
July 18th, 2009 at 9:03 pm
That’s right Pat G. All we have to do is have the confidence to buy and it will all be over! LOL
It’s all just a confidence and liquidity problem after all. And so if we would all just go out and read The Secret, everything would be rainbows and unicorns again and we could go back to lusting after granite counter tops and stainless steel appliances (or whatever the latest in fashion and style is, as defined by those selling it to us, of course.)
On a serious note, someday the history of this era will be written, and we won’t be treated kindly.
July 19th, 2009 at 8:55 am
AnnS Says:
July 18th, 2009 at 5:59 pm
And a statue that stupid promptly gets enjoined by the Federal COurts as an unlawful taking without due process.
reply:
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Perhaps it’s just an idea that’s ahead of it’s time. You forget that the US operates under Animal House rules (You Fucked Up … You Trusted Us). When money is involved, the rules can get creative. Some debts will be declared off limits. Others, those with perspective, are fair game. By perspective, I mean lots of gray. Payoffs of one form or another also help. You’re thinking too textbooky. The rules only exist for people who can’t figure our how to get around them. All it takes is a little creativity to find gray areas. Plus being a sociopath.
I bet you can name a few to whom this set of life rules applies.Who’s making billions while most others get 12 inches of foot up the ass?
California just hasn’t figured out the payoff part yet. Uncle Stupid will look the other way if he gets their cut. I don’t know what that is yet. The rest of the whiners don’t matter.
July 19th, 2009 at 10:00 am
[...] Yesterday, I posted this chart and wondered why “Some people were calling for a housing bottom.” That generated a ton of emails asking about for further clarification. [...]
July 19th, 2009 at 10:50 am
Now, lets take a look at the data for the last 2 years and note something that the media never seems to pick up – seasonality – little peaks along the downtrend. Now look at the early 1980s. Yep – same thing. How the media continues to miss this is beyond my comprehension.