Mort Zuckerman: "Home Prices Will Decline For Years"

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Mon, 01/03/2011 - 17:48 | 845163 hedgeless_horseman
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In regards to residential inventory, at least we built attractive and enduring designs with quality construction in sustainable locations that will not dramatically depreciate as they sit empty.  Or else we'd be screwed.

 

Mon, 01/03/2011 - 18:14 | 845238 Haywood Jablowme
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In regards to residential inventory, at least we built attractive and enduring designs with quality construction in sustainable locations that will not dramatically depreciate as they sit empty.  Or else we'd be screwed.

 

"quality" construction.......yeah, that's a good one.  You mean the kind of "quality" construction done by outfits who are comprised of 80% illegal immigrants whose bosses decided to chase even more profits by using the shit drywall made from China only to be replaced by dooped homeowners a couple years later? 

The USSA baby - Where "quality" is job #1!

 

Mon, 01/03/2011 - 19:57 | 845426 philgramm
philgramm's picture

he was being sarcastic, sir

Mon, 01/03/2011 - 20:03 | 845439 outamyeffinway
outamyeffinway's picture

Some people take all this too seriously! lol

Mon, 01/03/2011 - 19:58 | 845434 Jerry Maguire
Mon, 01/03/2011 - 20:09 | 845444 glenlloyd
glenlloyd's picture

Yes, it's all such a pretty shade of....beige, and when your neighbors house burns the siding on yours melts too. And when people want to break in to your house all they need is a serrated knife, because they can just cut their way in.

The worst is perhaps the wide garage door mouth that's front and center, and in some cases there are several garage doors, and along with that is the pretty sight of an overstuffed garage with junk whenever the door is opened.

Tue, 01/04/2011 - 09:51 | 846232 blindfaith
blindfaith's picture

a very well known and respected architect and builder in Charleston SC told me that the more the house is a stage front, the more people seem to like and buy them.  Quality, who needs any stinking quality when the front of your General Electric Refrigerator that is 3 years old is a total rusty mess, and your Jenn Air Range is a piece of shit.  Jobe secutiry is building crap so it need to be replaced ASAP, that is how we will jump start the new world.

Tue, 01/04/2011 - 04:13 | 845916 bankonzhongguo
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 I would just make a paranoid observation about housing for 2011.  I think the macro model may be to drive people out of home ownership and thus become a nation of renters.  Sure, the economy used to predicated on home construction/ownership, but many banks have seen that it is more profitable to rent property than to issue a mortgage and/or hold it on the books.  I know its more complicated than that, but there have already been numerous bubbles of news of repealing the mortgage interest tax deduction and now that Jerry Brown is back in California they are already talking about killing Prop 13.  Between possible higher prop taxes ("save our schools!"), future higher interest rates and well if Congress nukes the mortgage interest ("austerity" and "temporary emergency debt reduction") , well aside from the safety of "owning your home" why wouldn't TPTB want to revert to a peasant-landlord economy. If industry is not in the cards, well its a whole lot of burger flipping Facebook proletariat.  If the shadow inventory does not reduce and traditional mortgage rates rise with the 30 year, the incomes in a 20% unemployed country cannot support the emerging overhead of home ownership.  If the second dip had some teeth and prices dropped another 20% for two years you would have a chance to recover the status quo, but the Fed and OCC have let those banks hold those OREO for years.  Rent pays better than bonds.  Just pay attention.  Once you leave your home to rent because its cheaper, you may never be able to buy another home.  If you buy something, makes sure it can produce some income.

Tue, 01/04/2011 - 05:06 | 846036 Snidley Whipsnae
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Interesting observations.

Accounting rules changes plays into your scenario. By allowing the banks to hold REO on books at high valuations it is in the banks interest to rent out properties and recover their losses with rent.

Of course, this is all predicated on return on rents being equal to or better than home ownership costs. Congress could shift the focus of residential ownership from individuals to banks with some changes in tax breaks from individuals to banks.

With ownership costs rising with the ten year, more people will be priced out of ownership.

If banks are going to own and rent out large blocks of residential real estate a large market may develop for residential management and they would be hiring or sub contracting large numbers of 'maintanence workers' to keep the banks properties in rentable condition.

If this develops hiring in property management/property maintainence (employment) might catch an uptick.

This is no crazier than leasing autos...which when it first began was seen as a rediculous proposition...in fact, to me it still appears rediculous.

All speculative, of course.

Sat, 01/08/2011 - 12:26 | 858696 dizzyfingers
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I've been wondering if it's true that the banks don't want to unload because their bottom lines would be busted or if something else could be the reason. With fewer people able to buy, congress probably wouldn't have a problem killing the mortgage tax deduction or changing it so it's only for new owners for a limited time period. Landlords would be in charge. Emphasis on "Lords".

Fri, 01/07/2011 - 18:12 | 857664 dizzyfingers
dizzyfingers's picture

Is it too crazy to think that money could be made from those pits somehow...?

Mon, 01/03/2011 - 17:35 | 845168 Glasgow Gary
Glasgow Gary's picture

As usual, no news here. Just the news that it's allowed to be said, on TV.

GG

Mon, 01/03/2011 - 17:36 | 845171 jtmo3
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But the stock markets gone up 165% in the last week, so who gives a fck about home prices? Party on. Don't you have that great feeling that usually follows a healthy shit?

Mon, 01/03/2011 - 17:42 | 845187 Flapjackmaka
Flapjackmaka's picture

+90 today on dow. More POMOs and it will reach 12500 by the end of the month. not a good sign

Mon, 01/03/2011 - 18:01 | 845225 Boilermaker
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...and financials and REITs?  You have to plug the most gaping holes first.

Mon, 01/03/2011 - 19:17 | 845357 velobabe
velobabe's picture

boston proper really does need 2000 more parking spaces. i think parking lots are the new dot.com.

Mon, 01/03/2011 - 17:38 | 845172 the rookie cynic
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No recovery in housing or jobs = no recovery. (Except for Wall Street, they'll be just fine. The Fed is on there side after all.)

Mon, 01/03/2011 - 17:37 | 845173 bronzie
bronzie's picture

according to Martin Armstrong's cycle work the current real estate downtrend will end in 2032 so only 21 more years of declining home prices left ...

Fri, 01/07/2011 - 18:14 | 857673 dizzyfingers
dizzyfingers's picture

....bbbbbbut I may need to sell my house in order to move to a nursing home before that... waaaaaaahhhhhhhhhhh!

Mon, 01/03/2011 - 17:41 | 845174 Problem Is
Problem Is's picture

US News & World Report is Dinosaur Corporate DickWeed Media
The sooner the worthless government welfare whore teat sucking Z-Suckerman eats shit and goes bankrupt...

The better for the Amerikan Public...

ZH et al have proven these corporate rags as worthless fabrication generators...

A little less A-hole Wall Street propaganda a foot...

Mon, 01/03/2011 - 19:58 | 845430 Freddie
Freddie's picture

Zuckerman is a POS and former friend of Obama.  He loved him and now he said he made a mistake voting for him. Zuckerman is a whore, friend of the Fed bankers.

Mon, 01/03/2011 - 20:27 | 845466 Pants McPants
Pants McPants's picture

Play the ball, not the man.  Does the fact that he loved Obama (as you say) diminish anything he says in the interview?

Mon, 01/03/2011 - 20:47 | 845485 tamboo
tamboo's picture

at least this parasite is aptly named,
wonder if he lives up to it when he hits the gay sex clubs with his fellow yid the kenyan.
http://fellowshipofminds.wordpress.com/2010/05/27/washington-insider-oba...

Mon, 01/03/2011 - 22:52 | 845671 Whore_of_Babylon
Whore_of_Babylon's picture

I've never met anyone whose obsession with someone's sexual proclivities (implied or imagined) to be anyone who hasn't some serious unmet sexual desires.

 

Tue, 01/04/2011 - 00:34 | 845837 Oh regional Indian
Oh regional Indian's picture

+++ Very good observation WoB!

ORI

Mon, 01/03/2011 - 17:40 | 845178 buzzsaw99
buzzsaw99's picture

Prognostications from Madoff's best friend. Whatever.

Mon, 01/03/2011 - 18:23 | 845283 gloomboomdoom
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I have gotten DEATH THREATS on the phone for speaking my mind on Facebook.

People don't like being wrong on forecasting (They try and hide it)... or else they delete you.

Selling the latest scam to granny. Soon we will rip all the old people from their homes and force them to do manual labor to pay back the TARP money.

Ever seen Happy Gilmore?

Mon, 01/03/2011 - 18:43 | 845307 buzzsaw99
buzzsaw99's picture

The scene with bob barker was da bomb.

http://www.youtube.com/watch?v=QnJQ9U9pW9Q

The price is wrong bitch(ez)!

Mon, 01/03/2011 - 21:07 | 845501 gloomboomdoom
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Did Drew Carey get booted? Sorta like Conan? I am too lazy to google that information

Fri, 01/07/2011 - 18:17 | 857683 dizzyfingers
dizzyfingers's picture

Some grannies...you won't know which ones 'til too late...are likely to be packing a 44 mag and a shotgun. Be careful....

Mon, 01/03/2011 - 17:40 | 845181 Flapjackmaka
Flapjackmaka's picture

What's everyone's thoughts on where the dow will end up at the end of 2011?

 

Home prices drop 12%? More Americans on welfare? yay

+120... -stocks

Mon, 01/03/2011 - 17:49 | 845192 plocequ1
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Im confused. Does Apple and Google build houses? If not, Rally on.

Mon, 01/03/2011 - 17:53 | 845207 flattrader
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and Facebook is worth 50 bn.  Equal to Boeing.  At least the Squid thinks so.

And it makes what exactly?

Mon, 01/03/2011 - 17:57 | 845215 traderjoe
traderjoe's picture

All of these purchases - trophy buildings, so-considered trophy companies - imho are done with other people's money and allow these buyers to use these valuations to 'mark' the other parts of their portfolio to some ridiculous level. So, Morty buys a building up 50% from trough - and then gets to claim the rest of the BXP (and his own) portfolio is up 50% from bottom. Shazam! Bonuses for all of management! 

Mon, 01/03/2011 - 18:10 | 845245 pitz
pitz's picture

Yup.  And the opposite is done with the stock of productive companies.  Its bizarre watching, for instance, Barrick Gold, lag the GLD ETF by over 50%, in the past 2 years. 

Same is done with the salaries of producers such as engineers.  Top talent, when they apply to jobs in the US, has to 'compete' with barely literate people who are called 'engineers', and are asked to take salaries comparable to the barely literates. 

 

Fri, 01/07/2011 - 18:19 | 857689 dizzyfingers
dizzyfingers's picture

Atomic spitballs for him. Ready, aim, chew, fire...

Mon, 01/03/2011 - 18:09 | 845248 I am a Man I am...
I am a Man I am Forty's picture

no doubt, and has everyone forgotten about fannie and freddie, the ultimate get out of jail for free dumpster for mortgages??  geez, who gives a shit if you can stop paying your mortgage and the bank can just toss it over to the good ole taxpayer via fannie and freddie, party on....

Fri, 01/07/2011 - 18:26 | 857701 dizzyfingers
dizzyfingers's picture

I began reading Robert Pozen's book Too Big To Save, his idea of 'how to fix the u.s. financial system' involves keeping the swindle going ('cause there's too much money to walk away from) but with tight regulation. I puked on the book. Didn't we believe we HAD regulation? Aren't we paying government parasites to do such jobs?

Mon, 01/03/2011 - 17:44 | 845193 Instant Karma
Instant Karma's picture

I didn't know John Hancock sold his building to Mort. That's my favorite building in Chicago. Great observation deck. Next to Water Tower. Right on Michigan Ave.

Mon, 01/03/2011 - 17:47 | 845197 Instant Karma
Instant Karma's picture

I'm confused. I just watched the video and the John Hancock building is in Boston? Must be two of them.

Mon, 01/03/2011 - 18:01 | 845224 spongeBOB
spongeBOB's picture

This not the Chicago JH. There is one in Boston also and this was in 2009:

http://www.boston.com/business/articles/2009/02/10/hancock_tower_faces_f...

Mon, 01/03/2011 - 18:02 | 845226 NotApplicable
NotApplicable's picture

Or perhaps one is a forgery?

Fri, 01/07/2011 - 18:30 | 857705 dizzyfingers
dizzyfingers's picture

I think the Boston one is http://www.johnhancock.com/

 

Mon, 01/03/2011 - 17:47 | 845196 Dixie Normous
Dixie Normous's picture

That's it! There's your bottom!

Mon, 01/03/2011 - 17:48 | 845200 lsbumblebee
lsbumblebee's picture

It's good to hear a wealthy white man's opinion for a change. Thanks CNBC.

Mon, 01/03/2011 - 17:57 | 845214 Quigs
Quigs's picture

Does that John Hancock purchase smell like one of those deals William Black talks about?  +50% in good will value seems a bit steep.

Mon, 01/03/2011 - 18:00 | 845218 Boilermaker
Boilermaker's picture

REITs double the broader market gains today, as usual.  RMZ and IYR go fucking ballistic!

TA-DA!!!!

 

Mon, 01/03/2011 - 18:00 | 845219 High Plains Drifter
High Plains Drifter's picture

Maybe Morty and some of his pals want to scarf up on some cheap housing for some reason , at pennies on the dollar.........

Mon, 01/03/2011 - 18:00 | 845222 NotApplicable
NotApplicable's picture

What everyone seems to be forgetting is that one man's housing glut is another's political opportunity.

Fedgov will likely eliminate all affordable housing in the name of eradicating urban blight. After all, if there are millions of empty houses owned by Freddie/Fannie et al., why not "Do something!" productive with them.

As I've said here before, Dodd's "Livable Communities Act of 2009" paves the way for a complete takeover of the residential real-estate market. It contains everything needed from rezoning (aka override existing local laws in order to make homogenous regions) to mortgage funding/processing. Then there is the huge new bureaucracy needed, so it ends up creating "jobs" too!

Mon, 01/03/2011 - 23:17 | 845719 RmcAZ
RmcAZ's picture

"...why not "Do something!" productive with them"

Obama should just order that any home that is underwater should be bulldozed, and then give out money for everyone to buy new homes. This is a unique and revolutionary idea that has never been tried before...

... oh, wait.

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