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Robert Shiller: "Some Areas Of The Country Look Like They Are In Bubble Territory"
Just headlines for now... but in light of the presumably good Case-Shiller data ealier, this is just confirmation that even the allegedly good data today is unsustainable:
- ( NAW ) 10/27 02:31PM YALE'S SHILLER: RECENT U.S. HOME PRICE GAINS MAY NOT BE SUSTAINABLE-REUTERS TELEVISION
- 10/27 02:45PM US home price gains may not be sustainable-Shiller NEW YORK, Oct 27 (Reuters) - The gains in U.S. home prices in recent months may not be sustainable and increases in some areas of the country look like they are in "bubble territory,"
h/t Joel
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I would bet he is talking about SoCal. For some reason (probably due to national AND state interference in foreclosures) that area has had a bigger drying up of REO supply than other areas.
Eventually that dam will burst, the delinquencies are piling up, and the knife catchers buying today will be 20% underwater this time next year.
You are right. The banks and bankers are in full denial. California is functionally BK. There is no tax base or any ability to repay.
discussing right now on cnbc.
i can't focus on the discussion because mcc(s) are encased in a sweater that is so aesthetically offensive i have become nauseated.
good question mcc, "why are you still on screen"?
and large, don't forget large
I agree; she's becoming annoying with her tone, questions, & remarks. I don't care what her "assets" may be. Let's hope she soon disappears when CNBC is taken over.
Lizzy36,
Now now, don't be throwing stones. After all, I think your avatar hasn't changed her dress in what, 50 years? :>)
Some areas in the UK are going for above our peak prices achieved in Oct 2007! Our government (now owned) banks set up shell companies to stop any repossession getting onto the market and suppressing prices, this restriction of forced sellers coupled with media ramping that bring back the good old days of the boom have led to a frenzy.
In the UK they may as well do away with the housing market and just dictate any house that sells must sell for 1% more for each month since the previous sale. We have had nearly 15 years of 10% yoy rises and it is a source of great national pride as we have become wealthier and wealthier.
The Irish taught us a thing or two but the US is just playing at house prices in relation to the UK.
I just watched Shiller on Bloomberg. I have now lost all respect for him as a house price analyst.
he goes on like "I don't know what is going on", and "markets move on momentum".
No, Shiller, markets like housing still move on supply and demand, and as much as we have had stimulus on the demand side from the FTHB tax credit and Fed MBS buying, we have had even more supply constraints due to HAMP and the like.
How come so many of these so-called housing experts don't talk to the heads of servicing of the major servicers? there are only a handful of major servicers, I could give them some names.
Delinquency inventory is skyrocketing, growing month after month, as servicers are forced to put people through these mod programs.
Sooner or later that supply will hit the market. It is not a matter of if, but when.
In the Bay Area, the non-distressed market has not yet come down from the bubble days. The 50's, 60's crap boxes are still selling for $800-900K in the decent areas in the south bay.
How long can banks hold these REO's in an attempt to prop up the market before they explode? Who wants to be the last one to sell? It all seems to stupid and such a repeat of how we got here in the first place. If anyone in this country had an attention span longer than a gnat we might avoid a repeat of our mistakes within at least just a couple of years...
$8700 credit = direct bubble blowing.
As long as there is a credit the market forces can not align with reality.
reality = home ownership liability
Mission Accomplished.
Bubble talk is so 2006. Impulses during the selling seasons are expected so don't take the monthly figures literally. It's YOY that's important.
If you want to make a killing, short the Australian Real Estate Market. It's amongst the largest and last Mega Bubble to pop, and I bet it happens this year.
Here's why.
Prices have risen 5 fold since 1997. (100%/pa appreciation in places like Perth)
Interest rates are up
First home owner grant of $35,000 discontinued.
The RRE market is about to get crushed, from the top down. I sense desperation at the high end, people with jobs and homeowner equity want out before a good sized chunk of their nest egg disappears. It's easier to stomach $6K/month in mortgage payments when your equity is rising. Now that the equity burn is showing no signs of letting up, you are seeing downright desperation price-cutting on homes North of $800K. And this time they're selling to trade down, not to trade up. It's easy math to figure what will happen to the lower strata when the real avalanche of trade-down selling starts at the top.
Case Schiller index is as bogus as government economic data!
I just bought a piece of land in a nice place in Florida a block from the ocean that was down 92% from the peak in 2006. Real estate bubble? I don't think so.