Jobless Claims Up – Fed Admits Cash For Clunkers A Failure
San Diego housing market – Today’s video is about a rise in initial jobless claims. How does that affect the San Diego housing market? Actually, in two ways: #1, for the real estate market to build any kind of meaningful base, the unemployment numbers must improve; #2, watch this video carefully, and you’ll see where the government admits that its’ cash for clunkers program was a failure. It has been my contention that the government’s home buyer credit of $8000, which was modeled after the cash for clunkers program, was also a dismal failure. I believe it’s just a matter of time before one of the regional Fed branches admits this fact like they did today with their cash for clunkers program.
In my June 2, 2011 post: Existing Home Sales Take Huge Drop I said “The problem is there was never any real recovery in the US economy or the US housing market. Both were boosted by artificial governmental stimulus. The $8,000 Federal housing rebate was nice for many San Diego home buyers. But, if that was their main impetus to purchase a San Diego home last year, they may now be sad to know that the value of their home has subsequently gone down well more that the amount of the tax rebate they received.” Read more 
Real Estate Recovery – A Ways Off
real estate recovery
The National Association of Real Estate Editors during their annual meeting shared that continuing foreclosures and an “overhang” in housing inventory will likely prolong the housing slump for several more years. Home values in many markets are still in decline, said Stan Humphries, chief economist for online real estate search and information company Zillow. And housing demand may not see a normal balance with new household formation and housing starts until 2013, said Doug Duncan, chief economist for secondary mortgage giant Fannie Mae. Read more
Housing Recovery – Not This Year!
Warren Buffett
Will the housing market recover this year? Yes, if you believe the ‘industry’ line. Then again, according to the “industry,” it’s been a good time to buy,for the last three or four years! With the government’s big homeowner credits, a slight pick-up in the lower end of the market in San Diego ,and historic low interest rates, the end of equity devastation is relegated to bad dream status.
Housing Recovery … Really?
San Diego real estate broker
Consumer credit fell in September for the eighth straight month, the longest streak of declines since the Federal Reserve started keeping records in 1943.
Total consumer borrowing fell a seasonally adjusted $14.8 billion, or 7.2%, to $2.456 trillion in September, according to the Federal Reserve.
One in Four Borrowers Is Underwater
The proportion of U.S. homeowners who owe more on their mortgages than the properties are worth has swelled to about 23%, threatening prospects for a sustained housing recovery.
Nearly 10.7 million households had negative equity in their homes in the third quarter, according to First American CoreLogic, a real-estate information company based in Santa Ana, Calif.
Consumer sentiment….down, down, down. 75% think we are still in the recession, the masses are not wrong.
Sorrento Valley real estate
Housing Recovery Requires An Employment Recovery
www.brokerforyou.com
It’s amusing to read the prognosticators repeating the industry party line of a San Diego real estate market bottom and to buy now before one misses this great opportunity. Are the ‘talking heads’ just overly optimistic, espousing on unfounded hope, lies, or just ignorance?
The key to long-term house prices was, and will remain, incomes. Long-term, buyers can afford about three times income, assuming they don’t have too much other debt. Discussions on how much prices have dropped (Gee, it’s down 50% so that MUST mean it won’t fall any more!) are not of great interest if that’s all there is to the discussion.
Unemployment continues to collapse (-250k jobs is horrid, though merely less horrid than -600k jobs). Lending is tight. Consumers are still heavily in debt.
Let’s assume we get growth in 2012. Will the Fed start raising interest rates by then? Probably. If the deflationary forces of contracting credit abate and the inflationary forces of printing start to take hold, we could see rates rise sharply from 2012 to 2020. What will happen to house prices with mortgage rates at ten to twelve percent??
Housing Recovery – You May Have to Wait Until 2012
San Diego housing
As any of my blog readers already know, I’ve not been on board with the San Diego housing “bottom in 2009″ crowd. The Anderson forecast aside, a quick read of my last few post, shows many other prominent forecasters agree with me. As our seasonal up-tick in real estate activity draws to a close in another few months, it looks probable that the winter will bring another chill to the San Diego real estate market.
Below are a couple of other experts’ comments on the current housing market.
David Rosenberg, chief economist at Toronto-based asset management firm Gluskin Sheff & Associates said an interview: “Baby boomers are still in the discovery process on over-sized real estate being more of a ball and chain than a viable retirement investment asset. The high end of the market will be in a bear phase.” Standard & Poor’s Chief Economist David Wyss speaking about a housing recovery said: “We expect prices to drop for another year and then stabilize before starting to rise with incomes.”