Many markets in Orange County barely corrected during the bubble collapse. Many of the most desirable markets are already selling for more than peak values due to the stimulus intended to revive the rest of the national market. This will be the story over the next few years as some markets inflate mini-bubbles in reaction to stimulus while some markets languish under the weight of shadow inventory liquidations. Over time, the substitution effect will kick in and the markets will reestablish the equilibrium they once had prior to the housing bubble. Of course, that assumes politicians stop stimulating and manipulating the housing market at some point — an assumption that may be proven false.
Nobody who isn’t kool aid intoxicated believes house prices rise much more than the level of inflation. Intelligent people understand trees cannot grow to the sky. If house prices consistently went up in value faster than price or wage inflation, over time, people would lose their ability to afford to buy houses because debt-to-income ratios would have to rise to accommodate the higher prices. Either that, or all new buyers would have to substitute to inferior housing products so that the highest wage earners in the market end up buying one-bedroom condos in Santa Ana because it’s the only property affordable to anyone.
Dr. Shiller’s graph of real house prices suggests that prices have not risen when adjusted for inflation over the last 120 years. There have certainly been periods when this was true. When examining the last 30 years of data, it appears house prices have risen faster than inflation.
In my opinion, there are two plausible answers for why house prices have risen faster than inflation over this period. First, there has been much more new construction over the last fifty years than in the 70 years which preceded it. New construction always sells for a higher value, so aggregate values go up. In theory, Case-Shiller corrects for this phenomenon by looking at the prices of individual homes. This is one reason Case-Shiller is more accurate than tracking the median to evaluate the relative price change of specific houses.
Second, and more importantly, interest rates have declined dramatically and steadily over the last 25 years. Some amount of the gain is due to lower borrowing costs. House prices are bound to inflate faster than incomes rise when borrowing costs decline over a long period of time. In fact, as I demonstrated in Orange County monthly cost of ownership falls to 1980s levels, Buyers today in Orange County have the same monthly cost of ownership as buyers in 1989. The only reason home prices are any higher today than 1989 is because interest rates fell from 10.77% in April 1989 to 3.5% in October 2012.
So how long will it take for prices to get back to peak levels? If you had asked me a year ago, I would have said anywhere between 10 and 25 years. However, based on the recent collusion among the banks to withhold inventory, we may see peak prices much sooner than that — assuming banks can continue to keep properties off the market and interest rates make peak prices financeable and affordable.
Shiller: Housing Market Could Take 50 Years to Fully Recover
Published: Wednesday, 31 Oct 2012 | 3:54 PM ET — By: Drew Sandholm
From housing starts to home prices, renowned economist Robert Shiller acknowledged “there are a lot of positive signs” for the U.S. housing market right now, but told CNBC Wednesday it’s still unclear if a recovery is actually in place.
After all, Shiller noted the housing futures market for single-family homes was only “mildly optimistic” before superstorm Sandy struck the U.S.’s East Coast with expectations for just 3 percent growth per year over the next four years.
“If it goes up 3 percent a year that means that, in real terms, housing is just about flat,” Shiller said. “It’s not a recovery to write home about.”
The futures markets are not predicting a robust national recovery. Most of the judicial foreclosures states will likely see declines over the next few years as liquidations finally take place. The Southwest with its restricted inventory is also further along in the recycling process. While the east coast languishes, the west coast will rise faster than the national average.
Shiller is probably best known for helping create the Standard & Poor’s/Case Shiller index, a widely-followed measure of housing prices, which recently revealed that U.S. home prices rose 2 percent in August compared to one year ago. Meanwhile, the NAHB/Wells Fargo Housing Market Index — a survey of homebuilders — recently climbed sharply higher.
Despite the onslaught of positive indicators for the housing market, Shiller told CNBC’s “Futures Now” it’s possible for the housing market to return to full strength, but it will take a while.
“It can get big as it was again maybe in 50 years. This housing bubble was a once-in-a-lifetime thing, I imagine,” Shiller said. “Although, you know, the market might be more volatile, so the future is always unknown.”
If we had any real protections in place to prevent a future housing bubble, it would take a very long 
time for many markets to recover. It’s a bit like the Nasdaq waiting to hit 5,200. How long will that take?
To make his case, Shiller noted how the investing culture has changed over the years, thereby greatly affecting the housing market.
“50 years ago, hardly anyone thought of houses as investments, but now, people are focused on it like never before,” Shiller said, adding that homebuilding was so rampant in markets like Phoenix and Miami, it quickly drove up home prices to where one could see the bubble forming very early on. “The funny thing about this recent experience is it became so nationwide. Housing markets aren’t supposed to be correlated all over the country like that. It was a rare phenomenon.”
Going forward, though, Shiller doesn’t expect history to repeat itself anytime soon, if ever.
I think it will. We have done nothing substantive to prevent the next housing bubble, and with all the bailouts and their associated moral hazard, we have increased the level of kool-aid intoxication in the general population. I predict we will start to hear more kool-aid talk over the next few years as everyone takes on a selective amnesia to the events of the last six years.
“My general idea is that we’re not going into a nationwide boom and not many places will show booms in the next few years,” he said.
With the unlimited stimulus of the federal reserve, I think we will see a boom. As far as the banks are concerned we must see a boom because otherwise they will never have collateral backing behind many of their bad bubble-era loans, particularly the billions in worthless second mortgages they hold on their books. Banks need collateral behind these bad loans so they can recover capital when they finally do foreclose. Without higher prices, banks will face billions in write-downs they simply can’t afford. They’ve been writing down bad debts as quickly as they earn more, but at current rates, it will still take them decades to complete their task. If prices are higher, they can avoid all these losses, so they get Bernanke to reduce mortgage rates well below what’s reasonable, and they withhold inventory to force prices higher. It’s a matter of survival for them.
Banks must reflate the housing bubble to recover from the last one. It’s inevitable. And despite the hardship the last one caused, everyone will play along, the Ponzis will borrow and spend, the economy will recover, and everyone will act surprised when the next bubble deflates. It won’t be different next time.
Housing Market report presentation, Thursday, November 8, 6:00 at JT Schmids and the District
I want to invite all of you to come out to our special event tomorrow evening.
They sold to the bank at the peak
The former owners of today’s featured REO bought at the bottom back in 2007. Other than a small second mortgage taken out in 1997, they resisted abusing HELOCs through the entire housing bubble. Finally in 2007, they refinanced with a $623,600 first mortgage and a $155,900 stand-alone second. Basically, they sold it to the bank for $779,500. Not a bad deal considering it’s only worth $592,000 today.
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Proprietary OC Housing News home purchase analysis
24431 KINGS Vw Laguna Niguel, CA 92677
$592,000 …….. Asking Price
$252,000 ………. Purchase Price
12/18/1997 ………. Purchase Date
$340,000 ………. Gross Gain (Loss)
($20,160) ………… Commissions and Costs at 8%
============================================
$319,840 ………. Net Gain (Loss)
============================================
134.9% ………. Gross Percent Change
126.9% ………. Net Percent Change
5.7% ………… Annual Appreciation
Cost of Home Ownership
——————————————————————————
$592,000 …….. Asking Price
$118,400 ………… 20% Down Conventional
3.45% …………. Mortgage Interest Rate
30 ……………… Number of Years
$473,600 …….. Mortgage
$111,079 ………. Income Requirement
$2,113 ………… Monthly Mortgage Payment
$513 ………… Property Tax at 1.04%
$0 ………… Mello Roos & Special Taxes
$148 ………… Homeowners Insurance at 0.3%
$0 ………… Private Mortgage Insurance
$95 ………… Homeowners Association Fees
============================================
$2,870 ………. Monthly Cash Outlays
($328) ………. Tax Savings
($752) ………. Equity Hidden in Payment
$128 ………….. Lost Income to Down Payment
$94 ………….. Maintenance and Replacement Reserves
============================================
$2,012 ………. Monthly Cost of Ownership
Cash Acquisition Demands
——————————————————————————
$7,420 ………… Furnishing and Move In at 1% + $1,500
$7,420 ………… Closing Costs at 1% + $1,500
$4,736 ………… Interest Points
$118,400 ………… Down Payment
============================================
$137,976 ………. Total Cash Costs
$30,800 ………. Emergency Cash Reserves
============================================
$168,776 ………. Total Savings Needed
The property above is available for sale on the MLS.
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41 Responses to “50 years for house prices to reach peak levels without another bubble, Shiller”
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I am beginning to wonder if banks now think of housing as nothing more than mini-branch offices.
Similarly, local government visualizes putting a toll gate in front of everyone’s driveway to collect tolls in the form of property taxes and such.
The banks, federal reserve, local governments, loanowners, and politicians all want to see higher prices. Only potential buyers and economists who don’t believe the Ponzi effect is sustainable want to see lower, more stable prices. With so many on the side of higher prices, and with the considerable power they yield, I fear another housing bubble is inevitable.
The election of Obama slowed the push to a credit based housing bubble on top of the cash only .1 percent housing bubble now occurring. Now it depends on how strong Dodd-Frank is in requiring people to take out mortgages they can really afford.
But know this, the cause of housing bubbles are always the banks and the elite financiers, not the borrowers.
Without the borrowers, who would the banks and the elite financiers use to inflate the bubble? You can apportion more blame to bankers as I do, but you can’t absolve the borrowers of all responsibility. I know that doesn’t fit within your black-and-white world view where the bankers are 100% responsible and the borrowers are 0%, but in the real world responsibility cannot be apportioned as you attempt to do so. Borrowers were not blameless victims. They had a choice to make, and they made it. With choice comes responsibility. The argument should be about how much less than 50% that responsibility is. It’s certainly more than the 0% you advocate.
Sorry, the borrowers are just the tools of the bankers, who have been inflating bubbles for centuries. By spreading blame the banksters get folks to absolve them so governments don’t sever their heads from their bodies.
It’s borrowers, banks, and crony capitalism. Banks were selling bad notes to “investors”. In future, I think banks should have randomly retain such mortgages to prevent from happening again. However, when a bank mails you a ad refi check for $50K and all you do is need to sign here to get it. The borrower needs to review their finances to see if they can afford it. This is your responsibility to control your finances. You can’t do this responsibility then you shouldn’t own a house. Grant it, there are economic circumstances like jobless, but I’m talking about when borrower just refuses to pay because they don’t want to or because they don’t realize ARM’s rates can increase.
Many renters do this responsibility everyday. These people can do it too.
It is the responsibility of the bank to make certain you do not get more house than you can afford. Wells Fargo wants to avoid the Dodd-Frank rule that will accomplish just that. Read this article Mike, carefully, and you will see that the banks abhor the thought not being able to sell a bigger mortgage than folks can afford. The banks make more money on defaults and bailouts than they do on sound loans. Anyway, Mike here is the article. This article exposes the cause and the source of housing bubbles, the banks and the banks only: http://articles.chicagotribune.com/2012-11-01/classified/ct-mre-1104-podmolik-homefront-20121101_1_mortgage-bankers-association-residential-mortgage-home-purchases
The borrowers are the victims.
It’s the responsibility of the borrower to have the basic financial intelligence to realize what they can afford. Borrowers must be responsible for themselves.
Your victim mentality is a growing social cancer plaguing the country.
For as much as you and I disagree on this point, I am surprised we agree on strategic default. Personally, I think you have constructed this victim mentality to absolve borrowers who strategically default of any guilt. IMO, they should strategically default because it’s the right thing for their family despite the guilt for being irresponsible. You offer people the chance to have their cake and eat it too. They get off free of financial obligation and guilt for it. That’s just wrong. They can’t have both.
From the 1930′s to the 1990′s underwriters determined how much house you could get. There were guidelines and they were implimented. What changed was not the borrower. What changed was the responsibility of the bankers, who were able to securitize and pull their underwriter teams.
Just face it there are victims. People are victimized. The banks should give it back. They should modify the loans. It was their fault. You are letting the banks off the hook. They are responsible for the scam.
You didn’t see the Madoff victims go to jail did you Mike?
I absolutely believe there should be no guilt associated with strategic default. I wrote an ebook about it.
Since govt now has a mandate to plow full speed ahead in the ‘expand its reach’ business, there is no point salivating over prospects of the next bubble. The capital and price controls have only just begun. Too bad.
The only price control I see it place is a relentless push higher and higher.
For now, but what we’re seeing is purely ‘money illusion’
Nonetheless, history illustrates quite clearly that markets have uncanny ways of punishing central bank hubris. Stay tuned……
“…history illustrates quite clearly that markets have uncanny ways of punishing central bank hubris…”
In a nutshell, that is my great personal hope.
The big wrinkle this time around as opposed to say 50 years ago is that the global banking systems are tightly interconnected courtesy new computer and network technology.
I suppose one could argue the now tight coupling of the world’s financial markets is a good thing or a bad thing.
I would just love to be a fly on the wall in some of these meetings with Ben B., Tim G. and other world bankers.
At lot has been written about how these guys are in bed with each other. I am not big on conspiracy theories, but this may be the one exception.
” I am not big on conspiracy theories, but this may be the one exception.”
Me too. The evidence is quite compelling that the conspiracy is real. They aren’t even trying to hide the fact. The cronyism is on display for all to see.
re: David LoshI am not in the real estate bsnsieus now and have never owned a home in Seattle. I have however worked on real estate software and I have studied real estate finance from the derivatives side. I can tell you that as a member of the general public my experience with Realtors has been horrible. When I was looking for a home the people I ended up talking to were extremely ethically challenged and seemed to lie without the slightest hesitation. I’ve met some great, honest, and likable Real Estate agents but the number of get rich quick scumbags in the industry really hurts the overall reputation.Any model is only as good as the variables that go into it. I would like to add a few to the real estate equation.1. Mark-to-market accounting: The banks are all holding CDOs at 1% to 19% of actual value. They have been fighting to keep these off the balance sheets. If they are forced to write down the actual losses on real estate investments I have to think that the market is going to get pushed down even further. Tthe way these losses is being reported is one of the major reasons that we have any real estate market. What happens if the government simply allows everyone to cheat on their financial reporting? I really don’t know?2. CDS market- One of the most underreported stories is in the CDS market. Real estate related CDSs have managed to chain banks together in a way that no one expected. The problem is that the counter party in a CDS can change if the CDS is traded. If I enter a CDS contract with Goldman and they trade the CDS to AIG then AIG should pay in case of default. But if AIG goes bankrupt Goldman would become the counter party. That means that each former owner of the CDS needs to have the assets to cover the entire loss of the CDS. 3. Bond rating agencies: The bond rating agencies are still exempt from any legal ramifications for pumping their ratings. Bond ratings are actually covered as freedom of speech. It seems that this is a recipe for disaster. If banks can still create artificially high valuations for real estate related synthetic securities then it seems like the market will continue to be overpriced.Our real estate bubble formed because of horrific credit practices. We can not get rid of these bad policies because the loss would be so horrible that we might not have an economy if we do. It is very, very ugly and it seems that we are trapped.
An FHA bailout should surprise no one who reads this blog. More on this in an upcoming post…
FHA Said to Set Stage for Treasury Draw as Losses Mount
The Federal Housing Administration, faced with continuing losses from the housing bubble, will issue a financial analysis next week setting the stage for what could be its first draw from the U.S. Treasury in its 78-year history, according to three people briefed on the report.
The government-backed mortgage insurer, which warned in last year’s report that its insurance fund was being drained, has raised premiums and tightened credit standards in an effort to avoid asking for a taxpayer subsidy.
Still, the improved quality of recent FHA-backed loans — now comprising 15 percent of U.S. mortgages for home purchases – - may not offset continuing defaults from loans made from 2005 to 2008, said the people, who spoke on condition of anonymity because the report isn’t yet final.
The annual report to Congress, based on analysis by an outside actuary, could hamper a White House effort to expand FHA’s role as an insurer for borrowers whose homes are worth less than they owe on them. FHA officials and supporters are preparing to counter the downbeat projections by highlighting how the agency helps the economy.
“If FHA alone simply stopped doing business, we would have been propelled down into another double-dip recession,” said John Griffith, an analyst at the Center for American Progress, a research organization aligned with Democrats.
FHA Acting Commissioner Carol Galante is scheduled to appear on a panel at the Urban Institute in Washington on Nov. 8 to discuss a paper stressing the FHA’s importance to single- family housing finance.
FHA is one of the three pegs holding up home prices. The other two is the Fed MBS purcahse and setting interest rates at 0%,
I do have the feeling the FHA bailout will be full steam ahead. They will just use the bailout to raise the insurance premiums and probably do a super FHA above 729,000.
“They will just use the bailout to raise the insurance premiums and probably do a super FHA above 729,000.”
I really hope they don’t raise the limit to bail out jumbo loan holders, but it wouldn’t surprise me if they do. I wrote a post on the idea that allowing more high wage earners into the system would help its solvency, so they are likely considering this idea.
Home prices dip in September
(Reuters) – Home prices slipped in September after gaining for six months in a row as values were weighed down by cheaper distressed sales, data from CoreLogic showed on Tuesday.
CoreLogic Inc’s home price index fell 0.3 percent from August. Prices were still up strongly compared with a year ago, rising 5 percent for the biggest increase since July 2006.
Excluding distressed sales, prices were up 0.5 percent from August and also gained 5 percent from last year.
Homes that have been seized by banks or are in danger of being foreclosed are often sold at significantly reduced prices.
The stabilization in home prices this year has helped the housing market turn the corner as it recovers from its far-reaching collapse.
CoreLogic forecast prices would fall 0.5 percent in October as the benefit of the summer buying boost wears off. Still, October prices are expected to be up 5.7 percent from the previous year.
“So far this year, we’re seeing clear signs of stabilization and improvement that show promise for a gradual recovery in the residential housing market,” Anand Nallathambi, chief executive of CoreLogic, said in a statement.
Of the top 100 statistical areas measured by population, 18 showed year-over-year declines, down from 27.
A separate report, the closely watched home price index from S&P/Case-Shiller, has also shown home prices improving as of August. The September report will be released at the end of the month.
2.4 million mortgage loans are more than 60 days delinquent
In the third quarter of this year, servicers increased the pace at which they completed proprietary modifications and short sales, HOPE NOW data revealed Monday.
In Q3 2012, proprietary modifications, or non-government mods, stood at 186,057 compared to 161,764 in Q3 2011, representing a 15 percent annual gain, according to the alliance.
Quarter-over-quarter, proprietary mods were up 41 percent compared to Q2 2012, when there were 131,556 completed mods.
In addition to the 186,057 proprietary mods in Q3, mortgage servicers also completed 33,276 mods through the Home Affordable Modification Program (HAMP), bringing the quarterly total for completed mods to 219,333. HOPE NOW noted HAMP figures for September have not yet been reported.
When including all modifications, year-to-date, 604,301 homeowners have received permanent loan mods in 2012.
In Q3, short sales, another solution to prevent foreclosures, totaled 110,153, up 16 percent from Q3 in 2011 when there were 94,560 completed short sales.
Quarter-over-quarter, short sales were up 3 percent. However, completed short sales were actually down month-over-month by 13 percent in September.
While mods and short sales were up in Q3 2012, foreclosure starts were down, falling to 503,995 compared to 597,447 in Q3 2011, representing a 16 percent decline.
Foreclosure sales saw a slight 1 percent decline in Q3, dropping to 197,937 compared to 199,383 a year ago.
In a statement, Faith Schwartz, executive director of HOPE NOW said, “The combination of loan modifications and short sales solutions completed by mortgage servicers, in the third quarter of the year, totals over 329,000. That compares to approximately 198,000 foreclosure sales during the same time period.”
Sixty-plus delinquencies also fell in Q3 2012, numbering 2.45 million, down 12 percent from the same quarter last year.
For just the month of September, HOPE NOW also provided data on characteristics of proprietary loan modifications. Among the 60,595 completed proprietary loan mods in September, 87 percent included reduced principal and interest on monthly payments. In addition, 76 percent of those mods had reduced principal and interest payments exceeding 10 percent.
Since 2007, the servicers have completed 5.82 million permanent loan modifications. Of those loan mods, 4,739,109 were proprietary and 1,076,747 were completed under HAMP.
HOPE NOW—an alliance of mortgage servicers, investors, mortgage insurers, and non-profit counselors—offers a free hotline for struggling homeowners at 888.995.HOPE.
I guess that settlement shield wasn’t as strong as the banks hoped.
JPMorgan loses bid to toss mortgage debt lawsuit
JPMorgan Chase & Co. on Monday lost a bid to win the dismissal of a lawsuit by the Federal Housing Finance Agency accusing the bank of misleading D.C.-based Fannie Mae and McLean-based Freddie Mac in buying billions of dollars worth of risky mortgage securities, Reuters reported.
A judge in Manhattan pared down parts of the lawsuit filed by the U.S. regulator but allowed other claims to stand. The case was one of 17 lawsuits that the agency, as conservator for Fannie and Freddie, filed in September 2011 against banks including Bank of America Corp. and Citigroup Inc.
IrvineRenter,
It is my personal opinion that although “it won’t be different next time”, the players and the asset class WILL change. I know many people are jumping back into the real estate, but the fact is most bubbles after burst will take at least 20 years for the same asset class to become in vogue again. Majority of the time however, the same asset class would take much more than 20 years.
The human greed will remain the same, but most likely it won’t be real estate next time. What we really have is echoes of the housing bubble. I actually believe that real estate probably won’t have another nation-wide bubble in my lifetime. Anyone who is investing in real estate without having positive cashflow should be prepared to put in cash for the forseeable future. It’s even more ominous with the bond bubble yet un-popped.
I wish I shared your faith in past history. I hope the reaction to all the stimulus is just a small echo bubble, but I have my doubts. We may not see another national housing bubble, but I think another one here in California is almost a foregone conclusion.
The bond bubble is going to be really ugly when it finally bursts. In particular, I foresee the long-term end of the yield curve getting hammered. Far too many bond buyers are taking on 10 and 30 year debts chasing pathetic yields. The prices on those will crater at the first sign of rising interest rates.
Irvine Renter,
Would you explain what happens to the real estate market and home prices in SoCal if the bond bubble bursts? Thanks.
Jim from Torrance,
Thanks for commenting on the blog. Welcome.
If the bond bubble bursts in dramatic fashion with a complete implosion of bond prices across the full yield curve, mortgage interest rates would rise dramatically, and house prices would plummet.
My guess is that the bond bubble will deflate slowly starting at the long end of the yield curve, and it will be fought by the federal reserve who will selectively buy mortgage-backed securities to keep mortgage rates low.
Right now, the yield curve is flat and getting flatter. When the economy picks up, the yield curve should get steeper as money flees longer term bonds. Eventually, this will hit 10-year bonds at which point interest rates on mortgage will rise.
So much of what happens will depend on what the federal reserve does. They have an infinite balance sheet to buy bonds, and they have a proven willingness to buy 10-year Treasuries and mortgage-backed securities, so they will attempt to keep the yield curve flat as long as possible.
Just wait till we’ve reached the point monetarily where the central bank is forced to print money to buy gold. That will be the signal US bondholders are about to face a good cattle-prodding. It will be too late for many.
I was told it was 7 years not 20. I agree that bankers will keep inventory tight, and I don’t know if thats greed since it is their survival at stake. The prices going up already are in the best best areas like Turtle Rock. Those buyers overpay by millions and then sell for even more, and I can not do that precisely because I am a saver and therefore “rich”. I am thinking of the Russian invesor in Facebook who bought a house for 100M in 2011 and it was appraised for prop tax at 50M or something like that. Ouch and he didn’t care or notice. I would die. ‘This valley attracts money and lifestyle. We’re definitely seeing a little surge,’ Michael Sibilia, president of the Santa Clara County Association of Realtors
Some gems here…
http://ochousingnews.com/news/major-banks-steal-from-investors-in-foreclosure-settlement#comment-1507
Mellow Ruse says:
March 8, 2012 at 1:30 pm
We may as well brace for another Obama term and hope that the Republicans can hold the House to prevent any more foolish programs from getting passed.
Carl Pham says:
March 8, 2012 at 3:05 pm
Yeah, sorry, but I think you’ve swallowed a media spin hook line and sinker, and you’re in for a shock next January when President Romney is sworn in.
Mellow Ruse says:
March 8, 2012 at 3:58 pm
Sorry, if you like Romney that much than it’s you who has swallowed the media spin. The media wants Romney to be the Republican candidate more than anything. He and Obama are just two sides of the same coin, with the main difference being Romney’s desire to bomb Iran.
If you study history, it takes a revolution to unseat incumbent Presidents. You don’t see them lose by a few electoral votes, but rather by huge landslides and hundreds of electoral votes. Study the 1976, 1980, and 1992 elections and see what I’m talking about.
Carl Pham says:
March 8, 2012 at 5:39 pm
I don’t have to study those elections, I voted in ‘em.
We’ll see in eight months, won’t we? But I would sell your Hope ‘n’ Change T-shirts before late October.
wow really? You had to go searching trough archives to find this a re-post it.
i even agree with your comments but this is quite petty.
It’s only petty because your horse lost. I didn’t have a horse and I didn’t have to search through the archives.
The more I read your comments, the more I am impressed with your clarity of thought and vision. You really nailed it in that exchange.
Now c’mon Larry, MR’s head is also in a huge bubble (just like the bond market). Please be careful not to inflate it too much more.
kthxbye
el O,
Both of your are gifted and insightful. It’s interesting how much you both disagree, and yet how often you’re both right.
No, really. It is just petty.
Which is my horse? I didn’t vote of Romney and never implied that I did. I said I even agree with your comments.
It is really juvenile and petty to go search archives from six months ago and repost to “prove” you were so brilliant on your 50/50 guess.
I am not Carl Pham – just a neutral observer calling bull$hit when I see it.
Well, like I said there was no searching of the archives involved. His comments were what some of us refer to as “keepers”.
Back when I made the prediction 8 months ago, Romney was being touted as “the most electable candidate” by the Republican machine. Very few were predicting a Romney loss 8 months ago, before he was the official candidate… and even fewer were willing to back it up with sound historical reasoning.
We’re on a blog that deals with revisiting predictions, whether they be right or wrong. I just thought it would be fun to revisit this comical debate and stimulate some conversation about the election. Maybe I was wrong about that..
You weren’t wrong to make the comment, and clueless was not wrong for sharing his observations either. This kind of dialogue is what makes the comments interesting.
What struck me about your first comment was …
“even fewer were willing to back it up with sound historical reasoning”
It’s one thing to predict whether a coin will come up heads or tails. It’s another thing to explain why it will come up one way or another well in advance and be correct.
Sorry – maybe I am just overwhelmded with all the “Na-nanana” I am seeing on the interwebs today.
The Dem and Repubs have so divided this county, with their hate mongering every election now seems to bring the worst out in people.
Yes, the political rhetoric gets out of control. I watched a show today when they were asking if last night’s election gives Obama a mandate. A mandate? He barely won a tight election in a very divided nation. We obviously don’t agree on much as a nation, so the only mandate I see is that we will continue to disagree and not get much done. So be it.
Give me a break…
Republicans mourn ‘the day America died’ and plot the path ahead
The morning after President Obama’s reelection, tea party activists and movement conservatives reacted with dejection, rage and considerable resolve — saying they just need a better national candidate and a purer distillation of their anti-tax, small-government message to win the presidency in 2016.
That did not inspire high hopes for compromise in Washington — where automatic tax increases and budget cuts loom even before Obama’s January inauguration. If there was one subject on which the political right made conciliatory noises, one day after Mitt Romney’s defeat, it was immigration. Republicans must think about the issue in new ways if they hope to expand their appeal among the growing Latino population.
Out in the land, though, some hard-core conservatives spared no hyberbole in expressing their anguish over Obama’s victory. The political blog for the Cincinnati Enquirer reported that a tea party group in Warren County, Ohio, sent an email Wednesday morning saying “the world mourns the loss of America. Socialists, welfare and unions took over this country yesterday. Today I wear black. The day America died.”
Not to be outdone, right-wing commentator John Stacy McCain (no relation to the U.S. senator from Arizona) fulminated at the “American Spectator” website in an essay entitled “Doomed Beyond All Hope of Redemption: Dark thoughts on the meaning of a catastrophic election.”
“with expectations for just 3 percent growth per year over the next four years”
If houses rise at a steady 3% rate then it would take about 24 years for prices to double and put us back at the peak. A 50 year recovery would only require a 1.4% rate of increase per year.
Both of these scenarios assumes no future bubbles, which is a pretty bold assumption if you ask me. The Case/Shiller chart adjusted for inflation shows a national RE bubble forming about once a decade. Maybe this time will be different.
Sadly, I agree with you. Another bubble is likely, particularly here in California. The conditions are ripe, all we need now is time and more qualified buyers at 3% interest rates.