PatriotsReign

For those who actually believe our economy is "on the road to recovery", don't believe it, because it's not true.

CNN Money - "National home prices fell 4.1% during the last three months of 2010, compared with 12 months earlier, according to the latest report from the S&P/Case-Shiller home price index, a closely watched indicator of market trends. They were down 1.9% compared with three months earlier.

And things may get a lot worse, said Robert Shiller, a Yale economist and half of the Case-Shiller team, in a web conference after the report's release.

"There's a substantial risk of home prices falling another 15%, 20% or 25% more," he said."

Home prices fall 4.1%, near 2009 lows - Feb. 22, 2011

For those of you who think, "PR doesn't want the economy to get better", that's a load of bs. What I don't want is our government purposefully painting a rosey picture when all is not rosey.

Personally, I like to read the truth when it comes to economics. Hell, maybe no one knows the truth. I know I don't know where we're headed. But I do know things aint so good right now and all the kings horses and all the kings men aren't putting things together again.

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"No one walking this earth knows what is truly righteous"

STFarmy

I don't believe it, and no matter how many times the President says it, it doesn't make it true. Of course, any President would probably be saying the same thing. I'm not an economic expert, but from all the economic info I've read, "recovery" is still a long ways off.

Thanks for the post PR, you're still my go to source here for economics.

Real World

Anecdotal but I'm helping a friend find a home. Probably 7 out of 10 listings say "reduced" when listing the price. The bottom hasn't been felt yet. It's reflective in the offers we've recently received on our vacant space. Two offers each 30% below what was market.

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"The most difficult subjects can be explained to the most slow-witted man if he has not formed any idea of them already; but the simplest thing cannot be made clear to the most intelligent man if he is firmly persuaded that he knows already, without a shadow of doubt, what is laid before him."
Leo Tolstoy, 1897

PatriotsReign

It's frustrating & sad...people pay so much for their homes and now all they can do is watch their values fall. Hell, I just bought my house last May and I'm wondering if I did the right thing at 52 years old.

I took the risk and will now live with it, just like you and everyone else. Honestly, my own posts get me bummed out. We're living in troubling times.

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"No one walking this earth knows what is truly righteous"

STFarmy

I bought my house in February 2008, right before the whole fun feeling of "oh crap, is this going to turn out like Mad Max" in the fall. As you can imagine, it's fallen quite a bit in value. The upside for me is that the mortgage isn't for a huge amount, and my wife and I plan on staying here for a while. So, God willing, I'm in a good spot to wait it out... however long that takes.

chicowalker

If you can afford the mortgage, don't worry about it and live in your home the rest of your life.

I'm pretty sure you agree with this, but too many people started looking at homes as forms of wealth creation and income generation, often in the form of short- to medium-term investments.

Nikolai

I'm not buying until I know I'm settled in my final locale. At that point, home value won't matter so much because I won't be viewing my home as an investment (which was a mistake too many Americans made before).

That said, home prices rose at rates much higher than inflation for decades to outrageous heights and proportions. With gas, health care, food, and everything else soaring in price, it's not at all surprising that home prices are falling. I predicted this in a 2007 report for a major CRE company, and was blasted for it (look now, *****es). It's just not as important to own a home as it is to eat, get to work, and getting care when ill or hurt. I think the market is correcting itself and I really hope that the feds don't step in and try to manipulate this, because it could really backfire.

High home prices in a future with exorbitant costs in other areas of life means that, at some point, most Americans will be priced out of home ownership and we go back to a "feudalistic" system wherein the top 5-10% own 95% of the property in the country.

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We get what we deserve.

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“On a day when they could have had impact players David Terrell or Koren Robinson..they took Georgia defensive tackle Richard Seymour, who had 1 sacks last season in the pass-happy SEC and is too tall to play tackle at 6-6 and too slow to play defensive end. This genius move was followed by trading out of a spot where they could have gotten the last decent receiver in Robert Ferguson and settled for tackle Matt Light, who will not help any time soon.”

Nikolai

Bam! You basically posted a more eloquent version of my first two sentences in my previous post.

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We get what we deserve.

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“On a day when they could have had impact players David Terrell or Koren Robinson..they took Georgia defensive tackle Richard Seymour, who had 1 sacks last season in the pass-happy SEC and is too tall to play tackle at 6-6 and too slow to play defensive end. This genius move was followed by trading out of a spot where they could have gotten the last decent receiver in Robert Ferguson and settled for tackle Matt Light, who will not help any time soon.”

Patsfanin Philly

Amen, but unfortunately many of these people will be forced to stay in their houses as they will be 'underwater' wrt their mortgages.

Chart: Owing more than home is worth - USATODAY.com

PatriotsReign

I made the same prediction back in the early 2000's, but it was on a smaller scale. I was debating my brother and told him home values can't rise beyond what the people in a given area can afford. I typed up a prediction of recession and declining home values and emailed it to him. My forecast was not based upon the collapse of our mortgage system, but more on rising fuel costs.

Home values must and will settle at prices people in a given area can afford no matter that people won't want to sell low...they'll have no choice.

I agree with you regarding not wanting the fed gov't to step in in an attempt to "stimulate" housing. All it does is move sales forward followed by another decline. Just like what is happening since the first time home-buyer's credit ended.

I don't want the gov't trying to stimulate anything regarding our economy. Let it find it's natural bottom and we'll grow from there.

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"No one walking this earth knows what is truly righteous"