Current housing bubble could take 2 paths, and both are nasty (谈股论金) 2486次阅读
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Current housing bubble could take 2 paths, and both are nasty
Shawn Langlois 1 day ago
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So when’s the Fed going to start buying up millions of homes?
Assuming the answer is “it’s not,” Charles Hugh Smith of the Of Two Minds blog says prices are going to get hit hard across the country.
The latest data would hardly derail his gloomy outlook.
The S&P CoreLogic Case-Shiller 20-city index shows home price growth is screeching to a halt. The gauge rose 0.2% in December vs. November and 4.2% from year ago — the slowest pace of annual growth since 2014.
Smith said that bursting bubbles tend to follow a symmetrical reversal in terms of time durations and magnitudes of their initial rise.
“If the bubble took four years to inflate and rose by X, the retrace tends to take about the same length of time and tends to retrace much or all of X,” he wrote.
He used this chart of the Case-Shiller Housing Index as an example:
Smith explained that the Fed, by dropping interest rates to near-zero and buying mortgage-backed securities, didn’t allow the first bubble on the chart to run its course. This time around, however, there are “no more saves in the Fed’s locker,” he warned, adding that this decline will start this year and end around 2025.
But which path will it take?
Smith said the more realistic analysts out there would at least agree that some declines in prices is a possibility and that it would look like the milder scenario.
That’s now how he sees it, though.
“There is a good case for scenario 2, in which price plummets below the 2012 lows and keeps on going, ultimately retracing the entire housing bubble gains from 2003,” he said, laying out several factors, such as massive student debt, insufficient income to support nosebleed prices, the exit of Chinese buyers, etc.
“The economy has changed, and the sacrifices required to buy a house in hot markets at today’s prices make no sense,” Smith concluded. “The only question of any real interest is how low prices will drop by 2025. We’re so accustomed to being surprised on the upside that we’ve forgotten we can surprised on the downside as well.”
Related video: U.S. Housing Market 'Bruised But Not Broken' (provided by Bloomberg)
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完整帖子:
- 房地产投资栏。请在这底下发跟帖帖。3/1/2019-6/30/2019。旧帖讨论会一直保留,转移到正常的主帖。旧帖链接在内 - 雅歌, 2019-03-04
- Home Depot sees slower growth in housing market as its 2019 outlook disappoints - 雅歌, 2019-02-26
- Current housing bubble could take 2 paths, and both are nasty - 雅歌, 2019-03-01
- Sales of existing homes jump to highest level in 11 months - 雅歌, 2019-03-23
- Middle-class homeowners smacked by new tax law - 雅歌, 2019-03-23
- Pending home sales drop 1% in February, despite lower mortgage rates - 雅歌, 2019-03-28
- Median list price for a house reaches record $300,000 - 雅歌, 2019-04-05
- Young real estate flippers get their first taste of losing - 雅歌, 2019-05-10
- Five signs home prices Could be rolling over again - 雅歌, 2019-06-18
- Sales of new homes soared to a 12-year high in January - 雅歌, 2020-02-28