Appraisers' Free Forum

This is not about the recession... not exactly. This summer I met an old friend at a high school reunion. He used to build high end houses in Florida, but has now closed his company. He was enjoying his early retirement, but says he is thinking about what he will do next. He says he can hold out for awhile, but not indefinitely. I said, well, if you can hold out for awhile, why not just wait until doctors start building houses again? He said, I don't think we can hold out that long... it's going to take a long time for the market to absorb all the extra inventory that's out there. Then, he gave me his guesstimate... ten years before the housing market reaches equilibrium. Now, that was a broad overall estimate for the country as a whole... he thinks it will be even longer in Florida.

When I read this article, it got me to thinking that he might be right.

Code: Select all

http://www.cbsnews.com/stories/2008/12/12/60minutes/main4666112.shtml

Here's a hint about why I voted the way I did.

In the next four years, eight million American families are expected to lose their homes. But even after the residential meltdown, Whitney Tilson says blows to the financial system will keep coming.

At the time, I thought he was nuts... but, at the time I did not know that the treasury was going to put more than a $trillion into bailing out the banking industry, thereby making things all that much worse. Because none of us has a crystal ball, I have checked the option that allows you to change your vote. I am now saying six to ten, but may change my mind next month. As for my local area, it is only slightly out of balance now... it's a buyers market, but just barely. It may get better sooner, or it could get worse. If I could guess these things accurately, I would be a lot richer than I am... but, at least I was not dumb enough to buy a bunch of apartments on option only ARM's.

So, here is the question:

How long before the Nation's housing stock comes into something resembling equilibrium so that most appraisers can once again mark "in balance?" I know that housing markets are local... please try to answer the question in terms of Nationwide, then post your local comments in the thread.

For those who don't want to cut and paste, here's an attempt at the link in regular format:

http://www.cbsnews.com/stories/2008/12/ ... 6112.shtml

BTW, I believe the market in my little corner of the world will approach being in balance inside of four years. But, of course, my guess could change depending on what happens next.

Six to ten.

Eight votes? Surely we can do better than that! No need to be embarrassed if you guess wrong... I've allowed you to change your vote later.

We're not going to be here anyway. The end is near.

December 21, 2012



But I believe if we are still here it will take a decade. Some local markets much quicker - but overall it will take a long time.

Surely we can do better than 11 votes. Come on, folks... pretend you're in Chicago... vote early and vote often (changes allowed).

It depends your market, we are already down to less than 8 months of inventory. I was meeting with our guys last week, we getting ready to pour some foundations.

M L wrote:It depends your market, we are already down to less than 8 months of inventory. I was meeting with our guys last week, we getting ready to pour some foundations.

In some parts of Joplin we never got over 7 months of inventory. That is still horrible for us. I ran stats in the southeast part of town the other day. For the type of property I was looking at there were 73 active listings. Using December sales gave a 10 something month inventory, but using the last three months was 6 something and so was using the whole last year... chalk it up to December seasonal influences.

However, for those who think the worst is over:

http://www.washingtonpost.com/wp-dyn/co ... 501&s_pos=

The foreclosure crisis hasn't played itself out. The next wave looms in the form of a new batch of adjustable-rate mortgages scheduled to reset over the next two years.

I'm gonna change my vote to 3-6, though... Bama will surely fix this stuff....

They are much more optimistic than I am. But, I may still consider lowering my vote to the three to five category.

http://www.washingtonpost.com/wp-dyn/content/article/2009/01/23/AR2009012304172.html?wpisrc=newsletter

The depth of the troubles, analysts say, indicates that nations may need to spend more than the billions of dollars already planned on stimulus packages to jump-start their economies, and that a global recovery could take longer, perhaps pushing into 2010.

And, they are also of much different opinion of what should be done than I am. We have a good historical example of why the bailouts won't work. First, in the Great Depression, and more recently, in Japan's Lost Decade.

However, I am unaware of any study concerning how effective these kinds of stimulus plans might be if every country in the world is doing them at the same time. In past examples I am aware of, at least part of the reason it didn't work was because of the effect of currency exchange. If Germany, China, India, and everyone else is doing it, that effect should be largely negated. Question is, could that then push us over into something even greater than the Great Depression?

Here's a guy who agrees with my vote... sort of....

http://www.joplinglobe.com/homepage/loc ... cturestory

http://seekingalpha.com/article/123379-bernanke-seems-clueless-about-the-real-state-of-the-economy?source=email

He says the recession will end this year.

The utter ridiculousness of such a statement in the face of rising global unemployment, massive monetary inflation, and collapsing banks is testimony to the fact that the self-delusional government and financial industry psychology that incubated and unleashed the present financial catastrophe is alive and well.

Well, I guess I won't change my vote just yet.

I'm still not changing my vote, but here's someone who thinks it could be over by 2010.

http://www.mint.com/blog/finance-core/five-ways-youll-know-the-recession-is-over/

“I think we’ve got at least another 12 months to go,” says Jim Howell, an economics professor at Stanford University’s Graduate School of Business. “If we finish by the end of 2010, that would be a good outcome.”

Yes, that would be a very good outcome....

The article has some tips on how you can recognize the beginning of the turnaround. I would add one more to his list... when you start seeing resales of houses at higher prices than the previous sale within the last five years, without any remodeling having been done.

Things can happen quickly.

In this region we had a city (& surrounding area) increase in equity 3% compared to this time last year.

Now if you'd have said, "how long before the news media starts reporting equilibrium,"...well then I'd have said much longer.

Bad news stomps in with muddy feet...good news tiptoes.

Mako wrote:Things can happen quickly.

In this region we had a city (& surrounding area) increase in equity 3% compared to this time last year.

Now if you'd have said, "how long before the news media starts reporting equilibrium,"...well then I'd have said much longer.

Bad news stomps in with muddy feet...good news tiptoes.

According to the media - good news is NOT NEWS - they only report the bad stuff.

maybe the best way to look at the economy is in pictures....

http://seekingalpha.com/article/124560-a-look-at-the-economy-in-pictures?source=email