Housing Hopes and Worries

LA Times article and poll results

Update: Bloomberg reports that Fed's Poole Says Housing Slowdown Won't Put Economy at Risk

Comments

[yartrebo]

People's sentiment is all too often a great contrarian indicator of what will happen in the future.

[howard]

i'm actually impressed that half of the public claims to only expect 2-5% annualized appreciation in house values....

[yartrebo]

howard: And 85% of the public (excluding don't knows) expects >= 2% price increases per year. A mere 6% are expecting <= 0% increases.

I'd be amazed if prices don't drop this year after seeing the results the last few months. My prediction is for -10% this year.

[howard]

yartrebo: i'm not so sure. there are individual markets where i can imagine a 10% decline, but there are lots of markets across the country where there hasn't been an explosion of prices, either.

look, don't get me wrong: i think the poll suggests considerable over-optimism on housing prices. all i'm noting is that given that, it's amazing that the numbers aren't skewed higher....

[Belfour]

Those areas don't run the economy. The areas that are having "down the line" sales drops over the last few months are the big economic pumps in America(ie the coasts). In otherwords, prices will(may be happening right now) drop.

Other nations got away with a housing run up because the central banks nipped it in the bud. Not ours, they let it run wild and now people did some serious damage. Oh the pain, the pain.

[anne]

There has been an international boom in real estate and housing that has been broad and deep these last 5 years, and which has involved slowings and minor pullbacks here and there, but I am impressed at how well the markets have held and that pullbacks have involved minimal economic difficulty even though the booms were at least as pronounced in a number of other countries as here. Also, I find the Vanguard REIT index a reasonable indicator of housing strength and the index has held remarkably well. I am reasonably or selectively optimistic about housing and real estate barring a sharp rise in long term interest rates.

[anne]

Also, I am continually surprised by the lack of volatility in investment markets and not in any way sure of what this may mean though I would be careful of derivative markets. As far as stocks, I do not find the market here or in Europe expensive.