These guys were using this Case-Shiller graph to say the housing bubble has ended.
The line on a graph may look like it has normalized, but lately we have had a severely-restricted supply. The old bubble may have fully popped, but we’re not out of the woods just yet.
I tweeted this and posted it on Facebook. That’s just incredible to look at.
Is that a green shoot?
What a monster, and it looks like it might be brought in for a nice soft landing (although at tremendous cost).
Like the aftermath from a pimple, there’s still a mess we have to deal with.
We still got all these freeloaders costing me $500/month in PMI…grrr…
Is inventory, or lack of, creating upward pricing pressures? When do we start building again finally! That would be terrific for the economy.
I’ve updated the image chart.
http://i173.photobucket.com/albums/w78/kompeitou23/Random%20stuff/houseprover.jpg
New lows, new lows? … historical lows, From 73 each new low just a bit higher than the previous. Do we still have a little more to drop before we bounce around a few more years?
The environment/structure behind this “correction” is just as artificial as the bubble itself. In all bubble bursts there is an over-correction to the downside.
Do you recall the absurb rent/buy ratios of 2005/06/07? When we get the same absurd ratios of buy/rent to the downside….then THAT will be the bottom. And it will come in an environment that isn’t artificial.
Psychologically the tables are already turning- people saying its smarter to rent then to buy. When the taxi drivers and shoe shine boys promote the virtues or renting…..thats when the bottom is in.
Jojo posted : “In all bubble bursts there is an over-correction to the downside. ”
That didn’t happen in either previous RE bubble shown on the chart (late 1970’s and late 1980’s).
Still well above the lows seen in the last 60 years. Definitely room for downside action yet.
Room for more downside, yes, but this makes it look like the “there-has-always-been-overshoot” idea has some holes in it.
@jojo “Psychologically tables are turning … People saying its better to rent than to own” … really !!!
Please be kind enough to spread the word around on behalf of all landlords. We need more vigilantes like yourself to educate these morons who keep on buying. I would say NEVER EVER buy a house … help the poor landlord in paying off his mortgage with your pay-check.
@JtR
“Room for more downside, yes, but this makes it look like the “there-has-always-been-overshoot” idea has some holes in it.”
Indeed, but look at the shoulder of the graph from the years 2008 – present. That is a significant amount of noise and turbulence. Most of it due to governmental/Fed interference. If there was no interference from the Gov’t/Fed, then would there have been an overshoot?
Who knows….frankly, who cares at this point. The real tragedy is that although I was “smart” not to buy during the peak, I am not looking so smart since my cash is now severely devalued (Thanks Mr Fed) and I could have been living rent free.
…snark off…
All markets, everywhere and always, are “artificial” and “manipulated”. If you’re looking for a “natural” and “free” market, good luck and please let me know if you find one.