Housing: many years of decline
The stock and bond markets are fully aware of the housing situation. Then why aren't the markets worried? The housing decline could be slow and very extended rather than sharp and short. Thus, the decline in housing (think Japan) could take many years, with no single year being disastrous. Could this be what the market is "thinking"?
After all, volatility in almost every area is now low, low, low. Why couldn't volatility in housing also be LOW? Meaning, we could see years of gradually declining home prices with never a single disastrous year! Just a long, drawn-out bear market, a regression to the mean.
Any thoughts????
After all, volatility in almost every area is now low, low, low. Why couldn't volatility in housing also be LOW? Meaning, we could see years of gradually declining home prices with never a single disastrous year! Just a long, drawn-out bear market, a regression to the mean.
Any thoughts????
posted by Dr. Jeff Lazarus MD at 3:50 PM
3 Comments:
I am even more bearish... think; "The 2nd Great Depression"
Today’s report on San Diego has been released!
Local Home Price Analysis
The fed and seller will not let the housing falls violently. With today still relatively low rate and plentiful liquidity (many lenders private or institutions), sellers can afford to slowly sell their too many houses down to a few to make a stand and then reduce their inventory further over time.
Since the babyboomers will grey out just like Japan's babyboomers did in the 80, the similar housing bubble would leak the same as well.
Look for 10 years or more of slowly numbing decline.
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