Speculators Holding ‘Shadow Supply’ Of Homes
Inman News reports that the growing home investory has a few worried. “U.S. home builders took advantage of record-high temperatures in January and boosted the rate of housing construction significantly higher than expectations at the start of what is seen as a cooling-off year for the housing industry. The unforeseen rise in housing starts raises questions over whether this would lead to an oversupply of homes in cooling home sales market.”
“NAHB Chief Economist David Seiders expects that a decline in February housing starts will counteract the unusually strong month. ‘I’ve had some concern and I’ve been giving some reminders to builders… that the level of inventory is currently running pretty high,’ Seiders said during a conference call this morning. ‘Hopefully this will not exacerbate the inventory situation,’ Seiders said.”
“The level of new homes inventory was at 4.9 months at the end of December, Seiders said, compared to a 4.1-month supply a year earlier. ‘If sales slow down, the months supply can move up fairly quickly and that is the concern moving forward,’ he said.”
“Seiders also mentioned reports of builders offering more incentives to home buyers as well as an increase in home order cancellations. ‘I really do view the (housing) start and permit numbers for January as a temporary burst,’ he said.”
“Ben Bernanke also pointed to a slowing housing market. ‘Prices and construction could decelerate more rapidly than currently seems likely.’”
And the Wall Street Journal reports that Americans may have had enough of housing.
“After climbing steadily for a decade, the nation’s homeownership rate appears to have leveled off. New data released late last month by the U.S. Census Bureau put the homeownership rate at 69 percent in the fourth quarter of 2005, down from 69.2 percent a year earlier. It is the third quarter in a row that the rate hasn’t posted a year-over-year gain, and it’s the first time since 1994 that the rate at year-end hasn’t increased from the previous year.”
“Some economists say that the new data could be a sign that declining affordability is finally taking its toll on first-time homebuyers. ‘You’ve got seven quarters in which the homeownership rate basically has done nothing,’ says Jan Hatzius, chief U.S. economist for Goldman Sachs. ‘It’s fair to say that it’s stagnating.’”
“There may be other explanations for the flattening of the homeownership rate. some people are relocating to the South and West to take advantage of new job opportunities, he says. Some of these people may decide initially to rent rather than buy, even if they can afford a home.”
“The disconnect between record home sales and a stagnant homeownership rate suggests that the recent growth in sales is being fueled in part by investor activity, says David Seiders. While vacancy rates for rental properties declined overall, vacancy rates for one-unit rentals, which are typically owned by investors, climbed to 10.2 percent in the fourth quarter of 2005 from 9.6 percent a year earlier. Housing analysts say the growth of investor-owned units represents a ’shadow supply’ of rental properties that doesn’t show up in traditional rental market measures.”
“Some homeowners may also be taking advantage of recent increases in home values and cashing out as the housing market cools. Christopher Olsen in Lodi, Calif., decided he needed a bigger home with a new baby on the way. But instead of trading up, Mr. Lodi sold his house in May, and moved into a rental property. ‘We are renting for two years, waiting for the market to settle, or crash,’ says Mr. Olsen.”
Thanks to the readers who sent these stories in.
Inebriated epiphany.
I am sure we all would love to see your favorite comments from loyal bloggers (even if none of mine are included =).
Every few articles I find myself highly amused or gleaning insight I consider very valuable from a few posts.
We all greatly appreciate your effort and congratulate you on your success in the blogesphire. Your mostly (rightfully) restrained opinions are of great import to us and this might be a non liable way for you to express yourself.
A simple compilation of your favorites with commentary at your discretion might serve to put to put you in real print.
I for one would gladly fork over $15.95 for such a work in print, as I am sure a vast majority of your bloggers would. About the outer market I have no educated guess, but I believe you must have given them some thought.
Thanks Ben……
Sincerely,
Rich
haha,
told you Inebriated.
to put to put.
I wish we could revisit the young bullish investor in the famed Time article who was driving around Phoenix not knowing the locations of all the houses he was buying. As I recall he wasn’t even bothering to rent them out. I’m very interested in how widespread that practice was as well as how many were rented out but are now for sale.
I saved the Fortune Magazine article from last summer about a very similar story. I think I might read it in a few months with a good bottle of wine!
I agree,
I suggested to ben a “Hall of classics” thread of the most memorable articles and voted for that one.
Also the million dollar trailor in So-Cal with no land and the feed the squirrels lady in SanFran.
Truely people that need to meet me behind the tool shed….
Believe it! I know investors who bought in 03, 04 with 2yr ARMS and rented property waiting for appreciation. No way they can handle the reset, already CF negative. They will try to dump this year. Them, plus lots of owner occupiers who will find the PIN code on the ATM is now invalid. Add in builders furiously marketing their bloated inventory, lenders refusing the risk in the face of accelerating foreclosures, and here comes a PERFECT STORM. “The market will pick up in the Spring” yep, realtors will be very busy hammering signs in to the ground and practicing crochet at their open houses. There is no way that legit buyers can miss the headlines: “Hey honey, lets by a new house from a speculator and help get them off the hook so we can be the losers…” sure….
The true nature of investor selling will soon become apparent. When prices start down in earnest, the speculators will become the epitome of “motivated sellers.” What will motivate them? The spector of foreclosure. Try to imagine owning 4 or 5 homes that were purchased on easy terms a year or two ago. They have been cashflow negative in the interim and now they are upside down. That is going to hurt big time. Those folks are going to be unbelievably motivated to sell! And if they don’t succeed, the bank will soon be selling the property.
Don’t forget baby boomers/empty nesters looking to cash out and retire. These are the true sleepers.
Nah,
The boomers for the most part will work longer to stave off this wave.
Althought their inevitable infirmity and death is unavoidable that could push this wave back 10-20 years.
I feel this is one area that could justifiably be cushioned by other demegraphics.
20 years of immigration may be able to lessen the impact of this trend, not eliminate it but lessen it.
Any thoughts???
The “perfect storm” will have wide spread effects: after the price comes down and the foreclosures take place, the follow on waves would be the unpaid property taxes and the lowever appraisals which means less tax revenue. So, municipal services will have to be cut along with firing some of the employees. Last but not least, the municipal retirees will see their income go down due to already unfunded pensions [along with the poor returns of the mortgage back securities that, surprise, go bust!]
Call me a pessimist but I don’t think the outlook is good for the next few years…
What is a speculator? Someone who is looking to make a profit at the expense of a future homeowner. I hope they all get what they deserve.
“Speculator” used to be someone who looked to profit off of another speculator. I buy property A and immediately sell it to you for a 100k profit, you buy property B and immediately sell it to me for a 100k profit. Since the money is “free” we both end up with 100k to buy an 5-Series, Harley and party in Hawaii (yes, I know brothers who did this). Now a “speculator” is someone who has a hangover and clings precariously to hope. Soon, they will just be “poor” as in “poor John” or “poor Jane…”
i know people as I’m sure you do, who bought houses because they were scared of priced out. They are real victims of this bubble too. Of course, speculators are not the only ones to blame. The gov’mint should have popped the liquidity bubble long ago.
The “shadow supply” was recently manifest as “shadow demand.” Thus the effect of investors cashing out during the unraveling of the bubble has a double-whammy effect, deflating demand and swelling supply concurrently.
“Ben Bernanke also pointed to a slowing housing market. ‘Prices and construction could decelerate more rapidly than currently seems likely.’”
That is innocuous-looking sentence with very clever wording. Realtors and their lackeys can interpret it to mean that appreciation will slow down to 6%. But it also rings true for bears who studied physics in college, who realize that deceleration can continue until prices are in a free fall.
AGREED.
To again quote Mr. B…
“Prices and construction could decelerate more rapidly than currently seems likely.”
TRANSLATION:
“When sheople figure out what I already know to be happening with nationwide speculative buying… there is going to be a mad rush to list properties- which will in turn increase the inventory by large sums, which in turn causes prices to drop far lower than most flippers and speculators can imagine.”
The only reason he has disguised his true feelings and spoke a bit of “GreenSpeak” is because he doesnt want to create mass hysteria.
Feed the Flocks of Sheople friendly little “tidbit clues” and maybe he won’t cause a nationwide meltdown all within a month of his inauguration.
Bernanke doesn’t know the future any more than anyone else. Unless you want to really risk your credibililty you don’t make predictions about the future. He was merely making a conservative observation. I wouldn’t read a whole lot into it except for the fact that he is aware that the future is often a surprise.
Loren,
I would agree to this. The future truly is unknown. If any of us really knew the full outcome of the future… we all would have invested in real estate more than we did “back in the day” (for the past 5 years- up until about Sept. ‘05).
Lucky for Blogs, I can at least give my strong opinion without fear of my words crashing a market. They are only words and opinions. I definitely have been wrong before, and I admit that here.
Sorry if I was too “dramatic” for your taste… I just really believe in helping those that “may be on the fence” and are contemplating buying. I don’t want innocent people getting in trouble by believing the “hype” out there right now.
He is playing CYA. In either the soft landing or hard crash scenario, he can accurately say he forewarned of decelerating prices.
The most important part of Bernanke’s words is that he doesnt just go upbeat and leave the news agencies with happy talk. His job is to keep panic from ahppening. The bad news has to come out gradually from him, and he has to hope that he has time to react. Frankly, his position is pretty much Scylla and Charybidis (SP?), the famous double-danger rapids in Homer’s Odyssey. Danger either way he moves.
The FED has to be very careful as to what it says. One wrong word, and markets could turn to hysteria.
People forget that there is more to the FED than the Chairman. The Chairman, when making such announcements, consults with a large staff of economists, analysts, etc. And opinions differ even amongst the staff.
I think most significantly Christopher Olson is willing to go public with his bubble sitting strategy.
This has to be a first, calm even handed reporting that people need to move for a variety of reasons (new baby, career, family, crimes, etc.) and some are making a rational choice.
Chris Olsen if you are reading this blog pipe up and good on you!
Sunsetbeachguy,
Thanks for the nice comment. I have never read a blog before and did not know I was on this one. I got so much crap in September 2004 when I started to suggest this. My wife, her Mom, my Mom, etc. all told me how wrong I was. My realtor likely thought I was crazy too.
Our area has been listed as 70% overpriced, and the homes for sale are everywhere.
My interest in selling started when I read “A Short History of Financial Euphoria” by John Kenneth Galbraith. It’s Tulipomania all over again.
This is ot, but did you guys see cbs nightly news and the woman who is suing builder for the money she “could’ve made”? Wow!!! Builder cancelled construction due to the rising costs, never built, and her flip never went through. Now she is upset and suing. Unreal. I say, what a greedy bunch. Every single one of them deserve to lose $$$.
It’s called breach of contract. If the buyer breached he/she would lose their deposit. If the seller breaches he/she risks being sued for damages, i.e. the difference between the contract price and the current cost of the thing. It’s the way things work.
So if the buyer backed out and prices dropped the builder could sue the buyer for the “difference between the contract price and the current cost of the thing” right?
No, because the builder would be holding the buyers deposit.
Technically yes, but it would be hard to get a judgement, and even harder to extract the cash. Individuals seldom have enough money to cover their mistatkes - that’s why car insurance is mandatory in most states.
Here in Southern/Eastern Australia, where we peaked in early-mid 2004, there are cases going through the courts as we write.
There are some situations where both sides are suing; the builders to get the buyers to settle (=complete) and the buyers to get their deposit back (claiming the property {which is almost always what you call a condo} was not constructed as specified).
You all are barking out your collectiv arses.
It depends on the contract that was struck and I am sure it was quite favorable to the builders that drafted them.
‘Prices and construction could decelerate more rapidly than currently seems likely.’
Stucko-
I noticed the wording seemed odd too. Prices go up and prices go down. Prices do not accelerate or decelerate. (Price *appreciation* can accelerate and decelerate.) So it is ambiguous whether he is intending to say that appreciation will slow (but continue), or turn negative. It is my impression that this ambiguity is intentional, as Bernanke seems intelligent enough to know how to correctly pair nouns with appropriate verbs.
AGREED.
See my comments above… under GetStucco’s first post.
Home sales slowest since ‘01
MEDIAN PRICE RISES SEQUENTIALLY
By Sue McAllister
Mercury News
Bay Area home sales fell to their lowest level in five years last month, with 6,004 properties changing hands in the nine-county region, 20 percent fewer than in January 2005.
Throughout the Bay Area, median prices were still up compared to a year earlier, but have fallen from the heights they reached last summer, according to a report from DataQuick Information Systems on Thursday.
The last time sales volume was lower in the Bay Area was in January 2001, when 5,977 homes were sold.
Sales also dropped sharply in Santa Clara County compared to recent Januarys, with just 931 single-family houses changing hands, 26 percent fewer than in January 2005. The county’s median price last month was $705,000, up 14.6 percent from January 2005, and also up slightly from $700,000 in December.
DataQuick analyst John Karevoll said January and February are “not very good months for predicting upcoming activity,” and that it won’t be apparent until March whether the low sales volume is a temporary lull or a part of a significant downturn.
The number of houses for sale in Santa Clara County has been steadily increasing since the beginning of the year, with about 1,820 houses on the market last week. That’s well up from last February, when only about 1,120 were available — an unusually small amount.
Local real estate agents say the market is nowhere near as competitive as it was last year at this time.
“We’re not getting 200 people like we used to” at weekend open houses, said Dave Clark, an agent with Coldwell Banker in Sunnyvale. But 75 people is not unheard of, he said. “There’s a lot of people looking out there.
Article ends.
I have a unit in my complex that has been for sale for three months. I’ll be damned if I saw one person let alone 75 visting the open houses for this listing
In Colordo there are houses and townhouses that have been on the market for almost a year - some of them are now in forclosure for a number of months and still not moving. I know we never hit the bubble frenzy of the coasts, but our bubble was in 2000 along with the tech stocks. It’s been slow for years, but it’s really started to change lately.
>>In Colordo there are houses and townhouses that have been >>on the market for almost a year - some of them are now in >>forclosure for a number of months and still not moving. I >>know we never hit the bubble frenzy of the coasts, but our >>bubble was in 2000 along with the tech stocks. It’s been slow >>for years, but it’s really started to change lately.
Hi Loren,
Where are you in Colorado ? (Just curious)
I am in Longmont-Boulder area and do see home routinely taking 6+ months to sell. It has been like this since I moved here 2 and half yrs ago.
He hung out on the FRB long enough before his turn in the limelight to master the language known as Greenspeak.
A new word must be created to describe a new disease.
SPRINGHOPEMANIA: Definition- The unsound mental condition, held by newspaper writers, homeowners, and real estate people, that reveals its symptoms through a series of unsound beliefs. The infected repeat, ad nauseum, statements similar to these, often while drooling spasmotically: “In the Spring of 2006, buyers who have not already gotten bad loans, or flippers who had 20 homes on the market - and hopefully sold them- will come to the rescue of a rapidly deteriorating real estate market. SPRINGHOPEMANIA afflicts all races, creeds, religions, and spares no social class from it’s ruthless stranglehold on the victim’s imagination.”
A POSSIBLE CURE FOR SPRINGHOPEMANIA:
‘The Winter of 2007.’
This cure has not yet been tested on humans, and may or may not be suitable for use on the truly afflicted. Clinical trials of the use of ‘The Winter of 2007′ have revealed some dangerous side effects:
Projectile vomitting, diarrhea, migrane headaches, overactive bladder and bowel movements, constant ticks (with swearing), and impulsive, innappropriate public ass-scratching episodes are just a few of the side effects.
If you are pregnant and nursing, you should not use ‘The Winter of 2007′.
If you are Gary Watts, Johnathan Lansner or David DiaLereah, The ‘Winter of 2007′ may not be suitable for you. A stronger dosage, patented as ‘The Summer of 2007′, may yield results.
Use ‘The Winter of 2007′ only as directed.
This ad was paid for by Ben Jones, of TheHousingBubbleBlog.Com.
If you suffer from Springhopemania, The ‘Winter of 2007′ is the only drug you’ll ever need. Live again, breath again, be one with the universe.
See your doctor, Auction Heaven in ‘07, for more information on Springhopemania.
If not treated with sufficient quantites of GreaterFoolBuyers, SpringHopeMania will become SummertimeBlues long before ‘The Winter of 2007′.
Auction Heaven,
Very Creative. Keep ‘em comin’.
If SELLERS, FLIPPERS, Real Estate PRO’S can’t see the recent and obvious hellacious turn of events… perhaps you can reach them through humor.
Hey Auction:
LOL. Were you the guy who also posted the High School History Test in 2025?
Anyone remember that one and have it? If so could you repost that one as well.
THANKS!
Haven’t seen that one but this is my fav.
Yes please post it. Also, can anyone post any other “classic posts”?
I just got here a month ago and i understand that a lot of smart posters left long ago. Is that true? And if so, I’d love to know what they are thinking now. Any place they can be found?
Auction,
Glad to see you didn’t succumb to the dark side.
LMAO at your post
LOL
Fleckenstein used to talk about the fabled “second half recovery” that was supposed to save tech stocks every year since 2000.
Various housing comments, charts, WAMU layoffs:
http://www.xanga.com/russwinter
Houston — I’ve been visiting Houston for about ten days, searching for an apt to rent or small apartment building to buy. And there really seems to be very little slowdown here. I fact, it seems like the bubble mania has arrivied in Houston in the past few months. RE agents are still extremely busy and hard to reach. I was pressured by one agent to rent an apt for $525 immediately this morning after a 60 second preview, because there were dozens of calls. The rent was going up to all future prospective tenant callers too.
Only saw two forclosures (duplex and 4-plex) and both were still overpriced dumps that someone had bought and begun renovations, then bailed.
Both realtors also told me that there is a crime problem, and everyone wants out of all the recently built apt complexes!
If any of you fellow blog readers are in Houston and would like to chat over coffee, please let me know.
Hi easthawaii,
Lots of new faces here. Welcome to Houston. If you are looking to buy property hoping to make some cash, be careful. Speculators will meet their Waterloo here in a little more than 2 months:
http://louminatti.blogspot.com/2006/01/california-real-estate-investing-in.html
If you’ve been here 10 days you should have a good idea of what parts of town to avoid. Basically, anything between Westheimer and I-10 west, from downtown out to San Antonio, should be good places. Stay away from the east side. Run away from Sharpstown.
Hi easthawaii,
Welcome to Houston! I recently moved to Houston from California about 6 months ago so I can share with you the what I have observed of the market of the Houston area. So if you want, you’re welcome to drop me an e-mail at: mygoodcpa@yahoo.com.
was planning to buy house, but I decide to wait for the right opportunity, especially since I am not in a big rush. In the mean time, I have been keeping track of SFR houses inventory in Houston every week. So far the inventory number are increasing. starting the begining of the year
we talked about speculators having shadow inventory, a long with those who banked on retiring on their equity. they’ll probably panicing, from the looks of inventory numbers they already have.
I think they are already panicing. The number of “motivated” sellers is rising rapidly. Go to boston.craigslist.org and search for “motivated” or “reduced” under real estate for sale. The ads are almost as fun to read as the comments on this blog. Soon they will be funner than this Ben’s blog.
Check out pheonix…
Type in motivated and 352 houses are itching for your attention
Type in reduced… and it “reduces” to 264 homes
And then to single out all those speculators… “brand new” and you get a whopping 548 listings… to funny
I do think it’s fun to see the comments on craigslist. If there is an address and type it in to see what they paid for it on Zillow. They are still asking too much with it being reduced. No one wants to work for a living anymore
“If sales slow down, the months supply can move up fairly quickly”
This has been on my mind as far the statistics are concerned.
Less buyers coupled with rising inventory results in an exponential increas in month of inventory numbers.
This rapidley pumps typical DOM (days on market) for listings. It is this increase of DOM that will force the hand of sellers chocking on their “investments” after their teaser IO period goes out the window.
These “invesotors” will become panic sellers, and as my hero Jim Crammer says “panicking never made anyone a dime”.
These panic sellers will punish the comp property values on a beautiful (or horrible depending on you footing) downward spiral where one panicking fools capitulation sets all the others one ring lower toward hell.
“investory”
Was this a typo or not?
Kinda funny none the less.
LOL. It’s all about the proper strateajory!
I look up default notices (in their public notices section) in the OC Register and I’ve done this for a long time. The numbers keep going up. About a year ago, it was in the 30 range, now it’s in the 70’s. Didn’t you see this on the front page….. NOT!!!
Bubble Butt…
I didn’t post that one.
I’m just here ‘cuz I’m stalking Johnathan Lansner.
He dumped me for Gary Watts, and dammit, if I can’t have him- no one can.
Sure do miss that beard.
Has anyone else noticed this phrase popping up property descriptions on MLS?
“Sale Subject to LENDER Approval”
This doesn’t mean the new buyer’s lender, it is referencing the SELLER’S current lender. Why? Because at the listed price the sale would be a ’short sale’. The proceeds of the sale are less than the amount owed on the mortgage. Therefore the lender would need to ‘approve’ by agreeing to take LESS than the full amount owned as loan payoff.
I’m seeing this more and more in Denver condo listings in particular. I’m wondering how many lenders will agree to this.
This is ot, but did you guys see cbs nightly news and the woman who is suing builder for the money she “could’ve made”? Wow!!! Builder cancelled construction due to the rising costs, never built, and her flip never went through. Now she is upset and suing. Unreal. I say, what a greedy bunch. Every single one of them deserve to lose $$$.
Yes , I did see this and it just confirms my belief in greed. She deserves to loose. The attorney get the windfall
How many people think that their job wont be effected if home prices drop? I find it interesting that no one sees the correlation between the two, this will definitely create a chain reaction. why are we not talking about a recession that could easily come from this housing bubble. greed is what got us into this situation and it will be the thing that will ruin many families. My best advice to anyone is to prepare for a storm that is coming followed by a recession…(that might boost military recruitment when there are no jobs…)~accroyer~
The Winter of 2007.’
This cure has not yet been tested on humans, and may or may not be suitable for use on the truly afflicted. Clinical trials of the use of ‘The Winter of 2007′ have revealed some dangerous side effects:
Projectile vomitting, diarrhea, migrane headaches, overactive bladder and bowel movements, constant ticks (with swearing), and impulsive, innappropriate public ass-scratching episodes are just a few of the side effects.
Does that mean we should buy Drug Stocks to make that short term profit as these poor investors head for their cure at CVS.
“He hung out on the FRB long enough before his turn in the limelight to master the language known as Greenspeak.”
I think this is perhaps the most important thing we can take away from this particular quote. Until this moment, I actually thought Greenspeak was a thing of the past, and that Bernanke’s maneuvers would be predictable, and his intentions transparent. Oops - guess not.
He won’t be able to end the conundrum if his language is insufficiently diaphanous, now will he? (Or should I have said overly diaphanous?)
I wish we could revisit the young bullish investor in the famed Time article who was driving around Phoenix not knowing the locations of all the houses he was buying. As I recall he wasn’t even bothering to rent them out. I’m very interested in how widespread that practice was as well as how many were rented out but are now for sale.
Just looking at pre-foreclosure lists around here in Sonoma, one guys name comes up for three different properties
Wow, what sort of person has this mentality? When more houses are available for people to live it, it’s a “problem”.
‘Hopefully this will not exacerbate the inventory situation,’
The number of “motivated” sellers is rising rapidly. Go to boston.craigslist.org and search for “motivated” or “reduced” under real estate for sale. The ads are almost as fun to read as the comments on this blog. Soon they will be funner than this Ben’s blog.
From SF northbay…off of craigs list.org…Cash price of $795,000 reduced from $1.1 for quick sale.
NY Times:
Farewell, Condo Cash-Outs
“NAHB Chief Economist David Seiders expects that a decline in February housing starts will counteract the unusually strong month. ‘I’ve had some concern and I’ve been giving some reminders to builders… that the level of inventory is currently running pretty high,’ Seiders said during a conference call this morning. ‘Hopefully this will not exacerbate the inventory situation,’ Seiders said.”
Is’nt this illegal? Sounds like he is basically calling home builders and telling them to band together and cut production to keep prices high? I think if we see decreased production of homes we should seek a class action lawsuit against the NAHB & David Seiders.
In the United States under the Sherman Act, it is illegal for companies to restrict supply of products.
Then the oil companies should be in trouble since they do “maintenance” of their refiniries with the byproduct limiting supply and keeping prices artificially high. A barrel of oil has dropped to under $60 from almost $70 in less than a few weeks!
If the company isn’t based in the U.S. though, it seems like they can do whatever they want. Look at De Beers and the price of diamonds. Diamonds aren’t any rarer than emerals, rubies, etc.
The whole petroleum business has been refusing to investing in Exploration & Production (E&P). They certainly are flirting with anti-trust violations. It doesn’t suprise me that they are many realtor flippers that are trying to accomplish the same thing.
Remember if you are standing in line to buy an asset you are getting screwed.
Don’t be part of the herd.
The only reason the oil companies are not investing in exploration and production is because it does not provide a sufficient return on investment. Most of the oil that is cheap to drill has already been exploited. What’s left is too expensive to drill for at projected prices. Oil exploration is an expensive, dangerous and risky business. My hats off to the people who do it.
“How many people think that their job wont be effected if home prices drop? I find it interesting that no one sees the correlation between the two, this will definitely create a chain reaction. why are we not talking about a recession that could easily come from this housing bubble. greed is what got us into this situation and it will be the thing that will ruin many families. My best advice to anyone is to prepare for a storm that is coming followed by a recession…”
Depression…not recession. The speculation in first the stock market, which has yet to fall far enough to call a correction, and now the RE market, has far exceded the speculative mania of the 1920’s, and the results are not likely to be any less severe than the depression of the 1930’s.
There have been some comments on the coming recession/depression in some of the threads, but this blog deals mainly with the RE bubble so they are easy to miss. As far as I can tell, some readers think there will be a recession and others don’t.