Loans, Debt & Credit - View Single Post - When Do you think the house price will be bottomed and recover?

AZ Meltdown · 08-27-2008, 10:42 AM

Pundits have been calling the bottom for the last 2 years.

My guess nationally 2 more years to go. Most of the subprimes are about done, Alt As are just starting to fold and Primes will be right on their heels.
Some areas like Phoenix will probably go 3 years.

The Alt As and Primes will have a far bigger effect because the homes were more expensive, in nicer areas and they had good credit. A good FICO score will not guarantee a loan in the future, a LARGE down might.

Lenders that survive the banking meltdown will reduce home lending and will continue to do so. Reducing buyers.
Less buyers, lower prices.
Cash will be king!

Then it will linger at the bottom for a couple of years and make a slow recovery.
We will not see the peak prices of 2005 for 8-10 years.

Our economy has huge problems.
We as a nation and individuals spend way more than we make, and we have to pay interest on all that money.
2 expensive wars currently, nether looking all that good.
Govt entitlements keep growing.
Good paying manufacturing jobs are mostly long gone.
Our whole economic model is based on cheap energy. Big cars, big houses, big commutes, big energy using activities. The Big 3 US automakers are already on the ropes and looking for a taxpayer bailout. Other industries based on cheap energy will also falter.
Too many low end service jobs.
A second tier public education system.
The worlds largest prison population.
None of the above are even being addressed, let alone resolved. That will continue. That will impede recovery.

We are now connected and competing against the world and we are no longer all that efficient.
Looking at US home prices as a small but connected component in the big picture doesn't look good.

Sorry, didn't mean to bum you out, but plan accordingly.

08-27-2008, 10:42 AM	#5 (permalink)
AZ Meltdown Senior Member Join Date: Apr 2008 Posts: 130 Nominated 0 Times in 0 Posts TOTW/F/M Award(s): 0	Re: When Do you think the house price will be bottomed and recover? Pundits have been calling the bottom for the last 2 years. My guess nationally 2 more years to go. Most of the subprimes are about done, Alt As are just starting to fold and Primes will be right on their heels. Some areas like Phoenix will probably go 3 years. The Alt As and Primes will have a far bigger effect because the homes were more expensive, in nicer areas and they had good credit. A good FICO score will not guarantee a loan in the future, a LARGE down might. Lenders that survive the banking meltdown will reduce home lending and will continue to do so. Reducing buyers. Less buyers, lower prices. Cash will be king! Then it will linger at the bottom for a couple of years and make a slow recovery. We will not see the peak prices of 2005 for 8-10 years. Our economy has huge problems. We as a nation and individuals spend way more than we make, and we have to pay interest on all that money. 2 expensive wars currently, nether looking all that good. Govt entitlements keep growing. Good paying manufacturing jobs are mostly long gone. Our whole economic model is based on cheap energy. Big cars, big houses, big commutes, big energy using activities. The Big 3 US automakers are already on the ropes and looking for a taxpayer bailout. Other industries based on cheap energy will also falter. Too many low end service jobs. A second tier public education system. The worlds largest prison population. None of the above are even being addressed, let alone resolved. That will continue. That will impede recovery. We are now connected and competing against the world and we are no longer all that efficient. Looking at US home prices as a small but connected component in the big picture doesn't look good. Sorry, didn't mean to bum you out, but plan accordingly.