Housing downturn projected to be more severe than during the Great Depression
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    Housing downturn projected to be more severe than during the Great Depression

    Yale University economist Robert Shiller claims there’s a good chance housing prices will fall further than the 30% drop in the historic depression of the 1930s. Home prices nationwide already have dropped 15% since their peak in 2006, he said. "I think there is a scenario that they could be down substantially more,” he said.

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    ABC News: Housing Now: Worse Than the Depression?


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    Re: Housing downturn projected to be more severe than during the Great Depression

    Maybe in certain areas but I don't see this happening to the whole nation.



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    Re: Housing downturn projected to be more severe than during the Great Depression

    Anyone ever read any of Jubak's columns on MSN money? That dude is a manic depressive.



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    Re: Housing downturn projected to be more severe than during the Great Depression

    Quote Originally Posted by dmclone View Post
    Maybe in certain areas but I don't see this happening to the whole nation.
    I agree. Some areas may drop a lot where the market doesn't support the drastic increases. Other areas it will probably just level off.



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    Re: Housing downturn projected to be more severe than during the Great Depression

    Quote Originally Posted by Cyclonepride View Post
    Anyone ever read any of Jubak's columns on MSN money? That dude is a manic depressive.
    No kidding. Oil is going to $180 according to him. And the stock market is junk right now.



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    Re: Housing downturn projected to be more severe than during the Great Depression

    I work in the mortgage industry and we serve the entire nation - I really haven't noticed huge downturns except in certain really distressed regions. Honestly IMO it's starting to level off, but that's just from the appraisals I've been seeing.




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    Re: Housing downturn projected to be more severe than during the Great Depression

    Who has looked at his historical analysis of real estate prices over the last several hundred years?

    Shiller doesn’t just spout opinions like so many other analysis. He actually digs in and does some research. And if you’ve seen him in interviews, he doesn’t even strike me as that pessimistic. He usually qualifies his remarks heavily, saying of course he isn’t sure.

    But he did warn about the dot-com bubble and the housing bubble years before they burst.

    And once again his warning prove accurate. Maybe it will be 30%, maybe not. But dismissing him seems totally unwarranted.

    The fact is, there has been a tight relationship, in inflation-adjusted terms between rents/incomes and home prices.

    Those relationships have severely broken down over the last few years and people approached housing as speculative.

    My bet is those historic ratios will revert to the mean. Seems much more likely than not.


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    Re: Housing downturn projected to be more severe than during the Great Depression

    won't happen in Iowa. 10% at the most in Iowa



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    Re: Housing downturn projected to be more severe than during the Great Depression

    Quote Originally Posted by alaskaguy View Post
    Shiller doesn’t just spout opinions like so many other analysis. He actually digs in and does some research. And if you’ve seen him in interviews, he doesn’t even strike me as that pessimistic. He usually qualifies his remarks heavily, saying of course he isn’t sure.
    I work in the mortgage industry for a huge lender, and our people can't come to a consensus on how bad it's going to get and I assume they do a little research themselves. Basically they are in agreement that it could get a lot worse, but there is no way to know at this point.

    And I don't think it took a economist to see the housing bubble or stock market was going to bust. When homes double in value over a 2 or 3 year period there is going to be trouble. Vegas is a good example of this.




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    Re: Housing downturn projected to be more severe than during the Great Depression

    Quote Originally Posted by isuno1fan View Post
    won't happen in Iowa. 10% at the most in Iowa
    My house went up in value last year. Iowa isn't being too effected by it. Like I said, it's mostly areas like Baltimore, Vegas, the pacific northwest, etc. The areas that saw the biggest increases in home values will be the ones most effected.




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    Re: Housing downturn projected to be more severe than during the Great Depression

    I think this is all good for the economy in the long term. Falling housing prices mean that more people will be able to afford to become home owners.


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    Re: Housing downturn projected to be more severe than during the Great Depression

    Quote Originally Posted by cycloneworld View Post
    No kidding. Oil is going to $180 according to him. And the stock market is junk right now.

    If you lower interest rates more, the dollar drops more , the asset price of housing drops more than seen due to dollar decline. Not only are prices going down, but the dollar has added another 15% drop in the world market currencvyt for the dollar. One has to expect several fewer homeowners in the next ten years. Renting will come back big. Many more shoes to drop.

    Deflation versus inflation battle is underway.Who owns the oil and the food look to rule for next several years.


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    Re: Housing downturn projected to be more severe than during the Great Depression

    Quote Originally Posted by cycloneworld View Post
    No kidding. Oil is going to $180 according to him. And the stock market is junk right now.
    see thats the thing... He is right it will get to $180 / barrel. But it is like saying it is going to rain... at some point, no matter how far in the future, it WILL happen.

    -keep


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    Re: Housing downturn projected to be more severe than during the Great Depression

    Quote Originally Posted by Wesley View Post
    If you lower interest rates more, the dollar drops more , the asset price of housing drops more than seen due to dollar decline. Not only are prices going down, but the dollar has added another 15% drop in the world market currencvyt for the dollar. One has to expect several fewer homeowners in the next ten years. Renting will come back big. Many more shoes to drop.

    Deflation versus inflation battle is underway.Who owns the oil and the food look to rule for next several years.
    Or on the other hand the dollar rebounds versus the Euro because it's over-valued.

    Or the dollar continues to drop which spurs overseas companies to expand in the U.S. which in return creates higher paying jobs, reduced unemployment, etc.

    A lot of things could happen.



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    Re: Housing downturn projected to be more severe than during the Great Depression

    i have always believed a slightly weak dollar is the best for good ole USA.

    -keep


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