Is there any indication as to where the housing market is going? Will things improve or get worse? How will inflation affect the housing market? Do you think people will begin to buy homes amidst inflation?
Any thoughts or links are appreciated. I’m just curious on the subject.
Well the fundamentals are totally weak. Obviously an oversupply. Its a buyer’s market.
In theory you would never be able to make above the interest rate flipping houses; its practically a zero risk investment and everyone can do it.
You can make money if the administration messes with credit, which is exactly what its doing. We’ll have a clearer picture after the next presidential election. If obama gets reelected, the market is basically going to stay as it is now. Inflated, oversupplied, etc. If someone else gets elected, not necessarily Ron Paul but anyone who’s remotely fiscally conservative, it might go back to normal.
It’ll have to crash eventually.
Home prices will continue to slide slowly downward for a year or two, then stay flat until the process of hyperinflation begins.
So far, the fiat credit deflation has been more powerful than quantitative easing. We will not see price inflation until that dynamic changes.
I see the tipping point arriving as the boomer population continues to fill the ranks of social security and medicare. (The healthcare “plan” is simply to implement euthanasia as an official government policy to “control healthcare costs”.) The Fed will have to print money to buy U.S. Treasuries. There will be no other way to finance the deficit.
The oldest boomers reach 70 in 2016, they reach 80 in 2026. The youngest boomers reach 67 in 2031. So, in five or ten years I think we be begin to see the process of hyperinflation and the destruction of monetary system begin. Home prices, and the price of everything else, will rise during that timeframe.
Until then, down and flat.
Home prices are still artificially high in many areas of the country because of the support they are still receiving from low interest rates and tax breaks in the governments efforts to keep the market inflated. The government wants to get back to the good old days where home prices were forever rising and people kept cashing in on home equity loans to consume beyond their means. As far as your question to inflation I say the housing market, our economy in general, and ultimately the dollar is completely in the hands of foreign debt holders at this point. As foreign nations cease to roll over our debt and especially if they start dumping US debt then it will be the beginning of the long overdue correction for our economy. Now, whether foreign creditors continue to slowly ease out or create a quick run on government debt is beyond my expertise to make a prediction. Also, as Peter Schiff has mentioned there is the possibility that the Chinese will float their currency which would likely lead to its rapid appreciation. I don’t know if China would allow it to truly float though (at least not yet). Perhaps a one time revaluation or only allowing it to appreciate so much before putting the brakes on to avoid disrupting exports to the US would be a more likely scenario…in my opinion of course. But more expensive imports for the US would eat into the already overstretched budgets of Americans and being that we are completely consumer driven it doesn’t take a genius to figure out where this would take us.
Bottom line is that the dollar is losing reserve currency status as we speak. As this continues it will be harder and harder for the US to keep exporting inflation. With the dollar as the world reserve currency since WWII we were able to get away with inflation since everyone was pegged to us , and even though most currencies have not been pegged to the dollar for quite some time most of them still hold dollars to facilitate foreign trade. THis has allowed us to get away with a loose monetary policy of easy credit that has allowed consumer and government debt to sky rocket and for speculative bubbles to form. The dollar has been a ticking time bomb strapped to the whole world and people are now trying to figure out a way to get it off their back before it explodes. The question is will the end come quick or will it be a continued more drawn out process.
The other posts are correct about the boomer generation and the mountain of unfunded liabilities that have been promised, but I think inflation will really start showing up in prices long before the meat of the boomer generation retires.
One word - nowhere.