It's the Saturdau open thread, although with this weather I'll understand if you prefer to be outside than commenting on blogs.
8 comments:
Anonymous
said...
A friend of mine showed me this: http://mysite.verizon.net/vzeqrguz/housingbubble/
He says that SA lags the USA by 5 years and that we are going to crash much harder than they did? Is that true? I'm not that clued up on property. Would you agree or not with waiting to buy for another year or two?
A Crash Course http://www.chrismartenson.com/crashcourse
Money as debt http://www.youtube.com /watch?v=vVkFb26u9g8
Money as debt 2 http://www.youtube.com/watch?v=_doYllBk5No&feature=related
If the longwave economists and predictive linguistics are right then around October 25th should see the start of the second leg down of the Greatest Depression...
The problem with waiting to buy, might be that the Euro toting 2010 football tourists might just re-inflate the currently partially deflated cape property bubble.
Then the local buyers will be back to square one (until the bubble really deflates properly, which might take another 3 years.)
MIAMI (Reuters) - Every 13 seconds in America, there is another foreclosure filing.
That's the rhythm of a crisis that threatens to choke off hopes for a recovery in the U.S. housing market as it destroys hundreds of billions of dollars in property values a year.
There are more than 6,600 home foreclosure filings per day, according to the Center for Responsible Lending, a nonpartisan watchdog group based in Durham, North Carolina. With nearly two million already this year, the flood of foreclosures shows no sign of abating any time soon.
If anything, the country's worst housing downturn since record-keeping began in the late 19th century may only get worse since foreclosures, which started with subprime borrowers, have now moved on to the much bigger prime loan market on the back of mounting unemployment
The Center for Responsible Lending says foreclosures are on track to wipe out $502 billion in property values this year.
That spillover effect from foreclosures is one reason why Celia Chen of Moody's Economy.com says nationwide home prices won't regain the peak levels they reached in 2006 until 2020.
In states hardest-hit by the housing bust, like Florida and California, the rebound will take until 2030, Chen predicted.
The SA real prices usually bottom about 3 years after the US - so when that graph for the 'US prices factoring in inflation' curves up, that is their bottom. 3 years later, ours will do the same.
Our nominal graph is presently curving up and the bulls are getting all excited however, if you look at the real graphs (excluding inflation) from Standard, FNB, and Absa, they all show that prices are about 40% overvalued in real terms compared to the year 2000.
I believe this time next year SA will have negative inflation ie we will be in deflation just like most of the rest of the globe is experiencing presently.
That means our house prices need to fall much further than this to generate the negative real numbers we need. One graph indicates we could even see minus 15% nominal year on year growth next year.
Imagine this. The world stock markets all drop another 50%. The dollar once again becomes a currency of refuge. Gold drops. Oil drops. The rand remains strong. Deflation appears on the CPI as it does now on the PPI,food, houses,and commodities. Unemployment increases. Assets like houses fall, especially as no one has money and the banks are hurt by the increasing falls.
I reckon the US real bottom could well be in about 2 years time (remember their crash is 2 years ahead of ours) and our real bottom will be in about 5 years.
Then inflation will return, and house prices will go up with inflation.
8 comments:
A friend of mine showed me this: http://mysite.verizon.net/vzeqrguz/housingbubble/
He says that SA lags the USA by 5 years and that we are going to crash much harder than they did? Is that true? I'm not that clued up on property. Would you agree or not with waiting to buy for another year or two?
Thanks.
Anon,
That is exactly what you should do. House prices are not going up...those days are long gone...look around you at the economies of the world.
Below are a few favourite articles and videos I hae posted before. The more educated we become the more we can make good decisions.
http://www.rollingstone.com/politics/story/29127316/the_great_american_bubble_machine
http://taibbi.rssoundingboard.com/wall-street-gambles-on-old-people-dying.
A Crash Course
http://www.chrismartenson.com/crashcourse
Money as debt
http://www.youtube.com
/watch?v=vVkFb26u9g8
Money as debt 2
http://www.youtube.com/watch?v=_doYllBk5No&feature=related
If the longwave economists and predictive linguistics are right then around October 25th should see the start of the second leg down of the Greatest Depression...
I'd say much less than 5 years - about a year is my opinion.
The problem with waiting to buy, might be that the Euro toting 2010 football tourists might just re-inflate the currently partially deflated cape property bubble.
Then the local buyers will be back to square one (until the bubble really deflates properly, which might take another 3 years.)
It's all crystal ball stuff if you ask me.
MIAMI (Reuters) - Every 13 seconds in America, there is another foreclosure filing.
That's the rhythm of a crisis that threatens to choke off hopes for a recovery in the U.S. housing market as it destroys hundreds of billions of dollars in property values a year.
There are more than 6,600 home foreclosure filings per day, according to the Center for Responsible Lending, a nonpartisan watchdog group based in Durham, North Carolina. With nearly two million already this year, the flood of foreclosures shows no sign of abating any time soon.
If anything, the country's worst housing downturn since record-keeping began in the late 19th century may only get worse since foreclosures, which started with subprime borrowers, have now moved on to the much bigger prime loan market on the back of mounting unemployment
The Center for Responsible Lending says foreclosures are on track to wipe out $502 billion in property values this year.
That spillover effect from foreclosures is one reason why Celia Chen of Moody's Economy.com says nationwide home prices won't regain the peak levels they reached in 2006 until 2020.
In states hardest-hit by the housing bust, like Florida and California, the rebound will take until 2030, Chen predicted.
http://www.reuters.com/article/domesticNews/idUSTRE59705J20091008
http://www.reuters.com/article/domesticNews/idUSTRE59705J20091008
The SA real prices usually bottom about 3 years after the US - so when that graph for the 'US prices factoring in inflation' curves up, that is their bottom. 3 years later, ours will do the same.
Our nominal graph is presently curving up and the bulls are getting all excited however, if you look at the real graphs (excluding inflation) from Standard, FNB, and Absa, they all show that prices are about 40% overvalued in real terms compared to the year 2000.
I believe this time next year SA will have negative inflation ie we will be in deflation just like most of the rest of the globe is experiencing presently.
That means our house prices need to fall much further than this to generate the negative real numbers we need. One graph indicates we could even see minus 15% nominal year on year growth next year.
Imagine this. The world stock markets all drop another 50%. The dollar once again becomes a currency of refuge. Gold drops. Oil drops. The rand remains strong. Deflation appears on the CPI as it does now on the PPI,food, houses,and commodities. Unemployment increases. Assets like houses fall, especially as no one has money and the banks are hurt by the increasing falls.
I reckon the US real bottom could well be in about 2 years time (remember their crash is 2 years ahead of ours) and our real bottom will be in about 5 years.
Then inflation will return, and house prices will go up with inflation.
Good call CJ
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