-0.5%


expectation + 1.0%


Keep in mind:

* lowest interest rates in generation

* prices already declined 20-40% on average

* tax incentified marketplace

* devaluation of dollar


And we still can't jump start housing. What happens when interests rates rise, water finding its own level?

 

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i might buy a house next year. i doubt any large up swing in real estate will happen by next year. too many people holding onto their houses waiting for better prices that once it goes up a bit, market gets dumped on. i expect that downward pressure for awhile.

 

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Eh. It's certainly not good news, but I don't see it as the defining factor in an incoming double-dip, either. I don't think housing is going to pick up until significant gains in the job market are made or until the seven-year credit mark is cleared for the deadbeats that walked away from their mortgages. In the meantime, housing prices will probably hold or drop a little bit more in most markets.

As for interest rates, the fed has made it pretty clear they're not going up any time soon.

 

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Gas prices have almost quadrupled over the last ten years. Grocery prices have doubled. Health care costs have doubled. Child care costs have tripled...

Yet incomes have declined almost 10% over ten years.

I can't imagine why house prices haven't leaped back up to 2006 levels by now!

 

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@ZZ - I think you're missing the point in regard to the Fed and interest rates. Replace "we're not going to increase rates" with "we can't increase rates", and you get a more realistic view of the Fed's current situation. I'd love to hear how we are different from Japan, who hit 0.0% benchmark rate in 1999 and hasn't been able to successfully raise rates back up since then.

 

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Feb 2012 was 8% above Feb 2011. 0.2% above the prior 3 month average. And it was higher than the initial Jan 2012 number reported last month.


1 month of data doesnt make a trend and this number isnt a bad one.


edit - this is a seasonally adjusted number. The unadjusted number was 12% above January and 11% above Feb 2011.

Housing will take a long while to recover if only because of the glut of new starter homes and new (vacant) lots in new subdivisions waiting for a buyer. In many areas the market is super saturated.

 

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Japan has increased interest rates several times since then only to push them back down when the economy slowed.


Japan has tied itself in a knot. The government has tried large fiscal stimulus to push demand and growth, while the Bank of Japan has stomped on the economy every time inflation inched up.


So far the Fed has not shown the same zeal for eliminating inflation (and growth)

If we want any chance of keeping our middle class and the upward mobility of the lower income earners property and housing values need to keep dropping IMO at least in relation to the average wage.

 

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