Zillow CEO says more bad news to come - Shadow Sellers

mr. shadow seller... meet ms. sideliner.... it's like the Male/female ratio in RPI (rensallear)... like 10 guys for every girl... after a cold winter.. the uglies start to look HOT!

"...prices don't recover for a while..."

That's very optimistic. I don't believe prices are gonna go up after they come back down to normal, unless there's another bubble forming somewhere else. But according to Obama, a bubble- burst, bubble-burst type of economy is not a sustainable economy.

Also, 140 Millions of baby boomers are on the verge to retire and move to cheaper state, leaving the 44 Millions baby busters plenty of housing to choose from, especially in New York where housing is among the most expensive in the country:
http://www.bloomberg.com/apps/news?pid=20601039&sid=aiiT.sNeq2YQ&

What you can’t see in the most recent housing numbers is the least-visible driver of home prices today: demographics.

Baby Boomers

The baby-boomer generation, the largest in American history, will be buying fewer single-family homes.

The U.S. is experiencing a 40-year generational peak in consumer spending, one that will lead to “the first and last Depression of our lifetimes,” author Harry Dent predicts in his book “The Great Depression Ahead” (Free Press, 2008).

Although we may not be headed for a 1930s-style Depression, there’s plenty of evidence to suggest that boomers are dumping their four- and five-bedroom suburban homes for two- and three- bedroom condominiums.

It’s also unlikely that the “Generation X,” born between 1965 and 1976 (or more derisively called “baby busters”), will bid up home prices. They are only 44 million strong, not as wealthy and even more in debt from college loans.

The baby boomers are reorganizing their finances after a rocky decade in stocks. They aren’t buying as many second homes and vacation properties in warmer climates.

Trouble Spots

That’s why it’s unlikely that there will be any swift recoveries in Phoenix, Las Vegas or San Francisco, where prices fell 35 percent, 32 percent and 31 percent respectively in February from a year earlier, according to the Case-Shiller Index. More setbacks are coming in central and Southern California and south Florida.

One thing hasn’t changed in this recession: Those who are mobile will continue to move where jobs are relatively plentiful and housing is cheaper.

The winners continue to be southeastern states and Texas. Some 67,000 single- and multifamily building permits were issued in the southern region in the first three months of this year, according to the U.S. Census Bureau.

Texas alone accounted for more than 20,000 authorizations. Hot spots are still Houston, Dallas-Fort Worth and Austin.

Considering that almost 120,000 permits in the entire country were issued during that period, it shows that more than half of all new construction is in the South, where the cost of housing and living is significantly lower than in the Northeast, Midwest and on the West Coast. In contrast, just 5,571 units were approved in New York and New Jersey combined.

Rebuilding Wealth

While building permits don’t mean that housing will be built, they are one indicator of housing-market growth.

Yet don’t confuse building with the ability to restore home equity. Simply moving to another area won’t rebuild the estimated $6 trillion that was lost during the bust.

One of the reasons the housing mania was so damaging was that median home prices rose to about three times average household incomes as opposed to double income levels in 1950.

Wages simply weren’t keeping pace with housing inflation, so homeowners overleveraged to make up the difference. The wave of deleveraging will depress home prices in most markets.

It’s time to assess your options. Your home may not be a nest egg. You may never recoup your losses from the dot-com and credit busts in the stock market.

For most homeowners, wealth building and retention may depend more on a diversified, inflation-indexed bond portfolio than on real estate. This new reality, though, may be lost on those still trying to price their homes at 2006 levels.

And for the foreseeable future, I don't see how the young can do much more than sleep at mom & dads. maybe six to a one bedroom in Stuy Town, instead of four.

demographics rule, until they're wrong. through the bubble the talking heads were presuming that the boomlet occurring now and for the next few years in young adults would keep this afloat.

May be Texas will see another real estate boom again like in the 80's? I wouldn't be surprised...

"mr. shadow seller... meet ms. sideliner.... it's like the Male/female ratio in RPI (rensallear)... like 10 guys for every girl... after a cold winter.. the uglies start to look HOT! "

Except most of the original sideliners are still on the sidelines... and their numbers get added to daily with all the folks fleeing to the sidelines. I said it months ago, the sideliners would be dwarfed in number by those fleeing the market.

NYC, I gather you mean bearish, not bullish?

Ha, yes, sorry... bearish. Wrote that too quick.