Business Week: Housing Prices WIll Rebound by 2012

http://seekingalpha.com/article/91444-magazine-covers-as-contrarian-indicators

Prediction is very difficult, especially about the future.
Niels Bohr
Danish physicist (1885 - 1962)

if you watch the video, they profile sellers in northern NJ whoa re taking a loss on the house they bought in 2004. Their loss right now is $10,000. Give me a break! $10k is toilet paper on a $500k + house.

hey stupid: they haven't sold it yet. plus what about the commission---another $30-$40K and the money they put in. plus, the whole point was that this is the first time any owner lost money on this house. i accept that you can't read---but can't you watch the tv screen and follow along? its ok if you move your lips to the words.

Read this last night and have been waiting for some mindless bull to see the word "rebound" and post this article as a reflex response. When I saw the headline I thought to myself, "ericho75 is back." Close enough.

There isn't a single word here that has any relevance for Manhattan real estate. A sample: "Based on the National Association of Realtors national median home price of $180,000 for the fourth quarter of 2008, that would mean a median of $152,000 at the end of 2009 and then a rebound to $179,000 by the end of 2012." In Mnahattan, that's closer to storage room pricing than apartment pricing. What's to discuss?

the reason no other owenr took a loss is becasue the hosue was sold only few times. If the original owner who bought it in 1925 sold it in 1935, I'm pretty sure they would have taken a big loss. And as far the the work they did on the house, we don't know what it was. Did they renovate the kitchen? Or did they just slap a new coat of paint on the wall and change the bathroom light fixture?

and would you have called out a bear sidelinesitter for posting the same article if it said that prices would fall in 2012? I think not.

what about the commission, you moron? what about the fact that it hasn't sold yet?

"and would you have called out a bear sidelinesitter for posting the same article if it said that prices would fall in 2012? I think not."

I'm bearish, but a rational bear, not a reflexive one. I go by evidence, not philosophy. You want balanced, see my post a few minutes ago on the UES comps thread. If you ever post something balanced, feel free to point it out. In the meantime, I won't hold my breath.

Can understand why the BW article is of interest to you Jersey folk, though. Just don't see what it has to do with Manhattan.

The U.S. has experienced an unprecedented real estate shock. Real Estate will not rise for some time.. It will take at least a generation for people to forget the shock and awe they just received.

For Real Estate to rise you need the following
1) Easy Credit
2) Rising Incomes and employment
3) Low housing stock

I have yet to here a cogent argument on why any of this will be in place in the near term. And expect we possibly have another rise in real estate taxes in the next few as States grapple with budget deficits.

"The U.S. has experienced an unprecedented real estate shock. Real Estate will not rise for some time.. It will take at least a generation for people to forget the shock and awe they just received."

And why is that? It certainly did not take a generation for people to forget the "shock and awe" they received after the 80s RE bubble popped.

"And expect we possibly have another rise in real estate taxes in the next few as States grapple with budget deficits."

States don't set property taxes. Muncipalities and counties do.

Based on how much money they have, which is largely determined by state tax revenues.

President.........One difference here dipshit, this is a phony economy, we outsourced all our high paying jobs and these prices are not sustainable!!!!

"One difference here dipshit, this is a phony economy, we outsourced all our high paying jobs and these prices are not sustainable!!!!"

How is it then that so many in NYC have such high paying jobs?

"And why is that? It certainly did not take a generation for people to forget the "shock and awe" they received after the 80s RE bubble popped."

It took an unprecedented credit expansion that is now one of the largest financial disasters in history. Its a lot easier to start a real estate bull market from double digit interest rates than it is from here.

I'm not wasting my time responding to some troll who has to resort to calling me a dipshit. Obvivously you have nothing of value to add.

Does anyone who has posted on these boards truly believe that the situation is as dire today as it was in March, just four months ago? Are we falling off a cliff, as a nation or as a financial system? I don't think so. Is everything rosy? Absolutely not...Ya know, I was in business school when black october 1987 hit, and it truly seemed like the world was ending. Recall one 2nd year finance major staring at two colored lines that crossed each other on a computerized graph muttering, 'this can't happen. this can't happen." The early '90s recession can be linked back to that crash. Yes, it took a good 10 years for prices to heat up again in NYC, but that is still not a generation. And, yes, this crisis is deeper and more systemic...but things have a way of righting themselves quicker than many expect -- I am not suggesting in the next year or two, but BW's suggestion that by 2012 things will be a lot better is not so Polyanna. (Of course, even if this is the way things turn out it is little comfort to anyone trying to get a loan for a home today, or trying to sell in this market, or a developer who can't get reasonable financing because the banks are scared of their own shadow.)

Has anything changed since March other than the quoted prices of stocks? Yes, NYC will come back. It will come back with diversity, because once peak apartment prices are 35 cents on the peak dollar, there will be a lot of different kinds of people and families who will be able to afford to live here again... Like the 1990s. The difference between this and 1987 is the extreme from which we are falling. 1997 was the best year for Wall Street up until that date... Then with a brief intermission (2002-2003), the finance industry basically grew for 10 more years...in numbers and in average incomes. NYC is going to have a very hard time for a decent while to meet its budget and maintain the quality of living. It will still be the preeminent American city, but by such a wide margin (and wide margin in price), clearly clearly not.

I am not more optimistic than in March. But I am less pesimistic than I was in October. How about that?

Too many people on this board want to equate the stock market, or even economic conditions as a whole, to the bursting bubble that is Manhattan real estate. In 2004-2007 the economy was pretty robust.... that didn't mean that the Nasdaq took back its 1999 high. NYC can be the preeminent city...trading at a premium to Chicago or Boston...maybe not a MULTIPLE any longer.

"because once peak apartment prices are 35 cents on the peak dollar."

Good luck waiting for those 65% declines bubble boy.

President, if I call you dipshit, will you promise not to address me either? Ok, dipshit?

Note that the original article says rebound by 2012... not "get back to bubble prices", they basically mean finally start declining.

If thats a comfort to you, great.

Note they note that even nationally to expect more falling prices.

"BW's suggestion that by 2012 things will be a lot better is not so Polyanna. "

What's "better"? $800k classic sixes and more families here from diverse backgrounds and less banker and hedgie douchebags (speaking as one) would be better in my view. Besides, BW is a garbage magazine. To suggest things might get better in three years...What kind of worthless point is that? Sure they might.