Housing "Experts" Say Now is a Good Time to Buy!

This is a classic example of why I hate "experts" who are media wh*res. Here is Baker pretending to be an expert who sold at the peak when a quick Google search proves otherwise. What a shame...

LOL. This azz-clown sounds like David Lereah, or his mini-me replacement, Lawrence Yun, at the NAR:

"Prices are going UP! It's a good time to buy! Prices are DOWN! It's a good time to buy! Buy! Buy! Buy!"

No matter where prices went, the message was always "It's a good time to buy!".

actually this is kind of funny. the LA times article never identifies baker as one who sold at the peak, just as one who has claimed there was a bubble and who bought recently, although it infers it..

if you know anything about Dean Baker, it would be that he hates the media with a passion. he constantly accuses them of distorting the truth. i wonder if this is not a bit of payback.

i don't always agree with baker, but he is in no way in the same category as Lereah, Yun, or god forbid, dolly.

wait...so are "experts" better than "analysts" ?? I wish Socrates were here to discuss

"actually this is kind of funny. the LA times article never identifies baker as one who sold at the peak, just as one who has claimed there was a bubble and who bought recently, although it infers it.."

Um, yes it does. The title of the article is "Time to buy a house? Experts who sold at THE PEAK now wonder"

alpie, don't be an idiot. i don't give a rat's ass what the title of the article is, because you see i actually read it. read the article, cleverly it does everything but link baker to selling duing the peak.

so even if the article does not specifically say Baker sold at the peak, you can't read between the lines? Don't you think the average person reading the article would assume that Baker sold at the peak based on the title?

alpie, that's my point. of course the average person would think that. but read what i wrote, that wouldn't be the the general intention of baker.

The National Association of Real-tors told me now is the time to buy and 8 out of 10 experts believe that home will increase in value...

a recent post by dean baker. some NAR supporter.

http://www.prospect.org/csnc/blogs/beat_the_press_archive?month=08&year=2009&base_name=crashing_house_prices_cause_fo

this goes to the very point that all you market timers are completely wrong in your approach. Here is a guy who does this stuff for a living. An expert. And he wasnt able to time the market. Now all you arm chair quarter backs think that you are smarter than all the experts, and the market itself, and you will be able to time the RE market perfectly, and time the stock market perfectly. Meanwhile you do neither correctly and you remain renters for the rest of your lives.

"remain renters for the rest of your lives."

quite possibly a very wise financial non-decision. just don't send your check to petro, he's a slumlord.

remain renters for the rest of your lives..

interesting question..

Over the next "ten?" years where is the risk greater
Loss of dollar buying power or Future Home Price depreciation?

I believe Case Schiller has NY HPD over next 12 months down 20ish% and then up slightly...

fitzie, you dunce, it's not about timing anything "perfectly," but there's a lot to be said for reading into general indicators and buying in a more depressed market. Nothing's as black and white as you like to make it out to be.

riversider, you can't lump all dollar issues together. you'd have to have wage inflation to have rent inflation, or a significant increase in demand at least. won't happen in the near term, quite possibly in the medium to long term as well.

i'm not against buying under all circumstances, but there is nothing wrong with choosing to rent for the right reasons.

bjw - what indicators told you that buying at the top of the market in Williamsburg the epicenter of the housing crisis was a smart decision?

fritz, it was all about price and finding a place and building that fit. After well over a year of intense searching, I was able to get all of that in my favor.

A.R.
I don't agree
http://www.buzzle.com/articles/types-of-inflation.html

Why are you focusing on only one type of inflation?
Wage Inflation: Wage inflation is also called as demand-pull or excess demand inflation. This type of inflation occurs when total demand for goods and services in an economy exceeds the supply of the same. When the supply is less, the prices of these goods and services would rise, leading to a situation called as demand-pull inflation. This type of inflation affects the market economy adversely during the wartime.

versus.....

Fiscal Inflation: Fiscal Inflation occurs when there is excess government spending. This occurs when there is a deficit budget. For instance, Fiscal inflation originated in the US in 1960s at the time President Lydon Baines Johnson. America is also facing fiscal type of inflation under the presidentship of George W. Bush due to excess spending in the defense sector.
or
Hyperinflation: Hyperinflation is also known as runaway inflation or galloping inflation. This type of inflation occurs during or soon after a war. This can usually lead to the complete breakdown of a country’s monetary system. However, this type of inflation is short-lived. In 1923, in Germany, inflation rate touched approximately 322 percent per month with October being the month of highest inflation.

A.R.
No two inflations are the same. I believe the next deflation will come from Currency devaluation where our money buys less (commodity purchases a good example). Oil will cost more for the U.S. because the dollar is worth less, but may not cost more for the Japanese...

riversider, that's what i was saying, specifically. but rents are impacted primarily by wage inflation. the current fiscal inflation is reaching the housing consumer in a minimal way. it's really just leaving excess liquidity for the big guys to play with.

A.R.
If dollar will serve as store of value, then real estate may out perform either on a relative or absolute basis. Your wage argument impacting rents is interesting, however I see too many selling and renting out of fear and not personal financial decision. These "market timers" could very easily get bored and venture back in.

A.R.

Market seems to predict NY prices will come down 20% and then increase low single digits. This sounds about right to me. The shift in market preference to rent vs own should provide a floor in the rental market. With more choosing to rent vs buy this could put upward pressure on rents.

riversider, i'd never deny that real estate decisions are often emotional, many times primarily so. that's why i termed long-term renting a financial "non-decision." many who rent long-term do so for passive reasons, fear, inability to do otherwise, inertia. i'm actively choosing to rent, possibly for the remainder of my life, but i don't know many who aren't in RS/RC-type situations who would say the same.

but if people were to sit down and try to calculate costs, both monetary and qol issues, and try to figure out which scenario would optimize their returns, they might be surprised. of course it's extremely difficult to do so, as the mainstream media continually gets just about everything wrong, and bubbles such as our recent one are hard to account for. it's also difficult to be objective, even about your own personal situation. but once one overcomes any perceived stigma to renting, it becomes easier.

Of course if prices come down 20% and rates are in the 5% range a year from now(big if) and you suspect inflation or dollar devaluation, You would be buying at apx 2000 level prices and borrowing with below zero interest rate(after inflation). Just something to consider...

Your wage argument impacting rents is interesting, however I see too many selling and renting out of fear and not personal financial decision.

http://www.cnbc.com/id/32505791

there are more and more esteemed commentators on cnbc predicting the fall of the dollar. if they are correct, even more fear will be generated.

fear necessarily dictates personal financial decision. You may have made a personal financial decision to sell last year independently of all other factors yet other peoples fear dictated your outcome.

Of course if prices come down 20% and rates are in the 5% range a year from now

Riversider: are you saying prices will fall 20% from here or is your calculation 20% from 07/08 highs? tnx

if rates go up appreciably prices will fall further. some disagree, but that's my perception, which would of course be the one i would use in making my calculations.

riversider, i must confess that my husband is not paid in the dollar. so my situation is unusual. i'd personally be as happy as a pig in shit if the dollar tanked, under most circumstances. i don't think i'd like all that it would imply, but it would be good for this bottom line.

this is one of the many reasons i don't foresee an increase in rents. less than one-fifth of this year's graduates had job offers at graduation, and experts are warning that next year could be even worse.

http://www.msnbc.msn.com/id/32468172/ns/business-reinventing_america

surveys by the National Association of Colleges and Employers, a professional organization of career counselors at more than 2,000 U.S. colleges and universities, show that the recession has been particularly tough on those entering the job market with a college degree.

More than half of graduates in the class of 2007 had job offers in hand when they finished school, the association said. That figure dropped to one-quarter of 2008 graduates — after the recession began in December 2007 — and for the class of 2009, it was fewer than one-fifth.

Graduates ‘frustrated,’ ‘scared’
Projections for the class of 2010 won’t be final until the fall, but the association said the picture next spring was likely to be even worse.

"Meanwhile you do neither correctly"

Perfitz, you don't have to be perfect to do awesome, you just have to be smart enough to avoid bonehead moves, like yours!

Timing it perfectly isn't necessary, but had YOU had a brain, you wouldn't have bought at the peak of the market, and then gotten crushed!

http://www.reuters.com/article/ousiv/idUSTRE57K5LL20090822

JACKSON HOLE, Wyoming (Reuters) - Financial markets have not fully understood that the U.S. Federal Reserve's pledge to keep interest rates exceptionally low for an extended period means they will stay low beyond when officials normally would raise them, a top Fed official said on Friday.

"I don't think markets have really digested what that means," St Louis Fed President James Bullard said in an interview.

The Fed's strategy is aimed at promoting a future rise in inflation, which should provide an immediate boost in activity in anticipation of a future boom, but that hasn't happened, Bullard said.