No Rise in Home Prices until 2020: Bankers

Well yeah, nobody's got a job.

This prediction is not right either.

My friends in Florida are seeing spec homes being built in top neighborhoods again. Building costs are so low now, and there is a market for brand new among newly-minted retirees. 2011 is the first year for retiring baby boomers.

Word is that Florida has bottomed this spring and is ticking back up.

I'm an optimist and even I can't fathom it.

Well, I certainly disagree with this.
2020 means 9 years, which makes no sense to me for the following reasons.
*New defaults are not increasing.
*Mortgage pipeline is flushing, faster in some states, slower in others but 9 years?
*Housing formation has nowhere to go but up
*Who the hell can predict the economic environment/jobs picture 9 years out.

Sounds like the opposite of the idiots who called Dow 30,000

Useless article: 1) Survey of RISK MANAGERS, not BANKERS; 2) RISK MANAGERS are by DNA pessimistic and conservative

Not to say this can't be true, but the source is jaded.

Home prices are unlikely to recover before 2020 and mortgage defaults will persist for years, says a survey of bank risk managers out Friday.

Anyone know what the track record of the FICO survey is? Sometimes companies just out out press release and the news media merely reprints the results without vetting the release.

I agree housing prices won't recover in a decade. This is because the problem of US is larger than all you think. We are spending what we could produce by borrowing from other countries. With unemployment rate at 9%, I don't see how the housing market could return to the 2007.

Unless something get fixed in the government, the US economy would be staggering for a while and thus the housing market as well.

Demographics(baby boomers downsizing) do not support a strong housing market before 2010', neither does employment, income or economic growth. The economy is still delevering and deflating. We are not close to "flushing out the pipeline", because new delinquencies are still happening.

This is not out of the realm of possibility.

"Word is that Florida has bottomed this spring and is ticking back up."

Not generally, no. There is not the desperation of 2 years ago, but in most areas prices are still falling and inventories high.

"RISK MANAGERS are by DNA pessimistic and conservative"

Yes - but they are the ones who control the portfolios.

>>Word is that Florida has bottomed this spring and is ticking back up

Word economy is headed for a global recession, so the Brazilians will stop buying in FA and the Chinese will stop buying in Stockton. This are not good folks. Face the Facts

http://www.economist.com/economics

If the Brazilians will stop buying, what will Babs Corcoran have to say?

http://money.cnn.com/2011/09/30/real_estate/mortgage_loan_caps/index.htm?iid=SF_PF_Lead

This won't help.

Where is the growth going to come from that will create jobs? You need growth and jobs if you want housing prices to go up.

Could there be growth in tech? Maybe some but most of those markets are pretty saturated. How about health care? There is probably more growth potential in health care, just because the we have more older people.

But health care is not going to lead the economy out of this downturn. It's a highly skilled sector where you can't quickly bulk up the workforce.

Construction won't do it -- there's no demand because we overbuilt in the last real estate cycle. Manufacturing won't do it, because everything gets made in China now. The service sector is too low-paying to be much help.

There is only one sector that has the pontential to lead us out of the slump -- green. The market for energy-efficient retrofits is something like $650 billion, and it's not getting done because there's no capital for it.

We cam fix that with government incentives. We can also provide incentives for renwewable energy production and create millions of new jobs, and while we're at it also save what's left of the natural world.

But it takes political will -- and a fact-based reality system. You can't be thinking we can pray our way our troubles, or revert to the gold standard, or whatever other nonsense these right-wing nut jobs are spouting.

"There is only one sector that has the pontential to lead us out of the slump -- green. ..We cam fix that with government incentives. We can also provide incentives for renwewable energy production and create millions of new jobs, and while we're at it also save what's left of the natural world."

LOL. Because that sort of thing has worked so well the past three years, eh?

The only thing "green" is what you're smoking - i wish you would share it with me b/c its obviously some good stuff.

Have to agree on gov't funding of renewable energy. Subsidizing uneconomical businesses just wastes money. Solyndra never had a chance against. Prices kept going down and then you have the Chinese who are even undercutting the Germans. Leave it to gov't to decide it is a arbiter of successful enterprises than private equity.

"Because that sort of thing has worked so well the past three years, eh?"

Well, yes.

"Jobs in the solar industry are outpacing job growth in traditional fossil fuel-based industries, according to data released from The Solar Foundation. The data, part of the National Solar Job Census 2011: A Review of the US Solar Workforce, counted 100,237 Americans working in the nation’s solar industry.

Since August 2010, the solar business added 6,735 workers across all 50 states, an increase of 6.8 percent, according to the report. Those numbers mean jobs in solar outpaced jobs created in the overall economy and jobs in fossil fuel electric generation. During the same period of time jobs in the overall economy grew by only 0.7 percent, whereas 2 percent of jobs in the fossil fuel sector were lost."

And its obviously been a complete disaster for Germany, which leads the world in renewable energy.

"Since introduction of the first feed-in tariff in 1991, the share of renewables in the electricity sector has increased from less than 5 percent to about 20 percent, with 30 percent envisioned by 2020 and 80 percent by 2050. Renewable energy has thereby become a boom industry, employing around 300,000 workers today, with 500,000 expected by 2020. Utilities have passed on the extra costs to the end consumer. Yet consumers’ electricity bills have increased by less than 5 percent because of these tariffs, and customers have had no major objections."

http://www.nytimes.com/roomfordebate/2011/09/20/why-isnt-the-us-a-leader-in-green-technology/us-should-emulate-germanys-renewable-energy-model

I wonder if their economy will ever catch up to our pace of growth?

I typically find these kinds of general surveys/studies/reports interesting, but that's about it. They're certainly useful for getting a sense of the macro economy and overall direction of the real estate market, but everyone (should) know that real estate is local. There are remarkably stable cities, towns, and communities whose home prices have never depreciated through the downturn, and have in fact appreciated. And, of course, there are cities, towns, and communities that have been in a downward spiral during this time. Those are the ones that we hear about all the time. And there are those cities, towns, and communities that are somewhere in between. I rarely find that these types of surveys/studies/reports have the level of granularity to be especially useful for understanding specific real estate markets. I know that's not the point of the general studies, but broad generalizations like these are useful only to a point.

Thanks, Malthus. We can start building solar farms, whether the panels are manufactured in the US or in China.

The technology has improved so much that energy output from solar is going to be CHEAPER THAN FOSSIL FUELS OR NUCLEAR within five years.

Even GE thinks so:
http://cleantechnica.com/2011/05/29/ge-solar-power-cheaper-than-fossil-fuels-in-5-years/

We need to be building solar infrastructure, which is more than just the panels.

Anyone divide out the money spent on solar vs jobs created? There are some numbers floating around and they ain't pretty.

To play devils advocate against the o.p. here. it seems we have an interesting trend, credit card performance has been doing rather well lately...
http://brontecapital.blogspot.com/2011/10/time-for-discover.html

http://2.bp.blogspot.com/-NiAzzYyb88Q/ToXmkkiOmdI/AAAAAAAAC_Q/Mb-ECpdX5v4/s1600/dfs_delinquency.png
and
http://4.bp.blogspot.com/-OlYyGeT__bA/ToXmx67ZqzI/AAAAAAAAC_U/QQ6v-xtJNYE/s1600/dfs_chargeoff.png

Have you seen the cost of the externalities from coal plant emissions? I can guarantee they are less pretty. As in people dead.

>Have you seen the cost of the externalities from coal plant emissions? I can guarantee they are less pretty. As in people dead.

What about from nuclear?

Doesn't even a more fundamental question exist? What does "recover" mean in the context of nine years ? Is this "recover" to 2007 levels as adjusted by nine years of inflation? And which inflation measure would one use, the CPI or the real inflation level? This is a serious question -- as many suggest there is simply a "new normal" with a higher real unemployment level and less desire and ability to purchase homes. Just a thought.

Sure,
First they burned up all the coal and oil they could with complete disregard for the obvious colateral damage. Then they trucked off to Europe and Asia defeating exhausted armies with exhausted resorces for a few brief years. So splendid was their sacrafice that their reward for themselves and their children was an unpresidented spending spree whose bill is to be paid by the grandchildren and great grandchildren.

I vote not to pay their bills.

Viva La Revolution!

If we don't reduce carbon emissions from fossil fuels, the first industry to get killed off will be insurance -- they'll be bankrupted by extreme weather events.

Oh wait -- it's already happening. Here is Munich Re:'s report on the doubling of extreme weather events in 2010 over year previous, resulting in higher average annual losses and putting 2010 in the six biggest-loss years over the past three decades.

http://www.munichre.com/en/media_relations/press_releases/2011/2011_01_03_press_release.aspx

Do you want to live in a world without insurance comapanies? What do you think that would be like? Mmm-hmm, lick-smacking good. Nobody could invest anymore. We gave to get off fossil fuel. It's not an optional thing, it's a have-to thing.

So what does that mean for investing in agriculture? What will anti-American Jim Rogers do?

"Do you want to live in a world without insurance comapanies?"

Living in a world without health insurance companies is my biggest fantasy.

Global warming is a hoax. Rick Perry and Michele Bachmann said so.

>Living in a world without health insurance companies is my biggest fantasy.

columbiacounty's fantasy involves Cloris Leachman.

and now get to hear endlessly re solyndra---despite that we have for decades been handing money out in the form of tax credits and a raft of other subsidies to fossil fuel monopolies--not to mention the ugly external cost freebies that have benefitted cheney and his boys

wait?? external cost freebies?? isnt that our air, our beautifil vistas, our health, our water, our oceans................