Housing Market might decline a further 50% article

[MikeNY]

http://articles.moneycentral.msn.com/Banking/HomeFinancing/why-the-surge-in-home-sales-is-bad-news.aspx?page=1

Looks like the housing Market has another 50% to bottom out. And Jeremy Siegel wrote an article in Oct 08 that the federal Government can expect a Five Trillion Dollar loss from Frannie Mae & Freddie Mac http://www.kiplinger.com/magazine/archives/2008/10/siegel.html . The Government needs to change the Community Reinvestment Act that caused this Credit Crisis and mandated no regulation or documentation; right now nothing has changed and the CRA remains in place.

Politics is poison to business and Government Social Planning has caused this crisis. Obama got a pass from the media on his major contribution to the CRA along with ACORN that he directed. Lets hope Obama can now fix the mess he made.

[Andy62]

I have been following this and some of the leading experts have been predicting another 50% drop in home prices. The test is when the average buyer in an area can buy an average home without a "funny money" loan or a "pumped" value from his or her trade in.

[MikeNY]

Bob I think the next two years will be the best time to buy in the last 25 years. I hate to be a ghoul but stocks are on sale. If they bottom out in six to seven months they'll lay there dead for awhile. Buy when the market has crashed and you'll never regret it in the long run.

I'm living in Upstate New York, housing here did not have the huge run up other area's have and the price of houses is actually up since I bought just over 2 years ago. All Real Estate is really local markets.

[Andy62]

Two factors drive housing values:
1. Incomes
2. Available financing

1.I think middle class jobs will continue to move to the low cost producing nations in Asia and Eastern Europe and the result will be to continue to keep income levels of the group down

2. I also believe that all of the money that nations are dumping into the economies of the world will cause inflation and result in increased interest rates.

[Andy62]

The world is not just going though just another economic cycle it is going through what is referred too as a "sea change" or major transformation.

[MikeNY]

A Big Part of the Sea Change is the US and UK are becoming Service Economies. The Financial Services Business is the largest business in the USA. That means our Industrial might has been shipped overseas with all the high paying jobs. India, China and Russia are the future; Asia is where the growth will be. The West is importing 3rd World poor people as it declines to hasten the fall. Everything changes in time.

The US has burdened itself with debt and that will change us. The baby Bommer's retiring soon will lead to a 73.9 Trillion dollar deficit. The money that should have been invested for Social Security and Medicare was all spent of social programs. The US will not be able to afford to be the World's Policeman, and import poor people soon. We live in interesting times, and that means be prepared.