A year from now, on-market inventory (King Co. SFH) will be...
- 25% or more below today's level. (0%, 0 Votes)
- 15% to <25% below today's level. (2%, 2 Votes)
- 5% to <15% below today's level. (11%, 11 Votes)
- <5% below to <5% above today's level. (19%, 18 Votes)
- 5% to <15% above today's level (43%, 41 Votes)
- 15% to <25% above today's level. (8%, 8 Votes)
- 25% or more above today's level. (17%, 16 Votes)
Total Voters: 96
This poll was active 07.29.2012 through 08.04.2012
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It’s hard for me to imagine that invenventory can drop any lower. If prices go up, or if lenders write off principal owed, that will bring more listings, and I expect a little bit of both. We’re only talking about the next year, not beyond that.
Alas, I’ve been wrong before. I’ve been saying the same thing about interest rates, that they couldn’t drop any further, and they kept dropping, so what do I know?
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Yes Ira
Its a witches brew to make predictions, either direction.
Your lower interest rates scenario caught me by surprise too, but like anything it’s a ying and a yan….when retirees’ trusts have no safe annuity or trust fund interest return [like today], don’t expect retired Boomers to buy much….that cuts the throat of real estate too, by strangling the economy and jobs.
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By Ira Sacharoff @ 1:
A year ago I would have said the same thing about interest rates. Today I’d say the same thing about interest rates!
When stats are at or near historical lows (or highs) you expect them to go higher (or lower).
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We are stuck in the midst of a great liquidity trap. I’ve been talking about this for the last several years. It was first brought to my attention in 2007 by a brilliant Japanese economist who lived through the great Japanese liquidity trap and predicted a similar fate for the U.S.
Credit is the key to what is happening because it dwarfs the monetary base. Thus, people must borrow and spend in order for us to get out of this mess.This will create jobs, inflation, and rising GDP. So the Fed lowers the short term rate and buys up all the MBS and Treasuries to keep rates low in order to entice people to borrow and spend money. However, the gears are stuck. People are tapped out and fearful, and banks are afraid to let go of the money. So It’s a catch-22 economy, and nothing is moving except for government sugar. But the rate of government borrowing and spending is unsustainable. So while everyone is afraid of hyperinflation due to all the printing, it doesn’t occur. In order for the inflation to hit, the banks must transition their excess reserves into loans so that the money reaches mainstreet and competes for asset prices. But the banks just sit there.
A similar thing happened in Japan during its multi-decade housing collapse. Believe it or not, rates can actually get lower than they are today, but I don’t expect enough chaos to force them dramatically lower. It depends on the macro-economic picture. Local RE charts will not help you understand this phenomenon. It is global in nature. You must look at the entire picture, not just the tiny puzzle piece relevant to your particular life and neighborhood. My best guess is the U.S. will slip in and out of growth periods for several more years (more of the same).
The U.S. fiscal situation does not look good for the near future. I suspect we will fall off the fiscal cliff at the beginning of the year. The stock market will take a hit. And the politicians will scramble to throw something out there. If this occurs, I’ll be looking to take advantage of that entry point in stocks, as the market will rally when news of a fix is found. Even so, housing will remain in the doldrums.
I suspect house prices will take a bath this winter, and more people will get hurt. This will continue to restrict inventory. Thus, this time next year should be similar to today, unless the banks dump more crap on the market.
Yes, I’m in the extreme minority here, but I believe we’ve yet to see the bottom of house prices.
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An interesting question I think to ask is, “What will the King County inventory be in 5 months (December)?”. Usually that has the lowest level of inventory for the year. Could it get below the 12-year low of 4,411? Below 4,000? I think its possible. I find it interesting because usually its the benchmark for where the next year starts at.
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Jonness@4
Why will we “fall off the fiscal cliff” at the beginning of the year? What factors made you predict that specific timing of the “fall of the cliff”? Elections?
Whenever I read about the decade long house price decline in Japan, I wonder if we are next…..or in the process…..
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RE: gr8day @ 6 – That’s when the automatic spending cuts for the federal government kick in, if Congress doesn’t come to an agreement on a long-term plan.
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I am aware of the govt deadlines. There must be more to Jonness’ prediction – the politicians will argue until the last minute like they did in August of 2011.
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