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U.S. Home Prices May Be Lost for a Generation

david_mcmanusdavid_mcmanus
edited May 2009 in Housing Bubble
"Don't be blinded by the glint of optimism in headlines about rising consumer confidence and slowing price declines. Demographic and market realities tell a more sobering story. "

"One thing hasn't changed in this recession: Those who are mobile will continue to move where jobs are relatively plentiful and housing is cheaper.

The winners continue to be southeastern states and Texas."

and finally....

"For most homeowners, wealth building and retention may depend more on a diversified, inflation-indexed bond portfolio than on real estate. This new reality, though, may be lost on those still trying to price their homes at 2006 levels. "

http://www.bloomberg.com/apps/news?pid=20601039&sid=aiiT.sNeq2YQ&refer=home

Comments

  • SeattleMooseSeattleMoose
    I lived in TX for 10 years and loved it. People are more real (e.g. no pseudo intellectuals) than up here. And as far as weather, in TX you get 5 months of hell and 7 months of heaven. Here you get 9 months of hell and 3 months of heaven (sometimes).

    But I digress....Seattle is "special". :wink:
  • perfectfireperfectfire
    I had to choose between Houston and Seattle and weather is one of the reasons I choose Seattle. I like warm weather because I get cold very easily, but there is such a thing as too hot. The deal-breaker for me was that fact that the too hot season was exactly the time you would want to be out and about. Especially if you have kids summer is when they have time off to do things, but it's just too stupid hot to do anything other than play in the pool. So it's no surprise that it seemed that all Houstonians ever did was shop and eat.
  • david_mcmanusdavid_mcmanus
    Maybe the southeast and Texas is a popular place simply because of the fact that home prices didn't nearly increase on the level of the rest of the country. Well.....except for South Florida. :D
  • Lake Hills RenterLake Hills Renter
    I grew up in Texas and moved out here 8 years ago. Best decision I ever made. I do not like hot weather and despise Texas summers, which can start as early as February and end as late as November. Power to those that like it, but it's not for me at all. Dallas was just as bad as Seattle for "pseudo intellectuals", with an added redneck tint as well. My 30 years there was far too long. I don't ever expect to go back.
  • rose-colored-coolaidrose-colored-coolaid
    SeattleMoose wrote:
    People are more real (e.g. no pseudo intellectuals) than up here.

    Not to digress, but people are more or less the same wherever you go. Cultural norms might change (honking is awkward in Seattle, but expected in Boston), but the people are just as "real" everywhere. Don't feel bad though, I've heard just as many people hold the opposite equally stupid bias that people from the Bible Belt are uneducated just because they vote red.

    Cheers.


    Back on topic, there's definitely a chance that real estate falls out of favor for perhaps the next 20 years. Or, it might not. A lot probably depends on how this crash plays out. If values slide down to new permanent lows, we might see the lost generation. But, if they crash hard enough and fast enough, the recovery might be strong enough that people again think real estate can be a good investment...just not between 2005 and 2010.
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