Thoughts Opinions Ideas???

[WetWillie]

I know were all speculating. I think there is some pretty smart people in here and I would like to just hear diffrent oppinions and thoughts. They have been talking about a correction for some time havaent they... In 1999 they said how high can it go???
Why do they always post this stuff when I am making a move???
What do you guys think is something going to happen??
Economists warn of slowdown in the economy by year's end
By Dean Calbreath
UNION-TRIBUNE STAFF WRITER
June 21, 2005
K.C. ALFRED / Union-Tribune
Rising housing prices, as witnessed in Chula Vista and throughout the county, have been a key engine of the economy, with refinancings and home equity loans fueling retail sales and construction activity.
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Report: Housing market at risk
By the end of the year, America's bubbling housing prices will likely flatten or pop, causing an economic slowdown, economists warned in a flurry of reports yesterday and today.
Red flags issued by such diverse sources as the Merrill Lynch investment firm, the University of Maryland and the UCLA Anderson Forecast warn that a stumble in housing prices could take a major bite out of economic growth, damaging the already weak job market.
Other signs of economic trouble also loomed yesterday. The price of oil surged to a 20-year high of almost $60 a barrel and the nation's leading economic indicators fell twice as much as had been projected.
But the economists warned that the most serious problem is in the overpriced housing market.
"Policy-makers need to reckon with the end of the housing boom, which has been holding up consumer spending and the economy," said Peter Morici, economist at the University of Maryland. "With so many buyers benefiting from creative and highly questionable mortgage schemes, and regulators expressing concern about those practices, a pullback in the housing sector seems inevitable. When that happens, growth will skid."
In the past several years, housing has been a key engine of the economy, with home equity loans, refinancings and other forms of creative borrowing helping to fuel retail sales as well as construction activity.
But in a report to be issued today, the Anderson Forecast warns that the construction of new homes is outstripping the natural growth of the population.
The report notes that current population growth supports about 1.5 million to 1.6 million new houses being built throughout the nation. But 1.9 million units were built last year and 2 million are slated for construction this year, indicating that a slowdown is in order.
The report predicts a slow but steady decline in home sales throughout the second half of the year. Because so much economic activity is tied to housing, said Michael Bazdarich, senior economist at the Anderson Forecast, economic growth will decline from its current pace of 3.2 percent to about 1.5 percent by the middle of next year – assuming that the decline is orderly.
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"Beyond the housing market, there's really not much going on in the economy," he said. "The rise in housing prices has represented an inordinate part of our economic recovery. If the housing market slows too sharply, there would be nothing to sustain economic growth."
But it may not take an actual decline in housing to put the economy on the skids.
According to a report issued by Merrill Lynch yesterday, if the housing market merely stays flat, rather than declining, it could shave half a percentage point off economic growth this year and a full percentage point in 2006.
Overheated housing markets in cities from Los Angeles to Miami to New York "represent a big enough slice of economic activity that should they falter, we could see a fairly hefty impact on aggregate U.S. economic growth," warned Merrill Lynch economists Sheryl King and Claudia Lokody.
King and Lokody said that home prices have risen far above incomes in 30 of the nation's top 52 metropolitan areas.
"Six cities in the Golden State – San Diego, Riverside/San Bernardino, Los Angeles, San Francisco, San Jose and Sacramento – are well in bubble territory," they wrote.
"On average, home prices for these six cities, which represent about 70 percent of the state's population, have risen about 75 percent since the start of 2001. Per capita income growth has averaged around 3 percent since this time."
Other economists say that the predictions of economic decline are overly dire. But they add that if a decline in the housing market is combined with another economic hurdle, such as a spike in the price of oil, the effect could be serious.
Yesterday, the price of oil surged to $59.37 per barrel, up 90 cents on the day. It was the highest closing price for oil since the energy crisis of the early 1980s, when prices spiked above $80 per barrel, after adjusting for inflation.
In the past month, oil prices have risen almost $12 a barrel because of rising demand. And economists do not see the price slipping any time soon.
So far, consumers have adapted to the rising prices. In fact, gasoline usage has risen in the past several weeks despite the rise in prices.
The past two years, the rising price of oil has contributed to a slowing of the U.S. economy, which grew 3.5 percent during the first quarter compared with 4.5 percent during the same time last year.
Economists say that a price rise above $60 would not be enough to derail the economy. But if oil prices rise to $65 or $70 at the same time the housing market stalls, it could inflict serious damage.
"I don't think a price rise of an additional $5 a barrel will be all that life-threatening to the economy," said economist Morici. "But if housing prices decline at the same time that oil prices rise, then the whole economy's in the soup."
In the meantime, the nation's leading economic indicators, as tallied by the Conference Board in New York, fell by 0.5 percent, more than double the 0.2 percent that economists had been forecasting.
Only one of the indicators rose in May: stock prices. Building permits, vendor performances, consumer expectations, manufacturing orders, consumer goods and unemployment claims were all negative indicators.
The indicators suggest that growth will slow over the next three months worldwide, said Ken Goldstein, labor economist for the board, which is a corporate-funded research agency.

[shadow]

[QUOTE=WetWillie]I know were all speculating. I think there is some pretty smart people in here and I would like to just hear diffrent oppinions and thoughts. They have been talking about a correction for some time havaent they... In 1999 they said how high can it go???
Why do they always post this stuff when I am making a move???
What do you guys think is something going to happen??
Economists warn of slowdown in the economy by year's end
I'm by far not the smartest one around here so can i give you my opinion by years end? :rollside: I'll have alittle better insight by then.

[ZZ-Man]

I heard there would be a fizzle or sizzle but not a bubble burst. I personally would like to see the economy slow down just a hair. I've been through these economical changes in the last 25 years and the media seems to control the economy then the people. They are the ones anouncing it, if they said the economy was on a rise like they always do everyone spends like crazy and vise versa. Its a technique the government has been using for a long time, I guess it works. Also if anyone is going to buy a toy, home etc.. you have to live within your means any way. So good luck on your decisions.. just my .02

[WetWillie]

:supp: [QUOTE=WetWillie]I know were all speculating. I think there is some pretty smart people in here and I would like to just hear diffrent oppinions and thoughts. They have been talking about a correction for some time havaent they... In 1999 they said how high can it go???
Why do they always post this stuff when I am making a move???
What do you guys think is something going to happen??
Economists warn of slowdown in the economy by year's end
I'm by far not the smartest one around here so can i give you my opinion by years end? :rollside: I'll have alittle better insight by then.

[WetWillie]

1. Experts: Housing Prices False, Recession on the Way
For a few years now, UCLA economic researchers have been warning that a bubble has formed around California's bustling housing market.
And in their latest quarterly forecast, they predict that a housing decline could drop California into a recession and simultaneously arrest economic growth in the rest of the country.
According to an article in the Los Angeles Times, these economists assert that Californians have assumed a sense of false wealth as a result of a 40% spike in home values over the past two years.
As a result, increased spending has artificially boosted the state's economy.
But if the experts are correct and the housing boom suddenly slows, consumers will abruptly stop spending - and that could trigger a recession. And this scenario simply requires a leveling off of home prices.
"This process will have a detrimental impact on the economy even if prices don't fall," said UCLA senior economist Christopher Thornberg.
Bolstering this view, the Fed has recently noticed indicators of "froth in some local housing markets."
And a recent report from Merrill Lynch claimed that home price stagnation in some major cities could slow economic growth by a whopping 1% next year, while the company determined that a number of large California cities maintained exceptionally high ratios of home prices to actual household incomes.
According some frightening data from the FDIC, the top 55 housing markets in the United States - which have appreciated some 30% or more since 2002 - made up some 40% of the U.S. housing market's total value in 2004. So obviously, a housing slowdown would be a disaster of epic proportion.
Of course, naysayers believe current housing prices are valid and due to both inadequate supply and the rapidly rising requirements of immigrants. And they don't see a potential slowing in housing prices as a any reason for concern.
But bubble theorists insist the hot housing market has disguised some serious deficiencies in California's economy - they say that solid job growth is deceptive and incomes have made only insignificant gains. And all the while, people have been spending more based on an unfounded sense of wealth.
"Your average Californian adult found him or herself richer to the tune of $40,000 on the basis of housing appreciation over the past two years," Thornberg said.
But that amount was only about half what that same person took home in income for the same period of time.
If the market comes to a halt, that statistic will surely come back to haunt a great many Americans.
The U.S. Government is Perpetuating an "Inflation Lie" - Learn More
2. Could Overbuilding and Speculation Mean a Housing Bust?
More evidence of a bubble. Over the past year, there has been a 47% rise in the number of U.S. homes that were sold before they were ever even built, USA Today reports in a page one story Tuesday.
And that has created worries that too much speculation (or "flipping"), coupled with a housing saturation, could lead to a housing bust.
As of April, the Census Bureau reported that 88,000 homes were for sale - but they hadn't yet been constructed. That number was almost double the 2000 figure, and it represented the highest total since such information was first tabulated in 1973.
While demand for homes is strong, a housing overstock could easily lead to a bust, according to experts.
"Builders have a long pipeline for development that will be difficult for them to shut down, even when demand begins to weaken," says one economist. "They are geared for growth, and it will be hard for them to pull back."

[mexrunner]

i can only hope being single and looking for a house has been sucking lately got pre approved for 350 but that dont buy nothin nowadays so maybe i'll hold on for awhile

[XtrmWakeborder]

I heard there would be a fizzle or sizzle but not a bubble burst. I personally would like to see the economy slow down just a hair. I've been through these economical changes in the last 25 years and the media seems to control the economy then the people. They are the ones anouncing it, if they said the economy was on a rise like they always do everyone spends like crazy and vise versa. Its a technique the government has been using for a long time, I guess it works. Also if anyone is going to buy a toy, home etc.. you have to live within your means any way. So good luck on your decisions.. just my .02
speculative economics i think its called, and i think thats the main factor in the economy and how it moves.

[riverroyal]

as long as you dont have a 500k house that you owe 500k on its not a big deal,if it drops 10% and you owe 300 on it then you are still ok,10% is only 50k,everyone in socal has made more than that in the last year.If your not owning a home in socal yet,well then you screwed unless you can afford a 3000 a month payment

[Nord]

I'm single (never married no kids) and I own a house and I get screwed on taxes because of it! However, I am looking to buy a second home right now and the prices aint getting any lower!!!

[piper]

I'm single (never married no kids) and I own a house and I get screwed on taxes because of it! However, I am looking to buy a second home right now and the prices aint getting any lower!!!
I got the same deal. Got screwed on Taxes.