Housing Market Predictions For 2009

The Housing Bubble Blog asked its readership for their mid-year observations and predictions. Some of their previously-posted comments from New Year's predictions for 2009 are quite interesting:

A reply, “If your prediction comes to pass, no amount of funny money printing or interest rate buydowns by the Fed will save the housing market from the ongoing, precipitous crash that is already underway.”

Another added, “If savings become trendy, couldn’t I argue that inflated Mc Mansions are toast? The Government along with NAR can not change trends. Once burnt twice shy. This trend is going to be forced upon millions like it or not. Now only if we can convince my high wage earning fiancé not to buy hundreds of shoes, coats, clothes etc and to follow this trend.”

And another, “Make spending too much money socially unacceptable! If it becomes ‘cool’ to live within your means, the REIC, banks and government can huff and puff and blow interest rates to zero and drop hundred dollars bills from helicopters until they are blue in the face and it won’t matter. It takes only one link to break in the chain.”

A reply, “We can figure out how to live on less - less credit, less eating out, smaller houses or more people in the houses, older cars, you name it. But the process of getting to the smaller economy that this level of consumption will demand is going to hurt like anything.”

One said, “The entitlement generation will never give in to something so unreasonable. How dare you suggest such a thing.”

One had this, “I have thought housing will bottom in a couple years; my only doubt is all the government intervention. By driving interest rates low they could spur some buying by those who have secure jobs. I bet they do something under Obama to help people stay in ‘their’ homes, or should I say government homes owned by Fannie and Freddie. So, if the price is right I’ll be buying in 2009! I may be early, but it will be a cash deal and cheaper than rent at this point. Although, I do feel I have a year or more to find the exact deal I want!”

Another said, “I wish they would stop calling it a housing or foreclosure ‘crisis.’ The ‘crisis’ happened when the regulators, politicians, Wall Street thugs, etc. forced or allowed prices to escalate like they did.”

“It’s only a bad market for sellers. For buyers — the other half of the equation — the market is quite good and getting better by the day. As a future buyer, I see no crisis…only sunny skies ahead!”

And finally, “I can’t predict the future any more than the next guy, but my guess is that this is a generational cycle, more than it is a next year, two years, or three years until it’s all good.”

“My father lost 50% on a house in 1960, in a micro economic event (Rt 190 in Buffalo planned through our block). He absolutely rejected the idea of buying a house for the next 30 years or so. My niece has lost 50% on TWO houses in Santa Rosa, one a step up and the other ‘would sell quickly.’ She and her husband will remember this pain for the rest of their lives I’d expect. The whole model we have lived with for decades is broken.”

“Three times income is a stretch for anyone raising a family. That is over half your takehome pay. Plus utilities and maintenance and you and are living like a slave and your kids like paupers. I have done that for decades and will not do it again. Will anyone do that with a mindset that a house is the worst investment ever? Add to it that those average incomes are going down and taxes are going up (half my friends are already in a bind with reduced income). With an economy that needs to be reinvented and a government hell bent on large scale forced malinvestment, we will be in pain for more than a couple of years.”

“My 82 year old mother says ‘people will learn to live like we did.’”

“The bottom is a long way down, but it won’t be a killer for those of us who are not in debt. I am glad to have a roof over my head and a job, no matter how transitory. Food in the cupbaord, savings, friends and freedom. Merry Christmas to all of you, may you recognize your blessings and enjoy living!”