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David Rosenberg: Housing Double-Dip Straight Ahead

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December 30, 2010 – Comments (7) | RELATED TICKERS: DRV , SRS

[I've been bombarded by negative stories about the expected double-dip regarding housing prices in recent days, so I thought I'd pass along a couple of them.]

David Rosenberg: Housing Double-Dip Straight Ahead

Housing is very likely to double-dip, says David Rosenberg, the economist known for calling the original housing crisis in advance.

The Gluskin-Sheff economist says that all of the government efforts to arrest the downturn “merely distorted” the reality of the 3.7 million homes waiting to be absorbed by a weak U.S. economy.

“Here we are three to four years after the initial detonation, and we’re still left with this gargantuan inventory,” Rosenberg told CNBC. 

Full article

Roubini: Housing Market Already in Double-Dip

Recent numbers for the housing market don’t show much room for optimism.

Indeed, "It's pretty clear the housing market has already double dipped," star economist Nouriel Roubini tells CNBC in a text message. "And the rate of decline is stronger than in previous months."

Full article 

Shiller: Second Recession Possible, Triggered by Weak Housing

The housing economist who predicted the massive housing crash sees a down year ahead and, worse, believes that renewed housing problems could trigger a second recession.

“It’s not entirely clear that this is a double-dip in housing, but it’s starting to look like housing is beginning to resume the downtrend from 2006 to 2009,” says Robert Shiller, Yale professor and co-creator of the S&P/Case-Shiller Home Price Index.

The latest Case-Shiller numbers show prices fell in October, down 0.8 percent from a year ago. Some metro areas are just now recovering to prices they saw a decade ago, while others — notably Detroit — are struggling with catastrophic price declines.

Full article

 

7 Comments – Post Your Own

#1) On December 30, 2010 at 10:23 AM, TDRH (99.66) wrote:

Nice selection of articles.  That said, I wish they would ellaborate a little more.  

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#2) On December 30, 2010 at 10:23 AM, TDRH (99.66) wrote:

Nice selection of articles.  That said, I wish they would ellaborate a little more.  

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#3) On December 30, 2010 at 11:04 AM, kdakota630 (29.44) wrote:

And now another one:

Peter Schiff - Home Prices Are Still Too High

Most economists concede that a lasting general recovery is unlikely without a recovery in the housing market. A marked increase in defaults and foreclosures from today's already elevated levels could produce losses that overwhelm banks and trigger another, deeper financial crisis. Study after study has shown that defaults go up when falling prices put mortgage holders "underwater." As a result, the trajectory of home prices has tremendous economic significance.

Earlier this year market observers breathed easier when national prices stabilized. But the "robo-signing"-induced slowdown in the foreclosure market, the recent upward spike in home mortgage rates, and third quarter 2010 declines in the Standard & Poor's Case–Shiller home-price index—including very bad October numbers reported this week—have sparked concerns that a "double dip" in home prices is probable. A longer-term view of home price trends should sharply magnify this fear.

Even those economists worried about renewed price dips would be unlikely to believe that the vicious contractions of 2007 and 2008 (where prices fell about 30% nationally in just two years) could return. But they underestimate how distorted the market had become and how little it has since normalized.

Full article

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#4) On December 30, 2010 at 11:11 AM, tekennedy (67.31) wrote:

Pretty good articles, although I agree that they were a bit short.  Nice data though.

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#5) On December 30, 2010 at 11:22 AM, kdakota630 (29.44) wrote:

That Schiff article worked for me before.  It appears that if you want to read the whole thing and you're not a WSJ subscriber, go to:

http://news.google.ca/nwshp?hl=en&tab=wn

And then do a search for "Home Prices Are Still Too High"

 

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#6) On December 30, 2010 at 11:23 AM, oridinaryaverage (< 20) wrote:

Houses in my neighborhood are priced within the realm of sanity and some at a seemingly good discounts.........none are moving and haven't for months.

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#7) On December 30, 2010 at 1:01 PM, Valyooo (99.33) wrote:

Obviously they are not good discounts then.

The problem with permabears is that when they are right, they are right, and then they stay bearish for eternity and everybody just quotes them about the one time they were right.

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