The Housing Crisis is Over
May 27, 2008
It’s the first I’ve heard of it, but apparently Cyril Moulle-Berteaux over at the Wall Street Journal seems to believe that it is. I can’t tell if this is more media and realtor spin or if his analysis actually holds water. A quick google search turned up that Mr. Moulle-Berteaux ran a fund for Morgan Stanley back in 2002 and now is a hedge fund manager for Traxis Parters. Thoughts?
Nick
May 27th, 2008 at 5:02 pm
The timing of this post is interesting. Just 2 weeks ago a friend put up their house here in South Florida for sale and they have already had an offer and several people looking at their place. The house that has been on the market across the street just closed last week. I’m not sure if our area is more prone to bounce back quicker (i would say it is) but I am surprised to see both of these things happen when they did.
Murf
May 28th, 2008 at 2:10 pm
Put me in the “skeptical” column. The housing crisis might be over, it is certainly possible, on the other it is pretty common when you have an asset drop for people to jump back in thinking “prices have dropped so much the worse must be over,” when all that really happened was that ultra-expensive homes got reduced to only very-expensive. You really have to look at the underlying value of the asset to find out if you’re getting a bargain. I would compare the price of the house now with the price in 2000 and if they weren’t very close I’d wait and see. Here is one response to Mr. Berteaux.
Remember that property prices fell in Japan for 12 straight years after their real estate bubble burst.
Brandon
May 28th, 2008 at 2:31 pm
I think I’d have to agree with Murf. Although there are instances of houses selling quickly I just read in the NY Times that the total supply of homes for sale is north of 4.5 million and rising. They also have some interesting analysis of buy/rent ratios in various cities. They recommend buying at around a ratio of 11-12 and currently there are several cities at 20 and higher. Tampa is at 17.5.
Murf
May 29th, 2008 at 1:57 am
My favorite blog in regards to the housing debacle is Irvine Housing Blog . This guy chronicles the tomfoolery in housing lending only in and around Irvine. Check out this post where one guy took 35,000 cash out of his home in the first two months of ownership. Better than robbing a bank and (somewhat) legal.