4 replies to this topic

[bullshort]

I've always had the impression that the housing market was the tail that wagged the economy as the dog. I finally found the chart that proves it. This article is over two years old, but if you scroll down to the chart at the very bottom, notice the relationship between housing prices and general economic recessions. IMO, the author has it backwards in implying that a downturn in housing prices was caused by a recession in the economy. On the contrary, notice that downturns in housing prices tend to be a bellweather for the economy, usually leading recessions by about 6 months. Now that we're beginning to see some serious declines in home prices, a recession is pretty much baked in the cake IMHO. The chart also gives a pretty good idea of what is "normal" in terms of the severity and length of a housing price downturn. I doubt that this will impact anybody's trading over the next 48 hours, but thought it might be of interest.

http://www.investmen...5/20050701.html

[bullshort]

In the interest of fair and balanced, here is another side of the argument. We report, you decide.

http://www.paperdine...BNN.aspx?id=419

[redfoliage2]

I've always had the impression that the housing market was the tail that wagged the economy as the dog. I finally found the chart that proves it. This article is over two years old, but if you scroll down to the chart at the very bottom, notice the relationship between housing prices and general economic recessions. IMO, the author has it backwards in implying that a downturn in housing prices was caused by a recession in the economy. On the contrary, notice that downturns in housing prices tend to be a bellweather for the economy, usually leading recessions by about 6 months. Now that we're beginning to see some serious declines in home prices, a recession is pretty much baked in the cake IMHO. The chart also gives a pretty good idea of what is "normal" in terms of the severity and length of a housing price downturn. I doubt that this will impact anybody's trading over the next 48 hours, but thought it might be of interest.

http://www.investmen...5/20050701.html

House price just started to fall and it should accelerate over next 2 years.

[JAP]

I've always had the impression that the housing market was the tail that wagged the economy as the dog. I finally found the chart that proves it. This article is over two years old, but if you scroll down to the chart at the very bottom, notice the relationship between housing prices and general economic recessions. IMO, the author has it backwards in implying that a downturn in housing prices was caused by a recession in the economy. On the contrary, notice that downturns in housing prices tend to be a bellweather for the economy, usually leading recessions by about 6 months. Now that we're beginning to see some serious declines in home prices, a recession is pretty much baked in the cake IMHO. The chart also gives a pretty good idea of what is "normal" in terms of the severity and length of a housing price downturn. I doubt that this will impact anybody's trading over the next 48 hours, but thought it might be of interest.

http://www.investmen...5/20050701.html

House price just started to fall and it should accelerate over next 2 years.

Exactly. Anyone who thought 100% the appreciation could be sustained and never come back down is a moron. That first link is from 2005.

Edited by JAP, 30 September 2007 - 08:34 AM.

[spielchekr]

"Don't you dare buy a house. You will lose money". Cramer stands uncorrected.