housing market correction coming?

[brick]

"The inventory of unsold houses rose to the highest level in nearly 20 years."

Any thoughts on whether we will have a significat correction in the housing markets vs period of slower growth?

How can I best position myself to take advantage of a correction?

http://news.yahoo.com/s/nm/20051128/...kets_stocks_dc

in bubble areas you will see correction, in others, slow growth most likely

[AceHigh]

[ QUOTE ]
in bubble areas you will see correction, in others, slow growth most likely

[/ QUOTE ]

You should be careful how you use the term "bubble". Bubble's imply a massive loss of value, unlikely to be regained in a persons lifetime. House and Homebuilders have too much value to see that kind of loss most likely. Most Homebuilders have relatively low p/e's.

The housing market is slowing and some places it is no longer growing, but it's not a "housing bubble".

welcome to the HOUSE of pain

15% arms and 24% interest only jeez.....also watch for the interest rate deduction on your taxes be removed for residential investment properties and second homes in the near future.

http://www.courant.com/business/hc-apcrunch3.artnov30,0,6865338.story?page=2&coll=hc-headlines-business

the statistic i love the most is the affordability index where i live is 88% and 65%(really bad)for new home buyers.

[AceHigh]

I like that "HOUSE of pain".

[12AX7]

Hi AceHigh,
I agree with what you are saying here. Historically there have been few real RE price corrections in a truly down direction. At least that I can think of in my lifetime. I believe the CA market did do this once?

However, it *does* need to burst, bubble or not. If american workers are going to have to start competing with world labor costs dollar for dollar the prices for goods in the local american market have to come back in line with incomes. Or else we can become a truly two class place, like say Brazil?

[ QUOTE ]
[ QUOTE ]
in bubble areas you will see correction, in others, slow growth most likely

[/ QUOTE ]

You should be careful how you use the term "bubble". Bubble's imply a massive loss of value, unlikely to be regained in a persons lifetime. House and Homebuilders have too much value to see that kind of loss most likely. Most Homebuilders have relatively low p/e's.

The housing market is slowing and some places it is no longer growing, but it's not a "housing bubble".

[/ QUOTE ]

[DesertCat]

[ QUOTE ]
Hi AceHigh,
I agree with what you are saying here. Historically there have been few real RE price corrections in a truly down direction. At least that I can think of in my lifetime. I believe the CA market did do this once?

However, it *does* need to burst, bubble or not. If american workers are going to have to start competing with world labor costs dollar for dollar the prices for goods in the local american market have to come back in line with incomes. Or else we can become a truly two class place, like say Brazil?


[/ QUOTE ]

American workers don't have to compete dollar for dollar, the higher amount of capital historically invested in the U.S. typically makes the U.S. worker much more productive than his competition. Which is why the U.S. worker has always earned higher wages, and likely will continue to. The only way this will change if we have a massive capital outflow over decades.

There are exceptions, like the US Auto industry where strong labor has been able to bargain for wages about 3x what "free market wages" would be. Those are likely going to be rolled back, worst case to the $35 per hour level (wages + benefits). But for relatively unskilled labor, that's still very high wages anywhere in the world.

[AceHigh]

[ QUOTE ]
If american workers are going to have to start competing with world labor costs dollar for dollar the prices for goods in the local american market have to come back in line with incomes. Or else we can become a truly two class place, like say Brazil?


[/ QUOTE ]

America won't become a 2 class society like Brazil because we need local carpenters, electricians and plumbers, etc. We may lose some of our better blue collar workers jobs because it will be cheaper to manufacture products in foreign countries and ship them to the United States. But this is offset by all the white collar jobs in areas like software development.

[Uglyowl]

While there may be minimal wage pressure, the price of products declining as a result more than makes up for this.

[12AX7]

I just spent 5 years at IBM Level 2 software support...

White collar work is going to India too...