Nothing Is Going to Save the Housing Market
Jan 23, 2015 8:00 AM EST
By A. Gary Shilling
U.S. housing activity remains weak despite six years of federal government aid, strong interest from overseas buyers, rock-bottom interest rates and massive purchases of mortgage bonds by the Federal Reserve. Does this mean housing may never spring back to its pre-recession levels? Many signs point to yes.
Don’t blame the Chinese, who are showing an abundance of interest. Their share of foreign purchases leaped to 16 percent in the year ending March 2014, from 5 percent in 2007. They paid a median price of $523,148, higher than any other nationality and more than double the $199,575 median price of all houses sold.
The value of home sales to all foreigners rose 35 percent last year to $92 billion, up more than 50 percent since 2007 and accounting for 7 percent of all existing home sales. Foreigners view U.S. homes as safe investments and U.S. schools as good places to teach their children English.
Eventually the pent up demand from first time buyers will drive the market
“Eventually the pent up demand from first time buyers will drive the market”
I don’t mean to be contrary, but why are you so sanguine that first-time home buyers have sufficient mojo save the bacon of existing homeowners?
People need to move out of their parents basements,
When they buy I hoboken those yuppies move to ridgewood
It’s always been that way with our newbies from NYC and Hoboken
Once she gets a bun in her oven, she wants the kid in school here
It seems that the pre recession real estate market was super inflated. I don’t think you will ever see the market return to those numbers.