Economist Predicts Significant 2007 Receission

[RobRich]

Investors, homeowners, and consumers beware. Roubini Global Economics predicts a 2007 economic recession "much nastier, deeper and more protracted" than the 2001 recession. Political commentary aside, the housing market is already showing preliminary signs.

Quote:

"This is the biggest housing slump in the last four or five decades: every housing indictor is in free fall, including now housing prices," Roubini said. The decline in investment in the housing sector will exceed the drop in investment when the Nasdaq collapsed in 2000 and 2001, he said.

Source: MarketWatch

[tony_j15]

They've been predicting a recession based on the housing market ever since it started booming. Recessions are a neccessary inevitability, so I aint too worried.

[RobRich]

I am certainly concerned. Unlike previous conditions, the housing market is actually showing signs of problems this time around. More to the point, Florida is a strong housing market. We have experienced a large housing market bubble. I have no want to see home values decline.

[Toadman]

Still worthy of portfolio re-evaluation. Lots of people may go upside down on their homes or even foreclose. Even if appreciation falters I pay an add'l amt towards principal every month to ensure positive equity. I'm sitting on the SoCal bubble myself watching that horizon also, RR.

[RobRich]

Quote:

Lots of people may go upside down on their homes or even foreclose.

I hate to sound like a vulture, but that can be a direct positive benefit for me. I am waiting on the condo market to bust in Tampa, at which time I can look into potential mid- to long-term invesment opportunities. There are 30,000 condos setting vacant in the area.

[Toadman]

Quote:

I hate to sound like a vulture, but that can be a direct positive benefit for me.

Same here, sshhh... Those 30k+ condos could end up as rental or HUD property however, driving values down for all homeowners.

[RobRich]

Probably not on the rentals or HUD property. Most are new units that have never sold. Pricing will probably have to slide by 50% before the corporations resort to renting.

[surreal]

but aren't there huge numbers of speculative homes also sitting waiting for the market to go up in your area? In some parts of FL the numbers are astounding.

[RobRich]

Speculative buying is strong, but there are niche markets inside the larger Florida bubble. For example, my nature coast county is generally insulated against huge housing market changes, as the housing inflation rates increased steadily here, but not as explosively as experienced in the urban area markets.

Regardless of the housing bubble, there is still a strong migration influx in Florida, thus there is still plenty of money to be made. The questions are when to buy and how long to hold. As long as Florida home prices are less than similar homes in New England, then there will be people inline to buy.

BTW, Tampa presents an unique situation that is only present in a couple of areas of Florida. New condo contruction actually outstripped demand. Now that the county is taking measures to slow condo building, demand will eventually catch up, thus sustaining price growth over the mid-term. If there is a short-term price decline due to a housing market bubble burst, then there is the possibility of turning a few dollars once demand again overtakes the available supply.

[johnnycombat]

And I'll be selling my house soon. . . great timing