bostonbubble.com Forum Index bostonbubble.com
Boston Bubble - Boston Real Estate Analysis
 
 FAQFAQ   SearchSearch   MemberlistMemberlist   UsergroupsUsergroups   RegisterRegister 
 ProfileProfile   Log in to check your private messagesLog in to check your private messages   Log inLog in 

 
Go to: Boston real estate bubble fact list with references
More Boston Bubble News...
DISCLAIMER: The information provided on this website and in the associated forums comes with ABSOLUTELY NO WARRANTY, expressed or implied. You assume all risk for your own use of the information provided as the accuracy of the information is in no way guaranteed. As always, cross check information that you would deem useful against multiple, reliable, independent resources. The opinions expressed belong to the individual authors and not necessarily to other parties.

Turning Japanese?

 
Post new topic   Reply to topic    bostonbubble.com Forum Index -> Greater Boston Real Estate & Beyond
View previous topic :: View next topic  
Author Message
BostonObserver



Joined: 09 May 2009
Posts: 8

PostPosted: Sun Oct 25, 2009 9:12 am GMT    Post subject: Turning Japanese? Reply with quote

If these charts have any truth to them, I don't see how the housing market rebounds any time soon. Thoughts?

http://static.seekingalpha.com/uploads/2009/10/23/saupload_loan_resets.PNG

http://upload.wikimedia.org/wikipedia/en/thumb/d/d6/EconomistHomePrices20050615.jpg/581px-EconomistHomePrices20050615.jpg

http://static.businessinsider.com/~~/f?id=4a302f4d14b9b98b00d35d3e

http://graphics8.nytimes.com/images/2008/03/18/opinion/18opchart.large.gif

"Almost every circumstance leading up to the Japan housing crash has been present in the U.S. during the last decade:

Historically low interest rates
Housing touted as a 'can't miss investment'
Median home prices doubled
Median home prices in the six largest cities tripled
Lenders offered bad loans
Government acted as a partner to industry
Home price increases far outpaced wages and rents

After reaching peak values, Japanese home prices declined by an average of 40 percent. In the country's largest cities, the declines were worse, averaging 65 percent. Homes in Tokyo lost 80 percent of their value and are still on the downward slide to this day.

http://efinancedirectory.com/cimages/articles/japan-housing-decline.gif

If you are wondering what will happen in the U.S. when the disconnect between home prices and fundamentals finally becomes too much and knocks the knees out from under the housing market, take a look at the chart above"
Back to top
View user's profile Send private message
Xenos



Joined: 24 Jun 2009
Posts: 31
Location: Western Mass

PostPosted: Sun Oct 25, 2009 12:39 pm GMT    Post subject: Reply with quote

Turning Japanese?

I really think so.
Back to top
View user's profile Send private message
john p



Joined: 10 Mar 2006
Posts: 1820

PostPosted: Sun Oct 25, 2009 1:29 pm GMT    Post subject: Reply with quote

I think when you look at the second, third and fourth charts you can see how they align the two bubble lines at different time periods, which is fine, you just have to be aware of it...

Nice work.

The one thing I'd say is that Japan's economy and culture are a bit different and isolated so I don't see them being stabilized by other nations like say the US. Japan may be the canary in the coal mine, and when it dropped it didn't really bring down that many nations with it.

This current correction is more global and I was hoping the G20 summit would have been successful in establishing generally accepted principles for lending, leverage, underwriting, responsibility, etc.
Back to top
View user's profile Send private message
admin
Site Admin


Joined: 14 Jul 2005
Posts: 1818
Location: Greater Boston

PostPosted: Sun Oct 25, 2009 9:09 pm GMT    Post subject: Re: Turning Japanese? Reply with quote

BostonObserver wrote:

http://static.seekingalpha.com/uploads/2009/10/23/saupload_loan_resets.PNG


Wow. That makes me think one thing: are we in the eye of the hurricane right now?

On the other hand, I wonder how up to date that chart is in terms of loans outstanding. It looks like it may reflect the distribution of loans as of the beginning of 2006. In that case, that coming tidal wave of Option ARMs might not be quite so high now that many foreclosures have already occurred and many resales have occurred too.

- admin
Back to top
View user's profile Send private message Send e-mail Visit poster's website
BostonObserver



Joined: 09 May 2009
Posts: 8

PostPosted: Sun Oct 25, 2009 10:06 pm GMT    Post subject: Re: Turning Japanese? Reply with quote

Here is the latest version of the chart that I could find -- April 2009:

http://mortgage.freedomblogging.com/files/2009/05/reset-chart-for-blog-april.jpg

Source:

http://mortgage.freedomblogging.com/2009/05/20/loan-reset-threat-looms-through-2012/10791/reset-chart-for-blog-april/


admin wrote:
BostonObserver wrote:

http://static.seekingalpha.com/uploads/2009/10/23/saupload_loan_resets.PNG


Wow. That makes me think one thing: are we in the eye of the hurricane right now?

On the other hand, I wonder how up to date that chart is in terms of loans outstanding. It looks like it may reflect the distribution of loans as of the beginning of 2006. In that case, that coming tidal wave of Option ARMs might not be quite so high now that many foreclosures have already occurred and many resales have occurred too.

- admin
Back to top
View user's profile Send private message
admin
Site Admin


Joined: 14 Jul 2005
Posts: 1818
Location: Greater Boston

PostPosted: Sun Oct 25, 2009 10:46 pm GMT    Post subject: Reply with quote

Thanks. That actually makes things look worse, given the higher scale.

- admin
Back to top
View user's profile Send private message Send e-mail Visit poster's website
Boston ITer
Guest





PostPosted: Tue Oct 27, 2009 2:41 pm GMT    Post subject: Reply with quote

Throughout Japan's lost decade, now two lost decades, unemployment stayed between 3 and 5%. That's hardly a rampant job loss situation, albeit, it forced many to lose the chance (& prestige) of getting a 'salaryman' type of career, straight out of college since guarantee-ing a paycheck during a deflation was costly for many companies.

Instead, it was a general malaise of decreasing asset valuations, mediocre job growth, but reasonable international success for Honda, Sheisedo, Mitsubishi, Sony, a.k.a formerly Japan Inc (circa 1980s). All and all, most Japanese have an $80K+ savings mattress (real cash, not assets) and they can take that to some other asset rich nation to grow their funds which BTW, was happening with other Asia-Pacific nations during the lost decades. The Yen carry trade, which weakened the Yen actually helped both Japanese exporters and the ability of neighboring countries to finance their expansions. For Americans, however, only the upper middle class have such arbitrage opportunities. The rest are just keeping up with their housing payments so worldwide diversification isn't on the typical American dinner table.
Back to top
ca.voyagehomeloans.sac
Guest





PostPosted: Tue Oct 27, 2009 9:28 pm GMT    Post subject: Wow Reply with quote

Nice Charts. I wonder where the market will in fact end up. One one side it looks like it is improving but on the other side it looks like mortgages are still on the frits.
Back to top
BostonObserver



Joined: 09 May 2009
Posts: 8

PostPosted: Wed Oct 28, 2009 10:29 am GMT    Post subject: More from the WSJ Reply with quote

From the WSJ:

Is the U.S. Economy Turning Japanese?

Easy money from the Fed hasn't translated into more consumer lending by banks.

http://online.wsj.com/article/SB10001424052748704224004574489530753794994.html

"All of the above behavior invites legitimate comparisons with post-bubble Japan, where banks took years to be cleaned up as a result of regulatory forbearance. The same kind of forbearance is preventing America's increasingly distressed commercial real-estate market from clearing. Similarly, as was the case with Japan, monetary-base growth has exploded in the U.S. over the past year courtesy of the Fed, while bank lending is declining. This is why there is every reason to fear that America is already in a Japanese-style liquidity trap."
Back to top
View user's profile Send private message
Rental Lease



Joined: 28 Jan 2009
Posts: 21

PostPosted: Tue Nov 03, 2009 1:17 am GMT    Post subject: Reply with quote

I think as a nation we'll see even more of a dip this winter (as is customary for most of the U.S.), but my hope is that come spring 2010 we'll see more and more individual markets recovering.
Right now relatively few markets are going strong, but we should be seeing more markets improving as the job index improves and consumer spending recovers.
I'd like to stay optimistic, but I do know that I may have to keep my investment properties as rental units for some time to come.
We definitely live in "interesting times" though... it's a strange time to be a real estate investor!

____________________
Brian
Editor's Note: Signature links removed. Please avoid overly commercial linking.
Back to top
View user's profile Send private message
Display posts from previous:   
Post new topic   Reply to topic    bostonbubble.com Forum Index -> Greater Boston Real Estate & Beyond All times are GMT
Page 1 of 1

 
Jump to:  
You can post new topics in this forum
You can reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum


Forum posts are owned by the original posters.
Forum boards are Copyright 2005 - present, bostonbubble.com.
Privacy policy in effect.
Powered by phpBB © 2001, 2005 phpBB Group