I have read several articles that indicate that some of major metropolitan areas are seeing housing surges.
...yeah, I've read that too, here in Ireland, since the crash landing in 2008 (stalled still, somehow) - well maybe not "surges", but over and over again from the mainstream tubes: "...this is THE BEST TIME EVER, to get onto the property ladder, housing has bottomed, and quick, quick, QUICK, go and buy yourself a property, because once they are gone, they are gone(!!!)"
...four years straight of articles like that. Meanwhile, the economy is in TOTAL shambles, there is still oversupply of houses even from the boom times, I cannot possibly see who in this economy can still afford these houses, speaking in average terms (even at these lower prices), and the real estate goes NOWHERE but down, all the time. This bubble bursting was superficially stopped from happening full-on, thus it is still going nowhere BUT down, you can't fight the physics.
And if you look into the pipeline of things to come:
A) mortgage interest rates tax credits are expiring this year (here, people were entitled to get interest paid on their mortgages back, from the taxman, so to speak). How it will affect the pricing, do you think? "Honey, I know that Joneses were JUST able to afford that mortgage on their house, but that was before, and now, the government would not pay us back the interest that we are paying to the bank. So we cannot afford the same house, that they were able to get, even having the same budget."
B) Every
third residential mortgage is in arrears for 3 months or more. Every
seventh residential mortgage is in arrears of 6 months or more. Practically, that means a lot of these are going into receivership down the line, sooner rather than later, especially with stalled economy.
I just wait till A+B start to coincide, early next year, and just keep laughing at this year's "...it is THE BEST TIME EVER, to buy the house in Ireland, they never been so cheap, buy them before they are all gone(!!!)" articles.
So I guess my whole point is, be
very careful with the press articles, when making your long term obligation decisions :rotflmbo:
Remember, after any bubble bursts, the downswing below the "normal" line is usually as big, as the upswing was (in percentage terms), before things start to rise organically again. I am not following the US market closely, but from charts that I've seen from guys like Mike Maloney, who follow these long-term trends and chart different asset classes versus each other (instead versus US Dollars, which, as we know here, is a COMPLETELY wrong approach, but unfortunately - widely accepted) - housing in the US has shortly retracted just to the "normal" line, before bouncing straight up back again. Never went BELOW the normal line, as you would expect, after an EPIC bubble burst. Probably reacting to all kinds of stimuli - but still, a dead cat bounce, if you ask me.
...and this is even before we factor in things like demographic - i.e., all these Baby Boomers that just start to retire, and very likely, trying to downsize their lifestyles - first thing to do - get rid of their current house.
Somehow, I cannot see this market bouncing back to life within next two decades, I think. Of course, one still have to live somewhere, so that might be Good Enough moment to anyone in particular to jump on, but, better to make an informed decision/trade off. Gives you a better outlook
my $.02$.02$.02$.02