Jonathan Miller says the Bll McBride is confusing housing finding a bottom with recovery:
I feel like I have to qualify myself as NOT being a housing bear (a distressed housing apologist) but I still can’t figure out the math: flat to falling incomes, high unemployment, rising taxes and tight credit = housing recovery? What’s missing?
I can’t figure out what people who foresee better growth in 2013 are looking at. Where’s the growth going to come from? Retail? Housing? Durables? I think that people will decide to keep their old cars, refrigerators, and washing machines a bit longer.
Gasoline on the fire:
Despite wishful thinking from real estate brokers, banks, sensing stabilization, are holding and then just bleeding in at a modes rate, foreclosure homes. This inventory bleed should keep a cap on pricing for quite some time. I’ve read that new housing starts are up, but this must be track housing. Even higher end housing (I’m thinking $500K to a million) seems to be trending to smaller footprints.
Along those “new frugality” lines, I think the car/fridge/washing machine observation is spot on. (And pity the furniture people) Look for a resurgence in repair and maintenance businesses for big ticket cap goods.
I concur with Drew’s post, that people are basically retrenching, as a way to find some kid of economic equilibrium, during these confrontative and fiscally stupid times.
Mini-mansions, for instance, are definitely not what they used to be. Now, the construction of virtual ‘doll houses’ is the design of the moment — housing with 300 sq ft or less. Also, bigger ticket items, such as appliances and cars, will be treated in a less disposable manner, and replaced less often. However, I think high tech devices and goodies, will still be in vogue for those who always want to be the first to have the latest, the fastest, the best screen etc.
We have become a superficially-motivated society, in our lifestyles, our relationships and of course our politics. The easiest road most traveled is the way to go!
The 30s saw a major tech revolution underway. I dont see that happening now, though maybe it is starting somewhere and we just dont see it. Absent such, I think population growth, immigration and pent up demand will keep us on a slow growth trajectory barring exogenous shocks. I am not sure what the fiscal cliff really does to us. If we went over, but passed appropriate legislation 2 days later, I find it difficult to believe it would have catastrophic effects.
Steve
“However, I think high tech devices and goodies, will still be in vogue for those who always want to be the first to have the latest, the fastest, the best screen etc.”
I agree. And I call these (and yes, its a value judgment) irrational purchases. I have yet to purchase an Iphone. My wife and daughter on are version 457 or whatever………
Agree regarding tech, but I have to wonder if our crazy patent system is hurting that area. Who wants to try to build a business if Google, for example, can come along and sue you based on some obscure patent they own?