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Technology Stocks : Cisco Systems, Inc. (CSCO)
CSCO 71.08+0.1%Nov 7 9:30 AM EST
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To: Sr K who wrote (77090)8/26/2012 9:02:05 PM
From: RetiredNow  Read Replies (1) of 77397
 
You have to understand everything that has happened to understand what I'm talking about. The reason why houses still have a ways to go before they stabilize is because there is a massive overhang of shadow inventory. There is a massive overhang of shadow (unforeclosed inventory still on bank books but not on the market) because there was massive robo-signing and other fraud that held up the processing of all those houses. In addition, there was a lot of government intervention on behalf of home owners that slowed the clearing process down. All of that inventory is now starting to make its way onto the market. That is massive supply. What is the enemy of higher prices? Increasing supply.

Now, you may call that illogical, but then you may just be showing your ignorance on the subject. It is simply fact. Now as to how long it will take to clear is conjecture. Some of my friends in the industry say it will clear in 2-3 years. I believe it will take a lot longer to clear. In part, I think this, because we have an entire generation now that is learning to avoid housing risk and stay financially loose by renting instead of owning. Those habits are an interesting trend. Then you have Fannie and Freddie being wound down? Who will facilitate all these loans going forward? Will the government step in?

There are a lot of things that make me think housing is an injured beast that won't be getting up and running any time soon. It will have to lick its wounds awhile. I'm guessing more like 5-10 years, before we see anything like the steady 2-3% increases per year on average like was the old normal.
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