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Non-Tech : Investing in Real Estate - Creative Opportunities

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To: John Vosilla who wrote (1625)	5/27/2013 12:14:07 PM
From: tejek	1 Recommendation Read Replies (1) of 2722

"You build a house, you're adding $300,000 to the capital stock," Case said. "That's a lot of GDP just in the direct effect of housing starts. It's been the perfect instrument of housing policy." Yep another part of the equation as to why the economy can't jump start as fast as everyone wants. The multiplier effect of new construction ripples through so much of the economy. Think about it coming out of the last financial crisis 1990-91 it was slow going for a good 2-3 years more years in large part due to subpar housing starts and tight lending. Coming out of the tech crash, 9/11 and corporate capital spending freeze into 2003 real economy took several years to come back and only then it was due to record home construction, easy financing and the RE price appreciation bubble already in place. This time will be a bit different since J6P being left high and dry from tight credit, lackluster job growth and another casino type atmosphere quickly building without his participation?.. He is out of stocks, he is now missing housing, the crucial component for him too. Tough to build equity especially when your paycheck also lags inflation. I don't think housing expansion is a great generator of growth.........esp income growth. I much rather have it be the side show and tech or some other industry be the feature in the main circus tent. I think the economic recovery during the aught years was a weak one because I think it was so dependent on housing. Nothing like the one in the 90s. Workers saw little income growth. Making matters worse........the underpinnings of the housing boom were very weak. I think that added to the huge collapse we saw in 2008. "There is momentum in the housing market," Shiller said. "Momentum suggests increases in the next six to 12 months." Longer term, he added, "I'm not so optimistic. It's not going to be another big up and down." Why doe Shiller say this bad? You want stable slowly rising prices. Instead I fear another huge bubble in 2-3 years if current policy keeps up. Seems we are already there in some prime coastal submarkets. I am coming to the opinion that Shiller is a Debbie Downer. I don't think I have ever heard anything positive come out of his mouth. Its why I no longer rely on his observations.

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