Robert's outlook is not rosy.
Prechter is a high level macro thinker, but most of us live in the local, right?
Greenville is a good example a a metropolitan city that has decent employment, and that is what will determine the over vs. not over, in every part and parcel of the USA.
Another writer, John Mauldin, who just published "The End Game" has called this the "muddle through" economy for about 3 years.
So, in the simplest terms, I foresee a steady rate of foreclosure and short sale inventory for the next two decades across the country and I want to become a HUD local listing broker within 3-5 years.
Regardless, housing in my submarkets is a terrific value and across price ranges, demand exceeds supply. But...
62% of all Georgia mortgages originated in 2011 were FHA loans.
The USA's contraduopolistic politics, diminished currency value and poor leadership for generations, will challenge every local economy for decades to come, and if other countries are facing austerity measures, just wait til some of the communities in our couch potato Facebook nation get squeezed.
As for me in Intown Atlanta and Decatur, GA I know that it's not over and I will not ever call it over because about 20-30% of the metro ATL market is going to be distressed for years to come. However, when I study diverse submarkets like Virginia Highland, downtown Decatur or Brookwood Hills, I see 95% market health, anchored by solid community institutions like good schools and by great neighbors who love walkable streets and who support the restaurants and businesses that make our world go 'round....
Best hyperlocal example from my city, which is not in crisis - the last restaurant that went out of business in Decatur was Ruby Tuesdays in June.
Robert Prechter encourages investors to stay out of debt instrument investments, and his call for serious hedges against long term T bills is a harbinger for a credit crisis that can flatten any housing boom. That's the stuff that makes anyone a fool for calling a recent bottom across metro Atlanta.
I'll leave you with this upbeat note and a web reference that links you to this late June article called "Sell Paper, Buy Bricks."
Regular readers of The Daily Reckoning may recall that their writer, "Chris Mayer, editor of Capital and Crisis, has also become a big fan of US housing-based investments." He wrote:
â€œBeing bullish on housing is a contrarian view,â€ says Chris. â€œIn a recent national survey, 37% of homeowners say they think buying a house is a â€˜risky investment.â€™ And 86% think prices will either stay flat or fall.
But Chris believes the housing doom-and-gloomers have got it wrong. He thinks the housing market is on the verge of a rebound. â€œReal estate is intensely local, of course,â€ says Chris. â€œIt is hard to generalize. But clearly, there is value out there.
â€œOne individual I know runs a partnership that has purchased 87 homes in Georgia and North Carolina during the last year. When he leases out these homes, his firm averages a 16.5% gross yield. Thatâ€™s annual rent divided by purchase price, plus closing costs and estimated repair costs. And that is without leverage, net of all expenses, and includes estimates for vacancy and maintenance.
â€œThis is what the big-picture guys miss,â€ Chris continues. â€œEconomists can talk all they want about how a housing recovery is years away. Maybe so, but the opportunity to invest and make good money is now. In a world of sub-2% Treasury rates, 16.5% gross ainâ€™t bad.
â€œNow, I am not saying a housing boom is about to happen,â€ Chris concludes. â€œThere is more wood to chop before we get there. But I am saying that American housing, as an investment asset, looks cheap.â€
â€œBye-bye, then, to the McMansion phase of the American home investment cycle,â€ ... â€œHello to the era of McBargain."
Our national economy will likely be the gague by which sustained growth can be measured.
The recovery is due in part to this area being highly desirable to folks nationally and internationally. In addition, investors seemed to have scooped up many of the short sale properties - buying many of them in bulk with all-cash deals.
In addition to home prices improving, we are experiencing a lack of homes for sale to meet demand. This lack of inventory has created intense competition between real estate agents - often leading to multiple offer situations that further drives home prices up.
Here is a blog post I recently wrote on the competition: Shortage Of Fort Lauderdale Homes Yielding Intense Competition (http://luxurylivingfortlauderdale.com/shortage-of-fort-laude ).
Chad Gray, Realtor
Luxury Living Fort Lauderdale
For real estate professionals? Yep, we are doing transactions.
For investors? Yep, there is more money available to acquire bank owned real estate and fleece home owners.
For the buyer? Yep, they are able to see the trend arrows going in the right direction. The big banks have a fix in the system to 'help' the buyer and stick it to the home owner.
For the homeowner? I don't think so. They can't get a HELOC to replace the roof, They see a huge tax bill is just a few years away...and they don't have the money to replace the HVAC. Insurance is continuing to rocket upwards. If they can't buy the roof, the insurance is canceled..the bank forecloses...and this does not look like a recovering market to them. The car is 7 years old and facing the scheduled $2,200 repair. For these the crisis is REAL! Very real.
Those who purchased before 2000, the story may be different, but still not pretty.
Unfortunately, the wealth of middle class America, you know, that 40% they lost, is what the big banks are using to play with the economy now. The crisis may be over for everyone except Jane and Joe taxpayer and home owner who chose to do the 'moral' thing.
Family after family bare the scars inflicted by those who created this crisis. The pain is not even close to being over for many, who felt they should do the right thing. They honestly believed there was a person of good faith on the other side.
Before we start the party with the 'happy dance' please be aware, the fabric of America suffers and endures in absolute silence. As professionals, we need to make certain we have the resources and solutions that are most beneficial for these who are at the cusp of being a casualty.
How will I know the crisis is over and unlikely to occur again...when Bank of America, Citi, Chase and Wells Fargo are all regional banks. Then, we just might be safe.