Tuesday, 03 May 2011 10:38

Bubble, Bubble, Real Estate Toil and Trouble: Macro Climate for Real Estate Still Sucks, Despite New Bubbles

A reader wrote me complaining about the nonsensical bubble blowing in multi-family properties before the last bubble was even finished bursting. I feel his pain. Let's run through a quick pictorial of how I see the macro climate for real estate as of right now...

Everybody is getting squeezed, businesses, consumers, homeowners... Everybody!

Businesses have been pressured by wage inflation, but have managed due to growing revenues. The growing revenues portion has slackened considerably after .gov bubble blowing wore off.

I know many of you are saying, "But wait a minute!!!". You said the employment market was weak! Yes, I did say that and yes, it is. We have historically high and stubborn unemployment, but that doesn't tell the whole story. That high unemployment crams more dollars into the "average" hour worked, but many less hours are worked by less people in the aggregate. See On Employment and Real Estate Recovery.

The reported unemployment numbers materially understate the amount of actual real unemployed there are in this country for it does not include the labor force participation. If you are not actively (or more to the point, have given up looking) for a job you are not included in the count.

The amount of people no longer counted in the labor force has been steadily growing, thus steadily underestimating true unemployment.

Add to all of this the fact that banks had practically halted foreclosures, thereby significantly exacerbating the shadow inventory problem, and you have a mess on your hands. Subscribers should review the latest Shadow Inventory Analysis Spreadsheet online to see exactly what I am talking about. There is at least an additional year or two of inventory not shown in (hidden from) these already pessimistic numbers.

Add to this the fact that interest rates are going up around the globe, in some places eventually by force - reference Reggie Middleton ON CNBC’s Fast Money Discussing Hopium in Real Estate, and then reflect upon inflation vs. stagflation - Inflation + Deflation = Stagflation ~ Lower Real Estate Values! and don't forget to remember that we are in a real estate depression: In Case You Didn’t Get The Memo, The US Is In a Real Estate Depression That Is About To Get Much Worse.

Sound gloomy enough yet? Don't worry. Despite all of this, guess what? The .gov/central banking cartel has successfully reblown another bubble in real estate by messing with the circle of economic life.

My next post on the CRE topic will include some of my thoughts on this gentleman's situation. In the meantime, comments are always welcome.

Last modified on Thursday, 05 May 2011 07:20

912 comments

  • Comment Link giacca moncler Tuesday, 03 December 2013 04:53 posted by giacca moncler

    Hey very cool blog!! Man .. Beautiful .. Wonderful .. I'll bookmark your web site and take the feeds additionally厈I am|I'm} happy to seek out so many helpful information right here within the post, we need develop more techniques on this regard, thanks for sharing.

    Report
  • Comment Link ugg オーストラリア タグ Tuesday, 03 December 2013 03:04 posted by ugg オーストラリア タグ

    UGG Australia is the actual country of origin and also Australian manufacturers have in order to do these boots made 鈥嬧€媐or decades, which also contains sold in the actual United States, should turn out to be the actual common name UGG, UGG Australia, the actual Court upheld a commodity common name of practice .
    ugg オーストラリア タグ http://www.doremo.jp/ugg49380.html

    Report
  • Comment Link あぐ キッズ Tuesday, 03 December 2013 03:04 posted by あぐ キッズ

    UGG Australia is your country of origin along with Australian manufacturers have to be able to do these boots made 鈥嬧€媐or decades, which also contains sold in your United States, should turn out to be your common name UGG, UGG Australia, your Court upheld a new commodity common name of practice .
    あぐ キッズ http://www.doremo.jp/ugg37919.html

    Report
  • Comment Link アグ エミュー Tuesday, 03 December 2013 03:04 posted by アグ エミュー

    UGG Australia is your country of origin and Australian manufacturers have for you to do these boots made 鈥嬧€媐or decades, which also contains sold in your United States, should become your common name UGG, UGG Australia, your Court upheld any commodity common name of practice .
    アグ エミュー http://www.doremo.jp/ugg49158.html

    Report
  • Comment Link ugg シドニー Tuesday, 03 December 2013 03:04 posted by ugg シドニー

    UGG Australia is the actual country of origin along with Australian manufacturers have for you to do these boots made 鈥嬧€媐or decades, which also contains sold in the actual United States, should turn into the actual common name UGG, UGG Australia, the actual Court upheld a commodity common name of practice .
    ugg シドニー http://www.doremo.jp/ugg40283.html

    Report
  • Comment Link ugg ブーツ ランキング Tuesday, 03 December 2013 03:04 posted by ugg ブーツ ランキング

    UGG Australia is actually your country of origin along with Australian manufacturers have in order to do these boots made 鈥嬧€媐or decades, which also contains sold in your United States, should become your common name UGG, UGG Australia, your Court upheld a commodity common name of practice .
    ugg ブーツ ランキング http://www.doremo.jp/ugg41403.html

    Report
  • Comment Link ケアンズ ugg 価格 Tuesday, 03 December 2013 03:04 posted by ケアンズ ugg 価格

    UGG Australia can be the actual country of origin as well as Australian manufacturers have for you to do these boots made 鈥嬧€媐or decades, which also contains sold in the actual United States, should become the actual common name UGG, UGG Australia, the actual Court upheld a new commodity common name of practice .
    ケアンズ ugg 価格 http://www.doremo.jp/ugg48654.html

    Report
  • Comment Link 韓国 ugg 2012 Tuesday, 03 December 2013 03:04 posted by 韓国 ugg 2012

    UGG Australia can be the actual country of origin as well as Australian manufacturers have in order to do these boots made 鈥嬧€媐or decades, which also contains sold in the actual United States, should become the actual common name UGG, UGG Australia, the actual Court upheld a new commodity common name of practice .
    韓国 ugg 2012 http://www.doremo.jp/ugg42853.html

    Report
  • Comment Link amazon real ugg boots Tuesday, 03 December 2013 03:04 posted by amazon real ugg boots

    UGG Australia is actually the actual country of origin and also Australian manufacturers have for you to do these boots made 鈥嬧€媐or decades, which also contains sold in the actual United States, should turn into the actual common name UGG, UGG Australia, the actual Court upheld the commodity common name of practice .
    amazon real ugg boots http://www.doremo.jp/ugg45930.html

    Report
  • Comment Link ugg ベビー靴 Tuesday, 03 December 2013 03:04 posted by ugg ベビー靴

    UGG Australia is actually your country of origin along with Australian manufacturers have for you to do these boots made 鈥嬧€媐or decades, which also contains sold in your United States, should grow to be your common name UGG, UGG Australia, your Court upheld a new commodity common name of practice .
    ugg ベビー靴 http://www.doremo.jp/ugg48512.html

    Report
  • Comment Link ugg 素材 Tuesday, 03 December 2013 03:04 posted by ugg 素材

    UGG Australia can be the particular country of origin and Australian manufacturers have to do these boots made 鈥嬧€媐or decades, which also contains sold in the particular United States, should turn into the particular common name UGG, UGG Australia, the particular Court upheld a new commodity common name of practice .
    ugg 素材 http://www.doremo.jp/ugg39296.html

    Report
  • Comment Link duvetica sito ufficiale Tuesday, 03 December 2013 02:24 posted by duvetica sito ufficiale

    I enjoy the efforts you have put in this, thanks for all the great content.

    Report
  • Comment Link woolrich Tuesday, 03 December 2013 02:04 posted by woolrich

    I really enjoy reading through on this web site, it holds great blog posts. "A short saying oft contains much wisdom." by Sophocles.

    Report
  • Comment Link ugg 5825 Tuesday, 03 December 2013 01:44 posted by ugg 5825

    UGG Australia is actually the actual country of origin and Australian manufacturers have to do these boots made 鈥嬧€媐or decades, which also contains sold in the actual United States, should grow to be the actual common name UGG, UGG Australia, the actual Court upheld a commodity common name of practice .
    ugg 5825 http://www.doremo.jp/ugg19529.html
    ugg 5825

    Report
  • Comment Link ugg fluffie Tuesday, 03 December 2013 01:44 posted by ugg fluffie

    UGG Australia can be your country of origin along with Australian manufacturers have to be able to do these boots made 鈥嬧€媐or decades, which also contains sold in your United States, should turn into your common name UGG, UGG Australia, your Court upheld a new commodity common name of practice .
    ugg fluffie http://www.doremo.jp/ugg25553.html
    ugg fluffie

    Report
  • Comment Link ugg ムートンブーツ メンズ Tuesday, 03 December 2013 01:44 posted by ugg ムートンブーツ メンズ

    UGG Australia will be the particular country of origin and also Australian manufacturers have in order to do these boots made 鈥嬧€媐or decades, which also contains sold in the particular United States, should grow to be the particular common name UGG, UGG Australia, the particular Court upheld the commodity common name of practice .
    ugg ムートンブーツ メンズ http://www.doremo.jp/ugg29934.html
    ugg ムートンブーツ メンズ

    Report
  • Comment Link 銀座 アグ Tuesday, 03 December 2013 01:44 posted by 銀座 アグ

    UGG Australia is actually the actual country of origin along with Australian manufacturers have to do these boots made 鈥嬧€媐or decades, which also contains sold in the actual United States, should grow to be the actual common name UGG, UGG Australia, the actual Court upheld the commodity common name of practice .
    銀座 アグ http://www.doremo.jp/ugg26051.html
    銀座 アグ

    Report
  • Comment Link アグ ダコタ Tuesday, 03 December 2013 01:44 posted by アグ ダコタ

    UGG Australia is your country of origin along with Australian manufacturers have in order to do these boots made 鈥嬧€媐or decades, which also contains sold in your United States, should turn out to be your common name UGG, UGG Australia, your Court upheld a commodity common name of practice .
    アグ ダコタ http://www.doremo.jp/ugg21085.html
    アグ ダコタ

    Report
  • Comment Link ugg アウトレット ロサンゼルス Tuesday, 03 December 2013 01:44 posted by ugg アウトレット ロサンゼルス

    UGG Australia is the actual country of origin and also Australian manufacturers have in order to do these boots made 鈥嬧€媐or decades, which also contains sold in the actual United States, should grow to be the actual common name UGG, UGG Australia, the actual Court upheld a new commodity common name of practice .
    ugg アウトレット ロサンゼルス http://www.doremo.jp/ugg28090.html
    ugg アウトレット ロサンゼルス

    Report
  • Comment Link アグ ムートンブーツ 値段 Tuesday, 03 December 2013 01:44 posted by アグ ムートンブーツ 値段

    UGG Australia will be the actual country of origin as well as Australian manufacturers have in order to do these boots made 鈥嬧€媐or decades, which also contains sold in the actual United States, should turn into the actual common name UGG, UGG Australia, the actual Court upheld a new commodity common name of practice .
    アグ ムートンブーツ 値段 http://www.doremo.jp/ugg16089.html
    アグ ムートンブーツ 値段

    Report
Login to post comments