Federal Reserve: No recovery without housing market recovery

mcc100

ILW wrote: »

I would have thought a recovery could be defined as an increase in activity, not necessarily an increase in prices.

Exactly. That is the reasoning behind my post that RenovationMan chose to ridicule.

HAMISH_MCTAVISH

ILW wrote: »

Depends if you class housing purely as an asset and ignore all other considerations. Some people actually buy houses primarily as a home rather than an investment.

Houses and land are assets. Some assets have utility value, but it
doesn't change the fact they're still assets.

Thrugelmir

HAMISH_MCTAVISH wrote: »

Houses and land are assets. Some assets have utility value, but it
doesn't change the fact they're still assets.

Prices in the US have fallen by a third in the past 2 years. With around 1.9 million foreclosures. So a different situation to the UK.

ILW

HAMISH_MCTAVISH wrote: »

Houses and land are assets. Some assets have utility value, but it
doesn't change the fact they're still assets.

Virtually everything with any value is an asset.

RenovationMan

ILW wrote: »

Some people actually buy houses primarily as a home rather than an investment.

True, but then these people do not speak in terms of [asset] 'recovery', they simply get on with enjoying their houses. As to the contrary argument, Hamish gave as good an example as I could come up with and so I don't need to comment further.

ILW

RenovationMan wrote: »

True, but then these people do not speak in terms of [asset] 'recovery', they simply get on with enjoying their houses. As to the contrary argument, Hamish gave as good an example as I could come up with and so I don't need to comment further.

So it is possible to have a recovery in the housing market with static or even falling prices. Just depends on who are buying and selling and why. An EA would say the market is recovering based on volume as that is how they earn their money.

HAMISH_MCTAVISH

ILW wrote: »

Virtually everything with any value is an asset.

A pint of milk has value.

It's not classed as an asset, but rather under the banner of consumable goods.

In very general terms, things like shares, bonds, land & houses, precious metals, diamonds, rare classic cars, fine art, etc, would be classed as assets.

Things like milk, bread, consumer electronics, clothing, petrol, stationary, etc, would be classed as consumable goods.

ILW

HAMISH_MCTAVISH wrote: »

A pint of milk has value.

It's not classed as an asset, but rather under the banner of consumable goods.

In very general terms, things like shares, bonds, land & houses, precious metals, diamonds, rare classic cars, fine art, etc, would be classed as assets.

Things like milk, bread, consumer electronics, clothing, petrol, stationary, etc, would be classed as consumable goods.

A balance sheet would have most of the above as an asset. HMRC would have something to say if cars and electronics were not listed. And all the others if they were held as stock for resale.

gingeralan

HAMISH_MCTAVISH wrote: »

I usually ignore such factually inaccurate nonsense, but OK, I'll bite this time.

Where do you think the money goes?

Gradually it makes it's way up the property ladder until it reaches someone wishing to downsize who will then gift it to their offspring to invest in another over priced house! A classic pyramid scheme. I will say that I have just bought myself but this is purely as I am fed up with waste of space landlords who seem unable or uninterested in sorting problems.

Thrugelmir

HAMISH_MCTAVISH wrote: »

A pint of milk has value.

It also has a variable price. That is effected by a number of factors.

More importantly though the source, i.e. a cow is an asset.