[quote=Navydoc]I’m not sure condescending is quite the right word, but the way we use the term implies someone who believes the market has bottomed despite overwhelming evidence to the contrary.

There may actually be nothing wrong with being a knife catcher in real estate in the future. Every person who buys an automobile, unless it’s a rare collector car, is buying a depreciating asset. I have a feeling that someday we may start to view buying a home as more similar to buying a car.[/quote]

I agree actually.
Very much.
I am currently helping a friend look at places in 92126. It is currently the best selection of development in a small geographic where the market is one of the most perfect.
By perfect I mean that there are lots of houses with identical floorplans and relatively large percentage of distress sales. That means that you are dealing with a Wal-Mart effect. I have good insurance but deal with all my optical at Wal-Mart because they are dramatically cheaper than Kaiser (not interested in hearing your opinion on Kaiser).
When making offers there (Mira Mesa), I just take the lowest comp (usually a model match) and present it with my offer. Makes for a VERY buyer-centric market.

Whether or not my clients are fools for making offers is frankly irrelevant. They can totally afford a 30-year fixed and they can rent it out (should they need to down the road) for more than the price of mortgage.

They are getting a place they like which has the capacity to generate positive cash flow. I do not like to predicate value based on expectations of future profit, but these places are unlikely to continue to depreciate indefinitely. This is especially true considering their proximity to UCSD and positive cash flow capacity.