I too welcome the other side of the argument, but would like some numbers to back it up. Just having my own opinion reinforced will not make me any money. The only thing that makes me nervous at all about my view of a 30% drop that has begun, is that I am so sure of it.
My best trades as a trader are always the ones I am the most nervous about. Whenever I have been sure I was right, I have gotten my …. handed to me.
I do completely agree, that the long term prices of real estate are ever upward. However, just from an analysis standpoint I would challenge the bulls to point out one parabolic price move in any asset class ( you can name it ) that corrected sideways during the ensuing correction.
I have yet to find one, and I do not think we are in the midst of one in RE. For those that are new here, I have a good chunk of money in relatively liquid places waiting for a buy spot. That chunk is well into 7 figures, so do not target me as someone who cannot afford to buy a home. You can classify me as someone who is trying to time the market though. That is exactly what I am trying to do.
Timing markets is what I do for a living, and sometimes I am wrong. I am not so cocky as to think that I have the holy grail model for doing this. As a result, I absolutely welcome the bull side. If there is something I have overlooked I would openly consider it.
I am looking in the 1.5 range so mis timing that by 30% is 500k, and that is not chump change, so I wait patiently as a renter for now. I have bought and sold a few homes in the last 10 years, the last sale being at the end of 05.
It does seem to me just anecdotally, that things have changed dramatically in RE in just the last few months. It does feel like the tide is turning, and the numbers do support it. There are 3 major high rise buildings coming out of the ground in Irvine, with not one single pre-leased tenant combined in them. This is unprecedented. The standard would be about 50%. I am sure the appraisers could comment on this better than I can. Although this is commercial, the two are tied together at the hip. This is a topping sign, raw speculation. Two of them are Irvine Co. developments, so it makes it a little better than if it were anyone else because they have no carrying costs.
The comments on Greenspan made by Rich are the correct ones regarding the 2000 top.
