GN you are right, it usually overshoots and fear will play a role especially in my area where gas prices, traffic, distance to job centers, recent building (town doubled during the bubble), few established owners without a mortgage and the Murietta scandal/foreclosures are all serving to accelerate the local fear. The situation here is easily six months to a year ahead of San Diego.
But Rustico’s assertions about my strategy are spot on accurate probably because we have had discussions in the past about it. I am not trying to time the bottom, this is not my profession nor do I purport to be an expert. My strategy of waiting until rent/purchase ratios were inline as well as being inline with my own financial goals then it would be my time. It’s a simple way of approaching a complex market. A market that has often baffled experts and one that has way too many variables in it. My strategy has worked so far, I bowed out of the market in early 2006 and have been watching it fall without me. That was easy, the next part is hard. It is now where I wanted and expected it to be. If your chosen place had already fallen 20-25% you’d be in the same pickle. Do I decide on a target price or a target time. Does it matter if S.D. or O.C. hasn’t fallen yet? I will give it until the winter and re-evaluate but once the place you want hits the price you can comfortably afford the real confusion sets in.
Since this post just hit the official length of a diatribe, I’ll close with a Lao Tzu quote “There is nothing better than to know you don’t know”
