I think you greatly overestimate the number of PRs out there and you greatly underestimate how smart the average PR is. Most of the PRs are bearish because that’s what makes sense in the current market given the current relationships between rents and prices, not because they’re afraid or stupid. They recognize that, unlike sales prices, rents are directly related and to and dependent upon wages and population trends and therefore have a definite ceiling regardless of sales prices. Unless the wages go up, the rents basically can’t increase that much. This is evidenced by the fact that they basically haven’t increased that much in relation to everything else.
PRs are watching the sales volumes and the inventories, because they know that those are the relevant numbers to watch, not the sales prices themselves or the medians. Trees and forests. A lot of the tree-inspection that goes on here is done primarily in the name of entertainment value. The health of the forest is already well-establihsed and therefore not worthy of debate, let alone discussion.
What this means is that many of the current bears are probably going to go shopping while the bulls are still trying to figure out how to create a new credit identity to escape the poor decisions they made during the last few years. You could say the bear of 2007 will be the bull of the future and vice-versa.
