I’ve always said that the Fed/govt would do everything possible to bail out the big financial players, and I’ve always said that these manipulations would succeed at masking true prices *for awhile.* I even predicted the nationalization of the GSEs and the fact that they would be used to off-load risk from the private sector. Not once have I said that the manipuluations wouldn’t work, just that they wouldn’t work in the long run, and that they would end up causing more damage and would shift the costs from those who caused the crisis to those who had little or nothing to do with it, and who were trying to avoid it, altogether. Nothing has happened that would change my position on that.
It’s the long term that matters to me, and all of these bailouts have done nothing to fix the root of our problems. While you’re hyper-focused on housing in the NCC area, I’m looking at the bigger picture (contrary to what you’ve claimed, I’m the one with the open mind and open eyes, and I’m looking at the larger world and the ramifications of all these bailouts…you’re just focused on your little RE world in NCC).
While we’re at it, from 2006:
Comment by CA renter
2006-12-31 20:17:17
Let’s have a friendly wager.
I believe nominal prices will drop by 40% by 2010.
The only reason this won’t happen, IMHO, is if the PTB decide to bail everyone out via a “Ownership Society Tax Credit” or some such nonsense. Perhaps, we will enact trade barriers and require all business to buy at least 50% “Made in America” materials/services. Maybe the unions will pull themselves up by their boot straps and demand 200% wage increases for all. Maybe a new RTC is set up to offer those 40-year I/Os with principal only due upon sale of the home.
Barring all those things, I’ll bet you a bottle of wine (or beverage of your preference), not to exceed $50 (in today’s dollars) that prices will fall 40% by 2010.
Comment by CA renter
2007-06-30 04:33:39
Would like to see another predictions thread.
I’ll stick with my prediction from last year…YOY housing prices, nationally, will be down 10-15% by Dec 2007. There will likely be some type of (failed) bailout attempt, which will stem the foreclosures temporarily. Recession by Dec 2007. Foreclosures rise into 2008 & national prices drop an additional 10-15% by late 2008.
The credit markets will likely be volatile & I believe there will be periods when it looks like everything will collapse, then suddenly all will seem well as more money is injected into the system (from???). Each time the credit spigot gets turned back on, though, the loose periods will be shorter and shallower than before, IMHO. Very slowly, liquidity will dry up, but it will probably take years to totally unwind.
The bottom arrives no sooner than 2010-2012, with an emphasis on 2012 (or later).
Comment by CA renter
2006-10-11 23:07:46
Also agree with “waiting in LA”. The BIG year of the downturn will be 2008 or later *barring a bailout*. I think it will also go beyond 2012. There are demographic changes this time which will put downward pressure on prices for a long, long time to come.
