There are still alot of people that have it in their mind this is only a dip and the boom will resume. I was one of those people back in 2000 knowing my Ariba stock was going back up to 150 from 5. Right now any data point that is favorable to RE is being devoured. There has been a slight seasonal dip in inventory, on Wall Street you have Cramer with a blow horn screaming don’t listen to the HB CEO’s they are too doom and gloom, BUY BUY BUY. The money managers on Wall Street have a tendency to feast on novice shorts, they have made a nice meal of them lately. The soft landing argument is still fresh and alive even as these horrendous numbers show no sign of abating.
I saw where somebody posted the headlines on the last RE downturn from the LA Times, starting in 88 through about 96. You can see the reporting of many false starts during that downturn. I don’t anticipate this will be any different. Downturns are not totally linear, there will be months where sales will show a slight YOY increase then fizzle. Home prices in San Diego have dropped 9% since this time last year and they are currently dropping, thats about as much of a drop that you can get in an asset class like RE. And as everybody has pointed out we haven’t seen the full brunt of the ARM resets. This thing is far from over.
