[quote=waiting for bottom]
If rationalization is “I bought a house I like with the payment I can afford” then, yes, I have rationalized.
Seriously, you guys think there is no risk to timing the bottom? What do you think rates will do between now and then? I’ll give you a hint, not down.
Again – if my recent purchase falls 20% but rates go to 7.5%, I will have the same payment. There is equal – at best for your argument – chance of these happening. From my POV, 7.5% is a certainty, 20% down is not.[/quote]
I don’t think “rational” and “timing the bottom” could come together in the same sentence, since it is the seed for great disappointment.
Let me illustrate what I meant. The price bottom is determined the aggregate demands from the buyers as a group and the aggregate supplies from the sellers as a group. A bottom seeker has a price target of what it should be…and he might be very well correct in his maths. But the trouble is that the buyers as a group is not rational, the very fact that they criticize “knife catchers are always with us”, allows the buyers as a group to bid up the price to be higher than what a rational person think where the exact bottom price lies.
A true rational bottom price will only exist when all buyers in the market are rational. Therefore, the bottom price hunter who think themselves as very rational, will unavoidably be outbid every single time, as they have been. This is especially true in this cycle when the banks are more rational in their selling pricing strategy than a normal seller would be.
