A question about foreclosures in the 90s

[EconProf]

BobS
Historically, V-shaped housing prices just have not happened. Not in the late 1970s runup, or the late 1980s runup, or the most recent one.
The reason is largely rooted in mass psychology–what Keynes called “animal spirits”. A buying frenzy needs to be fed by recent evidence that there is big money to be made by making the huge committment that buying real estate represents. That is why the upturn feeds upon itself–everyone can point to big profits all around them that they are missing out on unless they jump in. But consider the atmosphere at the bottom: everyone who bought in the last 3 years (or 4, or 5?) had their head handed to them. Real estate investing will be seen as only for the foolish. Renters will be the smartest guys in the room.
It is easy to say now that there will be lots of bottom-fishers to propel a quick rebound, but psychological factors explain why it seldom happens.

[an]

Just because it never happened before doesn’t mean it can’t happen now. If the scenario of price dropping another 50% in the next 3-4 years, then you can say CA RE never dropped 75% before, but it would be happening this time. One unprecedented event might cause another unprecedented event. Only time will tell. All I know is we’re in some unprecedented time right now. How often have you seen housing price drop 50% in 3 years?

[an]

Just because it never happened before doesn’t mean it can’t happen now. If the scenario of price dropping another 50% in the next 3-4 years, then you can say CA RE never dropped 75% before, but it would be happening this time. One unprecedented event might cause another unprecedented event. Only time will tell. All I know is we’re in some unprecedented time right now. How often have you seen housing price drop 50% in 3 years?

[an]

Just because it never happened before doesn’t mean it can’t happen now. If the scenario of price dropping another 50% in the next 3-4 years, then you can say CA RE never dropped 75% before, but it would be happening this time. One unprecedented event might cause another unprecedented event. Only time will tell. All I know is we’re in some unprecedented time right now. How often have you seen housing price drop 50% in 3 years?

[an]

Just because it never happened before doesn’t mean it can’t happen now. If the scenario of price dropping another 50% in the next 3-4 years, then you can say CA RE never dropped 75% before, but it would be happening this time. One unprecedented event might cause another unprecedented event. Only time will tell. All I know is we’re in some unprecedented time right now. How often have you seen housing price drop 50% in 3 years?

[an]

Just because it never happened before doesn’t mean it can’t happen now. If the scenario of price dropping another 50% in the next 3-4 years, then you can say CA RE never dropped 75% before, but it would be happening this time. One unprecedented event might cause another unprecedented event. Only time will tell. All I know is we’re in some unprecedented time right now. How often have you seen housing price drop 50% in 3 years?

[HLS]

Asian,
You’ve stated well what so many ppl don’t seem to understand !!
This probably ISN’T going to follow a predictable path of any previous cycle.
(Past performance is no guarantee of future performance, blah blah blah)

The BILLIONS of dollars of write downs and BILLIONS of dollars of bailout/intervention is ALREADY unprecedented.

Many ppl who THINK that they are going to “scoop up bargains” can buy whatever they want if they have all cash, but most people have no clue about knowing whether or not they will actually QUALIFY for a non owner occupied loan, even if they have 25%-30% down.

There are plenty of people with money, and the rich will get richer, but Johnny Lunchbucket who spouts off about buying 2 or 3 rental properties if prices get really cheap may be talking out of his “posterior” and may be unable to qualify to buy ONE property, much less 3.

Any idea how many people feel like expert flippers JUST BECAUSE they have watched FLIP THIS HOUSE or Goofball Montelongo who has a few lawsuits chasing him.

Prayer is the only hope that some people have.

[HLS]

Asian,
You’ve stated well what so many ppl don’t seem to understand !!
This probably ISN’T going to follow a predictable path of any previous cycle.
(Past performance is no guarantee of future performance, blah blah blah)

The BILLIONS of dollars of write downs and BILLIONS of dollars of bailout/intervention is ALREADY unprecedented.

Many ppl who THINK that they are going to “scoop up bargains” can buy whatever they want if they have all cash, but most people have no clue about knowing whether or not they will actually QUALIFY for a non owner occupied loan, even if they have 25%-30% down.

There are plenty of people with money, and the rich will get richer, but Johnny Lunchbucket who spouts off about buying 2 or 3 rental properties if prices get really cheap may be talking out of his “posterior” and may be unable to qualify to buy ONE property, much less 3.

Any idea how many people feel like expert flippers JUST BECAUSE they have watched FLIP THIS HOUSE or Goofball Montelongo who has a few lawsuits chasing him.

Prayer is the only hope that some people have.

[HLS]

Asian,
You’ve stated well what so many ppl don’t seem to understand !!
This probably ISN’T going to follow a predictable path of any previous cycle.
(Past performance is no guarantee of future performance, blah blah blah)

The BILLIONS of dollars of write downs and BILLIONS of dollars of bailout/intervention is ALREADY unprecedented.

Many ppl who THINK that they are going to “scoop up bargains” can buy whatever they want if they have all cash, but most people have no clue about knowing whether or not they will actually QUALIFY for a non owner occupied loan, even if they have 25%-30% down.

There are plenty of people with money, and the rich will get richer, but Johnny Lunchbucket who spouts off about buying 2 or 3 rental properties if prices get really cheap may be talking out of his “posterior” and may be unable to qualify to buy ONE property, much less 3.

Any idea how many people feel like expert flippers JUST BECAUSE they have watched FLIP THIS HOUSE or Goofball Montelongo who has a few lawsuits chasing him.

Prayer is the only hope that some people have.

[HLS]

Asian,
You’ve stated well what so many ppl don’t seem to understand !!
This probably ISN’T going to follow a predictable path of any previous cycle.
(Past performance is no guarantee of future performance, blah blah blah)

The BILLIONS of dollars of write downs and BILLIONS of dollars of bailout/intervention is ALREADY unprecedented.

Many ppl who THINK that they are going to “scoop up bargains” can buy whatever they want if they have all cash, but most people have no clue about knowing whether or not they will actually QUALIFY for a non owner occupied loan, even if they have 25%-30% down.

There are plenty of people with money, and the rich will get richer, but Johnny Lunchbucket who spouts off about buying 2 or 3 rental properties if prices get really cheap may be talking out of his “posterior” and may be unable to qualify to buy ONE property, much less 3.

Any idea how many people feel like expert flippers JUST BECAUSE they have watched FLIP THIS HOUSE or Goofball Montelongo who has a few lawsuits chasing him.

Prayer is the only hope that some people have.

[HLS]

Asian,
You’ve stated well what so many ppl don’t seem to understand !!
This probably ISN’T going to follow a predictable path of any previous cycle.
(Past performance is no guarantee of future performance, blah blah blah)

The BILLIONS of dollars of write downs and BILLIONS of dollars of bailout/intervention is ALREADY unprecedented.

Many ppl who THINK that they are going to “scoop up bargains” can buy whatever they want if they have all cash, but most people have no clue about knowing whether or not they will actually QUALIFY for a non owner occupied loan, even if they have 25%-30% down.

There are plenty of people with money, and the rich will get richer, but Johnny Lunchbucket who spouts off about buying 2 or 3 rental properties if prices get really cheap may be talking out of his “posterior” and may be unable to qualify to buy ONE property, much less 3.

Any idea how many people feel like expert flippers JUST BECAUSE they have watched FLIP THIS HOUSE or Goofball Montelongo who has a few lawsuits chasing him.

Prayer is the only hope that some people have.

[Author]

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