Mortgage broker predicts further collapse in housing

[davelj]

[quote=4plexowner]
There have been enough financial bubbles on this planet that we can have high confidence that once a bubble bursts, these things will happen:

1. prices will fully retrace to the level where the bubble started[/quote]

This isn’t correct. What we can be “highly confident” of is that prices will retrace to the MEAN long-term trend based on fundamentals. SOMETIMES prices themselves fully retrace to the level where the bubble started, but this is not the norm. See Grantham’s analysis for more data.

[quote=4plexowner]
2. prices will likely overshoot to the downside[/quote]

Yes, prices GENERALLY overshoot to the downside, but this doesn’t happen all the time and can’t be counted on. Again, see Grantham’s analysis of the last 29 asset bubbles for more information.

[quote=4plexowner]
3. the asset category involved will be avoided until people have forgotten the pain of the burst bubble[/quote]

Probably. Historically this has generally been true, but it’s not axiomatic. Plenty of folks still drool over tech stocks despite all the carnage.

The only thing we can say for certain about bubbles bursting is that the long-term trend is re-established… eventually. Everything else – over-correction, etc. – is possible, but far from a certainty.

As I like to say whenever I read a post suggesting certain things “will” [happen], “You seem more certain of everything than I am of anything.”

[Anonymous]

The author in this article is from Chicago. There is a Psychiatric condition called SAD (Seasonal Affective Disorder). If you lived in San Diego your whole life you have no idea what it is like to have sunsets at 3:30PM like they have in Chicago. Illinois just joint the list of the hammered markets. You CANNOT even consider or put any stock in the fact that San Diego is at the same levels. We are suffering a lack of inventory for people that ready willing and able to buy. I have a consistent 30 and can only close 5 any given month.
Our market will not fall an additional 17%.

[Anonymous]

The author in this article is from Chicago. There is a Psychiatric condition called SAD (Seasonal Affective Disorder). If you lived in San Diego your whole life you have no idea what it is like to have sunsets at 3:30PM like they have in Chicago. Illinois just joint the list of the hammered markets. You CANNOT even consider or put any stock in the fact that San Diego is at the same levels. We are suffering a lack of inventory for people that ready willing and able to buy. I have a consistent 30 and can only close 5 any given month.
Our market will not fall an additional 17%.

[Anonymous]

The author in this article is from Chicago. There is a Psychiatric condition called SAD (Seasonal Affective Disorder). If you lived in San Diego your whole life you have no idea what it is like to have sunsets at 3:30PM like they have in Chicago. Illinois just joint the list of the hammered markets. You CANNOT even consider or put any stock in the fact that San Diego is at the same levels. We are suffering a lack of inventory for people that ready willing and able to buy. I have a consistent 30 and can only close 5 any given month.
Our market will not fall an additional 17%.

[Anonymous]

The author in this article is from Chicago. There is a Psychiatric condition called SAD (Seasonal Affective Disorder). If you lived in San Diego your whole life you have no idea what it is like to have sunsets at 3:30PM like they have in Chicago. Illinois just joint the list of the hammered markets. You CANNOT even consider or put any stock in the fact that San Diego is at the same levels. We are suffering a lack of inventory for people that ready willing and able to buy. I have a consistent 30 and can only close 5 any given month.
Our market will not fall an additional 17%.

[Anonymous]

The author in this article is from Chicago. There is a Psychiatric condition called SAD (Seasonal Affective Disorder). If you lived in San Diego your whole life you have no idea what it is like to have sunsets at 3:30PM like they have in Chicago. Illinois just joint the list of the hammered markets. You CANNOT even consider or put any stock in the fact that San Diego is at the same levels. We are suffering a lack of inventory for people that ready willing and able to buy. I have a consistent 30 and can only close 5 any given month.
Our market will not fall an additional 17%.

[Arraya]

Micheal Mekler I think you are suffering from SIUD(shadow inventory unawareness disorder). Don’t feel bad it is very common on this board. Turns out artificial scarcity does wonders for supply and demand. Coupled with the fact that the .gov took over 70%+ of the mortgage market means those two factors together keep the market from collapsing over night. On top of that, there is no engine for job growth, which means the pool of able buyers is dwindling.

It wont end well.

[Arraya]

Micheal Mekler I think you are suffering from SIUD(shadow inventory unawareness disorder). Don’t feel bad it is very common on this board. Turns out artificial scarcity does wonders for supply and demand. Coupled with the fact that the .gov took over 70%+ of the mortgage market means those two factors together keep the market from collapsing over night. On top of that, there is no engine for job growth, which means the pool of able buyers is dwindling.

It wont end well.

[Arraya]

Micheal Mekler I think you are suffering from SIUD(shadow inventory unawareness disorder). Don’t feel bad it is very common on this board. Turns out artificial scarcity does wonders for supply and demand. Coupled with the fact that the .gov took over 70%+ of the mortgage market means those two factors together keep the market from collapsing over night. On top of that, there is no engine for job growth, which means the pool of able buyers is dwindling.

It wont end well.

[Arraya]

Micheal Mekler I think you are suffering from SIUD(shadow inventory unawareness disorder). Don’t feel bad it is very common on this board. Turns out artificial scarcity does wonders for supply and demand. Coupled with the fact that the .gov took over 70%+ of the mortgage market means those two factors together keep the market from collapsing over night. On top of that, there is no engine for job growth, which means the pool of able buyers is dwindling.

It wont end well.

[Arraya]

Micheal Mekler I think you are suffering from SIUD(shadow inventory unawareness disorder). Don’t feel bad it is very common on this board. Turns out artificial scarcity does wonders for supply and demand. Coupled with the fact that the .gov took over 70%+ of the mortgage market means those two factors together keep the market from collapsing over night. On top of that, there is no engine for job growth, which means the pool of able buyers is dwindling.

It wont end well.

[Zeitgeist]

I agree with Arraya. Once the props get kicked out from under this false bottom, it will continue to drop. Not sure I am buying 2033 because I would expect technology to have some influence in the next 23 years that would impact housing and life styles, such as more robotic devices, DNA interventions to cure and keep people alive longer which will impact supply and demand. Back to the original point, although prices locally have risen somewhat, there is a huge inventory out there including commercial real estate. I am not sure how much more Congress will continue to play along with the administration, but strains are beginning to show already. The party is over.

[Zeitgeist]

I agree with Arraya. Once the props get kicked out from under this false bottom, it will continue to drop. Not sure I am buying 2033 because I would expect technology to have some influence in the next 23 years that would impact housing and life styles, such as more robotic devices, DNA interventions to cure and keep people alive longer which will impact supply and demand. Back to the original point, although prices locally have risen somewhat, there is a huge inventory out there including commercial real estate. I am not sure how much more Congress will continue to play along with the administration, but strains are beginning to show already. The party is over.

[Zeitgeist]

I agree with Arraya. Once the props get kicked out from under this false bottom, it will continue to drop. Not sure I am buying 2033 because I would expect technology to have some influence in the next 23 years that would impact housing and life styles, such as more robotic devices, DNA interventions to cure and keep people alive longer which will impact supply and demand. Back to the original point, although prices locally have risen somewhat, there is a huge inventory out there including commercial real estate. I am not sure how much more Congress will continue to play along with the administration, but strains are beginning to show already. The party is over.

[Zeitgeist]

I agree with Arraya. Once the props get kicked out from under this false bottom, it will continue to drop. Not sure I am buying 2033 because I would expect technology to have some influence in the next 23 years that would impact housing and life styles, such as more robotic devices, DNA interventions to cure and keep people alive longer which will impact supply and demand. Back to the original point, although prices locally have risen somewhat, there is a huge inventory out there including commercial real estate. I am not sure how much more Congress will continue to play along with the administration, but strains are beginning to show already. The party is over.

[Author]

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