Question for all of the Nostradamus’s on here

[Bugs]

It’s true that people want to benefit, but I think most people would prefer not to benefit at someone else’s expense. Just remember, the people who are overextended now are not being screwed by the people who now want the market to correct; they were screwed by the people who sold them their albatross. If you want to blame someone for the suffering of the FBs, Piggs are absolutely the last group of the someones who you should be looking at.

Your comment about how people were able to get themselves into this mess is practically a gimme. You imply the region was economically capable of supporting all those prices without artificial assistance. The problem with that suggestion is that current events are proving it to be completely unfounded.

Based on the number of ARMs that were used and the subsequent trends for default it has become obvious that a significant percentage of buyers who bought in 2004 and 2005 do NOT have such great jobs or earn the incomes necessary to sustain their purchases.

I don’t know when this trend will end and I’ve made no predictions beyond saying it isn’t going to happen in the next 2 years. The only reason I even go that far is because I have already seen a RE recession up close once before and I’ve seen what happens when there are a significant number of foreclosures in the market.

Price is a function of supply and demand. Use any measure you want – right now we have a lot more supply than the effective demand can absorb. Remember, “effective demand” goes beyond the number of people who simply want, and includes only those buyers who have both the desire and the financial means to achieve those desires. The normalization of the credit markets only serves to further reduce the number of would-be buyers who comprise that effective demand.

Before pricing can stablize the market has to achieve some level of equilibrium between the number of typically motivated listings vs. the rate of sales. That can’t happen when there are a lot of foreclosures available in the market, and all indications are that the stream of resale listings resulting from foreclosures will not recede below their current level until at least 2011.

The market has to absorb both the must-sell inventory and clear out all the excess wanna-sells before the number of available properties approaches the rate of sales. Once that happens and there are enough buyers to go around we’ll see price stabilization. It basically can’t happen before then.

That’s why I think that 2011 is the EARLIEST this trend can stabilize and we can go back into growth mode. The aggregate losses will be largely a function of the length of time multiplied by the current rate of decline that we’ve already seen. If the rate of decline speeds up the losses will be greater, if it slows down they’ll end up being less.

I was too optimistic in the early 1990s and called the end of that downtrend a couple years prior to when it actually occurred. I am a reasonably optimistic person by nature (I’m just not irrational about it), so it’s very possible that my opinion about 2011 being the earliest the market can turn may also turn out to be optimistic.

About the only way I can envision this decline being cut shorter than 2011 is if by artificial means. The most commonly touted artificial life preserver being bandied about right now if the taxpayers are compelled to bail out these investors and subsidize these foolish FBs. Aliens from outer space might come to Earth to give us the secret to clean power for free. The Rapture or it’s equivalent might happen and man may learn to live in peace without war or conflict.

But barring some unforseeable event changing the history of man, I’m just not seeing any shortcuts.

[lindismith]

Bugs Rocks!

[lindismith]

Bugs Rocks!

[lindismith]

Bugs Rocks!

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Bugs-

Nostradamus would be proud!

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Bugs-

Nostradamus would be proud!

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Bugs-

Nostradamus would be proud!

[sdrealtor]

Did someone say Nostradumbass?

[sdrealtor]

Did someone say Nostradumbass?

[sdrealtor]

Did someone say Nostradumbass?

[PerryChase]

Alex, you seem to have a split personality. Sometimes you are reasonable, and other times, you come off as an FB in trouble.

1) I’ve been calling people dumb for buying since 2002. When prices revert to those levels or below, they’ll see how dumb they were. Slaving all those years to pay for an overpriced house is not what anyone would call smart.

2) You can indefinitely rent a nice home in a nice neighborhood where you want to raise your kids. Kids don’t care how the house is financed (rent the house, or rent the money).

3) Life is about opportunity costs and making wise choice. Even if you can “afford” an overpriced house, you can also buy other things with that money — vacations, travel, saving for retirement, education, etc… People have been giving up a lot to own those mc mansions. Living prisoner of a cookie cutter house is no way to broaden one’s horizons and learn about the “real” life.

4) The majority of professional jobs in SD is based on venture money. When that easy money is gone, there’s be retrenchment and layoffs. What are the laid-off workers going to do?

5) Recessions are sure things. They always hit at the most inopportune moments. The best time to buy is when others are selling. Smart families save during the good times because the hard times do come around. Jobs are not forever and companies do come and go. I’m afraid that many professional families will be in for a nasty surprise.

6) Regardless of when the bottom will be, it’s dumb to buy when all signs indicate that the bottom is nowhere on the horizon. The alternative it to rent.

[PerryChase]

Alex, you seem to have a split personality. Sometimes you are reasonable, and other times, you come off as an FB in trouble.

1) I’ve been calling people dumb for buying since 2002. When prices revert to those levels or below, they’ll see how dumb they were. Slaving all those years to pay for an overpriced house is not what anyone would call smart.

2) You can indefinitely rent a nice home in a nice neighborhood where you want to raise your kids. Kids don’t care how the house is financed (rent the house, or rent the money).

3) Life is about opportunity costs and making wise choice. Even if you can “afford” an overpriced house, you can also buy other things with that money — vacations, travel, saving for retirement, education, etc… People have been giving up a lot to own those mc mansions. Living prisoner of a cookie cutter house is no way to broaden one’s horizons and learn about the “real” life.

4) The majority of professional jobs in SD is based on venture money. When that easy money is gone, there’s be retrenchment and layoffs. What are the laid-off workers going to do?

5) Recessions are sure things. They always hit at the most inopportune moments. The best time to buy is when others are selling. Smart families save during the good times because the hard times do come around. Jobs are not forever and companies do come and go. I’m afraid that many professional families will be in for a nasty surprise.

6) Regardless of when the bottom will be, it’s dumb to buy when all signs indicate that the bottom is nowhere on the horizon. The alternative it to rent.

[PerryChase]

Alex, you seem to have a split personality. Sometimes you are reasonable, and other times, you come off as an FB in trouble.

1) I’ve been calling people dumb for buying since 2002. When prices revert to those levels or below, they’ll see how dumb they were. Slaving all those years to pay for an overpriced house is not what anyone would call smart.

2) You can indefinitely rent a nice home in a nice neighborhood where you want to raise your kids. Kids don’t care how the house is financed (rent the house, or rent the money).

3) Life is about opportunity costs and making wise choice. Even if you can “afford” an overpriced house, you can also buy other things with that money — vacations, travel, saving for retirement, education, etc… People have been giving up a lot to own those mc mansions. Living prisoner of a cookie cutter house is no way to broaden one’s horizons and learn about the “real” life.

4) The majority of professional jobs in SD is based on venture money. When that easy money is gone, there’s be retrenchment and layoffs. What are the laid-off workers going to do?

5) Recessions are sure things. They always hit at the most inopportune moments. The best time to buy is when others are selling. Smart families save during the good times because the hard times do come around. Jobs are not forever and companies do come and go. I’m afraid that many professional families will be in for a nasty surprise.

6) Regardless of when the bottom will be, it’s dumb to buy when all signs indicate that the bottom is nowhere on the horizon. The alternative it to rent.

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sdrealtor-

that just gave me a good laugh!!

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sdrealtor-

that just gave me a good laugh!!

[Author]

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