Temperature Check for 2008 – Now how low do you think it will go?

[kewp]

Stan,

Roll the entire boom back to lowest point of the previous bust. Add a *ton* of inventory on top of that. Mix with high unemployment.

Thats why we think prices are going to overshoot on the way down.

I mean, when a towns economy can support a hundred families and there are two hundred homes, whats that going to do the cost of a house? Supply far, far exceeds demand.

[stansd]

Kewp,

I hope you are right. I fear you will be wrong. Time will tell.

Stan

[stansd]

Kewp,

I hope you are right. I fear you will be wrong. Time will tell.

Stan

[stansd]

Kewp,

I hope you are right. I fear you will be wrong. Time will tell.

Stan

[stansd]

Kewp,

I hope you are right. I fear you will be wrong. Time will tell.

Stan

[stansd]

Kewp,

I hope you are right. I fear you will be wrong. Time will tell.

Stan

[NotCranky]

Sdr, When I finally voice a firm prediction, it usually happens, even when I am not one of the experts on the topic. BTW gold will ABSOLUTELY peak closer to 2k than 1k before a sustained retreat. I’m serious.

I think one factor that may affect the overall decline is that by the time some properties are hitting their lows other properties will be selling for more than their comparables are sold for earlier on in the down trending portion of the cycle. So when this happens it softens the apparent declines of the later years. I think someone already said that, on this thread, and perhaps I am just rephrasing it. If this is “bat poop” crazy it “serves you all right”.

I do wonder how many houses in the last cycle had this effect.Not having been put strait already, I would have said the correction last time was about 40% when in actuuality it was around 17%. In 1997 I sold a house I bought in 1992 where the previous owner paid 40% more than I did for a 30% gain on my aquistion price.It was still under the previous owners price but only by approximately 10%.The market was in its trough, the 17% overall correction. Presumably the house was always bought and sold at market price.If that was my experience did it happen broadly or could it?

Wether it did or not I think this could happen for several reasons.
1)Some markets over correct early on.The later ones perhaps won’t over correct as much.

2)The bailouts could start to take effect more intensely further down the line?

3)Cash wielding “Vultures” buy houses low at the worst periods of the market, rent them, and slowly turn them back into the market to less “vulture” like buyers at higher prices when freer lending comes, as a bailout or otherwise.

I am pretty comfortable with my opinion that the overall market goes down approximately half as much as the hardest hit areas. After reading your opinions I think it is likely to go down a little more or less than that. Also for the above reasons the hardest hit areas are not going to be as hard hit as we might think they will be over the entire down trend of the cycle.So that brings me back to around 30- 35%. That last stuff I need to go study.

[NotCranky]

Sdr, When I finally voice a firm prediction, it usually happens, even when I am not one of the experts on the topic. BTW gold will ABSOLUTELY peak closer to 2k than 1k before a sustained retreat. I’m serious.

I think one factor that may affect the overall decline is that by the time some properties are hitting their lows other properties will be selling for more than their comparables are sold for earlier on in the down trending portion of the cycle. So when this happens it softens the apparent declines of the later years. I think someone already said that, on this thread, and perhaps I am just rephrasing it. If this is “bat poop” crazy it “serves you all right”.

I do wonder how many houses in the last cycle had this effect.Not having been put strait already, I would have said the correction last time was about 40% when in actuuality it was around 17%. In 1997 I sold a house I bought in 1992 where the previous owner paid 40% more than I did for a 30% gain on my aquistion price.It was still under the previous owners price but only by approximately 10%.The market was in its trough, the 17% overall correction. Presumably the house was always bought and sold at market price.If that was my experience did it happen broadly or could it?

Wether it did or not I think this could happen for several reasons.
1)Some markets over correct early on.The later ones perhaps won’t over correct as much.

2)The bailouts could start to take effect more intensely further down the line?

3)Cash wielding “Vultures” buy houses low at the worst periods of the market, rent them, and slowly turn them back into the market to less “vulture” like buyers at higher prices when freer lending comes, as a bailout or otherwise.

I am pretty comfortable with my opinion that the overall market goes down approximately half as much as the hardest hit areas. After reading your opinions I think it is likely to go down a little more or less than that. Also for the above reasons the hardest hit areas are not going to be as hard hit as we might think they will be over the entire down trend of the cycle.So that brings me back to around 30- 35%. That last stuff I need to go study.

[NotCranky]

Sdr, When I finally voice a firm prediction, it usually happens, even when I am not one of the experts on the topic. BTW gold will ABSOLUTELY peak closer to 2k than 1k before a sustained retreat. I’m serious.

I think one factor that may affect the overall decline is that by the time some properties are hitting their lows other properties will be selling for more than their comparables are sold for earlier on in the down trending portion of the cycle. So when this happens it softens the apparent declines of the later years. I think someone already said that, on this thread, and perhaps I am just rephrasing it. If this is “bat poop” crazy it “serves you all right”.

I do wonder how many houses in the last cycle had this effect.Not having been put strait already, I would have said the correction last time was about 40% when in actuuality it was around 17%. In 1997 I sold a house I bought in 1992 where the previous owner paid 40% more than I did for a 30% gain on my aquistion price.It was still under the previous owners price but only by approximately 10%.The market was in its trough, the 17% overall correction. Presumably the house was always bought and sold at market price.If that was my experience did it happen broadly or could it?

Wether it did or not I think this could happen for several reasons.
1)Some markets over correct early on.The later ones perhaps won’t over correct as much.

2)The bailouts could start to take effect more intensely further down the line?

3)Cash wielding “Vultures” buy houses low at the worst periods of the market, rent them, and slowly turn them back into the market to less “vulture” like buyers at higher prices when freer lending comes, as a bailout or otherwise.

I am pretty comfortable with my opinion that the overall market goes down approximately half as much as the hardest hit areas. After reading your opinions I think it is likely to go down a little more or less than that. Also for the above reasons the hardest hit areas are not going to be as hard hit as we might think they will be over the entire down trend of the cycle.So that brings me back to around 30- 35%. That last stuff I need to go study.

[NotCranky]

Sdr, When I finally voice a firm prediction, it usually happens, even when I am not one of the experts on the topic. BTW gold will ABSOLUTELY peak closer to 2k than 1k before a sustained retreat. I’m serious.

I think one factor that may affect the overall decline is that by the time some properties are hitting their lows other properties will be selling for more than their comparables are sold for earlier on in the down trending portion of the cycle. So when this happens it softens the apparent declines of the later years. I think someone already said that, on this thread, and perhaps I am just rephrasing it. If this is “bat poop” crazy it “serves you all right”.

I do wonder how many houses in the last cycle had this effect.Not having been put strait already, I would have said the correction last time was about 40% when in actuuality it was around 17%. In 1997 I sold a house I bought in 1992 where the previous owner paid 40% more than I did for a 30% gain on my aquistion price.It was still under the previous owners price but only by approximately 10%.The market was in its trough, the 17% overall correction. Presumably the house was always bought and sold at market price.If that was my experience did it happen broadly or could it?

Wether it did or not I think this could happen for several reasons.
1)Some markets over correct early on.The later ones perhaps won’t over correct as much.

2)The bailouts could start to take effect more intensely further down the line?

3)Cash wielding “Vultures” buy houses low at the worst periods of the market, rent them, and slowly turn them back into the market to less “vulture” like buyers at higher prices when freer lending comes, as a bailout or otherwise.

I am pretty comfortable with my opinion that the overall market goes down approximately half as much as the hardest hit areas. After reading your opinions I think it is likely to go down a little more or less than that. Also for the above reasons the hardest hit areas are not going to be as hard hit as we might think they will be over the entire down trend of the cycle.So that brings me back to around 30- 35%. That last stuff I need to go study.

[NotCranky]

Sdr, When I finally voice a firm prediction, it usually happens, even when I am not one of the experts on the topic. BTW gold will ABSOLUTELY peak closer to 2k than 1k before a sustained retreat. I’m serious.

I think one factor that may affect the overall decline is that by the time some properties are hitting their lows other properties will be selling for more than their comparables are sold for earlier on in the down trending portion of the cycle. So when this happens it softens the apparent declines of the later years. I think someone already said that, on this thread, and perhaps I am just rephrasing it. If this is “bat poop” crazy it “serves you all right”.

I do wonder how many houses in the last cycle had this effect.Not having been put strait already, I would have said the correction last time was about 40% when in actuuality it was around 17%. In 1997 I sold a house I bought in 1992 where the previous owner paid 40% more than I did for a 30% gain on my aquistion price.It was still under the previous owners price but only by approximately 10%.The market was in its trough, the 17% overall correction. Presumably the house was always bought and sold at market price.If that was my experience did it happen broadly or could it?

Wether it did or not I think this could happen for several reasons.
1)Some markets over correct early on.The later ones perhaps won’t over correct as much.

2)The bailouts could start to take effect more intensely further down the line?

3)Cash wielding “Vultures” buy houses low at the worst periods of the market, rent them, and slowly turn them back into the market to less “vulture” like buyers at higher prices when freer lending comes, as a bailout or otherwise.

I am pretty comfortable with my opinion that the overall market goes down approximately half as much as the hardest hit areas. After reading your opinions I think it is likely to go down a little more or less than that. Also for the above reasons the hardest hit areas are not going to be as hard hit as we might think they will be over the entire down trend of the cycle.So that brings me back to around 30- 35%. That last stuff I need to go study.

[kewp]

Stan,

I don’t know why you hope I’m right. The lion’s share of our economic growth over the last decade was dependent on phony equity from the real estate bubble. By the time it collapses its going to decimate communities, particularly ones that are over-dependent on that sector.

Its not going to matter if RE drops 80% if unemployment is at 20%, interest rates skyrocket and credit slows to a trickle. There won’t be enough buyers or renters around for all that cheap housing. Look at whats happening in Detroit and Cleveland, houses are just going to sit empty and abandoned in all but the most primo of locales.

Something I think *might* happen if our economy is resilient enough to handle the RE bust is that the huge surplus of empty commercial and residential property lures big businesses to setup shop in the IE.

Another possibility is the weak dollar combined with a huge glut of downtown condos makes SD a popular destination for rich foreigners to buy vacation properties.

[kewp]

Stan,

I don’t know why you hope I’m right. The lion’s share of our economic growth over the last decade was dependent on phony equity from the real estate bubble. By the time it collapses its going to decimate communities, particularly ones that are over-dependent on that sector.

Its not going to matter if RE drops 80% if unemployment is at 20%, interest rates skyrocket and credit slows to a trickle. There won’t be enough buyers or renters around for all that cheap housing. Look at whats happening in Detroit and Cleveland, houses are just going to sit empty and abandoned in all but the most primo of locales.

Something I think *might* happen if our economy is resilient enough to handle the RE bust is that the huge surplus of empty commercial and residential property lures big businesses to setup shop in the IE.

Another possibility is the weak dollar combined with a huge glut of downtown condos makes SD a popular destination for rich foreigners to buy vacation properties.

[kewp]

Stan,

I don’t know why you hope I’m right. The lion’s share of our economic growth over the last decade was dependent on phony equity from the real estate bubble. By the time it collapses its going to decimate communities, particularly ones that are over-dependent on that sector.

Its not going to matter if RE drops 80% if unemployment is at 20%, interest rates skyrocket and credit slows to a trickle. There won’t be enough buyers or renters around for all that cheap housing. Look at whats happening in Detroit and Cleveland, houses are just going to sit empty and abandoned in all but the most primo of locales.

Something I think *might* happen if our economy is resilient enough to handle the RE bust is that the huge surplus of empty commercial and residential property lures big businesses to setup shop in the IE.

Another possibility is the weak dollar combined with a huge glut of downtown condos makes SD a popular destination for rich foreigners to buy vacation properties.

[kewp]

Stan,

I don’t know why you hope I’m right. The lion’s share of our economic growth over the last decade was dependent on phony equity from the real estate bubble. By the time it collapses its going to decimate communities, particularly ones that are over-dependent on that sector.

Its not going to matter if RE drops 80% if unemployment is at 20%, interest rates skyrocket and credit slows to a trickle. There won’t be enough buyers or renters around for all that cheap housing. Look at whats happening in Detroit and Cleveland, houses are just going to sit empty and abandoned in all but the most primo of locales.

Something I think *might* happen if our economy is resilient enough to handle the RE bust is that the huge surplus of empty commercial and residential property lures big businesses to setup shop in the IE.

Another possibility is the weak dollar combined with a huge glut of downtown condos makes SD a popular destination for rich foreigners to buy vacation properties.

[Author]

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