The Great Turn Around of 2010

[an]

Talking about Country Fried, did you also catch the bottom when it hit 13-ish and bounced back hard to 20+ before pulling back to 18+ now? How about LEND when it bottomed out around 3 pop to 13+, bottom again @ 4 and now back to 10+? Man, if only my crystal ball was working at the time, I’d be buying my island by now :-D.

[NotCranky]

“They might be lucky unless they also bought in 1996″…. will 1995 do O.K? nearly 40% below what previous buyer paid. How about 1992 38% less than previous buyer paid….after sitting on hands for a few years. No lie An, even though I have a license, I stopped selling people houses after ….I am going to look it up…03-2004. I sold one condo after that but I swear I told the people they were nuts and that they should keep renting. They brought the deal to me because they owed me a favor for getting a 5k earnest money deposit back from an unscrupulous lender/agent combo by helping htem write letters.
I sold my last house in 03-2005 (except for the one I own free and clear thanks to not being able to time the market).
I will make you a deal. Let’s have lunch and I will break my anonymity to you and give you the proof of any of this that you want. I will bring my current clients who can tell you how long I have been telling them to play it safe. One sold and is renting. I refuse to sell houses to people who I deem cannot afford them. Yeah that’s wierd.
After I prove it, you let me sell you your next house. I will help you time the market, wether you can afford it or not will be your problem. If I am not telling the truth I will give you the entire commission on your next house, you time the market by yourself.
Please excuse any display of ill temper…I am in a foul mood.

[Bugs]

As far as I’m concerned everyone who concluded the local market had peaked within 9 months – in either direction – of 01/2006 should consider themselves to have been exactly correct. If you were a few months earlier than 03/2005 or a few months later than 09/2006 you were still doing really really well. Maybe not perfect but certainly not stupid either.

That’s the point – timing the market doesn’t require the accuracy of the 1000 meter shot through the right eye socket; anything in the 10-ring from 5 feet away works just as well. When the time comes your target will probably be in your sights for more than a year and the Piggs will be screaming “now, now, now – take the shot”.

[SD Realtor]

Lostcat I have noticed some deterioration of the thread so I thought I would post a comment hoping to bring it back to your thoughts.

I think that Shiloh’s post about Japan was VERY useful. Personally I have always thought that things would bottom out in 2010-2011 with at least a nice reduction of downside risk in the 09 timeframe. However I am getting more paranoid by the potential for intervention of some sorts that IMO will flatten out the slope of the decline. This adds a serious wild card that to me could indeed produce a long slow decline… one of many many years, 5 extra years? 10 extra years? I doubt it but I am starting to rethink things at least a little bit. For sure I do not see a V shaped sequence of events. I REALLY want the left side of the V to happen quicker but my fear is that it will not do that. Especially in the areas that I want to live in.

With that said I don’t think you need to be as concerned finding the bottom or which side of the recovery you end up on. What you really want to do is limit or reduce the downside of the purchase; thus minimize the depreciation potential.

Using factors such as sales volume will help to identify some degree of stability. When we get to the point where sales volumes at least match the yoy numbers for several months in a row then that will be helpful. In tandem with that, hopefully a consistent level of inventory will also need to be watched. Another ingredient will indeed be the number of distressed or potentially distressed properties that are in the queue.

Bugs said it best… looking for a year or a time to indicate the bottom is not essential. We all hope that 08 or 09 would be near the bottom like you said, but the real proof will be the indicators.

SD Realtor

[Anonymous]

How about LEND when it bottomed out around 3 pop to 13+, bottom again @ 4 and now back to 10+?

Man, that burns me up. I was too wuss (and a bit too bearish) each time to actually put some money into their stock. Would have been really nice though…

[an]

Totally agree Andy, I was in the same boat as you. I was watching it since the original crash that brought it to $3. That’s some serious profit in only a month.

Rustico, once again, near top/bottom is not top/bottom. Let me put it this way, you win. OK? I’m just an average Joe who can only determine trend but can’t call top/bottom for the life of me. Obviously, you’re much smarter than I. Please make a post with the title “Today is the bottom, buy now” when you think it is that day and I’ll be greatly appreciated. You’ll have my eternal gratitude.

“When the time comes your target will probably be in your sights for more than a year and the Piggs will be screaming “now, now, now – take the shot”.”
Bugs, I truly hope you’re right. Which would make this a V shape recovery. An L shape recovery I’d think would be much harder to call. Since I’m looking to retire before 65 and this is my first house, I’d really hope it’s a V shape recovery. This is my ticket to retirement :-).

[NotCranky]

Please make a post with the title “Today is the bottom, buy now” when you think it is that day and I’ll be greatly appreciated. You’ll have my eternal gratitude.

I am not saying I am smarter than you I just responded to your claims on one issue . IMHO real estate timing is fairly manageable. Enough of that.
The point is to understand that the probablity for success in improving your life with a certain purchase especially relative to the risk of the contrary is what matters. Risk management says you are doing the right thing by arguing RE topics rather than buying today and you have figured that out…you win.

[gold_dredger_phd]

If you want to get the absolute lowest price on real estate then wait until after the nuclear war with China/Russia/Pakistan/Iran (take your pick). I’ve got my lead suit ready and will drive my 4-wheeler out of its own spider hole and camp out in the best ruins in La Jolla. I should be able to get an excellent view of the crater from that vantage point.

You probably don’t even have to pay anything or even use a realtor!

[Anonymous]

Thing to remember about Japan is that they have a demographic issue we don’t share–a poppulation pyramid so far out of whack that their total population is decreasing as the post war generation shuffles off this mortal coil. While we have an aging population, our population is still at right around replacement level fertility.

[SHILOH]

Comparing China, which has gigantic underdeveloped rural areas and massive development/infrastructure needs, cannot be compared economically to the US, even though China’s rising economically, it’s not the same market.

[JWM in SD]

“Talking about Country Fried, did you also catch the bottom when it hit 13-ish and bounced back hard to 20+ before pulling back to 18+ now? How about LEND when it bottomed out around 3 pop to 13+, bottom again @ 4 and now back to 10+? Man, if only my crystal ball was working at the time, I’d be buying my island by now :-D.”

I didn’t short it, but rather bought long term $25 puts that quadrupled in value from original investment after having lost 2/3 of their value (bought too early). I didnt invest more than I was willing to lose though so I’m not a millionaire as result.

Nobody should beat themselves over not having become rich over this. Although it was predictable, the market was not behaving rationally and should have cratered 2 mos earlier than it did.

[LostCat]

JWM

JWM you’re freaking egotist. Get off the fact that you knew it was coming and that you predicted it. Everyone on this site has that figured out. That’s not what this site is for. You’re such a topper. I have a site for you to check out:

http://www.I-predicted-it-b-4-u.com

It’s a great site. It’s where a bunch of guys chat and talk about how they called it out first. You’d fit in well there. Have fun.

JWM AKA “THE TOPPER”

[Bugs]

AN,

I don’t think it makes all that much difference what shape the recovery takes. Obviously if its a V the timing will be more narrow and there will be a potential for a short term upside. However, even if it is a “U” of “L” shape if you are somewhere within 15% of the bottom your downpayment will mostly protect your position and you’ll still be able to control your housing costs over the long term. Back in the day that used to be the primary reason for buying.

Treating our homes like a lottery as a means of quitting our day jobs didn’t become fashionable until this generation.

[an]

Bugs, the only reason I say a “L” shape recovery is hard to call bottom because it might be a false bottom. Where it would stay flat for several months/years before taking another dive.

[NotCranky]

“the only reason I say a “L” shape recovery is hard to call bottom because it might be a false bottom. Where it would stay flat for several months/years before taking another dive.”

We absolutely have the thought about this possibility in common AN. Great minds think alike they say.I think most people think traditional cycle or something like Japan.

Edit: we could call this scenario “The little engine that couldn’t, then almost could and then couldn’t”.

[Author]

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