The often asked question, when will housing bottom?

[Eugene]

Here’s my theory.

Typical deflation period of a speculative bubble is 3 years. That’s approximately how long it took NASDAQ to deflate (Feb ’00 to Sep ’02). That’s how long it took DOW to deflate in the beginning of the Great Depression (Jul ’29 to Apr ’32).

Entry-level houses don’t form extended bottoms. People get married and have kids all the time. Demand from new homebuyers is always there, as long as the price is right. Unlike in the 90’s, we’ll have a lot of must-sell supply from all the foreclosures. Low tier will quickly fall to 2001-2002 prices and switch to modest growth as soon as early 2009, in accordance with the 3-year rule.

Coastal/move-up market is in more trouble. Demand for move-up houses will progressively get worse. People who bought in 2003 and later will not be in any shape to move up. Many will get foreclosed upon and end up locked out of the housing market for a few years. In 2009-2011, 5/1 and neg-am ARM resets will flush the remaining holdouts.

Massive numbers of foreclosures will occur throughout 2008. After the foreclosure, you have to wait 3 years before you can get a FHA loan. In 2011 we will see a surge in demand from people who abandoned their houses in 2008 and chose to rent rather than leave the state.

[vizcaya]

Everyone has thier own way of predicting the bottom. I think it depends on the house,location, and inventory

My Method of predicting the bottom, is calculated using the following method:

My recent house was built in 1993, and sold for $200k. I assume a 3% increase appreciation per year. As of January 2008 the house should be priced around $290(with no real improvements added). The houses around me are currently being advertised at a average of $400k. The homes that have sold fast(bank owned fixers) have been priced at $350k.

In my neck of the woods, the bottom will be when prices come down to $300-$330. Not sure when that will be though. But thats the target price for me.

[vizcaya]

Everyone has thier own way of predicting the bottom. I think it depends on the house,location, and inventory

My Method of predicting the bottom, is calculated using the following method:

My recent house was built in 1993, and sold for $200k. I assume a 3% increase appreciation per year. As of January 2008 the house should be priced around $290(with no real improvements added). The houses around me are currently being advertised at a average of $400k. The homes that have sold fast(bank owned fixers) have been priced at $350k.

In my neck of the woods, the bottom will be when prices come down to $300-$330. Not sure when that will be though. But thats the target price for me.

[vizcaya]

Everyone has thier own way of predicting the bottom. I think it depends on the house,location, and inventory

My Method of predicting the bottom, is calculated using the following method:

My recent house was built in 1993, and sold for $200k. I assume a 3% increase appreciation per year. As of January 2008 the house should be priced around $290(with no real improvements added). The houses around me are currently being advertised at a average of $400k. The homes that have sold fast(bank owned fixers) have been priced at $350k.

In my neck of the woods, the bottom will be when prices come down to $300-$330. Not sure when that will be though. But thats the target price for me.

[vizcaya]

Everyone has thier own way of predicting the bottom. I think it depends on the house,location, and inventory

My Method of predicting the bottom, is calculated using the following method:

My recent house was built in 1993, and sold for $200k. I assume a 3% increase appreciation per year. As of January 2008 the house should be priced around $290(with no real improvements added). The houses around me are currently being advertised at a average of $400k. The homes that have sold fast(bank owned fixers) have been priced at $350k.

In my neck of the woods, the bottom will be when prices come down to $300-$330. Not sure when that will be though. But thats the target price for me.

[vizcaya]

Everyone has thier own way of predicting the bottom. I think it depends on the house,location, and inventory

My Method of predicting the bottom, is calculated using the following method:

My recent house was built in 1993, and sold for $200k. I assume a 3% increase appreciation per year. As of January 2008 the house should be priced around $290(with no real improvements added). The houses around me are currently being advertised at a average of $400k. The homes that have sold fast(bank owned fixers) have been priced at $350k.

In my neck of the woods, the bottom will be when prices come down to $300-$330. Not sure when that will be though. But thats the target price for me.

[gold_dredger_phd]

Housing in SoCal will bottom sometime after nuclear 9/11.

[gold_dredger_phd]

Housing in SoCal will bottom sometime after nuclear 9/11.

[gold_dredger_phd]

Housing in SoCal will bottom sometime after nuclear 9/11.

[gold_dredger_phd]

Housing in SoCal will bottom sometime after nuclear 9/11.

[gold_dredger_phd]

Housing in SoCal will bottom sometime after nuclear 9/11.

[Bugs]

I don’t know when it will bottom out but I do know when it won’t bottom out: 2008-2009.

[Bugs]

I don’t know when it will bottom out but I do know when it won’t bottom out: 2008-2009.

[Bugs]

I don’t know when it will bottom out but I do know when it won’t bottom out: 2008-2009.

[Bugs]

I don’t know when it will bottom out but I do know when it won’t bottom out: 2008-2009.

[Author]

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