Timing the Bottom

[YokohamaCt]

“Stretch out the process of bottoming” – is that to say the prices are near bottoms, but just may stay at these levels for a few months/years? Or are you saying that the decline in prices will take longer and now rather than hitting a bottom in early-mid 2008 (for example), it may not happen until 2009 or 2010?

Would it be better to buy near the bottom, or miss the bottom and end up having to buy a bit higher?

[YokohamaCt]

“Stretch out the process of bottoming” – is that to say the prices are near bottoms, but just may stay at these levels for a few months/years? Or are you saying that the decline in prices will take longer and now rather than hitting a bottom in early-mid 2008 (for example), it may not happen until 2009 or 2010?

Would it be better to buy near the bottom, or miss the bottom and end up having to buy a bit higher?

[LA_Renter]

Here is a quote about the last downturn from Chapman I found on Lansners blog in the OC Register.

“The previous downturn in the housing market in the early 90’s was not short-lived. In Orange County, home prices declined for 54 months from the peak to the trough, decreasing 17.7 percent. It took another 51 months for the median price to reach back to its previous peak. A similar pattern occurred in many other regions of the state. Although there were significant job losses in the 90’s that sharply reduced demand for housing, in the current cycle, there is a different problem: a lack of housing affordability. Not only that, the job market is beginning to weaken considerably. The combination of these factors suggests that the county is facing a multi-year downward spiral in home prices.”

These things take a long time and they don’t bounce off the bottom like a stock. Regardless of any bailout I anticipate that 2008 will be toast, you will see falling prices all year with a possible exception this Spring where it may just go flat. The final shoe to drop in this housing bust is If we enter into, OR what degree of a Recession we encounter as a result of this mess. Pay attention to local job numbers. Here is my prediction of what the bottom will look like, it will be when RE becomes the most boring asset class in the world to watch and will be the furtherest thing from people’s minds.

[LA_Renter]

Here is a quote about the last downturn from Chapman I found on Lansners blog in the OC Register.

“The previous downturn in the housing market in the early 90’s was not short-lived. In Orange County, home prices declined for 54 months from the peak to the trough, decreasing 17.7 percent. It took another 51 months for the median price to reach back to its previous peak. A similar pattern occurred in many other regions of the state. Although there were significant job losses in the 90’s that sharply reduced demand for housing, in the current cycle, there is a different problem: a lack of housing affordability. Not only that, the job market is beginning to weaken considerably. The combination of these factors suggests that the county is facing a multi-year downward spiral in home prices.”

These things take a long time and they don’t bounce off the bottom like a stock. Regardless of any bailout I anticipate that 2008 will be toast, you will see falling prices all year with a possible exception this Spring where it may just go flat. The final shoe to drop in this housing bust is If we enter into, OR what degree of a Recession we encounter as a result of this mess. Pay attention to local job numbers. Here is my prediction of what the bottom will look like, it will be when RE becomes the most boring asset class in the world to watch and will be the furtherest thing from people’s minds.

[LA_Renter]

Here is a quote about the last downturn from Chapman I found on Lansners blog in the OC Register.

“The previous downturn in the housing market in the early 90’s was not short-lived. In Orange County, home prices declined for 54 months from the peak to the trough, decreasing 17.7 percent. It took another 51 months for the median price to reach back to its previous peak. A similar pattern occurred in many other regions of the state. Although there were significant job losses in the 90’s that sharply reduced demand for housing, in the current cycle, there is a different problem: a lack of housing affordability. Not only that, the job market is beginning to weaken considerably. The combination of these factors suggests that the county is facing a multi-year downward spiral in home prices.”

These things take a long time and they don’t bounce off the bottom like a stock. Regardless of any bailout I anticipate that 2008 will be toast, you will see falling prices all year with a possible exception this Spring where it may just go flat. The final shoe to drop in this housing bust is If we enter into, OR what degree of a Recession we encounter as a result of this mess. Pay attention to local job numbers. Here is my prediction of what the bottom will look like, it will be when RE becomes the most boring asset class in the world to watch and will be the furtherest thing from people’s minds.

[LA_Renter]

Here is a quote about the last downturn from Chapman I found on Lansners blog in the OC Register.

“The previous downturn in the housing market in the early 90’s was not short-lived. In Orange County, home prices declined for 54 months from the peak to the trough, decreasing 17.7 percent. It took another 51 months for the median price to reach back to its previous peak. A similar pattern occurred in many other regions of the state. Although there were significant job losses in the 90’s that sharply reduced demand for housing, in the current cycle, there is a different problem: a lack of housing affordability. Not only that, the job market is beginning to weaken considerably. The combination of these factors suggests that the county is facing a multi-year downward spiral in home prices.”

These things take a long time and they don’t bounce off the bottom like a stock. Regardless of any bailout I anticipate that 2008 will be toast, you will see falling prices all year with a possible exception this Spring where it may just go flat. The final shoe to drop in this housing bust is If we enter into, OR what degree of a Recession we encounter as a result of this mess. Pay attention to local job numbers. Here is my prediction of what the bottom will look like, it will be when RE becomes the most boring asset class in the world to watch and will be the furtherest thing from people’s minds.

[LA_Renter]

Here is a quote about the last downturn from Chapman I found on Lansners blog in the OC Register.

“The previous downturn in the housing market in the early 90’s was not short-lived. In Orange County, home prices declined for 54 months from the peak to the trough, decreasing 17.7 percent. It took another 51 months for the median price to reach back to its previous peak. A similar pattern occurred in many other regions of the state. Although there were significant job losses in the 90’s that sharply reduced demand for housing, in the current cycle, there is a different problem: a lack of housing affordability. Not only that, the job market is beginning to weaken considerably. The combination of these factors suggests that the county is facing a multi-year downward spiral in home prices.”

These things take a long time and they don’t bounce off the bottom like a stock. Regardless of any bailout I anticipate that 2008 will be toast, you will see falling prices all year with a possible exception this Spring where it may just go flat. The final shoe to drop in this housing bust is If we enter into, OR what degree of a Recession we encounter as a result of this mess. Pay attention to local job numbers. Here is my prediction of what the bottom will look like, it will be when RE becomes the most boring asset class in the world to watch and will be the furtherest thing from people’s minds.

[YokohamaCt]

Actually when it is the furthest thing from people’s minds that doesn’t correlate to the bottom. More often it is when everyone is saying how much further it will go down, how scared they are, etc etc.

But, perhaps this is the most interesting fact of them all.

Maybe the sign of the bottom is when our own humble and NASD-muted Professor Piggington’s OWN LANDLORD has defaulted on his loan! Yes, it’s true (as long as Piggington still lives in the same address as the NASD has on file).

In fact, one of Piggington’s neighbors tried to sell his place for 698,000-714,000 (5/2006), and it is currently active for $369,000, after buying it for $390,000 in 2004 (it previously sold for $199,000 in 2001). If this property is even comparable to Piggington’s, then the $670,000 mortgage on the place will be a short sale or REO very soon!

Oh, and lastly, the owner is also an Agent. Yes, the bottom is very near!

[YokohamaCt]

Actually when it is the furthest thing from people’s minds that doesn’t correlate to the bottom. More often it is when everyone is saying how much further it will go down, how scared they are, etc etc.

But, perhaps this is the most interesting fact of them all.

Maybe the sign of the bottom is when our own humble and NASD-muted Professor Piggington’s OWN LANDLORD has defaulted on his loan! Yes, it’s true (as long as Piggington still lives in the same address as the NASD has on file).

In fact, one of Piggington’s neighbors tried to sell his place for 698,000-714,000 (5/2006), and it is currently active for $369,000, after buying it for $390,000 in 2004 (it previously sold for $199,000 in 2001). If this property is even comparable to Piggington’s, then the $670,000 mortgage on the place will be a short sale or REO very soon!

Oh, and lastly, the owner is also an Agent. Yes, the bottom is very near!

[YokohamaCt]

Actually when it is the furthest thing from people’s minds that doesn’t correlate to the bottom. More often it is when everyone is saying how much further it will go down, how scared they are, etc etc.

But, perhaps this is the most interesting fact of them all.

Maybe the sign of the bottom is when our own humble and NASD-muted Professor Piggington’s OWN LANDLORD has defaulted on his loan! Yes, it’s true (as long as Piggington still lives in the same address as the NASD has on file).

In fact, one of Piggington’s neighbors tried to sell his place for 698,000-714,000 (5/2006), and it is currently active for $369,000, after buying it for $390,000 in 2004 (it previously sold for $199,000 in 2001). If this property is even comparable to Piggington’s, then the $670,000 mortgage on the place will be a short sale or REO very soon!

Oh, and lastly, the owner is also an Agent. Yes, the bottom is very near!

[YokohamaCt]

Actually when it is the furthest thing from people’s minds that doesn’t correlate to the bottom. More often it is when everyone is saying how much further it will go down, how scared they are, etc etc.

But, perhaps this is the most interesting fact of them all.

Maybe the sign of the bottom is when our own humble and NASD-muted Professor Piggington’s OWN LANDLORD has defaulted on his loan! Yes, it’s true (as long as Piggington still lives in the same address as the NASD has on file).

In fact, one of Piggington’s neighbors tried to sell his place for 698,000-714,000 (5/2006), and it is currently active for $369,000, after buying it for $390,000 in 2004 (it previously sold for $199,000 in 2001). If this property is even comparable to Piggington’s, then the $670,000 mortgage on the place will be a short sale or REO very soon!

Oh, and lastly, the owner is also an Agent. Yes, the bottom is very near!

[YokohamaCt]

Actually when it is the furthest thing from people’s minds that doesn’t correlate to the bottom. More often it is when everyone is saying how much further it will go down, how scared they are, etc etc.

But, perhaps this is the most interesting fact of them all.

Maybe the sign of the bottom is when our own humble and NASD-muted Professor Piggington’s OWN LANDLORD has defaulted on his loan! Yes, it’s true (as long as Piggington still lives in the same address as the NASD has on file).

In fact, one of Piggington’s neighbors tried to sell his place for 698,000-714,000 (5/2006), and it is currently active for $369,000, after buying it for $390,000 in 2004 (it previously sold for $199,000 in 2001). If this property is even comparable to Piggington’s, then the $670,000 mortgage on the place will be a short sale or REO very soon!

Oh, and lastly, the owner is also an Agent. Yes, the bottom is very near!

[(former)FormerSanDiegan]

Would it be better to buy near the bottom, or miss the bottom and end up having to buy a bit higher?

Answer: It is clearly the latter

Taking into account the time value of money, it’s better to buy after the initial stages of the upswing, than to try to buy when things are still going down. Your probability of experiencing further declines is much higher when prices are still declining. Once prices have made the turn positive, history shows that there is plenty of time to catch more upside.

[(former)FormerSanDiegan]

Would it be better to buy near the bottom, or miss the bottom and end up having to buy a bit higher?

Answer: It is clearly the latter

Taking into account the time value of money, it’s better to buy after the initial stages of the upswing, than to try to buy when things are still going down. Your probability of experiencing further declines is much higher when prices are still declining. Once prices have made the turn positive, history shows that there is plenty of time to catch more upside.

[(former)FormerSanDiegan]

Would it be better to buy near the bottom, or miss the bottom and end up having to buy a bit higher?

Answer: It is clearly the latter

Taking into account the time value of money, it’s better to buy after the initial stages of the upswing, than to try to buy when things are still going down. Your probability of experiencing further declines is much higher when prices are still declining. Once prices have made the turn positive, history shows that there is plenty of time to catch more upside.

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