[EconProf]

BobS
Poway-seller may have it right.
If so, this is the kind of manipulative, semi-honest person that would be hell to go through escrow with. If I were a buyer, I’d automatically lower my offer to protect myself.

[EconProf]

BobS
Poway-seller may have it right.
If so, this is the kind of manipulative, semi-honest person that would be hell to go through escrow with. If I were a buyer, I’d automatically lower my offer to protect myself.

[EconProf]

BobS
Poway-seller may have it right.
If so, this is the kind of manipulative, semi-honest person that would be hell to go through escrow with. If I were a buyer, I’d automatically lower my offer to protect myself.

[EconProf]

BobS
Poway-seller may have it right.
If so, this is the kind of manipulative, semi-honest person that would be hell to go through escrow with. If I were a buyer, I’d automatically lower my offer to protect myself.

[EconProf]

BobS
Poway-seller may have it right.
If so, this is the kind of manipulative, semi-honest person that would be hell to go through escrow with. If I were a buyer, I’d automatically lower my offer to protect myself.

[EconProf]

BobS
Historically, V-shaped housing prices just have not happened. Not in the late 1970s runup, or the late 1980s runup, or the most recent one.
The reason is largely rooted in mass psychology–what Keynes called “animal spirits”. A buying frenzy needs to be fed by recent evidence that there is big money to be made by making the huge committment that buying real estate represents. That is why the upturn feeds upon itself–everyone can point to big profits all around them that they are missing out on unless they jump in. But consider the atmosphere at the bottom: everyone who bought in the last 3 years (or 4, or 5?) had their head handed to them. Real estate investing will be seen as only for the foolish. Renters will be the smartest guys in the room.
It is easy to say now that there will be lots of bottom-fishers to propel a quick rebound, but psychological factors explain why it seldom happens.

[EconProf]

BobS
Historically, V-shaped housing prices just have not happened. Not in the late 1970s runup, or the late 1980s runup, or the most recent one.
The reason is largely rooted in mass psychology–what Keynes called “animal spirits”. A buying frenzy needs to be fed by recent evidence that there is big money to be made by making the huge committment that buying real estate represents. That is why the upturn feeds upon itself–everyone can point to big profits all around them that they are missing out on unless they jump in. But consider the atmosphere at the bottom: everyone who bought in the last 3 years (or 4, or 5?) had their head handed to them. Real estate investing will be seen as only for the foolish. Renters will be the smartest guys in the room.
It is easy to say now that there will be lots of bottom-fishers to propel a quick rebound, but psychological factors explain why it seldom happens.

[EconProf]

BobS
Historically, V-shaped housing prices just have not happened. Not in the late 1970s runup, or the late 1980s runup, or the most recent one.
The reason is largely rooted in mass psychology–what Keynes called “animal spirits”. A buying frenzy needs to be fed by recent evidence that there is big money to be made by making the huge committment that buying real estate represents. That is why the upturn feeds upon itself–everyone can point to big profits all around them that they are missing out on unless they jump in. But consider the atmosphere at the bottom: everyone who bought in the last 3 years (or 4, or 5?) had their head handed to them. Real estate investing will be seen as only for the foolish. Renters will be the smartest guys in the room.
It is easy to say now that there will be lots of bottom-fishers to propel a quick rebound, but psychological factors explain why it seldom happens.

[EconProf]

BobS
Historically, V-shaped housing prices just have not happened. Not in the late 1970s runup, or the late 1980s runup, or the most recent one.
The reason is largely rooted in mass psychology–what Keynes called “animal spirits”. A buying frenzy needs to be fed by recent evidence that there is big money to be made by making the huge committment that buying real estate represents. That is why the upturn feeds upon itself–everyone can point to big profits all around them that they are missing out on unless they jump in. But consider the atmosphere at the bottom: everyone who bought in the last 3 years (or 4, or 5?) had their head handed to them. Real estate investing will be seen as only for the foolish. Renters will be the smartest guys in the room.
It is easy to say now that there will be lots of bottom-fishers to propel a quick rebound, but psychological factors explain why it seldom happens.

[EconProf]

BobS
Historically, V-shaped housing prices just have not happened. Not in the late 1970s runup, or the late 1980s runup, or the most recent one.
The reason is largely rooted in mass psychology–what Keynes called “animal spirits”. A buying frenzy needs to be fed by recent evidence that there is big money to be made by making the huge committment that buying real estate represents. That is why the upturn feeds upon itself–everyone can point to big profits all around them that they are missing out on unless they jump in. But consider the atmosphere at the bottom: everyone who bought in the last 3 years (or 4, or 5?) had their head handed to them. Real estate investing will be seen as only for the foolish. Renters will be the smartest guys in the room.
It is easy to say now that there will be lots of bottom-fishers to propel a quick rebound, but psychological factors explain why it seldom happens.

[EconProf]

BobS
Time lags explain this. You are approximately correct that the “bad times”, ie. recession and outflow of defense jobs was roughly 1990 – 93. The impact on housing took a while to sink in and be reflected in housing prices, rents, and “capitulation” by homeowners leading to the late peak in foreclosures your graph shows. Accordingly, housing prices were approximately flat in the mid-1990s, and only began their long ascent in about 1997 & 1998.
The lesson for today: Our decline will last a lot longer, and the bottom will be more of a flattening out for possibly an extended period of time. Don’t look for a V-shaped recovery. There will be plenty of time to pick through the debris.

[EconProf]

BobS
Time lags explain this. You are approximately correct that the “bad times”, ie. recession and outflow of defense jobs was roughly 1990 – 93. The impact on housing took a while to sink in and be reflected in housing prices, rents, and “capitulation” by homeowners leading to the late peak in foreclosures your graph shows. Accordingly, housing prices were approximately flat in the mid-1990s, and only began their long ascent in about 1997 & 1998.
The lesson for today: Our decline will last a lot longer, and the bottom will be more of a flattening out for possibly an extended period of time. Don’t look for a V-shaped recovery. There will be plenty of time to pick through the debris.

[EconProf]

BobS
Time lags explain this. You are approximately correct that the “bad times”, ie. recession and outflow of defense jobs was roughly 1990 – 93. The impact on housing took a while to sink in and be reflected in housing prices, rents, and “capitulation” by homeowners leading to the late peak in foreclosures your graph shows. Accordingly, housing prices were approximately flat in the mid-1990s, and only began their long ascent in about 1997 & 1998.
The lesson for today: Our decline will last a lot longer, and the bottom will be more of a flattening out for possibly an extended period of time. Don’t look for a V-shaped recovery. There will be plenty of time to pick through the debris.

[EconProf]

BobS
Time lags explain this. You are approximately correct that the “bad times”, ie. recession and outflow of defense jobs was roughly 1990 – 93. The impact on housing took a while to sink in and be reflected in housing prices, rents, and “capitulation” by homeowners leading to the late peak in foreclosures your graph shows. Accordingly, housing prices were approximately flat in the mid-1990s, and only began their long ascent in about 1997 & 1998.
The lesson for today: Our decline will last a lot longer, and the bottom will be more of a flattening out for possibly an extended period of time. Don’t look for a V-shaped recovery. There will be plenty of time to pick through the debris.

[EconProf]

BobS
Time lags explain this. You are approximately correct that the “bad times”, ie. recession and outflow of defense jobs was roughly 1990 – 93. The impact on housing took a while to sink in and be reflected in housing prices, rents, and “capitulation” by homeowners leading to the late peak in foreclosures your graph shows. Accordingly, housing prices were approximately flat in the mid-1990s, and only began their long ascent in about 1997 & 1998.
The lesson for today: Our decline will last a lot longer, and the bottom will be more of a flattening out for possibly an extended period of time. Don’t look for a V-shaped recovery. There will be plenty of time to pick through the debris.

[Author]

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