[pencilneck]

Your question reminded me of today’s Doonesbury (Sunday, August 6):

http://news.yahoo.com/comics/doonesbury

but more seriously, I think the real estate downturn will feel like rolling waves down, but on historic charts will look like a tsunami. Unlike a stock market crash, this will take a comparatively long time. Start date: July 2005.

[pencilneck]

Quote:The Federal Reserve Board estimates that homeowners have a net worth nearly 36 times more than that of renters.

I have always loved the argument that you are more likely to be wealthy if you own your own home.

Limosine owners have a net income of over 10 times the average income of those who use public transportation. Wouldn’t it make sense for everyone to purchase limosines as well?

[pencilneck]

Thanks lickity, great data (& link)! These numbers are mindbogling. I’ve been expecting this for a long time, but still can hardly believe how quickly the market has changed.

All-time low inventory March 2004
New all-time high inventory record set April 2006?

That is a freaking fast turn-around. Does anyone else have that sick feeling that you get at the top of a roller-coaster?

[pencilneck]

I started thinking about buying around 1999, but before buying I thought I would study real estate cycles for a year or so. By early 2001 I was convinced that we had reached the top of the market from a cyclical perspective.

I still believe that 2001 should have been the top of the market according to normal local real estate cycles. Of course the cycle was disrupted, but then no cyclical systems last for ever…

[pencilneck]

Yes, I suppose there could be over a longer time frame than I’m looking at. Scroll to the bottom of the link below for a look at some numbers:

http://rereport.com/sdc/main_sc.html

I have no idea how accurate this information is, but I like the format. Its too bad the data is listed over such a short timeframe..

[pencilneck]

Anyone please correct me if I’m wrong, but I wouldn’t think a direct correlation between number of sales and price should exist without bringing supply into the equation.

For example, over the last 50 years the price of gasoline has dropped (when adjusted for inflation) even though the sale of gasoline has increased greatly. This is due to more production, more competition, etc. However, small adjustments to the supply available creates large adjustments to the price. Changes in price will eventually create some adjustments to sales.

[pencilneck]

This answer isn’t much fun, but I believe the real estate crash will probably be blamed on and named after the “event” that causes it. For example, the stock market crash 0f 2001 is frequently blamed on 9-11 even though it began well before the world trade center attacks. People I work with go so far as to refer to the stock market crash as 9-11.

The Bird-flu-scare crash or Oil-shortage crash could be boring candidates, but you never know what the next cause will be blamed on.

I vote for the Tom-Hanks-didn’t-get-an-Oscar-this-year-because-the-Davinci-Code-sucked-induced-recession causing the real-estate market panic of 2007.

[pencilneck]

Word of the day regarding 4plexowner’s comment regarding the “got my head in the sand and everything’s fine” mentality:

Struthious- like an ostrich.

[pencilneck]

The large number of open house signs posted in North Park has receded substantially in the last month or so, after blossoming abundantly this spring.

Also, open house signs are no longer typically displayed mid-week as a few had been.

For Sale signs are still abundant in the neighborhood, but there has been a huge decrease in open house signage.

[pencilneck]

The end is near. Pistachio.

[pencilneck]

Pardon my attempt at humor.

I believe short replies such as the one provided by myself above are much more damaging to dialog than long replies. I read several financial and housing related blogs, and thanks to posters such as Powayseller, this is one of the best.

Thanks for giving us the opportunity to post here Rich.

[pencilneck]

I agree completely. Postings should consist of little more than either praise or condemnation of the prior post and a smarmy comment.

Two or three lines should cover it.

[pencilneck]

Their study is total BS of course. This question and answer segment from There Is No Housing Bubble came to mind. Very funny stuff:

http://www.thereisnohousingbubble.blogspot.com

Question: Prices have gone up so much in the last 5 years. I’m worried about buying at the peak and overpaying for a house. The house I’m considering is a fixer upper in North Oakland. It is 1100 sq. ft. and needs a new roof. The asking price is $675,000. What should I do?

Good question. First of all, remember, you can not over pay for a house. In fact, as I proved previously, the more you pay for the house the more money you’ll earn in the long run. I know some deluded renters are screaming at their monitors right now “that’s the stupidest thing I ever heard!” Here’s the proof. Let’s say you buy that house for 675K and we’ll be very very conservative and assume only 10% yearly appreciation instead of the industry standard 20%. After 10 years you’ll have a little over 1 million in equity (even if you negatively amortize a few hundred thousand you’re still sitting on a mountain of cash). Now, let’s say you aggressively bid 750K on this Oakland charmer. After 10 years at ONLY 10% appreciation on the higher price you’ll have over 1.2 million in profit. That’s right, you made an extra $200,000 by “overpaying” for that house. As the math above proves you can not make a mistake of overpaying for a home. In fact the only mistake would be passing on that cute Oakland home.

[pencilneck]

Thanks Poway, I didn’t realize that this had been discussed and at such length.

I read Bob’s article a few weeks ago but didn’t give it much thought. Last night I had what I thought was an epiphany, and it suddenly made sense how the median could keep going up. Upon re-reading Bob’s article, it now occurs to me that I am just reiterating his message in a clumsier language.

I’ll have to keep an eye on these epiphanies.

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