[urbanrealtor]

Okay fine but honestly the Wire just rocks.

[urbanrealtor]

Okay fine but honestly the Wire just rocks.

[urbanrealtor]

[quote=peterb]I see way too much eagerness to buy on this site. And I would have thought it would have been more bearish. The sure sign of a bottom is improving fundementals with a high level of negative sentiment. Many people here are thinking that it’s “so cheap compared to where it was.”… Like that is how the market works. I heard the same thing about a year ago here. And this year the fundementals and outlook, are far worse!!!

So in my estimation, we’re still far away from it.[/quote]

The problem with what you are saying (and a problem with indicting “knifecatchers” in general) is that your are presenting this as a game in which the winners are the most effective and strategic market timers. That does not hold and here is why:

1
Many of the fundamentals are here now and performing nicely. Of course the usual caveats apply with regard to micro markets and unseen costs. However, cash buyers tend to be willing to get their feet wet at anything with a cap of over 6% (though that seems insanely low IMHO). The financed buyers tend to be okay with even lower ROE’s.

2
A tolerance for poor numbers is born out by the nature of the market in question. The housing market does not conform to most models (for sales of anything) currently at play in the US. This is due to the goods not being interchangeable, the actors’ inability to view the market dispassionately, relative lack of information (and ensuing opportunity cost) and the relatively high cost of purchase as a function of personal wealth. I mean seriously, how many people think about a house the same way they shop for groceries?

3
Negative sentiment is pretty widespread but the contrary nature of market watchers tends to mitigate that. I mean I have never dealt with more all-cash buyers than I am doing right now.
Chula Vista, Temecula, and the gnarliest parts of the downtown melt are seeing cash lurkers around every corner. Waiting for public sentiment to meet a particular threshold here may be a fools errand. Almost everyone who stops by one of my open houses comments that they are looking because things are now affordable to them.

Bottomline: timing a vital resource has some value when the resource seems intuitively over-priced, however, calling a bottom can be as productive as calling a top.

[urbanrealtor]

[quote=peterb]I see way too much eagerness to buy on this site. And I would have thought it would have been more bearish. The sure sign of a bottom is improving fundementals with a high level of negative sentiment. Many people here are thinking that it’s “so cheap compared to where it was.”… Like that is how the market works. I heard the same thing about a year ago here. And this year the fundementals and outlook, are far worse!!!

So in my estimation, we’re still far away from it.[/quote]

The problem with what you are saying (and a problem with indicting “knifecatchers” in general) is that your are presenting this as a game in which the winners are the most effective and strategic market timers. That does not hold and here is why:

1
Many of the fundamentals are here now and performing nicely. Of course the usual caveats apply with regard to micro markets and unseen costs. However, cash buyers tend to be willing to get their feet wet at anything with a cap of over 6% (though that seems insanely low IMHO). The financed buyers tend to be okay with even lower ROE’s.

2
A tolerance for poor numbers is born out by the nature of the market in question. The housing market does not conform to most models (for sales of anything) currently at play in the US. This is due to the goods not being interchangeable, the actors’ inability to view the market dispassionately, relative lack of information (and ensuing opportunity cost) and the relatively high cost of purchase as a function of personal wealth. I mean seriously, how many people think about a house the same way they shop for groceries?

3
Negative sentiment is pretty widespread but the contrary nature of market watchers tends to mitigate that. I mean I have never dealt with more all-cash buyers than I am doing right now.
Chula Vista, Temecula, and the gnarliest parts of the downtown melt are seeing cash lurkers around every corner. Waiting for public sentiment to meet a particular threshold here may be a fools errand. Almost everyone who stops by one of my open houses comments that they are looking because things are now affordable to them.

Bottomline: timing a vital resource has some value when the resource seems intuitively over-priced, however, calling a bottom can be as productive as calling a top.

[urbanrealtor]

[quote=peterb]I see way too much eagerness to buy on this site. And I would have thought it would have been more bearish. The sure sign of a bottom is improving fundementals with a high level of negative sentiment. Many people here are thinking that it’s “so cheap compared to where it was.”… Like that is how the market works. I heard the same thing about a year ago here. And this year the fundementals and outlook, are far worse!!!

So in my estimation, we’re still far away from it.[/quote]

The problem with what you are saying (and a problem with indicting “knifecatchers” in general) is that your are presenting this as a game in which the winners are the most effective and strategic market timers. That does not hold and here is why:

1
Many of the fundamentals are here now and performing nicely. Of course the usual caveats apply with regard to micro markets and unseen costs. However, cash buyers tend to be willing to get their feet wet at anything with a cap of over 6% (though that seems insanely low IMHO). The financed buyers tend to be okay with even lower ROE’s.

2
A tolerance for poor numbers is born out by the nature of the market in question. The housing market does not conform to most models (for sales of anything) currently at play in the US. This is due to the goods not being interchangeable, the actors’ inability to view the market dispassionately, relative lack of information (and ensuing opportunity cost) and the relatively high cost of purchase as a function of personal wealth. I mean seriously, how many people think about a house the same way they shop for groceries?

3
Negative sentiment is pretty widespread but the contrary nature of market watchers tends to mitigate that. I mean I have never dealt with more all-cash buyers than I am doing right now.
Chula Vista, Temecula, and the gnarliest parts of the downtown melt are seeing cash lurkers around every corner. Waiting for public sentiment to meet a particular threshold here may be a fools errand. Almost everyone who stops by one of my open houses comments that they are looking because things are now affordable to them.

Bottomline: timing a vital resource has some value when the resource seems intuitively over-priced, however, calling a bottom can be as productive as calling a top.

[urbanrealtor]

[quote=peterb]I see way too much eagerness to buy on this site. And I would have thought it would have been more bearish. The sure sign of a bottom is improving fundementals with a high level of negative sentiment. Many people here are thinking that it’s “so cheap compared to where it was.”… Like that is how the market works. I heard the same thing about a year ago here. And this year the fundementals and outlook, are far worse!!!

So in my estimation, we’re still far away from it.[/quote]

The problem with what you are saying (and a problem with indicting “knifecatchers” in general) is that your are presenting this as a game in which the winners are the most effective and strategic market timers. That does not hold and here is why:

1
Many of the fundamentals are here now and performing nicely. Of course the usual caveats apply with regard to micro markets and unseen costs. However, cash buyers tend to be willing to get their feet wet at anything with a cap of over 6% (though that seems insanely low IMHO). The financed buyers tend to be okay with even lower ROE’s.

2
A tolerance for poor numbers is born out by the nature of the market in question. The housing market does not conform to most models (for sales of anything) currently at play in the US. This is due to the goods not being interchangeable, the actors’ inability to view the market dispassionately, relative lack of information (and ensuing opportunity cost) and the relatively high cost of purchase as a function of personal wealth. I mean seriously, how many people think about a house the same way they shop for groceries?

3
Negative sentiment is pretty widespread but the contrary nature of market watchers tends to mitigate that. I mean I have never dealt with more all-cash buyers than I am doing right now.
Chula Vista, Temecula, and the gnarliest parts of the downtown melt are seeing cash lurkers around every corner. Waiting for public sentiment to meet a particular threshold here may be a fools errand. Almost everyone who stops by one of my open houses comments that they are looking because things are now affordable to them.

Bottomline: timing a vital resource has some value when the resource seems intuitively over-priced, however, calling a bottom can be as productive as calling a top.

[urbanrealtor]

[quote=peterb]I see way too much eagerness to buy on this site. And I would have thought it would have been more bearish. The sure sign of a bottom is improving fundementals with a high level of negative sentiment. Many people here are thinking that it’s “so cheap compared to where it was.”… Like that is how the market works. I heard the same thing about a year ago here. And this year the fundementals and outlook, are far worse!!!

So in my estimation, we’re still far away from it.[/quote]

The problem with what you are saying (and a problem with indicting “knifecatchers” in general) is that your are presenting this as a game in which the winners are the most effective and strategic market timers. That does not hold and here is why:

1
Many of the fundamentals are here now and performing nicely. Of course the usual caveats apply with regard to micro markets and unseen costs. However, cash buyers tend to be willing to get their feet wet at anything with a cap of over 6% (though that seems insanely low IMHO). The financed buyers tend to be okay with even lower ROE’s.

2
A tolerance for poor numbers is born out by the nature of the market in question. The housing market does not conform to most models (for sales of anything) currently at play in the US. This is due to the goods not being interchangeable, the actors’ inability to view the market dispassionately, relative lack of information (and ensuing opportunity cost) and the relatively high cost of purchase as a function of personal wealth. I mean seriously, how many people think about a house the same way they shop for groceries?

3
Negative sentiment is pretty widespread but the contrary nature of market watchers tends to mitigate that. I mean I have never dealt with more all-cash buyers than I am doing right now.
Chula Vista, Temecula, and the gnarliest parts of the downtown melt are seeing cash lurkers around every corner. Waiting for public sentiment to meet a particular threshold here may be a fools errand. Almost everyone who stops by one of my open houses comments that they are looking because things are now affordable to them.

Bottomline: timing a vital resource has some value when the resource seems intuitively over-priced, however, calling a bottom can be as productive as calling a top.

[urbanrealtor]

[quote=Bugs] Someone correct me if I’m wrong, but didn’t we get into this mess when too many people in 2003 and 2004 extrapolated recent trends and then made prediction based on those extrapolations?

Exactly, hence the value of looking at the recent trends within the context of the long term trends rather than using ant point in a single cycle as the reference point.

[/quote]
Good idea in theory. However, there are still a large number of people who have cash and have always wanted something that give a roi that is at or better than recommended and is a tangible non-paper asset.

How many of us have relatives or friends who comment about wishing they had cash so they could leverage a portfolio of rentals? Perhaps I see more of this due to my profession, but I am seeing a lot of this and seeing it reflected in the volume.

[urbanrealtor]

[quote=Bugs] Someone correct me if I’m wrong, but didn’t we get into this mess when too many people in 2003 and 2004 extrapolated recent trends and then made prediction based on those extrapolations?

Exactly, hence the value of looking at the recent trends within the context of the long term trends rather than using ant point in a single cycle as the reference point.

[/quote]
Good idea in theory. However, there are still a large number of people who have cash and have always wanted something that give a roi that is at or better than recommended and is a tangible non-paper asset.

How many of us have relatives or friends who comment about wishing they had cash so they could leverage a portfolio of rentals? Perhaps I see more of this due to my profession, but I am seeing a lot of this and seeing it reflected in the volume.

[urbanrealtor]

[quote=Bugs] Someone correct me if I’m wrong, but didn’t we get into this mess when too many people in 2003 and 2004 extrapolated recent trends and then made prediction based on those extrapolations?

Exactly, hence the value of looking at the recent trends within the context of the long term trends rather than using ant point in a single cycle as the reference point.

[/quote]
Good idea in theory. However, there are still a large number of people who have cash and have always wanted something that give a roi that is at or better than recommended and is a tangible non-paper asset.

How many of us have relatives or friends who comment about wishing they had cash so they could leverage a portfolio of rentals? Perhaps I see more of this due to my profession, but I am seeing a lot of this and seeing it reflected in the volume.

[urbanrealtor]

[quote=Bugs] Someone correct me if I’m wrong, but didn’t we get into this mess when too many people in 2003 and 2004 extrapolated recent trends and then made prediction based on those extrapolations?

Exactly, hence the value of looking at the recent trends within the context of the long term trends rather than using ant point in a single cycle as the reference point.

[/quote]
Good idea in theory. However, there are still a large number of people who have cash and have always wanted something that give a roi that is at or better than recommended and is a tangible non-paper asset.

How many of us have relatives or friends who comment about wishing they had cash so they could leverage a portfolio of rentals? Perhaps I see more of this due to my profession, but I am seeing a lot of this and seeing it reflected in the volume.

[urbanrealtor]

[quote=Bugs] Someone correct me if I’m wrong, but didn’t we get into this mess when too many people in 2003 and 2004 extrapolated recent trends and then made prediction based on those extrapolations?

Exactly, hence the value of looking at the recent trends within the context of the long term trends rather than using ant point in a single cycle as the reference point.

[/quote]
Good idea in theory. However, there are still a large number of people who have cash and have always wanted something that give a roi that is at or better than recommended and is a tangible non-paper asset.

How many of us have relatives or friends who comment about wishing they had cash so they could leverage a portfolio of rentals? Perhaps I see more of this due to my profession, but I am seeing a lot of this and seeing it reflected in the volume.

[urbanrealtor]

I have a possible reason that reflects my current cynicism with much of the managed rental pool in town. Your unit may be one the management company considers to be at high risk of foreclosure.

If the property gets repo’d, the tenant’s deposit (if held by the original landlord) is gone and the tenant may ask the management company to cover it. Also, the management fees may end up delinquent and unrecoverable.

I recently saw management company freeze a landlord’s account when the NOD showed up. They announced that they would be escrowing the deposit for return to the renter if the property was taken by the bank. This is not just altruism. Some of these situations end up in court.

[urbanrealtor]

I have a possible reason that reflects my current cynicism with much of the managed rental pool in town. Your unit may be one the management company considers to be at high risk of foreclosure.

If the property gets repo’d, the tenant’s deposit (if held by the original landlord) is gone and the tenant may ask the management company to cover it. Also, the management fees may end up delinquent and unrecoverable.

I recently saw management company freeze a landlord’s account when the NOD showed up. They announced that they would be escrowing the deposit for return to the renter if the property was taken by the bank. This is not just altruism. Some of these situations end up in court.

[urbanrealtor]

I have a possible reason that reflects my current cynicism with much of the managed rental pool in town. Your unit may be one the management company considers to be at high risk of foreclosure.

If the property gets repo’d, the tenant’s deposit (if held by the original landlord) is gone and the tenant may ask the management company to cover it. Also, the management fees may end up delinquent and unrecoverable.

I recently saw management company freeze a landlord’s account when the NOD showed up. They announced that they would be escrowing the deposit for return to the renter if the property was taken by the bank. This is not just altruism. Some of these situations end up in court.

[Author]

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