[youngster]

sdr, good insights and we appreciate that you continuously kept us updated.

[youngster]

Good comments sdr & gzz.

Real or perceived shifts in interest rates, economy, and institutional policy affect the short & long-term real estate market.

Days of inventory can be a trailing rather than leading factor of real estate market adjustments, since part of it is influenced by time delays such as default numbers.

[youngster]

“If the current economy was as sick as the 90s economy I would also jump on the 25 – 30% or more median price loss bandwagon.”

Well…I guess I’m an economy bear. Even with the current real estate/construction sector meltdown, my broken crystal ball says it has been a while since the last consumer-driven recession.

If housing is weak in the absence of recession, then it will be pummeled during recession – which is hard to avoid if the slowdown lasts several years.

It’s depressing if the 3 top sectors of additional jobs were in hospitality, government, & education. Maybe the government can balance us out of this one.

[youngster]

“If the current economy was as sick as the 90s economy I would also jump on the 25 – 30% or more median price loss bandwagon.”

Well…I guess I’m an economy bear. Even with the current real estate/construction sector meltdown, my broken crystal ball says it has been a while since the last consumer-driven recession.

If housing is weak in the absence of recession, then it will be pummeled during recession – which is hard to avoid if the slowdown lasts several years.

It’s depressing if the 3 top sectors of additional jobs were in hospitality, government, & education. Maybe the government can balance us out of this one.

[youngster]

Buy Now! Your return on the most expensive houses will be outrageous!!

Larger price appreciation means more room to drop. I consider the higher housing to rent prices to be an ownership bubble that will likely pop in depression. The unaffordability in these “superstar” cities has recently been causing people to take their money out of the areas rather than an influx. While the rich are getting richer, there are increasing fewer of them, so ultimately only the top property will show extreme appreciation.

I think the high end will fall the hardest, just as high end economic markets suffer the worst in recessions.

[youngster]

Buy Now! Your return on the most expensive houses will be outrageous!!

Larger price appreciation means more room to drop. I consider the higher housing to rent prices to be an ownership bubble that will likely pop in depression. The unaffordability in these “superstar” cities has recently been causing people to take their money out of the areas rather than an influx. While the rich are getting richer, there are increasing fewer of them, so ultimately only the top property will show extreme appreciation.

I think the high end will fall the hardest, just as high end economic markets suffer the worst in recessions.

[youngster]

Could be:

“Cardboard box and shelve thru 2012”

or

“Foreclosure and lien till 2013”

[youngster]

Could be:

“Cardboard box and shelve thru 2012”

or

“Foreclosure and lien till 2013”

[youngster]

“The next possible cycle low I see for RE is 2008, so it could be at that time that we see another swing down in stocks and up in RE as money shifts.”

Rich’s chart excludes the mini-rallies and mini-bottoms that Chris utilizes to shift money around, even though the overall markets may be headed opposite directions.

Though the American economy is weakening, there are many reasons to limit excessive investing abroad:
1) Foreign companies are dependant upon American consumers.
2) Foreign investors buy American T-bills and stocks, and American investment fuels the foreign markets.
3) Foreign countries will likely deflate their curriencies with the dollar.
4) Political instability.

When the American economy falls into recession, the globe will likey follow. Up to 20% foreign investments are good for diverification, but will not likely escape American decline.

[Author]

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