Last week, I began to discuss why the San Diego housing market’s oft-foretold soft landing is something less than the shoo-in that everyone thinks.
The definition of “soft landing” is a bit of a moving target. At best, the soft landing will be a period of 5-percent-or-so appreciation before home prices really start to take off again. At worst, it is to consist of several years in which home prices remain flat until incomes grow enough to render housing affordable once more.
The entire spectrum of soft-landing predictions are predicated on the idea that past housing booms have been followed by price flatness — unless, that is, economic times got so hard that many people were forced to sell their homes.
The essence of the problem with this analysis is that it completely fails to account for the fact that we’ve just been through the mother of all housing booms.
read more at voiceofsandiego.org
I heard this on BBC radio
I heard this on BBC radio the other day, let’s see if I can remember the quote correctly: “recession is the period where the excesses of the previous boom are corrected”
Great article, Rich.
We seem
Great article, Rich.
We seem to be at that Wile Coyote moment where he has dashed headlong off a cliff but gravity has not yet taken hold because he has stubbornly refused to acknowledge it’s existence.
Market psychology is a fascinating thing.
Beep! Beep!
HA!
HA!
I don’t think that we should
I don’t think that we should be looking at this as a one item event.
Its all interlinked to banks, stock market, interest rates, unemployment etc.
If foreigners stop buying our bonds, interest rates will climb (You can’t blame Bernanke, he’s pushing on a string)
A real bad stock market drop could vaporize the mutual funds market.
Earthquake anybody (aren’t we about due)?
There is no fear yet just a lot of inventory.
There are some great books
There are some great books out on real estate cycles, and what we’re looking is the tail end of the 18 year cycle, the last time it was around was in the late 1980s. So, it makes sense there’ll be a correction. How big is another question, and that is the unknown that is scary.
rona