patrick.net

You’re implying that everyone would sell for a penny if pushed far enough. That itself ignores behavioral factors.

They will. I did not say how far though. :)

No, some people leave the market; just like we did on the way up.

We all have breaking points.

Wha!

Wolf Blizter on CNN is going to have a story on the HB sometime this hour.

It is far from useless.

It is not only useless, it is counter-productive. Why was demand booming when prices were skyrocketing? Why is demand plummeting when prices begin to drift downwards?

Again, one should not trust me on economics. Randy is the expert.

"It is not only useless, it is counter-productive. Why was demand booming when prices were skyrocketing? Why is demand plummeting when prices begin to drift downwards?"

We've either found the elusive Giffen Good or its another case of people with unrealistic expectations about future price growth.

Most likely the latter. We also see similar behavior amongst people during periods of hyper-inflation.

Randy,

If push comes to shove, people will abandon property they own, if the net present value of the property is at zero or negative. This will happen if the cost of maintenance is greater than the value derived from the property. We see it all the time with old computers and abandoned mines all the time. We may soon see it amongst condos with high HOA fees and high desert houses with 3 hour commutes and $600 cooling bills.

Well that characterization is rather subjective but what I meant to say is that particular mentality isn’t as scarce as you might think.

That mentality is WIDEspread. Actually, I want to become clueless as well. It should give me better sleep at night.

In the case of that 50% off house, the seller must have had totally unrealistic original expectations about the value of the property. NoVA houses have not dropped anywhere near 50%. I'm seeing 5 to 10% reductions on SFHs and THs, maybe up to 20% on condos, but the asking prices are still pretty high and decently priced houses (around April-May 2005 levels) are still moving okay.

pbass,

Hehe. First they get designated as money laundering operations for the North Koreans and now this. Not to mention all the under-secured debts to SOEs that they're never getting back. I almost feel sorry for these bloated (cuz half their job is getting boozed and dinned by borrowers) Chinese bankers.

astrid Says:

> I predict 2008 to 2012 will be good years to buy exotic
> vacations and slightly used European handbags/cars
> with cash.

I wonder if any of the Junior League SF gals that bought $9K Hermes Birkin Bags (many JLSF gals have more than one) with cash from HELOCs will try and sell to save their homes from foreclosure?

http://tinyurl.com/f2qx8

Again, one should not trust me on economics. Randy is the expert.

**Disclaimer: Randy is not an expert, just well researched and opinionated. Always consult a licensed expert before you make a financial decision.

"**Disclaimer: Randy is not an expert, just well researched and opinionated. Always consult a licensed expert before you make a financial decision."

Egad! Licensed economists? Next thing I know, we're going to have a philosophers' strike on our hands.

In the spirit of really OTness, I bring you a link to eBay's guide to buying Hermes bags.

http://tinyurl.com/enleb

I like Hermes perfumes. But paying more than $1,000 for a bag seems pretty insane. I guess the secret is to get a sugardaddy to buy that stuff for you a la Carrie Bradshaw.

Not that I'd pay more than $250 for a bag. For my purposes, a man-purse is much more practical.

http://www.fatiguesarmynavy.com/store/item/FA1955

Apologies to all for going really really OT.

My crystal ball says property taxes will no longer be deductable off your federal income tax. They will be tax credits! You will get dollar for dollar off your federal tax bill for property taxes paid. This will effectively transfer the cost of local government to the federal budget which is perfect since they have the printing press. The result will be a reduction in the cost of owning; thereby putting a floor under housing prices.

"They will be tax credits!"

I sure hope you're kidding. This is ALL we need right now. Plunge Protection Team Damage Control to the rescue!

If anything the pendelum is swinging the other way. You mean to tell me we don't subsidize home ownership enough already? If this is what we're counting on to prop up the RE market we're all screwed.

Conor,

Please count yourself (along with the only guy studying for CFA) among this "esteemed" crowd! I actually value ALL of the posters here opinions. Or I wouldn't be here.

When you work at home this is the closest thing you have to a "water cooler".

along with the only guy studying for CFA

Who is that?

speedingpullet Says:

"Wolf Blizter on CNN is going to have a story on the HB sometime this hour."
____

Ahh, sorry to burst YOUR bubble; however, his name is Wolf Cheese-Blintz, not Wolf Blitzer. That's Wolf CHEESE BLINTZ!

Thank you kind sir!

Peter P,

Giving the books a rest are we?

New Thread: Collateral Damage

you never know when a driver or crazed motorcyclist might come round a blind bend on your side of the road

OMG 8-O

This is why I will avoid undivided highways if at all possible.