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bmwman91
@
2012 May 14, 9:14am
In a rational world with a truly free market, you would be right.
However, what we have is a highly manipulated market controlled by large interests with a desire to keep prices as high as possible. Those large interests are ultimately sitting on a font of unlimited money (tax payers) and they can stall indefinitely, or until the entire nation implodes, in which case real estate is the last of anyone's concerns.
I doubt that anyone would argue against the logical reasons why housing prices have more to fall. However, in practice, it is unlikely that they will without some sort of larger implosion of the economy as a whole. Believe me, I would LOVE to see prices tank again as a prospective buyer, but I sort of doubt that they will. So, I focus on enjoying my life and the fact that I am financially secure with zero debt to my name.
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Here are some things I think seem true to me, but could be refuted by you geniuses.
If we have hit any bottom, we need a counterargument to the below. Please add to these negative pressure arguments as you think of more. I'd suggest we make an alternate list of bull arguments and see what we think looks most accurate as to where we are in this bubble:
Bear argument--
During the bubble:
There were 100s of thousands of consumers added to the pool of purchasers, due to easy credit and low underwriting standards.
There were more houses being built, adding to inventory now
There was lower unemployment, and now it’s very high
There were people who could have afforded houses that can no longer purchase any (due to foreclosure, credit damage, job loss or eviscerated savings)
There was irrational exuberance
There was a healthy (feeling) business environment, in Europe and in Asia too, adding to consumer strength and purchases of CDOs and MBS by sovereign wealth funds
People are trapped in houses due to underwater conditions; unable to relocate or move up
People are gun-shy, scared to take the plunge
Society is more mobile now; people may feel they need to move to get better jobs and feel that mortgages constrain them
The elderly will have houses to put on the market when they downsize, and there are millions of boomers that will
Retirement accounts have been neglected or drained, keeping people in the workforce longer (but concerned about savings, not home buying)
Deficit issues have made the idea of killing the MID or Fannie/Freddie a possibility
Wages haven’t kept up with much of anything, including inflation, driving down purchasing power
Deficit reduction obsessions dampen consumerism
Why would these conditions have changed in the last year or two, to the point where home prices would be turning around?
#housing