patrick.net

The people that are still holding out probably aren't much at liberty of taking the loss. That is to say, if you are living month to month and just scraping by to pay your monthly nut, thinking that peak prices are coming back (or needing a return much closer to peak levels to be solvent) you're not going to wake up tommorrow and say fuck it, just short sale the thing and be done with it. Just think of all that leverage that built up to get to the peak, do you really think we've worked thru that thus far? The boomers are oftened referred to as the "bulge in the python". The first boomers have barely begun to hit retirement age, this will be a tough pill to swallow for many. What has changed? We've used five more years worth of petroleum, piled on a ton more debt, and been lucky to have just semi-stabalized and slugged along. Now, you might anecdotally look at your own personal situation, or some of those in your sphere, and say things aren't that bad, we're doing good for ourselves. As a whole, the 315 million are still tapped, over worked, under paid, buried in debt and of negative net worth. You'd have to be insane to think that house price go up from here. Smells like a big fat trap to me.

Sorry for the tangent. I just don't believe there is this large swath of mortgage debtors watching for seasonal price spikes to escape. Then they'd be in the same shit situation and out on the street. Those people will squat it out as long as possible, return to lender, and the banks will lean on the tax payer to slowly bleed out the inventory. If they had to mark to market and realize these losses, how many are still solvent?

dunross,

The Fortress is "different". However, for the Rest of Us who are not in The Fortress, I think that the most likely outcome is not 'another down leg' but instead a very slow downward grind, year after year, etc., so slow and gradual that many will not recognize it for what is.

The next catalyst:

Well, I am working on one right now. I put a bird feeder into my apartment's back yard. The goal is to get TONS of birds to feed there. I will then work caffeine and laxatives into the feed so that they fly all over Mountain View, shitting on everything. Surely that will cause house prices to crater as all the people with expensive leased cars flee in terror from the white rain that could break the terms of their lease!

Alternatively, I could probably just gorge myself on super burritos for a week straight, overload the sewage system and drive everyone out once they cease to have functional septic infrastructure. It'll be a little messy, but worth picking up a 4/3 on a quarter acre in Mountain View for $100.

bmwman91 says

Well, I am working on one right now. I put a bird feeder into my apartment's back yard. The goal is to get TONS of birds to feed there. I will then work caffeine and laxatives into the feed so that they fly all over Mountain View, shitting on everything. Surely that will cause house prices to crater as all the people with expensive leased cars flee in terror from the white rain that could break the terms of their lease!

Alternatively, I could probably just gorge myself on super burritos for a week straight, overload the sewage system and drive everyone out once they cease to have functional septic functions. It'll be a little messy, but worth picking up a 4/3 on a quarter acre in Mountain View for $100.

MOST DESERVING UPVOTE, EVER! Five Thumbs Up!!

B.A.C.A.H. says

The Fortress is "different".

That can't be the case, that every other area, except the fortress goes back to fundamentals. If that was true, then, with each boom-bust cycle, the fortress would become more and more overpriced, relative to the other areas. History has shown, that this never happens. Quite, the contrary, with each boom-bust cycle, areas which were considered as a fortress before, evolve to become just ordinary neighborhoods, and areas which were ordinary become the fortress. Take Detroit, Cleveland, Houston and South Florida and others. All those areas were considered fortresses, in the past, and look at what happened to them, today. This is because, the govt can't inflate new bubbles in the industries which have already deflated. New industrial centers will rise out of the ashes of the bust, and they will not be the same as yesterday's fortresses.

Catalyst incubator;

http://sfbay.craigslist.org/sby/reo/3070271322.html

Banks, NAR, Government, and investors are in control of it, or so it seems to me sometimes. Time to clear inventory/carnage, as painlessly as possible for them of course. Home prices are moderating in the spring as they usually do, will we have another leg down, or are prices just north because of that. Looks like we might have to wait and see.

Rates are at record lows again, good time to try and pump the market up.