patrick.net

I concur with Peter P,

I'm less bearish by the following measure: I was biased much closer to a hard-landing than a soft-landing, assuming that there was a tipping point past which all hard-landings are equally as bad.

What I am now convinced of is that the "range of soft-landing" up to that tipping point is much wider than I initially thought. This is propelled by both fundamentals and financial reasons, not the least of which being (in the BA) wage inflation, rent inflation, and job growth.

I still think starter homes are in for a "harder" correction, but even there I'm not counting on that class of homes passing the tipping point in many areas.

WWII,

Good article and I especially like where Bruce Norris addresses the speculative tangent of buying a 450K home and renting it out $1,500 a month b/c the specuvestor believes it will sell for 550K next year. When the "demand" decreases either people stop buying OR (they will try to raise the rents!) *Raise the rents* my comment, not his. And why not? Now that I'm stuck with this "steaming pile" and unable to sell it anywhere near what I owe on it I might as well give raising the rent a shot in an effort to fill some of this black hole? There's raising rents b/c you're coming from a position of strength and then there's raising rents b/c you have no choice.

What I didn't like: Now that "MY" bubble (because I found it damn it) is in full bloom it's a heck of a lot easier to get on the band wagon and not have to endure at least a solid two years of rude stares at neighborhood cook outs. Lastly, (and I hate to beat this to death) no credible discussion of the HB can take place until we acknowledge the impact of the 500K cap gains exemption. It starts there, it ends there. Everything else is just the "frilly lace on the windows". Every school child above the age of 8 should be taught this before they can move on to the next grade. It's really just that simple. If we had 500K of tax free gains on Harley's or beenie babies (and allowed you to write off the points, interest and taxes) you're gonna get a bubble there too.

This is propelled by both fundamentals and financial reasons, not the least of which being (in the BA) wage inflation, rent inflation, and job growth.

Huh?

What wage inflation? What job growth (outside RE)? As far as rents go, in SoCal I'm only seeing rents trending up on par with inflation (real inflation - approx. 5-6%/yr, not hedonically adjusted CPI).

Has someone hijacked Randy H's & Peter P's identities, or are we finally seeing the ultimate sign the bubble has peaked: Bear capitulation.

New thread: "Why Not?"

Yeah X
I was wondering if you were losing it.

Christ, I thought it was real -- and not too bad either, heh.

I like the 63 Mustang on the gen-u-wine site tho -- reminds me of the car they used in the video clip of Australian Crawl's 'Reckless' -- but you can't find it on the net, which is a shame, it's about the same vintage as Duran Duran or similar...

John A, as a physicist, can't you appreciate the potential for geometric effect with feedback situation of slow RE sales causing RE lost jobs causing slow RE sales causing...etc, etc, etc?
Well, I'm sure you appreciate all the possibilities!
What will happen? Who cantell?!?!
It will be interesting to see!