patrick.net

Syrib,

Those are good points. For me the country started in decline when it became passe to work with your hands for a living. Now we have traded financial fantasy for making real products.

I'm sorry but lots of assets have gained less than 1% over a ten year period. Many have lost more over greater time periods than that. Take gold for example. Around 1980 or so it was over $850 an ounce. It lost value and didn't reach that value until a couple of years ago. If you had invested in the NASDAQ composit in march 2000, the best you would have done since is to recoup a little over 50% of your money. If you bought the Dow in august 1929 it would have taken 26 years before you would have broken even. Why is it some people believe that their chosen investment\asset is any different? That is exactly what people thought in march 2000, that is exactly people thought about gold in 1980, that is exactly what people thought in august 1929. Blue skies, nothing but blue skies from now on.

To all the graphers out there... you may be right about being at the bottom. However, I think you can only say that as we are climbing up the other side. Which it seems we're not. So if you continue to try and find 'glimmers of hope', it starts to smell like desperation.

Sure you can say things like "on par with coastal cities", "more affordable than western europe"... but I think as we move forward our graphs should start to add more esoteric quantifiers... How about perception? Something akin to wind-chill. Sure you guys are dragging out the thermometers, and saying "Look it's 5º above freezing..." I think the rest of us are saying, the wind is blowing like crazy, we're hungry and it's dark. So it feels a lot colder.

In the past I think the 'numbers' crew could say perception, expectations and belief have no place in schematics. Now, I'm not so sure. If enough buyers BELIEVE that house prices should/could come lower... isn't that a huge downward pressure on home prices?

Is that what you're worried about? Not being right or wrong... but if enough buyers hold off, it becomes a self-fulfilling prophecy? It seems like a Mexican stand-off between new buyers and the banks as it is anyway.

I think the numbers that came out today are leaning towards those of us who tend towards a W or a long drawn out bottom. One thing is for sure, we're NOT bouncing back any time soon. If you can't sense that... you don't buy your own milk.

junkmail

You are absolutely right

I think it would be great if people just did not bother to buy houses. At least not until it makes financial sense. I think that is was Patrick is trying to accomplish with his site.

It would certainly accelerate the inevitable. Wouldnt it be a economical boom if houses were affordable again. People could afford to buy a home and fuel the economy.