patrick.net

@swebb Forget the 'hill' comment, it was a short-hand comment about reference points. If you think house prices are 'bouncing along the bottom as they did from 91 to 97' (Or could)... You asked the question: "Could you be so wrong to call 2009 the bottom?"

Answer: Well it depends how good an investor you are. As for 91 to 97... I distinctly remember '95 - '96 as being worse as the other years you listed. Accuracy aside... If you buy a home in '91 and have to wait until '98 to see appreciation vs. buying in '97 and only waiting a year to see your home appreciate. Which would you choose?

A: You'd have to go with '97, because your money would be tied up for 6 years doing nothing.

I think the nervousness shown in this forum with calling the 'bottom' lends me to believe some here fear that if you don't anticipate the market returning, you'll 'miss-out' as the market rockets back to... I don't know... 2004? 2005?

It's not going to happen. There will be many false re-starts and fails as we slowly drift down to where Fannie and Freddy are pulled out altogether and banks will struggle to get other private institutions to take the mortgage notes off their hands.

There won't be enough private credit to fund all of the loans at the prices of today, so something will have to give and the sellers will have to break, because unless the buyer is printing money in the basement, where's it going to come from?

I know we're talking cross-purposes here... I know you're coming from an academic point of view, I'm just injecting some common sense. I don't think I'm saying anything new either, I'm just pointing out graphs and numbers don't buy houses. People do and graphs and numbers do a shitty job of predicting what people will do.

Try call the next general election today with numbers and graphs.

junkmail says

Answer: Well it depends how good an investor you are. As for 91 to 97… I distinctly remember ‘95 - ‘96 as being worse as the other years you listed. Accuracy aside… If you buy a home in ‘91 and have to wait until ‘98 to see appreciation vs. buying in ‘97 and only waiting a year to see your home appreciate

I bought in early 90s. Like so many back than, it was not an investment, it was a purchase like i would purchase any goods. My 'investments' are in stocks and bonds which generate earnings. We wont see a bottom until this dreadful mentalilty of pegging a home as an investment is gone.

in the bay area for march, short sales were 17.6% or sales and foreclosures another 31.5%.
http://dqnews.com/Articles/2011/News/California/Bay-Area/RRBay110414.aspx
49% of all sales were foreclosures or short sales.
1 out of 2 sales was a distressed property.
every other sale repesents a person, bank or loan owner losing a substantial amount of money.
in this environment, where half the sales are distressed, it will be very difficult for prices to appreciate.

the case shiller inde indicates weakening prices:
http://www.socketsite.com/archives/2011/04/spcaseshiller_san_francisco_value_decline_accelerates_i.html

one thing to note is the momentum of the YoY Change in CS index.
once the trend starts up or down, it keeps going in that direction for several months (and even multiple years).

robertoaribas says

we still have reduced foreclosures due to the recent roboscandal, state attornies general looking into bank processes.

So, we still have delayed foreclosures to deal with, and their impact on the market. Despite this, prices are still sliding.

DEFINITELY something to keep an eye on.

Despite EVERY SINGLE IMAGINABLE government tactic to support and prop up RE values, they are still falling - that shows just how pathetic and sad the situation is. You can't have homes worth a relatively large X amount in a nation that has a fundamentally hollowed-out economy that produces mostly low-paying service-sector work (minus government sector which is just based on the USD reserve status printing press mechanism), it just isn't going to work. Now take out larger and larger chunks of those low, real-dollar paychecks (inflation), and you expect RE to GO UP? I wish I could understand the bulls, but I just can't. I think the vast majority of them are just clueless, mainstreamer baby boomers who are used to "USA, number 1, etc." It's ridiculous, laughable. They are in for a very rude awakening.

schmitz_kris says

Despite EVERY SINGLE IMAGINABLE government tactic to support and prop up RE values, they are still falling

Don't underestimate their imagination. They'll come up with some new gimmick.

klarek says

schmitz_kris says

Despite EVERY SINGLE IMAGINABLE government tactic to support and prop up RE values, they are still falling

Don’t underestimate their imagination. They’ll come up with some new gimmick.

Beat me too it.