If only homes would correct this fast...

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jbenko_IHB

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If only the housing market could correct like the stockmarket. Not that the stockmarket is corrected but it sure finds its true value really fast. It slowly trickled down in value over a year and then over the past month or so we have seen blood.



Home prices have been trickling down as well, but no signs of blood. It will come though. I'm just tired of seeing it drag out for an eternity and tired of seeing inflated prices.



Banks need to mark to market, but they are waiting for our government to buy them off at inflated prices passing the burden. So does that mean our government will mark to market? Or will they hold inflated securities for 30+ years until they break even/take a small loss. Well, now that I think about it with inflation they are taking a loss no matter what. So why not just end the pain and unload them them for what people will actually pay. Then we can know where we stand and buying healing can start.

Cause if they don't then we have to sit around twiddle our thumbs and wait for inflation to erode value of homes, which can take some time.



Kinda frustrating...but my cash isn't giving in until Irvine's income to home ratio is between 3.5-4.4 as it was between 1980-2000!



Your thoughts?
 
[quote author="blackvault" date=1223432640]If only the housing market could correct like the stockmarket. Not that the stockmarket is corrected but it sure finds its true value really fast. It slowly trickled down in value over a year and then over the past month or so we have seen blood.



Home prices have been trickling down as well, but no signs of blood. It will come though. I'm just tired of seeing it drag out for an eternity and tired of seeing inflated prices.



Banks need to mark to market, but they are waiting for our government to buy them off at inflated prices passing the burden. So does that mean our government will mark to market? Or will they hold inflated securities for 30+ years until they break even/take a small loss. Well, now that I think about it with inflation they are taking a loss no matter what. So why not just end the pain and unload them them for what people will actually pay. Then we can know where we stand and buying healing can start.

Cause if they don't then we have to sit around twiddle our thumbs and wait for inflation to erode value of homes, which can take some time.



Kinda frustrating...but my cash isn't giving in until Irvine's income to home ratio is between 3.5-4.4 as it was between 1980-2000!



Your thoughts?</blockquote>


Actually, the rate of price decline has been extraordinary. There hasn't been a 10%+ correction in house pricing in a single year since the Great Depression. The fact that we are off 20% is simply astounding. The denial of sellers and the activity of knife catchers is the only thing maintaining the illusion of pricing here. The slow drops probably won't start until we approach rental parity. If I buy in 2010, I would not be surprised to see a further drop in prices and a few years of treading water near breakeven, but then again, I will be saving money versus renting, so I really won't care.
 
I hear you. But at the same time there hasn't been an increase like the one we experienced. Either way, I'm with you. When owning a home saves more than renting...I'm in.
 
Every single commentator on the markets is saying this is a crisis of confidence, not of fundamentals. They are all, and I mean <strong>ALL</strong>, are saying the fundamentals are fine.



They are all wrong. The fundamentals suck and will get worse.



The herd is always wrong.
 
Home prices will come down slowly. Many of the regular, non-distressed, sellers are pulling their property off the market.
 
There?s too much seller resistance preventing me and others on the sidelines from punching it in.

A number of sellers are still unrealistic with regards to pricing and market conditions.

That being said, on the few homes that are realistically priced, I?ve been outbid.
 
[quote author="awgee" date=1223439532]Every single commentator on the markets is saying this is a crisis of confidence, not of fundamentals. They are all, and I mean <strong>ALL</strong>, are saying the fundamentals are fine.



They are all wrong. The fundamentals suck and will get worse.



The herd is always wrong.</blockquote>


It IS a crisis of confidence. I'm not making any statements on fundamentals. When you have a stock market go down 7% in a day, that's not fundamentals. Fundamentals don't spin on a dime like that. Fundamentals were bad 3 months ago, they're bad now. Yet we have a 20% drop in the stock markets between the two.



As for the "herd" being always wrong... well that's a matter of perception. I've got co-workers now who are suddenly becoming "experts" in the bank's demise, and I've heard the "buy gold" line more than a couple of times in a workplace normally impervious to investment talk. There are very few articles on seekingalpha today that's remotely bullish on the market as a whole. And every single one of these articles gets spammed with 100 bearish comments.



You see a "herd" of commentators that say fundamentals are fine. I see a herd of investors who have been selling everything they have for the past month. With a 20% down in a month, I find it very difficult to make an argument that being bearish here is some kind of isolated, contrarian position.
 
[quote author="awgee" date=1223439667]Home prices will come down slowly. Many of the regular, non-distressed, sellers are pulling their property off the market.</blockquote>


Actually, the housing tracker listing price data for OC shows a diversity based on price:



25th percentile listing price (currently $318k) is off ~30% in the past 12 months



median..... (currently $472k).....~20%



75th percentile (currently $795k) is off ~7.5%





Do you think that everything under $750k is 'distressed' selling?
 
[quote author="muzie" date=1223446533][quote author="awgee" date=1223439532]Every single commentator on the markets is saying this is a crisis of confidence, not of fundamentals. They are all, and I mean <strong>ALL</strong>, are saying the fundamentals are fine.



They are all wrong. The fundamentals suck and will get worse.



The herd is always wrong.</blockquote>


It IS a crisis of confidence. I'm not making any statements on fundamentals. When you have a stock market go down 7% in a day, that's not fundamentals. Fundamentals don't spin on a dime like that. Fundamentals were bad 3 months ago, they're bad now. Yet we have a 20% drop in the stock markets between the two.



As for the "herd" being always wrong... well that's a matter of perception. I've got co-workers now who are suddenly becoming "experts" in the bank's demise, and I've heard the "buy gold" line more than a couple of times in a workplace normally impervious to investment talk. There are very few articles on seekingalpha today that's remotely bullish on the market as a whole. And every single one of these articles gets spammed with 100 bearish comments.



You see a "herd" of commentators that say fundamentals are fine. I see a herd of investors who have been selling everything they have for the past month. With a 20% down in a month, I find it very difficult to make an argument that being bearish here is some kind of isolated, contrarian position.</blockquote>


I did not say the bearish position is the contrarian position. I said all the commentators are saying the fundamentals are fine and they are wrong. The fundamentals have been lousy since 2000, but the fed has produced a false economy. It is not a crisis of confidence. Lack of confidence is catching up with reality. Confidence was misplaced. The perception of reality is not a crisis. It is an acceptance of what is.



I am not a bear or a bull on equities. I have no idea what they will do, and if you look at my posts for the last two years, you will see I have been consistent in that statement. I do know that the earnings are based on a false economy. Whether or not investors realize that on a long term basis is anybody's guess. They are a herd and a not too bright herd at that. The herd is always wrong.



How many of those talking a "buy gold" line actually own gold?
 
"How many of those talking a ?buy gold? line actually own gold?"



I missed the boat on gold. So if there is a bubble in gold one day, I'll have to align myself properly ahead of time to short it. The bubble though could be years in making...
 
[quote author="blackvault" date=1223463417]"How many of those talking a ?buy gold? line actually own gold?"



I missed the boat on gold. So if there is a bubble in gold one day, I'll have to align myself properly ahead of time to short it. The bubble though could be years in making...</blockquote>


Not sure you missed any "boat" here. Sure in 06-07 gold double, but you bought almost any commodity that's what you got. For 08 we're looking at a 6% gain YTD, but it moves so fast we could easily end up at -5% or +15% at the end of the year.
 
No I hear you muzie. I guess I'm more scared to invest in gold as I don't really know how it behaves or know that much about it or even spotting the signs of getting out of gold if I was to get in it. If I was to invest in it, I would be doing it because everybody is doing, and I'm not the type to follow a herd unless I know what I'm doing.
 
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