What are your predictions for 2008?

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profette_IHB

profette_IHB

New member
<p><strong>Happy New Year, IHB!</strong></p>

<p>There is no shortage of predictions from pundits, but I'd like to hear what IHBers think. What will the new year bring? What will happen to the dollar? To the economy? Will Ron Paul be president? Interest rates? Home prices? Other predictions...</p>

<p><img alt="New Year celebration in Sydney" src="http://media.ft.com/cms/fd6a2a8a-b7b1-11dc-96f3-0000779fd2ac.jpg" /></p>
 
<p>Ron Paul won't be president. Neither will anybody else who has a shred of statesman/womanship.</p>

<p>House prices will be down another 20%.</p>

<p>There will be some inflation and then deflation will set in. The mkt will drift aimlessly, or slightly down and then in fall or the beginning of winter, there will be a huge collapse.</p>

<p>No matter how much liquidity is injected the banks won't begin to lend.</p>

<p>The dollar will do better than one would think because everybody else is not well off either, only it's better hidden.</p>

<p>Lennar and Countrywide will go bankrupt or, the polite equivalent, merge. Probably other builders too. My small scale builder buddy will not sell his million dollar houses.</p>

<p>I will continue to be a real estate litigator instead of doing closings, and related happy stuff like drafting condo docs.</p>

<p>Oh, yeah, and within 6 months of the coming stock mkt collapse, the banking system will collapse. Depression-style.</p>

<p>People will continue to say, it's the bottom, it's the bottom, and now is a good time to buy the whole time.</p>

<p>President Clinton will probably not do too badly being a latter-day female FDR. I will hate her the whole time she is in office, same as I did her hub.</p>

<p>There, you have it. Conduct your lives accordingly.</p>

<p> </p>
 
<p>Residential re will continue to drop in inflation adjusted, (real), dollars.</p>

<p>Precious metals will appreciate in nominal dollars.</p>

<p>The credit crunch will continue.</p>
 
<p>In December 2008 President-elect Clinton will name William Jefferson Clinton as Secretary of State, and the Irvine median sales price will drop below $500k for the first time in 5 years. I'll buy a house about a month later.</p>
 
I think 2008 is going to be a really, really bad year for Americans. I hope I'm wrong. I think we're going to get hit by terrorists on American soil again, and we're going to finally end Bush's war because of it. I think our economy will be in the worst recession ever experienced, although not as bad as the Great Depression because of how globally intertwined economies are today. I really, really hope I'm wrong.
 
1) Government attempts (subprime loan modification plan) to soften the credit crunch are not only ineffective, they make it crunchier





2) The Fed continues to lower interest rates with the Fed Funds being between 2 and 3% by this time next year





3) Washington Mutual collapses





4) Several major homebuilders go bankrupt





5) New Berkshire Hathaway bond insurance business steals business from ABK and MBI leading to collapse of both companies





6) Tapped out consumer leads to major selloff in the retail sector and consumer technology stocks


6a) Investors/traders crown into GOOG, GRMN, AAPL, and RIMM


6b) After providing a temporary island of safety, GOOG, GRMN, APPL and RIMM collapse





7) Dollar weakness over the past few years combined with a tapped out consumer lead to an increase in exports of US goods and services and a decrease in imports. This helps limit the impact of the financial meltdown





8) Continued success against al Qaeda in Iraq, but the mainstream media won't report it in an election year
 
Recession - Interesting to see a poll on Yahoo fiannce today. When I voted, 56% were thinking there would eb a recession in 2008.



Interest Rate will drop by another point, point and a half.



I doubt there will be as much bankruptcy as people seem to think. Most companies will get bought before going bankrupt.



Housing will be down by 10% from today.



People will say by then end of 2008 that the housing downturn will be over by mid-09...funny how poeple only see 6 months ahead of time.



Irvine renter will sell his first book!



I'll have the new BMW 1-series convertible! Yeah!
 
"What will the new year bring?" – More diesel-powered cars.





"What will happen to the dollar?" – Will continue to slide in value, prevented from collapse by foreign banks/governments seeking to avoid larger-scale financial problems.





"To the economy?" – Mild recession similar to the last one in scale and length.





"Will Ron Paul be president?" – No.





"Interest rates?" – Prime rate will 1-1.5 points lower, actual loan rates will be only slightly lower than currently.





"Home prices?" – In Orange County, prices will drop 10-15%.





For myself, probably sell my home in North Orange County and buy in Tustin/Irvine. Oh, and buy a Ferrari. Anyone want to buy a used Maserati? :)
 
You guys could have written the post I have coming out tomorrow. Perhaps I should have checked this thread first, it would have made the post quicker to write :)





I agree with most of the predictions above, although I think mortgage interest rates will begin to rise even if the FED rate drops to zero.





<em>"Irvine renter will sell his first book!"</em>





I have to finish writing it first...





I predict:





1. Hillary will be our next president.


2. The New England Patriots will defeat the Green Bay Packers in the Super Bowl.


3. Britney Spears will hit bottom, although I have no idea what form that will take.


4. The stock market will be volatile and finish lower on the year. There will be a few scary drops.


5. The sun will rise in the east and set in the west. (I want to make sure I get one right.)
 
<p>1. Hillary will be the next president (girl power!!!!!!)</p>

<p>2. Fed will drastically drop Fed Fund rate to stabilize the HELOC market (no choice)</p>

<p>3. Index rates will also drop to stabilize the rate-reset loans to around 5% adjusted rate (no choice)</p>

<p>4. Brand New home buyers will beg TIC to build more houses as all new home inventory disappears.</p>

<p>5. Chinese buyers return to Irinve market (I have seen very strong indication)</p>

<p> </p>
 
2008 Predictions:





--I will become the first resident/squatter in Laguna Crossing, and watch the market implode with a view. (Can't tell you how I'm going to squat just yet, maybe I'll post some pictures though).





--In addition to the doom and gloom though, I think we'll see the first <em>ski-jump</em> (flattening, turning up, and then more falling) in the median price graph. This will be the thing that will be really interesting to me because that's when a lot of people (like a commenter just above me) will say that the worst is over. Let's face it, we've all been right and unified and watching the market dropping like many balls have in Times Square. Some real new and vibrant discussion (just imagine the songs that will accompany it!) is going to happen at the ski-jump, and this brother is really looking forward to it.





It's been a heckuva a ride this year on IHB. For something that I just stumbled across on google and joined up (11 months ago today) it has really been one of the most educational experiences for a guy in his late 20's who is in school and has been non-stop since he was three. I've really enjoyed the discussion on here, and I'm fortunate to have been enriched by it.





Thanks Everyone!





<strong>--ISB</strong>
 
<em>What will the new year bring? </em>Another year of craziness, and we will look back and say, "What a crazy year!" For many it will bring happiness, and for some it will not.


<em>


What will happen to the dollar? </em>It will continue to decline, with a few surprise upswings here and there. See below for the surprise that <em>could</em> make it continue to go up.


<em>


To the economy? </em>Jobs, jobs, and jobs will determine the economy. Why? Because, consumer spending is dependent on jobs. We still have yet to recover from the tech bust. So, we need jobs, and inflation adjusted increasing income to recover and grow from the last recession. Otherwise, this recession will be worse than the tech recession. Currently... it looks like we are headed for a nasty recession. I really, truly hope I am wrong, but it looks like it is headed this way. If I find data to prove otherwise, then I will be happy to post it.


<em>


Will Ron Paul be president? </em>No, but at least he has the guts to speak his mind. He may be a nutter, but he doesn't give a crap what other people think. He thinks he knows what is right, and leads with that. It may not be right, but he thinks for himself. Hillary will win, however she is slacking at the moment when the others are taking charge. At least Ron Paul has a higher bid/ask and volume than Al Gore in the <a href="https://www.intrade.com/jsp/intrade/contractSearch/#">futures market</a> to win the party nomination.


<em>


Interest rates? </em>For the most part they will be down. However, investors will realize that the asset that backs their MBS investment is going down, and it will increase rates for the increase in in risk. Risk has been priced in a disproportional way for way too long, and this year will bring back the correct pricing for the amount of risk.


<em>


Home prices? </em>Flat to 30% down, depending on the location. The median in OC will only be down less than 10%. There will be deals to be had, as long as the banks, or scratch and dent lenders, dump properties at a significant discount. Seriously, you will be able to find deals at 50% less than they sold for before. No joke, I have seen a few already. It will only get worse, and December will show that the foreclosures are still increasing.


<em>


Other predictions... </em>I think people will come to the realization, that the market has changed, and they will start to be honest with themselves. There will be a few hold outs, but the truth will always prevail. The sooner people start being honest, then the faster the market can recover. There is no need to hide reality, it will only lead to more pain later. If a recession happens, then consumer staples, like MO will do well. Realism is about being honest about the current conditions. I hope to learn from it all, and I hope we all will. There is financial and emotional positives in all of this.
 
Home prices in OC will continue to drift down, and end the year down 10-15% in nominal terms as measured by Case Shiller. Inventory and active/pending ratios will remain historically high throughout the year, signaling further drops for 2009. In the second half of the year it will be easy to find examples of homes listed at 2003 selling prices in OC, and 2002 selling prices in SD and IE. 90% of people who consider buying a home in Southern California at some point in the year and end up not doing so will be ecstatic with their decision.



Precious metals, oil, and stocks, and general price inflation will all be down as a mild recession sets in. The dollar will strengthen as the types of problems caused by the popping housing bubble in the US start to become apparent elsewhere as well, especially Western Europe. There will be no great collapses of a financial or political nature.



Hillary Clinton will win the Democratic nomination but lose the election to her Republican opponent because she is unable to carry either Ohio or Florida. The Democrats will however win big in congressional elections and further their dominance of the House and Senate.



Several posters on this blog will continue to fail to understand the concept of substitute goods and believe that The Irvine Company can substantially influence the market price of homes in Irvine.



I will continue wasting too much time reading housing blogs, even when I'm hung over.
 
<p>bigmoneysalsa,</p>

<p>Could you please expand and explain this comment: <em>Several posters on this blog will continue to fail to understand the concept of substitute goods and believe that The Irvine Company can substantially influence the market price of homes in Irvine.


</em></p>

<p>thanks!</p>
 
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