Friday we'll find out...I expect the number of existing home sales to be down. Little in the way of evidence that buying is up. It could be a wash with a mix of new and old homes entering the market...prices will indeed drop. I see nothing pretty in the next 6-12 months.
You're making my point BLSH. Just the fact that some jacked up place like Naples can't come off 40% on air is in itself a bull item. Listen, I'm not at all bullish for a litany of reasons. I'm also though a keen observer of sentiment and there's too much bearishness. Bear talk without prices following through equals a bullish tape.
Another problem I see in many of the latest suburbian bubbles is that most of the houses built in the last 7-8 years were huge. In the past, investors would buy housing and rent them out. However, a lot of these mini-mansions are not rentable as they're just too big for the avg renter. So that market becomes more illiquid than in years past and the demand for *rentable* sized property improves along with rents relative to the bigger stuff.
I was thinking the same thing. Jeez, people are down to 1 or 2 kids (if any at all) and yet everyone is building (and heating/cooling/insuring/paying taxes on) 4000sq homes.
Pabst, I perfectly understand what you're saying about what has happened to date. It's what is about to happen where I think you and I have more divergent views. I don't discount anything you say. I know you've seen a lot of cycles. I think Shiller has theory on nominal deflation that makes sense, even in the areas where absolute deflation isn't pronounced. He says that a 10 year 'flat' condition could equal a 40% depreciation. So, housing appreciation of 3% less than the inflation rate for a protracted period of time can have devastating effects, too. Of course, he also has the sudden-shock, absolute deflation risk baked into his model, too, and you're right, those deflationary pressures are greatest in the most speculative markets.
I used to live on Marco Island and recently went to visit some friends...driving from the 75 towards Marco two years ago on a visit I noticed a ridiculous amount of new construction on swamp land. This year I noticed a shitload of abandoned projects. Prices will come down when desparation sets in....can't happen overnight.
http://rattube.com/blog1/2007/03/20/houses-cheaper-than-cars-in-detroit/ im moving to motown... cheap houses, hot women, and good music. houses starting at $1300... buy a McMansion for $130,000... down from $500k !!!!
Even the NAZ took 3 years to fall to its lows and that is an instrument people can dump instantly. Pointing out the housing hasnt fallen much so far, so early after the peak is just plain silly. Lets see where home prices will be 6 years from now. Real estate grinds down at a much slower rate than NAZ stocks. Lets get realistic here.