It's always time to trade RE stocks. Right now I'd be inclined to short rather than going long though. Problem with shorting is the idiot speculators like to buy on bad news thinking its going it shoot up and can't get any worse than it is. That makes a good bear play do sideways. Hmm, maybe its time to start selling short Iron Condor Credit spreads on both the put and the call sides since it ain't going no where for a while... TS
HA HA HA Housing rolling along!! I remember reading this post last year. Where is this guy now...I guarantee you he's a real estate agent.
This is just the beginning for real estate. It's going to get a lot worse. In 2000 greenspan butchered rates which opened the flood gates to massive borrowing. Which inturn is now creating inflation big time. As inflation increases, which it will, rates will have to be risen (remember 30 year mortgage rates are still at 6% wait until they hit 9% or double digits) WATCH WHAT HAPPENS TO REAL ESTATE AT THAT POINT. Greenspan butchered the rates to save everyone from the Stock market. All he did was open real estate to save everyone from the markets. You have the Nasdaq bubble all over again and it's now in real estate. The problem we have now is inflation. They claim inflation is O.K. but it's far from O.K. The cpi says it' alright but look at commodity prices, which I feel are good measure of inflation. Commodity prices are off the charts and are only going to get worse. The fed is stuck if they raises rates they crush real estate, which in turn will screw everyone that bought a house, but they are going to have to do it. You have oil, gas,precious metals and other commodity prices that need to come down and are only going to get worse. Personally I think you are going to have what happened in the 80's all over again. Mortgage rates at 18%. HA HA let me know what happens to real estate when we hit an 18% mortgage rate. Everyone that has these variable rates. IT's going to be the biggest bubble bursting of all time!!!!
What is the chance of this happenning again ? How hard did home prices drop from the high's ? What are the differences between now and then ? What happened to the stock market at the point ?
What is the chance of this happenning again? Very good. Greenspan butchered rates. He took the discount rate down to what 1%. When you have that much borrowing going on there is going to be a consequence to pay. You see speculation is what drove real estate just like it drove the Nasdaq. When those speculators are gone it's over with. You still have low mortgage rates which is what's holding the real estate market just barely together. Inflation will equal what it was in the 80's due to Greenspan's screw up.
A lot of people didn't get fixed rates. They got variable. I have a friend that bought a million dollar house he can't afford it. Like just about everyone that's in the house they're in now. He has to wait a year to refinance without a penalty. When he goes to refinance he more than likely won't be able to afford his payment.
"What is the chance of this happenning again ? How hard did home prices drop from the high's ? What are the differences between now and then ? What happened to the stock market at the point ?" The answers to your questions are in the book "Irrational Exuberance". Covers the real estate market in a historical perspective AND relationship to the market, very thorough.