Looking back? Peter Schiff got most things right. I don’t think we’ll see inflation for a little while more, that might come when people actually have money, but we’re in a deflationary recession right now. Everything is hit. Everything.
I think we’ve got more pain to come, but after a nearly 45% hit to the broad indexes, my opinion is that it’s got to get better sometime. This could be a replay of the late 1974 double-bottom. JMHO, this is not investment advice. If you get gains, take ‘em, you may not know when they’ll come again.
Don’t buy SoCal housing yet, you’ll be handsomely rewarded in the future for patience. There’s a lot of knife catching out there that might tempt some people, but the trend is in, and it’s down.
If you want to see something really interesting, check out Lawrence Yun talking about something that bloggers caught onto long before the NAR did, shadow inventory… when sales come back, so do sellers. whocoodanode?
In addition, the most startling revelation (which bypassed the host’s attention) was Larry the Liar’s admission that Realtors are bypassing entering direct sales into the MLS.
So, now that the MLS is no longer valid as a data collection tool, what is the next step? Maybe the NAR will offer an open MLS?
For anyone interested in why interest rates on property are still going up, here’s a great chart courtesy of Paul Krugman’s Opinion column today:
I’m predicting whatever lift we saw this summer from decent rates (muting the crash underway), will disappear and the next leg down of prices will continue. This dead cat bounce is dead!
I will be officially revising my 2008 Socal Real Estate estimates based on recent action.
With the mainstream media in a tizzy about whether housing has bottomed or not, the professional wishers and hopers are all too quick to tell us that everything will be fine, everything is ok.
Everything is not fine, everything will not be okay.
David Lereah, in fact was quoted:
Last year “was the year of contraction,” said David Lereah, the NAR’s chief economist. “When we get the figures for this spring, I expect to see a discernible improvement in both sales and prices.”
Uh… yeah. Call me in a few months and tell me how that’s working out for you.
The sad part (and the cause of so many dead cat bounces) is that the psychological environment changes enough for committed (and often overcommitted) interested parties to buy back in (Never Been A Better Time To Buy crowd). It is only when these parties become dissillusioned by repeated losses that the entire market capitulates and often sinks below fair value. In the heady times, leverage is power, in bad times, leverage is death.
