October 11, 2006

HousingPanic Stupid Question of the Day



How long will the ride back down the slope take?

Posted by blogger at 10/11/2006

16 comments:

Anonymous said...

I keep telling you... 6 years.
(2 to 3 years on the way down and 3 to 4 years at the bottom).
I think we've got about 1/2 year, already, but I get better with more hindsight.
Anyway, that's my guess.

October 11, 2006 9:07 AM
Anonymous said...

I think it'll play out in three phases.

1: Fast drop a all the toxic ARM loans reset and flippers become floppers.

2: Suckers rally. Prices may even go up a bit.

3: Long slow fall as baby boomers continue to put homes up for sale, and are forced to sell at what people can actually afford. Due to inflation prices may appear to be stagnant.

October 11, 2006 9:39 AM
Strategic Investor said...

I think that there will be a fairly sustained drop as bb suggests, and it should last about six years, provided we do not suffer a major economic slowdown.

The big question will be what this does to people's spending and saving habits. Boomers, who have been "Living for Today" and "Imagining" all sorts of things, like living off home equity, will discover that they have relatively few financial assets (the kind that will keep them in the lifestyle to which they have become accustomed), so they may begin a major push to save more. This would however, also mean that today's spenders would become savers, and probably lead to a major economic slowdown (not like the last two, but severe and potentially very long lasting, because Boomers, who will also stop working, will not see their consumption rebound). Output and employment would be adjusted sharply lower. The would means a continued drop in housing as the newly unemployed begin selling their homes in a tough market.

October 11, 2006 10:26 AM
Anonymous said...

As fast as the towers fell because of the explosives.

October 11, 2006 11:06 AM
Anonymous said...

The bubble markets of Arizona, California, Florida, etc. will drop fast and furious in the next 12 months. The rest of the country will be effected, but only by 10%. It's all about the M3 and interest rates. Lots of cheap money still out there.

October 11, 2006 11:21 AM
Roccman said...

That depends which slope Keith...

no pulling up from the Olduvai slope...

http://en.wikipedia.org/wiki/Olduvai_theory

October 11, 2006 1:10 PM
Bill said...

We have to take into account, will this administration take us to war, and if so, things will fall much faster then we realize. And like panicearly said people of various ages read this blog and are learning alot about mortgages and home ownership. They are stepping back and saying,
"That bullshit is not for me, Ill rent thank you".

October 11, 2006 2:22 PM
Anonymous said...

The problem is that Baby Boomers out number Gen-X and Echo by at least 2 to 1. Who can pay for all those medical costs? The BBs will probably not be able to afford to retire.

I already see older people working to bag groceries at the checkout aisle.

With regards to how long - Japan took up to 15 years, and they had a much stronger industrial base than the Americans have today. Still - the US dollar is the reserve currency. Better hope that no one switches to petro-euros.

October 11, 2006 3:16 PM
InfidelSix said...

Predictions are worthless b/c there are so many dependant factors? Rates, regulatory changes, foreign influences, energy costs, etc. The only thing for sure is that the REIC no longer controls ALL THE INFORMATION like it did 10 yrs ago. This means that market adjustments will happen more quickly than they would have before the internet, blogging, and the availability of data. Still, it's an illiquid market and will always be sticky on the way down.

October 11, 2006 6:38 PM
Anonymous said...

If all those boomers retiring cause a labor shortage....Wouldn't a labor shortage cause higher wages?
+++++++++++++++++
What "labor shortage"? Our country will just do more outsourcing and wages will probably fall for everyone. (IMHO)

If people are healthier and living longer, and well paying jobs are available, wouldn't people without savings be able to work longer at higher wages?
++++++++++++++
See the answer above. Also, age discrimination is alive and well and older employees are more expensive to retain because of their increased health insurance costs. Therefore, lots of the elderly will be laid off to make way for more outsourcing. What jobs remain will probably be McJobs like Wal-mart. (IMHO)

October 11, 2006 10:59 PM
Anonymous said...

The ride back will go down faster than Monica on Slick Willie's Willie!

October 12, 2006 3:01 AM
Anonymous said...

Ahistorical levels of indebtitude should ensure a relatively quick crash to the bottom, followed by many long years before housing recovers.

Average past turnarounds have been 9 yrs; expect this one to last longer.

October 12, 2006 4:02 AM
Anonymous said...

FRACTIONAL RESERVE BANKING CREATES 9 DOLLARS {VALUE?} FOR EVERY DEPOSITED DOLLAR, CREATING INFLATION, THAT THE FED PRINTS MONEY TO BALANCE, ANY PART GOES WRONG, 1$ CASH EQUALS 10 DEBT???EXPECT BAILOUTS OR CASH DOLLAR CONFISCATION, WHICH IS 9$ INFLATION ,NOTHING CAN GO WRONG

October 12, 2006 7:45 AM
Anonymous said...

Nar says we have hit bottom keith.

October 12, 2006 3:59 PM
Anonymous said...

kind of looks like dark side of the moon album cover

can you find and put up a you tube video of shine on you crazy diamond?

October 12, 2006 6:18 PM
Anonymous said...

Remember the yodeling "Mountain Climber" game on The Price is Right?

October 13, 2006 4:01 AM

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