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  • Eight Reasons the Market Is Going Down [View article]
    Okay, I went out on a limb that the government sawed it off. I wrote my prediction yesterday at my blog and it was only posted by Seeking Alpha today. I have no control over when it appears - or if it appears - on Seeking Alpha.


    On Oct 29 10:02 AM thiazole wrote:

    > Funny that the GDP data had already been released before you posted
    > this (3.5%). No guesswork needed - it was good.
    Oct 29 12:03 pm |Rating: +1 -1 |Link to Comment
  • When Will Housing Bottom? [View article]
    I don't think your replacement cost approach will accurately predict a bottom. When houses are selling for less than replacement cost the market simply shifts more from new homes to existing homes. With an existing home market flooded with REO (foreclosure) sales and short sales, there is no lack of cheap supply at the moment. Calculated Risk provides a nice discussion on how the ratio of new home sales to existing home sales was consistent until 2006 and then began to gap, with the gap now growing larger at an accelerated rate. In other words, both new and existing sales are down, but new home sales are trending downward faster than existing home sales. We will reach bottom, I am afraid, when houses become affordable. For builders, that may be below what it costs to build new homes, so a new home may be more of a luxury for some time to come.

    www.calculatedriskblog...


    On Feb 25 08:54 AM crewman wrote:

    > Too much emphasis is being put on these indexes which can't account
    > for the many market forces that set pricing. I believe a better way
    > to determine the bottom of the market is to determine replacement
    > cost for a home. In So Cal, where I live and build homes, you could
    > give me the land for FREE and I couldn't deliver a SFD home for less
    > than $280k after paying for dev costs and fees. If there are new
    > homes being sold for less than this, it's because the builder is
    > willing to take a loss or has purchased finished lots from a bank
    > at pennies on the dollar. This is unsustainable. Again, figure out
    > replacement cost in your area and that's the bottom.
    Feb 25 16:47 pm |Rating: 0 0 |Link to Comment
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