Mike Mosieur

Reflexive Changes in Real Estate

Eric; there are many markets where the "Panic" sale is beginning to manifest itself.

A good site to see this is forsakencraft.com, amoung others.

The slide has begun and who knows when but real estate will bottom out.

I think Pauls comments apply in either direction.

Housing: What Does "Return to Mean" Really Mean?

Tim

I think you are right on the money, except real appreciation is in the 3% per year range, just a little ahead of inflation. Pheonix may be the exception.

You are correct when you point out that no one seems to be considering RTM, a basic economic principle. In fact this is the first time I've seen an article on it.

I live in Central Florida, or "Bubble Central" I figure a house that sold for $100,000 in 2000 is now worth $120,000 to $123,000 today, 2006. Presantly that house is priced at 180,000 to 200,000 so we have a 30 to 40% decline ahead. RTM is like gravity. What goes up (or down) will eventuality return to the mean.

No 'Stabilization' in the Housing Market

Barry;

It's just a bump on the long slide to oblivion.

Grasping at straws.

Mike

Home Prices Fall For First Time in Decade

This is a great site. I love the NAR comments. I am a Realtor and a Real Estate investor. I bought my first house at 19 and am now 55, so I've seen this "Bubble" stuff before. I am a certified member of the NAR, those lovable number benders. Google all the David Lereah sites popping up. It sucks to be him about now. You can bet the NAR is loosing dues paying members as we speak and my guess is as this whole train wreck of a real estate market plays out, The NAR will announce that Mr. Lereah is leaving to "seek other opportunities".

"Why Don't Big Housing Sales Drop Produce Big Price Drops" I believe was a question posed above. One answer is that when a house closes, it is considered "sold". However the price it closes at was determined 3 to 6 months previously when the contract was written. This would be on a previously owned home. Some sales of new construction don't close for a year. So the sale price, or the price at closing, in a declining market will lag the actual sale price of a similar home on the day of closing. We won't know Augusts real sales prices until possibly December.

Realtors do other things to bend the numbers like instead of reducing the price of a house, they pull the listing and relist it as a new listing for the reduced price. Susequently the data on time of listing and price reductions looks better than it actually is. Also, with new houses and now some previously owned houses the sellers are offering spiffs, like cars, vacations and cash back. The value of these items are not usually reflected in the sales price.

I make more money in a down market than a hot one. I only hope that the coming blood bath in the real estate market will not effect the overall economy to badly. There is a differance between cutting yourself shaving and hacking your arm off with a machette. Unfortunatly, I suspect the worst scenario. I have never seen it like this. All we can do is hope for the best.

As a parting shot, I believe that Alan Greenspan will go down in history as the most reviled person of the decade. His attempt to save us from the fallout from the dot com bubble by lowering the prime rate to 1% has had the unintended consequence of creating the out of control Frankenstein Monster the real estate market has become. I am afraid we ain't seen nothin' yet, including but not limited to an S&L type bank disaster. Lets hope for the best and make money on the great real estate deals that are definitly coming.