[ClarkGrisowld]

Well econ 101 may have said one thing, but more astute macro analysis would have recognized calling a reversal in the trend was premature. I think I said prices would fall at least 10-15% about 9 months or so ago, which looks to have been pretty accurate. I expected things would stabilize around this time.

Now, based on current info, I would say stabilization is likely not to occur until the end of '09. Hard to gauge prices, but once again if you look at the history of bubbles popping, they deflate completely and overshoot, meaning we are probably going back to 2001 prices or thereabouts before this starts to turn around.

The state of the economy is starting to look worse than Japan in the 90's, and the similarities are alarming when you consider 0% interest rates and quantitative easing only slowed the bleeding, not really reversing things. Why do I bring this up? Because Japan also went through a property bubble where prices fell an average of 60% from their highs.

Where are we now? 2003 prices? Some 35-40% off the highs? I'd have to dig in a little more to housing bubbles to see if Japan is an anomaly (but again, hard to say why we wouldn't be on the same course). Suffice to say, the risk is clearly to the downside right now and that downside could be significant still.

[olecapt]

Sorry but you have to follow these things in context. Pulling various statements out of context is an old rhetorical technique of poor reputation.

These are not engineering or legal position papers but an ongoing dialog. And you have to keep up if you want to follow the discussion.

Just posted another blog entry that shows the rest of 89134, the Summerlin area where Sun City is located, which also appears to be stabilizing.

The most striking thing is leveling price in that zip when compared to the accelerating downward trend in Mountain's Edge.

So do we divide into two cities? One still headed powerfully down while the other recovers? Is such a thing possible?

Interesting times.

[olecapt]

Originally Posted by ClarkGrisowld

Well econ 101 may have said one thing, but more astute macro analysis would have recognized calling a reversal in the trend was premature. I think I said prices would fall at least 10-15% about 9 months or so ago, which looks to have been pretty accurate. I expected things would stabilize around this time.

Now, based on current info, I would say stabilization is likely not to occur until the end of '09. Hard to gauge prices, but once again if you look at the history of bubbles popping, they deflate completely and overshoot, meaning we are probably going back to 2001 prices or thereabouts before this starts to turn around.

The state of the economy is starting to look worse than Japan in the 90's, and the similarities are alarming when you consider 0% interest rates and quantitative easing only slowed the bleeding, not really reversing things. Why do I bring this up? Because Japan also went through a property bubble where prices fell an average of 60% from their highs.

Where are we now? 2003 prices? Some 35-40% off the highs? I'd have to dig in a little more to housing bubbles to see if Japan is an anomaly (but again, hard to say why we wouldn't be on the same course). Suffice to say, the risk is clearly to the downside right now and that downside could be significant still.

The discussion was 13 months ago. The trend that prevailed did not exist at that time. In the last nine month the median is down 35% the average over 30%.

We are past 50% of the high using a rounded high. Using the actual max we are at 60% or very close. In any circumstance we should hit 60% by June/July at present rates.

Velocity of events and flows is vastly faster than Japan. And some of the actions are much stronger based, at least partially, on the Japanese experience.

The fun thing is everybody is simply riding the dynamics. Nobody has any idea what happens next. Can Las Vegas really sustain two different price lines in different zip codes? Who knows?

We live in interesting times.

[tony soprano]

Originally Posted by olecapt

Sorry but you have to follow these things in context. Pulling various statements out of context is an old rhetorical technique of poor reputation.

I've quoted your post in it's entirety and gave the context. If you feel you've been misrepresented, I can start linking directly to the quoted sources and let the readers decide.

It's hardly like I cherry picked. I ran across at least a dozen of the same volume is up-inventory is down-prices are stabilizing-time is short posts of yours before I stopped looking. You are prolific if nothing else.

[olecapt]

Originally Posted by tony soprano

I've quoted your post in it's entirety and gave the context. If you feel you've been misrepresented, I can start linking directly to the quoted sources and let the readers decide.

It's hardly like I cherry picked. I ran across at least a dozen of the same volume is up-inventory is down-prices are stabilizing-time is short posts of yours before I stopped looking. You are prolific if nothing else.

Go for it. Start out by demonstrating that they are the same invenotory number. That would prove your point.

Just dig out where the inventory was defined in each context.

And report those.

[tony soprano]

Originally Posted by olecapt

Go for it. Start out by demonstrating that they are the same invenotory number. That would prove your point.

Just dig out where the inventory was defined in each context.

And report those.

Prove my point? It would appear that my point has been lost on you. I don't particularly care what the inventory was then, or what it consisted of. What mattered to that buyer 13 months ago was what were prices going to do going forward.

Originally Posted by olecapt on 3/3/2008

Little time left. It appears pricing is stabilizing. Volume is up over 10% and inventory is down a bit.

Originally Posted by olecapt on 4/5/2009

Volumes are very high and going much higher. The crucial inventory is shrinking...both in absolute terms and relative to the sales. It is a cusp forming.

What did housing prices do in the 13 month span between those nearly identical sound bites?

[AdamRocket]

I was thinking about waiting to buy as well, but I'm not so sure if the market is going to drop any further. With housing prices so low I really don't see a better time to buy. Pretty soon I think people are going to realize this and start jumping on the buying band wagon again, driving prices back up, especially right around summer time. I've been using online mls tools and I've found some insanely good deals out there, I mean I found consistent 3/2's in green valley for around 100k, I gotta buy right now, my current rent is higher than what my mortgage would be. Here's the site in case anyone is interested... www.freelasvegasmls.com

[ClarkGrisowld]

Originally Posted by olecapt

The discussion was 13 months ago. The trend that prevailed did not exist at that time. In the last nine month the median is down 35% the average over 30%.

We are past 50% of the high using a rounded high. Using the actual max we are at 60% or very close. In any circumstance we should hit 60% by June/July at present rates.

Velocity of events and flows is vastly faster than Japan. And some of the actions are much stronger based, at least partially, on the Japanese experience.

The fun thing is everybody is simply riding the dynamics. Nobody has any idea what happens next. Can Las Vegas really sustain two different price lines in different zip codes? Who knows?

We live in interesting times.

At the time, there really was no trend other than down besides a temporary bump up, which typically happens because few things go straight down. That was really the argument that I was making, that a few data points was not a trend by any definition and that, absent a catalyst, the macro fundamental didn't indicate any direction other than down.

I wouldn't read too much into "velocity" vis a vis Japan. It certainly would not be surprising that market corrections occur more quickly, which is a trend that is evident in multiple asset classes due to structural changes increasing the efficiency of asset flows and information.

The parallel to Japan that should be concerning or relevant is the macro state. While markets can temporarily diverge from fundamentals, it's always been the case that long run asset prices are driven by economic fundamentals. Here's my point about Japan: the US currently has a 0% fed funds rate and is instituting quantitative easing. While that may have slowed the fall in Japan and eventually led to some stability, it DID NOT spur recovery. And prices in Japan have still not recovered. I'm afraid a "lost decade" in the US has more than a small probability of happening.

If we are off 60% and use Japan as a gauge, then we may be close to a bottom, however that 60% is an average and smart money would be Vegas being above average with further to fall. But that would require some comparisons on the run-up and other things.

The NASDAQ lost 80% of its value after the tech bubble burst. It's a reasonable assumption that the housing bubble will completely deflate and overshoot. A recent article in the Economist predicted home values in Ireland would fall 80%, in real terms, peak to trough. As I said, I'm not sure where the bottom is for the US but perhaps prices of 2000 or 2001. Of course, a year ago I think you tried to deny that there even was a housing bubble.

If the US housing market has further down to go - and by all accounts, it does - then Vegas has further to drop as well. If the average US price bottoms at 40-50% off the peak (which is to say, 10-20% more), Vegas will probably be looking at easily 60-70%, perhaps 80%, peak to trough.

The only positive I see for the Vegas market at the moment is if the stimulus jump starts this economy, and perhaps the stock market is indicating that. But until the economy improves or at least stabilizes, which is a rather optimistic outlook actually, there really is nowhere for Vegas to go but down.

[KCfromNC]

Originally Posted by olecapt

That is simply not true. The inventory of REPOs is dropping relatively fast in the face of soaring demand. That is how it is. As the REPO inventory drops to 1.5 months or so, which it looks like will be in May or June something has to give. Either the banks open a new vein of REPOs or price goes up.

Freddie and Fannie's moratorium on foreclosures has to end sooner or later. Some sources are reporting this ban did end late last month, which should provide that "new vein" of foreclosures for your area to work with.

[rpachigo]

Originally Posted by tony soprano

But of course, prices continued to plummet after your volume/inventory down/stabilization/time running out call, so the market must be manipulated. Yes, all the banks and lenders have formed an evil cabal and are colluding to drive prices lower so they can record bigger writedowns. That makes perfect sense.No, it hasn't been demonstrated. It's an unsupported conspiracy theory advanced by you to explain why after telling someone 13 months ago that pricing was stabilizing, volume was up 10%, inventory was down, and there was little time left, that you're repeating the same message this evening. Don't get me wrong, you're going to get it right one of these times simply because you've been repeating it for so long. You ever think of running for political office?
"This inventory is different than that inventory. I was talking about that inventory and a non-manipulated market. This inventory didn't matter then, now what matters is lender owned inventory, not that inventory...if it's not manipulated."
If you didn't know those two posts above were made 13 months apart, you'd swear they were spoken in the same conversation. Well, after hearing the same message repeated by you for so many months, and with such conviction, I would have thought that you had access to some crystal ball unavailable to most of us. Imagine my surprise to find out just how wrong I was.

I couldn't have said it better myself.