A review of the investment emotions:
4. Euphoria (market price peak) Peaked in late 2005/early 2006
5. Anxiety (I'm a long term investor, not a speculator.)
6. Denial (Reached in October of 2006 until mid-May of 2007)
****7. Fear (Reached in mid-May of 2007). *****Current state****
8. Desperation Predicted to start in mid-
10 Capitulation Could it be
11 Despondency (start of market price bottom)
12 Depression (end of market price bottom) Not over before summer 2011, probably later.
13 Hope (hey, this investment has picked up off its bottom)
14 Relief (Its almost what I paid for it...)
15 Optimism (cycle starts again)
Basically, I'm shocked at how much people can be in denial. While prices drop in FEAR, its during Capitualation through Despondency that we see the greatest price drop slope.
Conclusion: The "buying window" keeps shifting to the right. Disagree with the window? Let's chat in 2009, shall we? Most of the slide is because there just seem to be so many ready "knife catchers." They are starting to come out of the wood work. For homes they cannot afford! Sigh... patience. Patience.
I do think the current mortgage freeze up could accelerate things... but then I realize how far we have to go... I'm not happy we arrived where we are. Personally, I *really* like the idea of loans capped at $417,000 plus the down payment. ;)
Now to see if Fannie Mae canceling their August bond auction means anything. We won't know for months... but that could have me, for the first time, pulling my timeline back to the left! (Quick and abrupt market correction.)