tag:blogger.com,1999:blog-27885619.post4545017196675627765..comments2023-11-03T02:41:15.906-07:00Comments on Real Estate comments: Tardy August real estate emotionswannabuyhttp://www.blogger.com/profile/04297458705683991405noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-27885619.post-88085378437540615512012-09-13T10:34:22.100-07:002012-09-13T10:34:22.100-07:00it is just like you have done glass repair. This i...it is just like you have done glass repair. This is the best solution for window cleaning as well<a href="http://www.baysidewindowcleaning.com/" rel="nofollow">window cleaning</a><br />Anonymoushttps://www.blogger.com/profile/02509964518226040233noreply@blogger.comtag:blogger.com,1999:blog-27885619.post-74255732208360567612008-09-03T21:42:00.000-07:002008-09-03T21:42:00.000-07:00Do you think this is more from local emotional acc...<I> Do you think this is more from local emotional acceleration, or will things really just fall that much?<BR/></I><BR/>Sandman:<BR/>I think that there is plenty of room for further drop. Now... out in Palmdale that might be only another 15%. Yes... far below replacement. But Replacement costs only come into account once the surplus inventory is absorbed. I think thinks will fall that much with most of the price losses going forward being the 'upper middle class.' You know, the ones who invested their shirt in Real estate. ;) <BR/><BR/>Local emotions always play a role. But I know central Phoenix and Costal California have been lagging their ex-urbs. But oh boy... look at auto sales. Is about to happen. I cannot wait for CR to publish his next summary of Realtor (tm) commisions as a function of GDP. Actually, I wish we could look ahead and see Fall/Winter 2009's numbers. ;) I think Realtor commissions will bottom at 0.2% of GDP (slightly below previous recession bottoms).<BR/><BR/><I> The insurers are beginning to force 10%+ down </I><BR/>I 100% agree with you. I've predicted for a long time that 25% down will be the norm during the darkest days of this downturn. 10% is starting to happen... Down payment requirements are going to grow faster than a bad foot fungus once the bank failures get rolling. When? I think we're at about T-minus a year from the 'darkest days' of the mortgage market. Quite a few banks are having trouble selling FHA backed mortgages due to the low down payment requirements. Its it significant yet? Outside of a few bubble markets? No. But again, we bears have been patient, so we can wait another six months. <BR/><BR/><I> Each step up the pyramid eliminates the largest set of remaining buyers; this is something the market will feel very quickly. </I><BR/>Yep. When everyone wants out, no one wants in. We're not there yet, but within 18 months we will be. :) <BR/><BR/>Insurance will be interesting. I'm not just talking mortgage insurance, but overall insurance. Its one of those side issues I normally ignore... but will certainly play a role in the economy going forward. (e.g., due to fraud) <BR/><BR/>Got Popcorn?<BR/>Neilwannabuyhttps://www.blogger.com/profile/04297458705683991405noreply@blogger.comtag:blogger.com,1999:blog-27885619.post-21537506696897340332008-09-02T18:17:00.000-07:002008-09-02T18:17:00.000-07:00Great post, as always, Neil. Hope you're gett...Great post, as always, Neil. Hope you're getting some sleep :). A few things:<BR/><BR/>First, as you said, capitulation is where the largest price drops occur (something I've heard many times). But in CA, some areas are down >35% from the peak, and in AZ we're around 25% down. Do you think this is more from local emotional acceleration, or will things really just fall that much?<BR/><BR/>Second, I'd like to propose one more trigger towards a faster panic. The insurers are beginning to force 10%+ down (despite the best efforts of FRE/FNM). Sure, it's just a bus stop on the way to 20% (or more), but each incremental increase cuts a large portion of potential buyers out of the pool. It's like a pyramid where the top is people who can buy for cash, and the bottom folks have nothing for a down payment. Each step up the pyramid eliminates the largest set of remaining buyers; this is something the market will feel very quickly.sandmanhttps://www.blogger.com/profile/13517423608064201201noreply@blogger.com