Stop thinking things are looking up!

Let people post what they want to post. Freedom to everyone! Who are you to think people should only post what you find appropriate???

ah...the snake crawls out from under the rock.

NYCROBOT - your statement is kind of ridiculous. You say that we will still be in a decline as long as prices are coming down. No kidding. That's redundant and provides no real insight into anything.

I make my predictions based on what is going on with people's wallets (that is, their ability to buy real estate).

Previously, all factors pointed downward - people had less income, less savings, less job security, and were facing more difficulty getting financing. Based on the foregoing, real estate prices had no choice but to head down - a lot.

Now, to the extent the equity market has turned positive, we now have one factor pointing in a positive direction. If someone was heavily invested in the stock market, they would have more buying power now.

I think prices will continue to drift downward, although the rate of decline might start to slow.

sorry to disappoint you bitter renters, but the market has already bottomed in NJ and the bottom is making it's way toward NYC as we speak!

New Jersey Suburb's Prices Holding Up
Matt Woolsey, 04.29.09, 04:00 PM EDT
Bucolic Mendham, N.J., again leads this week's list of biggest gainers.

Mendham, N.J., is a small township of 5,000 residents 40 miles from New York City. With tree-lined streets and large, traditional houses on quiet, wooded acres owned by affluent residents--the median income is $145,000--it's every bit the picture of an idyllic small-town suburb.

However, as the nation's real estate market declines, Mendham has been one of the best performers in the Forbes Luxury Housing Index, which ranks the 500 most expensive ZIP codes in the country, using real estate statistics provided by Altos Research, a Mountain View, Calif.-based real estate derivates research firm. What's stirring in Mendham? Why are prices up 9.8% from this time last year?

The whole of 2008 was a very slow year. While early 2009 has been an improvement so far, it's still well behind sales rates of 2006 and 2007.

That's a higher inventory, but in a wealthy marketplace where the median income is $145,000 and distressed homes are virtually nonexistent (Mendham has only three foreclosures, according to RealtyTrac), it's also a sign of sellers' increased confidence in finding a buyer.

http://www.forbes.com/2009/04/29/luxury-homes-mendham-lifestyle-real-estate-mendham.html

cc, stop you insults! Let me ask you: You seem to be posting 24hrs a day and you still haven't answered my question: What do you do for a living that you have so much time at your hands? True reason I haven't posted much is that I am feeling good about how things are going. Things are def. looking better and spring is in the air!!

But... but.... the bad nooz is so much more interesting! ;-)

http://economix.blogs.nytimes.com/2009/04/30/robert-reich-on-power/

"f someone was heavily invested in the stock market, they would have more buying power now." yes...i have more now than i had a month ago. but, i still have roughly less than 40% from where i began. and then there are the poor souls who cashed out 6 weeks ago because they simply couldn't stand it any longer. wonder how they're feeling now.

"We’re looking at a near term dominated by the existing economic power structure. The remaining big banks (in the US) and big banks/corporates (elsewhere) are made invincible by campaign contributions, political connections, and everyone’s reasonable fear of a great depression. It will be hard for outsiders to challenge that structure effectively – either as new companies or with new ideas. But you won’t see a great deal of innovation, investment, and growth coming from these survivors."

http://baselinescenario.com/2009/05/01/zombie-oligarchs/

Rah rah for NJ.

cc, i never got back in. opportunity lost, but that's ok. i got out early almost completely intact, i'll sit out the bear market rallies because i'm a wimp with no stomach for it. but I really feel sorry for the poor souls who don't get out in time this time. twice in a couple of years seems like a lot to stomach. and for those 401K watchers, they're going to feel like they've been whiplashed.

carnegie, honesty forces me to admit that my husband is reporting, from the legal side, a significant increase in M&A/PE activity. But, with companies cratering, and financial concerns feeling that they are backed by the full faith yada ya of the US gov't, it's really not surprising. he's also reporting that the larger firms seem to be considering a wave of layoffs. win some, lose some.

What do the facts say?

12/31/87 to 3/31/00

S&P 500 (total return) grew at 18.96% CAGR

Case-Shiller New York (price only) grew at 1.50% CAGR

Correlation of monthly returns was -0.01.

is he reporting a year on year increase or an increase from a couple of months ago?

columbiacounty - I am definitely still on the sidelines, but I do feel a lot better about my own financial situation than I did in November or December. I suspect we'll see more moderate price declines starting around the third-quarter, as opposed to prices continuing to fall off a cliff as they have over the past 9 months.

Overall my view is that by the end of the year it may be time to dip a toe in the water. But there is absolutely no need to rush into buying anything, since it will probably be cheaper next year.

Alpine and Carnegie, and any other brokers, if "things are looking up", please quantify and go on the record.

In Manhattan, are prices go up, down, or flat over the next year or whatever timeframe you choose? If you show a client an apt, what do you tell them it will be worth in a year? more or less?

Is inventory going up or down over the next year?

How much do you think prices have dropped from the peak already? 20%? more, less? When was the peak and have you ever said prices would decline at any point in your career?

And please provide any data that supports your view.

Thanks

glad to hear that you're feeling better ( and I hope you're right).....so much is being posted here and elsewhere, though, that this current market rally is an illusion. i have no idea other than if that turns out to be true, i think many will lose what little faith they had remaining.

cc, look more closely at Topper's post.

Topper, like your work a tremendous amount, but this is a bit subtle.

carnegie's not a broker, just in finance. wait, that didn't come out quite right.

I agree that it might be an illusion. Therefore I have not been buying stock, and I pretty much missed this rally. Although the small amount of stock that I own has been up nicely.

Plus, the stock price of the company I work for has practically doubled over the past couple months (although this is not saying much, since it's only about half of where it was last year). Still, I have a nice chunk of restricted stock that will vest this summer, and I am happy to see it's value going back up. Will be useful for my downpayment (next year).

Alpine, read this re: your Mendham example;

http://njrereport.com/index.php/2009/04/29/prices-up-in-mendham-huh/

Aboutready, I don't understand Topper's post. Could someone explain, for the unsophisticated?

I think Topper is saying that between 1987-2000, NY real estate prices barely went up at all, while the stock market provided pretty decent returns. In other words, real estate does not always go up, sometimes it's value remains flat for an entire decade or more.

let's see - Topper cherry picked one of the all time great time frames for the stock market - post '87 crash to peak of the tech bubble, and compared those returns to that of NYC real estate, to make some type of point that real estate is a bad investment.
about as intellectually honest as someone taking RE returns from early '00 till '07 and comparing that to stocks.

topper, care to elaborate? look at the dates, evnyc. then realize that topper noted this after someone claimed that the stock market had provided wealth that could generate real estate sales. from 1987-2000, real estate gains were minimial, compared to gains in the market.

Sorry if I sounded "subtle" - I aimed for "obtuse." But thanks, aboutready.

Assume folks know that CAGR stands for compound annual growth rate.

The point I was making is that there has been virtually no correlation between stock prices and New York residential real estate prices.

Updating the analysis:

3/31/00 to 12/31/08

S&P 500 (total return) was -3.97%

Case-Shiller New York (metro) was 6.50%

Correlation of monthly returns: 0.06

Bottom line: rising stock prices do not automatically mean rising residential real estate prices. In fact, the two markets have been moving out of synch for many years.

printer, think about what you just wrote. one of the all time great time frames for the stock market. didn't do much for the real estate market did it?

evnyc, what that means is the stock market going up or down has no effect on home prices. Historically, there is no correlation between the two, so one moving does not predict any movement in the other. 1 is a perfect correlation, they move in tandem, -1 is negative correlation, they move in the opposite direction, 0 is no correlation.

Thank you, both AR and Topper, I didn't know the CAGR and it threw me.

I have no intention of saying that real estate is a bad investment over the long term.

I like real estate - but not at "current" price levels "in Manhattan."

The key question is do you get an attractive net yield (implicit rent) from New York "residential" real estate today? Not when the price/gross rent ratio is north of 20!

Lots of publicly commerical real estate "in the United States" now offers "net" yields of 10% and I do like that! And non-U.S. publicly-traded commercial real estate is also attractively priced.

And, thank you also, Streeteasyaddict!

about - if you change the time frame slightly, you'd get substantially different results - push the dates out 1 or 2yrs ('88-'01), and tell me what you get. or shorten it a few years, taking out the froth of the tech bubble which sucked assets away from other classes, and it will look sharply different. we all know you can makes stats tell you whatever you want to hear

Gotta love that Mendham example. The rationale seems to be something like this: the six houses that sold in Mendham this year are bigger than the six houses that sold in the first four months last year, so the tri-state real market is turning around.

take the froth out of the greenspan bubbleSSS and numbers would be very different.

Hey, printer!

Talk is cheap. Try doing some of the real lifting yourself!

I've played with the data every which way. And you can find small sub-periods when the correlation has been high between residential real estate and stocks prices. But over the long term the correlation has been low.

The monthly correlation for the period 12/31/87 to 1/31/09 was -0.01. You can't get much closer to "no correlation."

Yes, it is a bit counter-intuitive!

Res tantum valet quantum vendi potest.

A thing is worth only what someone else will pay for it.

Latin Maxim

topper, it's not really that surprising.

Wealth projections through 1997 suggest that 86 percent of stock market gains between 1989 and 1997 went to the top ten percent of households while 42 percent went to the most well-to-do one percent

They don't need THAT much housing.

Anyone willing to go on the record with their bullish projections for prices and inventory?

Power to the People, aboutready!

Percentage annual returns. S&P 500 is total return. Cashe-Shiller is price-only.

Period Ending S&P - 500 Index S&P - Case-Shiller Home Price New York Index

12/31/1988 - 16.83 - -0.09
12/31/1989 - 31.51 - -3.56
12/31/1990 - -3.17 - -7.04
12/31/1991 - 30.55 - -1.15
12/31/1992 - 7.68 - 0.82
12/31/1993 - 10.01 - 1.81
12/31/1994 - 1.32 - 2.15
12/31/1995 - 37.47 - 0.42
12/31/1996 - 23.07 - 1.70
12/31/1997 - 33.25 - 3.85
12/31/1998 - 28.76 - 7.59
12/31/1999 - 20.99 - 11.04
12/31/2000 - -9.12 - 12.67
12/31/2001 - -11.88 - 11.47
12/31/2002 - -22.12 - 16.42
12/31/2003 - 28.69 - 11.78
12/31/2004 - 10.87 - 14.06
12/31/2005 - 4.89 - 14.86
12/31/2006 - 15.81 - -0.34
12/31/2007 - 5.54 - -7.36
12/31/2008 - -36.99 - -10.49

No bulls here!

Expect prices to be down about 50% from the peak before this is over. And then an L-shaped "recover."

Now I better get back to work...for the Man! Nice break anyway.

Maybe this will be clearer.

Period Ending S&P - 500 Index S&P - Case-Shiller Home Price New York Index

12/31/1988 / / / 16.83 / / / -0.09
12/31/1989 / / / 31.51 / / / -3.56
12/31/1990 / / / -3.17 / / / -7.04
12/31/1991 / / / 30.55 / / / -1.15
12/31/1992 / / / 7.68 / / / 0.82
12/31/1993 / / / 10.01 / / / 1.81
12/31/1994 / / / 1.32 / / / 2.15
12/31/1995 / / / 37.47 / / / 0.42
12/31/1996 / / / 23.07 / / / 1.70
12/31/1997 / / / 33.25 / / / 3.85
12/31/1998 / / / 28.76 / / / 7.59
12/31/1999 / / / 20.99 / / / 11.04
12/31/2000 / / / -9.12 / / / 12.67
12/31/2001 / / / -11.88 / / / 11.47
12/31/2002 / / / -22.12 / / / 16.42
12/31/2003 / / / 28.69 / / / 11.78
12/31/2004 / / / 10.87 / / / 14.06
12/31/2005 / / / 4.89 / / / 14.86
12/31/2006 / / / 15.81 / / / -0.34
12/31/2007 / / / 5.54 / / / -7.36
12/31/2008 / / / -36.99 / / / -10.49

I think Topper's statistics (which show little correlation between S&P and Case Schiller) are interesting, but also they are not as important as the real-world effects of how much money you have in your pocket. Your stock portfolio is one component of that. Right now, that is moving in a positive direction and making people feel (and actually be) a little more comfortable with their financial situation. Will this have a positive effect on real estate prices? I think so. Will it have much of an effect? Probably not. Prices will keep going down, due to many, many countervailing negative factors - incomes, rents, availability of credit, and many intangibles such as job security.

My next question for the bulls is this. If the stock market drops from here, will that mean RE prices will go down?

If you are going to use statistics when talking about the NYC market, Case Schiller is far from your best resource. The indices specifically exclude condo and coop properties. They also exclude new construction. In fact, the only properties included are single family dwellings. Not too many of those in Manhattan.

While nine of the ten cities are based on the Metropolitan Statistical Areas (MSAs) or Metropolitan Divisions defined by the U.S. Office of Management and Budget, there was not enough data for NYC. So the New York region is expanded from the New York MSA to include counties in New York State, Connecticut, New Jersey and Pennsylvania that are within commuting distance of New York City.

http://www2.standardandpoors.com/spf/pdf/index/SP_Case_Shiller_Home_Price_Indices_FAQ.pdf

The intention here is not to dispute or support the general theme above on the correlation, or lack thereof between S&P and NYC housing prices. It is also not intended to undermine the broader Case-Schiller index, because it works well in metro areas where a large percentage of the residences *are* single family properties. This is rather a convenient opportunity to remind (or inform) the active posters here that the Case Schiller data for NYC should most accurately be referred to as the broader NYC Metro Area excluding condo's, coops and new construction (NYCMAECCNC)

Onward and Upward
~ Philip

FULL DISCLOSURE - I am the Chief Technologist at Coldwell Banker and President of Manhattan Association of Realtors. As a leader in the industry and a member of society, I have a vested interest in seeing the housing market and general economy turn around and start rising.

Need to add this: how can NYC real estate be bottoming out when unemployment continues to grow and the big drivers of wealth in this city (i.e. wallstreet/finance jobs) are way down and not likley to come back any time soon.

My opinion, in addition to the one I expressed at the start of this thread: NYC RE prices will start to stabilize when it starts getting harder to get prime-time tables at trendy manhattan restaurants. Or when NY Yankees box seat prices start going up again.

Again, I don't feel richer today than on April 1 because the market was up 6% in April. And I'm damn sure the wall street exec who got laid off in december and is closing in on the end of his unemployment and still hasn't landed a new job yet is feeling richer today than a month ago.

Wait until unemployment starts to run out for the first wave of laid-off execs - then you'll really see some panic at the disco.

actually, if he's vesting during this process the unemployed wall streeter may feel richer right now. i know people who were about to retire who couldn't because their wealth was so tied up in their company's stock, which had fallen off the proverbial cliff.

the conspiracy theorist in me is on overdrive.

NYCR - The first wave was in the fall of 2007. Severance and unemployment are long gone for those people.

Anyway, a few months of severance and $400 per week in unemployment is not the story. Loss (for some) or dramatic reduction (for most of the rest) of six or seven figure annual incomes plus wealth destruction from declines in Wall Street employers' stock prices and financial assets generally - i.e., the first sentence of your post - is the story. As that reality works its way through the system, prices will adjust. By comparison, the impact of unemployment running out is rounding.

ar - I can't see anyone feeling richer because they have $X that vested on termination vs. having $3X or $5X or $10X unvested back in 2007 before the stock price collapsed. They are slightly more liquid because they can sell the $X of stock, and the golden handcuffs that tied them to their employers are gone (mostly because the gold itself is gone!), but it's hard to argue that they are richer.

they aren't richer compared to two years ago, but they may very well be richer compared to two months ago.

this run up will allow some (by no means all) to cash out and avoid destruction. i know a couple of them myself.

and sidelinesitter, this wouldn't be a case of compelling people to buy property, but perhaps of allowing some to remain and not sell now.

To be clear, the market has hardly "run up". Dow is at 8218, high was over 14,000. Very little wealth has returned.

streeteasyaddict, which sector has gained the most? financials by far, many have doubled during this "run up." and those are the people I'm talking about.

pjc -
The equity market has not turned positive, it's just up from its last bottom on March 9. Your comment, "If someone was heavily invested in the stock market, they would have more buying power now" is ridiculous. Sure, only if you are comparing your buying power today to your buying power on March 9. AND also only if your sole factor that determines buying power is equity or net worth. If you include INCOME in "buying power" which lenders do, it is still declining. If you include EMPLOYMENT in "buying power" which lenders do, it is still declining.

aboutready,
The financial sector may have doubled in the last month but only after dropping exponentially before that. They are in worse shape than anyone! BAC - down 76% in the last 10 years, down 78% in the last 5 years, down 77% in the last year, down 64% in the last 6 months, up 32% in the last 3 months, up 23% in the last month, down 4% in the last 5 days - yeah those people are running to their mortgage brokers right now.

This may be totally ignorant but if the DJIA, S&P500, and NASDAQ are all trading at 1997 levels, why should real estate prices not be trading at the same levels?

wilso, i know. i'm just pointing out that this run up is conveniently convenient for some people who would most benefit from the upturn. this isn't helping your average retail investor, and it most likely won't help the 401k people either. I never said that they'd go out to buy real estate, i was saying they might live to see another day. I'm a bear with a large b.

many people think that real estate will hit 1997 levels. much more illiquid asset, generally stickier prices. we shall see.

Manhattan real estate is still triple what it cost 10 years ago. Show me an asset or an income that has done the same over that period.

Topper your point about equities vs real estate.... What it tells me best is that real estate will be flat over the next 10 years like it was from 87 to 97....And I guess it also says buy the market on dips with a 10-year outlook...maybe turn the 401k deductions back on.

nope....double maybe

Yeah commodities have been strong and emerging market stocks... But nothing remotes related to Manhattan real estate supply and demand.

Rhino,

Never turn the 401(k) deduction off in the first place - unless dire emergency!

I don't have particularly hard stats on the eighties - but from what I've seen the residential bull market then paled in comparison to that of the 2000s.

And in the nineties there was never a year in which residential real estate prices dropped by anything like 20%. And we've already seen that in the past 12 months this time around. I wouldn't bet on a repeat of the relatively mild residential bear real estate market of the early nineties. (And it didn't seem all that mild at the time!)

Price/rent ratios are still wildly out of line.

As Mae West said, "Fasten your seat belts, it's going to be a bumpy night."

"Fasten your seat belts, it's going to be a bumpy night." I believe that was Bette Davis in 'All About Eve'

I stand corrected!

One of the signs prices have stabilized is the free month(s) landlords are giving, including the large complexes like Glenwood. As of now they are still offering at least one month free and prices are still a bit negotiable.

Wall Street is bouncing back with the vengeance, many new hires this season whowill make $400,000 per .they year should at least be qualified to buy a $4,000,000 apartment. Manhattan is on an upswing. Inventory is being snatched up, the recession is basically over. Land in Manhattan is a small island with very limited. Manhattan is the most desirable/prestigious place in the US and will not drop any further. I would suggest anyone in the market buy now!!!!! the deals will be over in a month or two and you will be stuck renting.

buy buy buy

Wall Street is bouncing back with the vengeance, many new hires this season who will make $400,000 per - they year should at least be qualified to buy a $4,000,000 apartment. Manhattan is on an upswing. Inventory is being snatched up, the recession is basically over. Manhattan is a small island with very limited land. Manhattan is the most desirable/prestigious place in the US and will not drop any further. I would suggest anyone in the market buy now!!!!! the deals will be over in a month or two and you will be stuck renting.

buy buy buy

Wow - thanks for the tip, RR1!

buy buy buy buy buy buy buy buy buy buy buy buy buy buy buy buy buy buy buy buy buy buy buy buy buy buy buy buy buy buy buy buy buy buy buy buy buy buy buy buy buy buy buy buy buy buy buy buy buy buy buy buy

Don't complain when the recession is over and all the good deals are gone.

Topper, maybe you don't turn the 401k off, but you don't allocate any to equities when they are trading above 18x. Good studies on rolling returns based on valuation entry points show pretty well that you don't get equity-like returns unless your dollar goes in at a below average valuation.

Back to topic. Even if Wall Street improves from here, bulls are high to expect an immediate about face for real estate. That is not how it worked in the 1990s. Hell, the stock market recovered from Black Monday by the end of 1987, and real estate drifted down 15% a year for like three years. This should be faster...and deeper!

Let's see

Unemployment going towards 2digits could be 10% most likely higher
that's really good for RE LOL

NYS and NYC are broke
Bloomberg has already and will continue to raise taxes for NYorkers yday he announced another one - this time sales tax - that's great news for RE

Retail esp high luxury is under a lot of pressure
Henri Bendel Plans to Stop Selling Clothes This Summer
that's a very good for RE LOL

"I make my predictions based on what is going on with people's wallets (that is, their ability to buy real estate)."

Bad choice. The vast majority of people who buy residential real estate do it much more on emotion than anything else. They can have tons of cash in their wallets, but if they "feel" bad about RE, they don't buy. As a guy I used to work with said "Real Estate is the only thing no one wants to buy when it's "on sale". If you go to Bloomingdales and they put a sign up on a rack of women's designer shoes '50% off' women will be stabbing eachother to get at it. When Real Estate falls 50%, no one wants to touch it.

In a word, MOMENTUM... The most powerful force in any market.

pkiracofe: excellent post....very helpful and interesting information

"You say that we will still be in a decline as long as prices are coming down. No kidding."

Funny to have bulls saying that NOW. Most simply miss that point on a daily basis.

"sorry to disappoint you bitter renters, but the market has already bottomed in NJ and the bottom is making it's way toward NYC as we speak!"

LOL... nobody more bitter than Alpine!

Remember, this is the guy who said there WAS NO DECLINE just months ago. Now suddenly he has all the facts that the decline is over.

Why is it the morons who denied that there would ever be a crash are suddenly experts on when it ends?

Did alpine really just use the example of one block in shitty Jersey to show that Manhattan RE has bottomed?

Oh my lord, is this bitter buyer desperate...

"Remember, this is the guy who said there WAS NO DECLINE just months ago. Now suddenly he has all the facts that the decline is over.

Why is it the morons who denied that there would ever be a crash are suddenly experts on when it ends?"

If I had a dime for every time you posted this, I'd be able to buy half of all the overpriced apartments in this city.

Wouldn't be a thread without a post from the hypocrite hall monitor.

You back from seeing the statue of liberty? You should check out Broadway next.

It's funny that I am suddenly a "bull" (considering I actually walked away from my deposit on a new condo), just because I think recent stock market gains may produce a small positive affect on the real estate market (not to increase prices, but to slow the pace of decline).

To re-state my position (for those who can't seem to read) - I think the second quarter will show continuing shockingly huge declines in NYC real estate values. I think the third quarter will also see declines, but perhaps those declines may begin to be less dramatic. The free-fall period will come to an end at some point. I suggest that this point will be later this year - AGAIN, for those who can't read -- I think prices are continuing to drop, just that the pace of decline will begin to ease up.

But how can one deny that one economic factor has turned positive (stock prices). Plus, a lot of true sideliners (people who don't read Streeteasy) have a perception that bargains are out there. These people might start to venture into the market.

I guess I am a bull because I think the free-fall in prices has to ease up, eventually. I guess I am a bull because I don't think prices will be down 50%-75% from peak to trough. I guess I am a bull because I state the obvious - some people are beginning to recover their losses in the equity markets.

> But how can one deny that one economic factor has turned positive (stock prices).

Because stock prices aren't an economic factor, they're primiarly an economic indicator.

And the realization that we're only in a mega recession and its not the end of the world isn't really an economic jump...

> Plus, a lot of true sideliners (people who don't read Streeteasy) have a perception that bargains
> are out there. These people might start to venture into the market.

But be dwarfed by the number of people leaving the market.... who also weren't on streeteasy and didn't see this coming (not that everyone on SE got this was coming either).

> I guess I am a bull because I state the obvious - some people are beginning to recover their losses
> in the equity markets.

Ironically, a large number of RE bulls on this board tried to claim that stock losses would move more people into RE. Now, stock market jumps apparently move more people into RE, too. I just call it... bull.

Stock prices are, in fact, both an economic indicator and an economic factor, at least for people who own stock. Part of the reason I decided not to close on my condo last year is that I lost a big chunk of my would-be down payment in the market. Now, that is slowly starting to recover. More importantly (for me, and probably for some others) is that I have a decent amount of compensation in the form of restricted stock in my company. I have to wait until it "vests". During 2008, it lost 2/3 of its value, which acted as a severe economic constraint for me (lower expected compensation). Now, it has recovered half-way. A huge gain for me. These are real-world positive impacts to my wallet and my buying-ability, and I suspect I am not the only one feeling that. Just one good trend, in a sea of bad trends, that's all.

50% of buyers currently are from first time buyers. They are now getting in to range where they couldnt get in to. This creates micro burst of rise in RE. Through this micro burst, artificial interest rate will slightly move upward and the price will start to bottom out.

The question is, if the interest rate goes higher, the prices would go lower, theorically from the pressure of interest. I suspect that even with rising interest rate (Q1 2010), the prices would not go down but rather it would stabilize and move upward slightly.

There will be a rush of late buyers who did not get in to the market in 2009 who are willing to buy by early 2010.

Current burst is maintained by rise in stock and "good news" which is not sustainable. Looking at fall would be better indication of whats to come in the market.

Am I making sense? Of course not.

jifjif: You've got it down. Couldn't have said it better myself.