Listening to the incompetent media can cost you much money

It reads like an op-ed in The Onion . . . author's photo and all.

How do I know that it's steveF even before I open the thread?

So what is your outlook, stvejhx: Decline until end of 09? 2010? When will recovery start? What has me very curious is that I have the feeling that there are tons of people on the sidelines. Will they rush in all of a sudden? When the market stabilizes? When they get bonuese again? Interested to hear your opinion?

because I go right for the jugular stevejhx. Well, what's your opinion?

sniff sniff...

smell that?

yep, smells like good 'ol desperation.

the only value of this post is that we yet again have another confirmation that the bottom is not near. it can't be near until people stop trying to call it and true capitulation sets it.

wow uppereast I posted the same exact time and would also like to hear stevejhx opinion. Although I may not agree w him, he does present a formidable challenge. But that's good makes you think harder and possibly reevaluate.

that article was ludicrous. thanks for pointing it out though.

Interesting, I'm really not too gung ho anymore to actually be owning. I'm on the sidelines indefinitely.

Why is that cleanslate? Isn't there a level where it makes sense for you?

The author is right ... but only in principle. Now he has to work on his timing. Look at his conclusion: "The best bargains were available in the early 1990s and buyers can expect a rebound in the foreseeable future." Once again, real estate is sticky and the best bargains were available in the early 1990s (really around 1993). That was 6 years after the peak of the stock market in Fall 1987. We are about 18 months past this peak and it has much farther to come down this time around. Under this thinking I should start getting ready to buy in 2013.

like cleanslate, we're sideliners too . . . indefinitely as well, right now. Before it makes sense, seems like the buy vs. rent ratios have got to get much closer

Given that there are lots of sideliners is actually a positive thing for real estate. It demonstrates there's a willingness to buy. It also, presumably, indicates that there's lots of money that's going to eventually flood the market.

"A developer of residential and commercial properties in the region, who prefers to remain anonymous...."

Anonymous. I bet. Fear of getting arrested for fraud.

My outlook is the same as it's always been: 50% down from peak, which is just what the auction article that was threaded today says. Maybe as low as 55% given the tendency to overshoot.

There are not tons of people on the sidelines - most people who had money in the stock market lost 50%-60% of what they had. Rents are still vastly cheaper than buying and getting cheaper still. Credit is tight. Wall Street is dead and never coming back.

Two things will not happen in my lifetime:

1) We won't see another Republican president; and
2) housing will not recover to its 1Q2008 peak.

It took 10 years for prices to recover after the 1988 crash, and prices hadn't gone up nearly as much as they have over the last 10 years in Manhattan - on the order of six- to sevenfold.

That's why I am interested in outlook. I have the feeling that there are lots on people on this blog that are salivating over property they believe they will finally be able to afford. Shouldn't that create an upward swing again? But the question to me is when this will happen?

Stevejxh, you don't really think that Wall Street is dead forever? It will come back, trust me!

A. I don't think the number of people on this blog represent any significant amount of force that could swing the market.
B. I have seen more people over the last month say they are going to sit out another year than jump in now, so even if it is a representative sample, I don't think it is headed the way you think.

Truth is, an upward swing will not begin again until people believe there will be an upward swing. Why buy this year when I can get a lot more for the same price next year?

That's exactly my question. When is hte upswing going to happen? My feeling is that bonuses next year will be better. ARe people ready then?

What I meant is that perception is powerful and one of the reasons brokers are out in force on boards like this trying to make you believe this is the bottom.

What I meant is that perception is powerful and one of the reasons brokers are out in force on boards like this trying to make you believe this is the bottom.

What I meant is that perception is powerful and one of the reasons brokers are out in force on boards like this trying to make you believe this is the bottom.

Bonuses will not be good in Q1 of '10 because 2009 is going to be challenging. Best-case scenario would be that some recovery begins to gain traction in 2010 and bonuses in Q1 '11 are an improvement over what little people will have received in '09 and '10.

Bonuses will not be good in Q1 of '10 because 2009 is going to be challenging. Best-case scenario would be that some recovery begins to gain traction in 2010 and bonuses in Q1 '11 are an improvement over what little people will have received in '09 and '10.

I am quite bullish on my bonus. Of course, not where it used to be but a substantial uptick.

What I meant is that perception is powerful and one of the reasons brokers are out in force on boards like this trying to make you believe this is the bottom.

Sorry for the duplicate posts, as SE seemed to lock-up on me.

I also meant to post that I think the earliest you will see any significant gravitation back to buying RE would be middle of 2011, based on jobs, bonuses, fear & uncertainty and a few other things to boot. Just my guess with what we know and can realistically expect right now.

Also sideliners may be making assumptions based on mortgage prequalification they got 6 months ago.

>>>> Two things will not happen in my lifetime:

1) We won't see another Republican president; and
2) housing will not recover to its 1Q2008 peak.

You must be really old. There will unfortunately be another Republic president. The party will adapt to the times and come back, make no mistake about it. It's ridiculous to forecast where the world we be in 20+ years, so unless you are over 70, that's tough to say. Ever hear of the term "Southern Strategy" that brought the South from Democratic to Republic - there will be another strategy aimed at another group of people.

Housing may not come back to its 2008 peak in real terms in the next 20 years - but in nominal terms, it most certainly could. We are in somewhat of a deflationary spiral, but even Japan's "lost decade" did not last forever. And with all of the money they are - and will continue to - dump into the system, inflation may happen on the back end.

That said, I don't buy into the "sideline money" theory meaning we'll find a bottom quickly. The sideliners are by defintion more conservative buyers .. and many of them have been hit as well, if not by bonus cuts, by depleted stock portfolios.

"Still, instead of predicting the next Great Depression, I am finally listening to some of the smartest real estate and business leaders who agree that the best time to go into business and make investments is in the worst bear market."

This part is certainly a true point. Problems are not getting in too early while the market has some way to fall, and the need to stay solvent through the nasty bit until the upswing.

"even Japan's "lost decade" did not last forever."

Japan's property prices have not returned to their peak yet - they're still 50% off, in nominal terms.

The point wasn't that Japan has recovered from it's lost decade, but that even they have found there way out of it. It's really arrogant to pretend you know what prices will be in 20 years. Or to know what the presidential party will be for the next 20 years. So many things could change that - inflation comes to mind. I

I don't see a rebound in the medium term either - which is why I think people who are trying to "wait for the recovery" are in wishful thinking mode. But 20 years is a long, long time.

If you had said they MAY not recover in 20 years in nominal terms is one thing. But to say they WILL not is arrogant.

nobodys going to buy. not now, not soon. where's the bottom?
we only know in retospect. like trying to procreate and score the kid that gets born midnight january 1. You know when to buy the wine and make the insertion but to get that time right...??? We know the bottom is near 1mo, 1yr, 1decade? It's close and, everyone wants to close the day the market bottoms. Welome to the next 24 months, buy your wine and take your chances.

"Why is that cleanslate? Isn't there a level where it makes sense for you?"

It hasn't made sense so far especially right now. A lot of folks are in miserable situation because of the economy, I feel lucky I'm not bound to any sinking property value. And at times like these, I'd rather keep the cash and feel worry free, than throw all my money to some property that will bind me for most of my lifetime. I'm evaluating things in a better atmosphere, not right now when it feels like we're in the eye of the storm. Why throw away my life jacket?

"Still, instead of predicting the next Great Depression, I am finally listening to some of the smartest real estate and business leaders who agree that the best time to go into business and make investments is in the worst bear market."

True.... but that assumes you aren't buying BEFORE the major decline.

If you buy at the beginning of the worst bear market ever, you are absolutely screwed.

BTW, has there been a level at which somebody DIDN'T say buy.

RE down 5% - "this is your opportunity to get in to a rising market"
RE down 10% - "historic buying opportunity"
RE down 15% - "multi-year lows, get in now"
RE down 20% - "the worst bear markets are when you should buy...
RE down 25% - ??
RE down 30% - ??

Wonder what they'll come up with next. Remember, there hasn't been a point where a broker idiot hasn't written an article saying "oh, NOW is the time to buy.. .forget what I said last week".

"It's really arrogant to pretend you know what prices will be in 20 years. Or to know what the presidential party will be for the next 20 years."

So no one can make a prediction?

Cool.

But I'm going to do it anyway. It's not arrogant, it's taking a stand. It took 10 years for prices to recover in Manhattan after the 1988 bubble burst. Japan still hasn't recovered. Prices in Manhattan increased from six- to sevenfold in 10 years. Unsustainable. It was a bubble generated by the Wall Street bonuses predicated on the housing bubble that has the rest of the country in a giant mess. It's not coming back. If housing does fall 50% from the peak - which I've been predicting for a year and even Jonathan Miller now seems to agree - and it then increases at its historical rate of about 1% per annum in real terms, it will take longer than 20 years to return to the peak level in real terms.

Gold has not returned in nominal terms to the price level it attained after the US abandoned the gold standard under Nixon. 40 years later, and we're still not there. In NOMINAL terms.

I think inflation will hit eventually and then you are glad you own real estate.

Yes, wall street couldn't save us, the irish carpenters couldn't save us, the oil shieks couldn't save us, but.... yes, the bulls have one more rationalization left.

Inflation will save us!

Of course, given that housing is a HUGE HUGE factor in inflation, and commodities are tanking... yes, I'm sure RE will save us.

Of course, that would also jack up interest rates to hell.

Lets call it what it is... grasping at straws.

"I've made alot of money in manhattan real estate off others who listen to the media."

Unless you sold last year, you've probably given it all back and more.

I'll make a lot of money off the folks who bought in the bubble because they didn't read the writing on the wall (and also listened to the media).

Media told everyone to buy, too. Not sure why you were ok listening to them then...