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Strategies & Market Trends : Rande Is . . . HOME -- Ignore unavailable to you. Want to Upgrade?

To: Jim Willie CB who wrote (55083)	10/2/2001 3:09:13 PM
From: Tradelite	Read Replies (3) \| Respond to of 57584

Jim, that is quite a "scorched earth" picture you painted, even though you and I apparently agree on one thing: home prices will come down--to some extent--and they should. Home prices can't exceed people's ability to pay for them and have always risen and fallen according to personal income levels. However, who will sell in this environment, and create the excess inventory of homes that would signal the "falling pillar" that you referred to? I predict people will hunker down and not make a move at all. Employers aren't going to transfer as many employees as they did before--costs too much. Retirees are going to postpone that move to sunny Florida, either because they've lost their stock nest eggs and have to go back to work, or they don't want to commit to a new home purchase when their present home is probably paid off already. Divorces may decline due to the high cost of creating separate households. Marriages might be postponed, too, due to financial uncertainty. So, where are the empty houses going to come from? If prices go down as much as you say they will, houses will get snapped up by investors, who will make big bucks renting them out. That's the way the real estate cycle works, usually.

To: Jim Willie CB who wrote (55083)	10/2/2001 4:28:08 PM
From: Rande Is	Read Replies (4) \| Respond to of 57584

my gut intuitive guess is middle range and upper middle range urban and suburban housing will drop by 23-28% and highend will drop by 40% and most commercial property will drop by 30% I hope I am wrong. But the damage may already be done. These new rounds of layoffs may cause further cutbacks and cancelled orders which in turn may cause more layoffs. This downward economic spiral is VERY hard to stop once it gets going. Here is the worst case scenario: Should we slice through those recent lows on a re-test, we could easily surpass the 1998 October lows, which would set-up for a steep drop without support. If that happens, many many companies will find themselves unable to get necessary financing, due to market conditions and stock prices. . .there will be more fear and uncertainty among the young CEO's . . .and more layoffs. . . and we could be facing a depression square in the eyes. After the slide into 1932, we had about 8 more years of terrible economic conditions. The war effort in the 40's was credited for placing many Americans back to work building ships, planes and ammunition, etc. and stimulating the U.S. Economy once more. There won't be any shipbuilding for this war effort, IMO. So once we take the slide, what catalyst will there be to stimulate the U.S. Economy to rebound in 5, 10 or 15 years? Technology? The Internet? See what I mean? If the worse case were to happen, I would adjust your predictions of property value declines sharply lower. If we use the tech industry as a leading indicator and look at housing in Silicon Valley. . . from what I have heard, many many homes that were purchased for 1.5 mil to 2 mil are listed in the $600,000 range without buyers. That is already a 60 percent or more decline for the upper end. I think that could increase to -85+ percent within 3 years, should we slice the 98 lows and continue sliding [worst case]. Median homes in Silicon Valley are $400K. These could be cut in half by 2005, IMO, should we get a worst case scenario in the markets and we begin a period of extended depression. . . as the tech market would be the last place people would be looking to hold out for secure jobs. They would be scampering for places to live with a lower cost of living. . . as I would guess many already are doing. Best case scenario: We recover from this tragedy, we make headway in the war to eradicate terrorism. After a year, consumers go back to consuming and the economy gets back on track, for the most part. At this point, I cannot imagine us getting through this without at least a years worth of recession. If this is the case, housing prices will probably remain mostly steady, though it will be a local thing. In this scenario, technology would still lead the way out. In areas where companies & factories are having the most trouble, property values will fall accordingly. . . just like they have in every other recession we have had. I can take you to whole cities in the U.S. that never recovered from the recession in the 70's and where you can buy a 3 bedroom home with a basement for $5,000. And if we do get a depression, those homes may actually hold their value more than any others in the U.S. I know it isn't a pretty picture. But until I start seeing some rays of light through this economic tunnel, all the colors are just dark. I hope like crazy that we bounce REALLY hard in October and bring hope to corporations in America. Rande Is

To: Jim Willie CB who wrote (55083)	10/2/2001 5:44:54 PM
From: yard_man	Respond to of 57584

What is really outrageous is what Greenspan told us a couple of months ago -- "you are still rich; housing prices are holding up" -- what a mean old man he really is ... After he helped wall street rob J6P, he has the audacity to tell everyone that things are fine when they really aren't. The doofus didn't know when to leave ...

To: Jim Willie CB who wrote (55083)	10/2/2001 5:44:54 PM
From: yard_man	Respond to of 57584

What is really outrageous is what Greenspan told us a couple of months ago -- "you are still rich housing prices are holding up" -- what a mean old man he really is ... After he helped wall street rob J6P, he has the audacity to tell everyone that things are fine when they really aren't. The doofus didn't know when to leave ...